The New Era for Cardano ADA with Charles Hoskinson

But I think there's a great impatience where people don't see the price moving up and so they instantly infer well, if that's the case, it must mean that it's a dead ecosystem and it's in a great decline. Meanwhile, we're just about to do the greatest governance upgrade in the history of the project and probably the history of the industry. We have the best scalability plan. We

have a very vibrant, rich community. When you look at rare Evo and you look at the Kardono Foundation summit, you look at all the cool things the communities building, and there's all these cool DAPs and DeFi projects which are all home grown and they don't have ponzonomics or any of these other things. This content is brought to you by Uphold, which is one of the top crypto platforms out there, which allows you to easily buy and sell trade Bitcoin

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Charles, great to have you back on. It's great to be here, Tony, thank you so much for having me on. Yeah, Charles, I'm excited to chat with you. Obviously not your first time on the podcast. I'm a Cardono token holder, so I have a lot of questions. The community sent me a bunch of questions to ask you, and of course want to get your take on the general crypto market. I would love if we can start off with what's upcoming for Cardana. What's the latest. One

item I read is an upcoming hard fork. Yeah, So we're working in parallel on the last two parts of the Cardinal roadmap. There's bas Show and Voltaire. You need Voltaire for certain parts of bas Show. So Voltaire is all about governance, and there was always this idea of creating the largest, most representative on chain government in the entire cryptocurrency space, and we spent two years as an ecosystem having those discussions. So we wrote first to SIP.

SIP sixteen ninety four were named after the birthday of Voltaire the poet, and we we then socialize that throughout the entire community. There was more than twenty five workshops all across the world, and it took over a year and a half of dialogue to get to a final design. And now we're in as an ecosystem the last stages of implementation of the test net for these governance tools,

and then it's called Sancho net. So Note nine dot zero, which is going to come out probably next week, is basically the fork ready candidate. So how it works in cardoto Land is that once all the discussions have been had, the SIP process has been followed, which takes quite a bit of time and a lot of hands touch it from many different institutions. This stakepool operators have to be that final line in deciding whether to conduct a hardfork

or not. So we need seventy percent of them to install and then the hard fork will get initiated. So we're almost there. Usually it takes about

a month for that to occur. But this is a very significant hard fork because not only does it add a completely new governance system, so de reps and a constitutional committee and constitutional guard rails and representation in these types of things, it also actually adds a bunch of enhancements to Plutus, so Plutus B three which allows for BLS supports, so that basically brings roll ups and zero knowledge stuff and all kinds of really cool scalability things into the Cardino ecosystem.

So this is the largest and most significant hard fork ever done, and it's the most meaningful because it basically builds a whole un chain. Government turns on the Cardino Treasury. There's almost a billion dollars of value floating around there,

and it basically turns on democratic consent and constitutional representation. So people will register d reps just like they register stake pools, and they can delegate to them, and those de reps can vote, and those de reps and constitutional committee members basically control all the major governance actions, whether it be hard forks or treasury withdrawals or protocol parameter updates. It's the largest and most significant doo ever

built for for our industry. So obviously this one's being closely watched by many people and it's really exciting, but it's a little scary because there's no going back. You know. It's like the domino effect. You've pushed the domino and you just have to watch what happens afterwards. But we're all in good spirits about that. The other major thing is Basho, and there's kind of

a multiprong scalability approach that we've been taking as an ecosystem. So we have Hydra which is rapidly approaching version one, and there's a lot of cool and interesting things that will be demoed at rare Evo for that, and that's kind of our off chain state channels play, which is usually very useful on a DAPT by DAPT basis. Then you also have things like or worse layoffs.

We just published the paper for that six years in the making, so it took a really long time to get there, but in our view, it solves a big chunk of the blockchain trilemma, where you get pretty much the fastest protocol you can get. It's called a one minus delta protocol, but you preserve that fifty percent Byzantine resistance, and actually you have a higher degree of decentralization than we currently do, which is best in class for consensus.

So we're very proud of that. And now it's entering the prototyping phase. And then we have things like partner chains, for example, which take very high load applications off the cardio network and into their own dedicated side chain that

basically can run in parallel with the system. And then of course all the enhancements we're making the zero knowledge space and recursive space thanks to pluted V three and Midnight so very vibrant, and it's kind of an all of the aboves scalability strategy and a little bit of optimization, a little bit of new capabilities, some of the old things that you've all come to know and expect, like state channels and roll ups, and some new things like or horse loos,

which really innovate and bring a completely new way of looking at this stuff to the industry as a whole. So Bascho is in deep development and there's a lot of really cool things happening. You need Voltaire to get to Bacho because there are certain decisions that have to be made about how to roll things out and where to break backwards compatibility, and that requires complex governance to be able to have that discussion and debate and eventually converge to it. You can't

really do that in a more simplistic governance. Since so I have a couple of fall up questions here in regards to governance. Let's say there's a new CARDONO tooken holder at to token holder listening. Is there like a threshold how would they be able to participate in some of these votes if you could take us behind the scenes at or is it still too early to talk about that?

No, it's not too early. The design has been over a two year period, people have talked about it, and so the design is completely known and fully formalized. Yeah, so basically it's a representative democracy, and so we try to take the best elements of a republic, so you have constitutional representation and representatives and combine that with liquid feedback, which is a concept that the Pirate Party came up with about twenty years ago. So basically the

idea is that there's two primary houses and kind of a fallback. And so the two houses are the d reps and the Constitutional Committee. The d reps they register very much like a person registers a stake pool operator and then you can delegate to them a vote, so you can be your own de rep and delegate to yourself and that's how you participate directly in votes. Or you can delegate just like you do to a stakepool somebody you like or coalition of

people that you like, because you can delegate to multiple d reps. So this allows political parties to form, and this allows special interest groups to form and these types of things. And there are seven different governance actions that can be brought before a d rep. Everything from was drawing money from the Cardino treasury, to initiating a hard fork, to changing protocol parameter and everything in

between. Now, each of these actions are defined in SIP sixteen ninety four, so if you're curious, you can kind of look up the table and see that. Now, for more significant governance actions you have to then involve the Constitutional Committee as well. So for example, hardworking the system is very significant. So there's an odd chain constitution. We wrote an interim constitution, and there's going to be a constitutional convention in Argentina at the end of the

year to get the final constitution written with the community as a whole. And basically that establishes some baseline and variants like hey, maybe there should only ever be forty five billion eight because that was the social contract that people signed up for these types of things, and then some operating variants that need to be

put into bootstrap the system. And basically the Constitutional Committee's job is to look at governance actions from the perspective of the constitution and ask is this constitutional or not? For example, are they trying to print money out of thin air or these types of things. In some cases, you can algorithmically protect the system, so we actually have a smart contract that was written with one hundred and thirty one on chain guardrails. So in many cases like that print money,

you can stop that. And others are social consensus, which means that the constitial Committee can basically act as a stop and for very significant things, the stake pool operators get involved as well, and so it's a tripartite model. So what's so cool about it is that we took some of the best ideas from traditional governments and some of these new ideas that come from the Internet governance, and we try to put them together in a way that creates a

really nice minimum viable government system. And you really judge the quality of your government by three parameters efficacy, efficiency, and integrity. So efficacy is basically are you making the right decisions or not? So you usually have some goal in mind, like hey, I want to reduce poverty or make homeless people get homes or something, or improve the GDP. Then you can measure it, so did it happen or not? Efficiency is how quickly can you get

to a decision. So does it take a year to get to yes, Like if you're voting on a budget, does it take six months to get a budget done or something? Like that, or do you do it in a week or something like that. And integrity is who do you leave behind in the process of making decisions. So high integrity systems take everybody along. Low integrity systems tend to only focus on a certain group, minority or majority

and benefit them and kind of throw the other people in society away. So just like there's a blockchain trilemma between scalability and decentralization and security, there is actually a governance trilemma where it's really hard to have all three properties in the same governing system. So China, for example, is fairly effective and fairly efficient. They make decisions very quickly, and also those decisions tend in the

long arc of things to have built up their country into superpower. On the other hand, a lot of decisions they made don't have a lot of integrity. You know, a lot of people get left behind, human rights are violated, these types of things. Switzerland is a high integrity and very effective government. When they make decisions, they tend to be the right decisions, and the Swiss have one of the freest, most central societies and most representative

societies in the world. However, it's highly inefficient takes like ten years to build something in Zurich. You know, it's very slow moving system. The Swiss, you know, think in terms of decades and centuries, as do the Japanese. So you know, usually you get two if you're lucky.

It's really hard to have a situation where you get all three. We tried to design as an ecosystem the governance system of Cardono in a way where we could try to solve that trilemma and be efficient, effective and have high integrity.

And you typically do this with institutions and constitutions. Your constitution is basically a memorandum on the integrity principles that you desire, and then your institutions are there to help take complex decisions and get them to a yes no state so that they can be voted on quickly and so they can pass quickly after you've done the desk work and the prep work. So the strength of your institutions really does tell you if you can be efficient, effective and have high integrity.

And that's the great social experiment that we're conducting kurdon a land. So we have institutions like Intersect, the members based organization. Anybody who holds ATA can join and it's taking over a lot of these functions like the product function and the budget functions and these types of things which are very complicated. But there are other institutions like the Cardono Foundation and so forth, and they're there to basically lend support aid as well. And so it's kind of a giant

experiment, and we're the most significant blockchain to do something like this. It's a little scary at times because you have no idea how these pieces are actually going to come together in practice. But so far, every social signal we've seen has pointed towards a commitment desire for the community to decentralize this as much as possible. For example, the first Constitutional Committee elections are being held for

the interim Constitutional Committee responsible for turning this all on. We already have seventeen candidates running for that Constitutional Committee to be voted on by the ADA holders through some dow So that's real exciting to see, even pre governance, that governance is awakening. And I expect to see dozens, if not hundreds of de reps probably in the next ninety to one hundred and twenty days. So you have a very diverse set of people whose only job is to think about the

governance of Cardono as a whole Charles hard question. And I don't know if you can answer this at the top of your head because it requires or there's a lot of factors and variables. Let's say we're using a scale of one to ten for decentralization, right, and ten may be impossible to have complete decentralization. I don't know. You're smarter men these things. But where would you say Cardono is on that scale? And then with the upcoming hard fork,

where would that put you? So we wrote a paper and then partnered with the University of Edinburgh to build an index called the EDI, the Edinburgh Decentralization Index, and that paper identified and the EDI identifies eight different areas that you can look at decentralization. And so you don't look at decentralization just from one lens, but you look at it from everything from who controls the consensus

nodes to how many full nodes do you have inside this system? To who writes the software, to the tokenomics of the system, to particulars behind where security comes from, is it proof of work or proof of stake based? And so each and every one of these things can either move you towards a state of more centralization or less centralization. It just depends on those facts and

circumstances. So the goal of EDI is to come up with a number and basically tell you explicitly what is the aggregate of all those different activities together. Now they've been working on it for about two years and they've started measurements, and so if you go to the website of the Inverurt Decentralization Index, you can actually see real time some of the measurements of Bitcoin and Ethereum and Cardano.

So I think with the chang hardfork, what this is going to do is sit Cardano on a path within the next six to twelve months to become the most decentralized cryptocurrency project ever, including Bitcoin. Now, people have a gut feeling all I disagree with that. Well, you know, I don't care about your feelings. I care about facts and measurements. And you know, when we say it's the most decentralized as measured by the EDI, you can choose to agree or disagree with the EDI, And if you disagree,

it's an open source academic metric by an academic institution. So then participate in versioning. The whole point of the EDI is to be version, you know, version one, two, three, four, in each version tries to be more representative of what it attempts to measure, which is decentralization as a

whole. So they've already begun pretty extensive conversations with regulators like the FCA, the ady GM over Abu Dhabi Vara in Dubai, the US Department of Commerce and others to kind of say, hey, you have this notion of sufficiently decentralized and your statutory viewpoint, maybe just maybe we should begin discussing and measuring

it. And actually, the pay for EDI was approved and is going to be submitted, is going to be presented at your financial crypto, so it's already going through the peer review process as well, and there's been some phenomenal feedback and that's already feeding into the discussion of whether EDI is an effective measurement or not. So my view is you have to start somewhere, and because the industry doesn't already have an accepted index of decentralization, we kind of had

to start from one oh one and get that index bootstrapped. And now the next step is to apply that index in every dimension, and that is one of the design goals. When you look at protocols like arbors, layos or the Unchain government system, they're not just being built from a position of efficiency and effectiveness or throughput, but they're also looking at is decentralization preserved and protected

because that's so sacred for these systems long term viability. Yeah, I need to do my reading on that, but that's great that some sort of index and scale is being made here. I think really good for the industry. Adopt a standard like that and it can help, you know, stop some food because we know how. We'll talk a bit about crypto media and things later, but you know, we can use actual data in facts versus people just tweeting stuff now and by the way, we've been reaching out to a

lot of blockchain projects, don't look. I just had a conversation with the al Grant folks and others, and there's a lot of excitement about these indexes existing because they suffer from the same problem that we suffer from, which is how do you actually measure decentralization? Right? You know, and then you've got to get away from feelings and these cults of personality and really get to

the facts of the batter and can we establish a baseline? And once we have that baseline, how do we then apply it and at least measure the top thirty forty to fifty projects in the ecosystem And then you have a starting point, and then you go talk to policy makers and lawmakers and you say, look, this is our view as an industry of what we think sufficiently decentralized means. Do you have a differing view and if so, why,

what are you worried about? Is it disclosures, is it information at symmetries, is it unpredictable failings or cascading failures like we saw in two thousand and eight because of over centralization or lack of transparency, you know, these types of things. And so they're obviously going to have a view on that, and then our goal is to address that view and get that into the index as well. And then the hope is over time that this becomes a steering

tool for project management, roadmap development, and ultimately regulatory compliance. Yeah, great point. I know you're hinting towards let's say, like the SEC. I'm sure the industry would love to have that data to fight back, you know, against government overreach. That would be pretty significant in these lawsuits and so forth. Yeah, and also in just lawmaking. So like FIT twenty one, which everybody prays past, it has embedded within it a definition of

decentralization. So that's an example, and it's the same for the FIA with the concept of the Financial innovation ACLAMUS is build with the concept of an ancillary access asset and FIT I believe they call it a restricted digital asset, whatever the nomenclature is. You have this concept of it starts as a security and then it goes through a series of upgrades and then eventually it becomes a commodity, and the gatekeeper there is the level of decentralization of the project. So

the Hindman test with ethereum kind of implied this. But this is eventually going to be written down in a law somewhere in the United States. So for this to work appropriately, the policy makers are going to have to decide what that test is, and usually that means they're going to form a committee between the CFTC, which regulates commodities and the SEC which regulates securities, and for them to agree on something having an academic standardized benchmark that universities use and potentially

even standards bodies like Department of Commerce could use, is probably a better approach because then it takes subjectivity out of the assessment and you have an objective measurement. For better or for worse. Now you can argue that that measurement is not a reflection reality or doesn't cover enough use cases. And that's the point of versioning it, you know, that's the point of waking up every day and say, well, tell us what version two should look like. What

did we miss in the in the index? And if it becomes an industry accepted print a project, then very quickly one or two years, it'll probably converge the right measurement. Yeah. You know, as you were saying that I was thinking of, and I think you alluded to it, is that something starts as a security, but eventually it becomes decentralized, then it would go under the cfdc's jurisdiction. But that same scale or index enterprises can look

at that or individual builder. Let's right, I want to launch an NFT and I'm like, I want to go to the most decentralized blockchain or what's in the top five of the centralization I can do that. That helped me so man remove a lot of ambiguity and confusion. We have like government standards like Phipps, you know one ninety and et cetera, et cetera, And

there's all these different government standards for how to build stuff. And typically those are gatekeepers or whether you get a contract or you can bid on something, or if a large corporation can work with you or not so or CMMI is

another example of that. And so by having these benchmarks, what you can do is in the procurement process or quality process or security process, say I only feel comfortable building on a system that's above this particular threshold, and you really have to dig into the governance of it other such things, because nobody wants to build on Quicksand you don't want to go as a company and make a bet, you know, for a half billion dollar piece of software only

to discover that the core maintainers have disappeared or you know, it's been forked because of political problems and now you have a much weaker project. You know, that would be pretty problematic. Like if you're Samsung, would you feel super comfortable if the governance of the Android project is really bad and it's having all these issues. You know, would you really want to use that as

your operating system of your phone? Probably not, you know, So it's really important that you have some sort of metric that not only tells your level of decentralization, but part of that decentralization is looking at the continuity and governance components of the chain itself, because that kind of gives you a sense of whether that's a high quality product to deal with or a low quality product. Yeah. Absolutely. Now you had mentioned earlier the Argentina partnership, so that's

what the Cardono Foundation tell us about that. How did that come about and what's the mission there? So the ecosystems pretty big. So the Cardino Foundation has been doing some independent work of us in Argentina. We're of course aware of it because we talked to the same people, and my understanding is that's an extension of some of the projects that they've had, like in the country

of Georgia, where they've done some really interesting government contracting. What we've been working on has been basically building strong relations in anticipation of the constitutional convention in December. Because I have very practical problem to solve. We're bringing more than fifty people from fifty different countries to be delegates to the Constitutional Convention. Well,

how do visas work? You know, little stuff like that. So there's a lot of ground game logistical things, and it's incredibly important that we have connections at the highest levels of the Argentinian government so that nothing gets in

the way of the constitutional delegates. You know, they deserve if they're going to take time and effort to commit to writing the government of Cardano to get white glove treatment, so they need to stay at safe places, they need to have good transportation, good food, and also get their visas approved. In these things, so there's a very practical, tangible set of engagements that have occurred, and we've already sent two delegations to Argentina to begin building up

that corpus. I would also like to spend some time with the President, so we'll see if we can get our schedules aligned in July and at that to happen. But it would be very nice to sit down and understand more deeply about what his goals are for Argentina because there's actually a very strong cardinal relationship with Argentina. We didn't just start conversations today. People have been working

on Cardono from Argentina since twenty sixteen, eight years ago. It's one of the very first firms to write code for the Cardinal project was Atex, which has now been acquired by Globin. But Alan Werbner and his team started working on that code in twenty sixteen, So there's almost a decade long Buenos Aire's

connection in particular to the Cardinal project. And so there's a lot of really cool things, whether it be a talleprism, or it be work on partner chains, or work on Midnight or Cardinal Core, that I think could be done by Argentinian developers. And so really, if the president wants, you know, I think it would be very easy for us to actually set up

a center of excellence to do cryptocurrency development in the country. But you know, you always extend the Curtis see and try to get a deeper understanding what each administration values. In some cases they're quite compatible, you know, in other cases they're not, And so it's really important just to have a dialogue and engage with people and say, okay, well we bring jobs, and

obviously we bring a great ecosystem and would this technology be useful. I happen to believe that Argentina is in a very interesting place in history where this current government has, through a process he likes to call the chainsaw and the blender, the chainsaw cut programs and the blender not increase the spending and let inflation cut them, has basically decimated the existing government. And that's step one. Step two is to rebuild. So then there's an open question of when he's

rebuilding, what does he rebuild with. And my view is that it would be sensible to rebuild with blockchain based technologies, blockchain based supply chain systems and voting systems, and transparency systems and accounting systems, and maybe even a blockchain based money system for the for the state. So obviously we need to get a deeper understanding if that is on the horizon and what time horizon does that need to look like. And then that's not going to be done by a

single entity. It'll probably be done by a coalition of actors. And there's a lot of very prominent Cardono projects that are actually in Argentina. For example, people don't a lot of people don't know TX pipe is based in Argentina. You know, that's a major Cardono project, twenty six people on that, so there's a local coalition of people. And that's also another thing that

the government needs to be educated on. Oftentimes you have Western companies come to South America and they say, hey, we'll do everything and we'll be these guys up north, come on down South. Well, actually, any meaningful government contract would probably be serviced by Argentinians if it was actually enacted. So that's the conversation they have. So you just meet with people and you know, I'm trying to solve both problems at the same time of getting that constitutional

convention to a great state. We already have some great partners ships. We just signed an MoU with the University of Buenos Aires, so the convention will be held at the School of Law, and it's an absolutely stunning place and it's the perfect place to write a constitution and ratify it. And you know, if you actually take a look at some of the pitchers, it's one of the most beautiful all hauls around. And UTN is another university that we're

looking at. We'd love to build a relationship there and there's a lot of local government that we've been working with as well. So that's the practical side of it, the meat potatoes side, and then there's just talk to the government about what its goals are and if they coincide, maybe that's something for us to take care of the foundation, to take care of our local partners like t x pipe to take care of and let them be aware that they

actually have a domestic option to blockchain the entire country. Yeah, as you're saying that, I remember our previous conversations where we talked about countries in Africa adopting blockchain. Obviously you guys are doing some work there too, and that they're starting from the ground floor, not like the United States where he's trying to steer a cruise ship and all the bureaucracy, all the red tape. But they can move faster and a greater infrastructure faster than maybe the United States

and sebities for US world countries. So that's really great that they can adopt this technology and just catch up, so to speak. Yeah, and we're still in Africa. In fact, we're growing by leaps and bounds. We just launched the Real five website. So if you go to Realfi dot Co. You can see that, and that's a microfinance play. It's made by John O'Connor and the other guys that he was our director of African Operations and now he's the CEO of real Fi and it's one of our portfolio spinouts.

And that company employs I think almost fifty people and they're based into Robi and we've already deployed five million dollars of capital to lend through channel partners who are regulated actors the microfinance business. So we've learned a lot in that process and we've been a bit more concern are deliberate about how to approach these types of jurisdictions. And everyone's different. You know, Kenya is radically different places in

Nigeria than Ethiopia. And in some cases you get great outcomes and other cases not so much. And you don't let those things dissuade you. You have to be a bit relentless and resilient and every day you wake up and you try to find a different approach. So maybe doesn't work in one system fertilizer vouchers, but then maybe you make it work with fast moving consumer goods or maybe that doesn't work out, so you do remittances, or maybe it's microfinance.

That's the key, because at the end of the day, it's infrastructure. And every time somebody does something, if they're touching a blockchain system, they get a wallet, they get an identity, they get cryptocurrencies, and once they have it, they are their own bank. It's a self sovereign identity, and ultimately they're in charge of their economic agency. And that's the mission is to bank the unbanked. And you don't have to bank the unbanked

through way A versus WAYB. It doesn't matter which road you take. You're heading to one destination, which is getting people economic autonomy, so they have agency and they're in control of their lives. So I think the model that John has come up with, which is tempered with about six years of history there in Africa, is a really good one and we're real excited to see that grow. And it's already starting to take off by leaps and bounds,

and we've gotten some great preliminary data. You know, interest rates fell from eighty five percent to like thirteen percent. NPL which is a non performing loans fell from forty percent to two percent. Imagine having a forty percent default rate and then you go down to two percent twenty times better, So we make more, they pay less, and the overall structure goes from you know, a big chunk of loans failing almost more than a third, all the way

down to two ninety eight percent success. It's just remarkable all things considered. Now there's a lot more to do. There's a founder effect in that, and you know a huge amount of work on the credit scoring side, and you've got to syndicate, so it has to go across border, and then eventually you have to add in some more of the blockchain crypto components and then

eventually open it up to the retail side. So that's a multi year journey that they're going on, and they've already spent two years of that multi year journey, you know, getting that into play. But we built all that

technology out for like a talleprism, it's not just an identity system. It can also be used as a credit system as well, and we've built out the voting software and built out wallet software, and some variant of Lace will eventually work its way into that pipeline, and then we'll see where the stable coin side of Cardinal fits and then you know that works its way in as well. So we built capabilities over a long period of time and you know

it works just as well in Argentina as it does in Kenya. So that's another thing you bring to the table and you say, by the way, we're doing this amazing stuff in Africa, would this be interesting to you guys as well? And so that's the great part about having that conversation and you

can bring people together. Yeah, I love it, and I'm just excited to see what the future like ten years from now with blockchain, AI and all these technologies helping some of these countries which you know, in the old I guess industrial system got left behind, right because maybe they didn't have the natural resources or currency problems or bad governments. But now blockchain and can really bring a lot of benefits to people and the average man, not just the

guys sitting at the top in the government. So that's great. I didn't want to ask you about Midnight side chain, tell us about Midnight what is it? How Cardono will benefit? And then some people that we are saying there's an ear drop coming from this, Yeah, that's correct. So there's this problem of how do you sell the centralized services to the entire blockchain industry.

So you know, you have an application on Ethereum, is it really on Ethereum if it's also on Infira or Alchemy and that the bulk of your logic runs there, Like open c is another example, Yeah, okay, we have an NFT on the Ethereum blockchain. But if all your APIs and your wallet and everything basically just talk to open see and they don't even check the Ethereum blockchain, if open sea gets rid of it, like just disappears,

you know. Marty Marlin's book wrote about this. He's one of the founders of Signal, and he kind of demonstrated the hypocrisy of things where people are saying it's decentralized and trust lists and Web three, but it's really Web two or Web two point five. So services matter. And I thought a lot about how do you do blockchain blockchain deals, and so what I thought would be really cool is to have a layer that basically specializes in that.

And I wrote this in twenty sixteen and why Cardono and I had this idea of Cardino SL and cardinalcl. So SL is the main system and cl is the control layer of the system. So for eight years, you know, we've been kind of talking about this and exploring this, and eventually we resurrected the idea with a framework called partner Chains. So what we did is we

looked around. We looked at Cosmos fabric scorex, which was an in house framework, and Parody Substrate, and we said, which one of these blockchain builder kits makes the most sense, And a variant of parody Substrate made a lot of sense. So we took that as a base and then built it up and created Midnight on top. We'll get the Midnight in a second,

but let's talk about partner chains in general. But basically, the idea is that you launch something that looks like a layer two to everyone, so it can talk to and appse from Ethereum or base or BnB or Solana can use it for whatever service it's providing. Maybe it's computation or privacy, or its storage, or maybe it's your DAP back end, and instead of running it

in centralized infrastructure, you run it in decentralized infrastructure. Okay, so you're a layer two to everybody and you run this model and when they query it they pay in the currency of that chain, so ether or soul or what

have you. And remember we created that technology babble fees. Well, then what happens is then it can consume the token of that system and then it can be secured by the Cardano stakepool operators, which means then these transaction fees and the inflation actually gets paid through to ATA holders and to stakepool operators. So basically you have your cake and you need it too. You have these

pseudo independent networks where they partner with each other. So the service provider partners with Cardano for security and infrastructure and decentralization from day one, as well as the security of the Cardino Native Asset standard. But then that pays it's tokens, it's inflation, and it's action fees to Cardano for providing that service. So you actually get multiple revenue streams now and then in turn it sells its

services to Cardano and the broader blockchain industry. And you say, well, why would I want to do that, Why not just use a DAP or something like that. Well, first, this economic model is wildly viral because you can actually pay that to multiple systems at the same time, so you actually have inflation go in many different places, so it gives people an interoperability incentive because they actually care about the token. The second thing is that you

can create chains of consensus algorithms together. So part of the partner chain's framework is Minotaur and minotaurre It's this multi resource consensus system. So we all the time we have the bitcoin maxi's proof of work, proof of work, and then you work proof of steak, proof of steak. And here's what I happened. You take your peanut butter, you take your jelly, and I see what I'm doing. See what I'm doing. I'm putting them together.

There we go, peanut butter and jelly. Yay. So what if I could put proof work, proof of stake together, and more abstractly, what if I could take proof of X whatever X is, proof of history, proof of storage, whatever it is, and chain it together with multiple consensus protocols in the same ledger. What does that mean? It means that your

partner chain can borrow security from Cardano. Cardon gets paid for that. But then you can also have your own independent consensus algorithms that also secure the system. For example, let's say you wake up tomorrow and you say, you know what we need to do is we need to create a competitor to chat GPT. So we're going to create our own open ai. Okay, well what do you need for that? Well, you need data, lots and lots of data, so you need some storage incentive. Okay, what else

do you need? Well, you probably won't keep that data private, so you need like a privacy system for that. Okay, Well, well what else do you need? Computation? You need a ton of compute power. You know, Elon Musk just diverted all of his Nvidia chips from Tesla to Xai. He's building a ten billion dollars center. Mark Zuckerber is in my backyard building a center down in Cheyenna million square foot data center that he's building

there. You know, Microsoft is with open ai building one hundred billion dollars supercomputers. So you need a lot of compute power. Okay, Well, what if you could create a proof of useful work where the useful work is

training for lllms and inference for LMS. Then you've built a decentralized supercomputer that it's sokenized as opposed to these central data centers that are being built by Meta and Microsoft and Xai and these other people, and you could combine that with BFT protocols and proof of stake protocols and these other things, so you have fast finality and all these other things, and at the end of the day,

the user experience is the same. It has a chat GPT style interface and you type it in and when you do your query, you paint a token for that query, kind of like the API model that everybody has. So somebody can construct that chain multiple algorithms together, and one for incenttivizing storage and data acquisition, one for incentivizing useful work and computation, and then one for fast finality and fast transaction. You put it all together, guess what

you have. Metataur that's partner chains in a nutshell, and somebody's going to build that. Iagon, for example, is already building proof of storage in center our ecosystem, World Mobiles building a telecommunications system. It's a blockchain for telecommunications, which is very different than a normal blockchain. Midnight is one about privacy, preserving things for private smart contracts because businesses can't keep a secret,

and you know, well, blockchains can't keep a secret. But every business requires a secret, doesn't matter if you're McDonald's or Microsoft. Every business has secrets. Your amount of money and your cash register. You're probably not going to go tell people. Well, you can't put that up on a blockchain unless your blockchain has privacy preserving smart contracts. So that's the purpose of Midnight. It is the first of a kind of a new kind of blockchain,

a fourth generation system that can work with everybody. It's kind of a metachain that can talk to everybody, and it's built in a framework that basically allows a broad distribution. So typically, if it's a service token, you want as many people as possible to have that, So you do an air drop and you just distribute the token across to everybody, so from day one they can use it. They don't buy it, they don't pay for it.

It's just there because the goal of the system is to be a service, and it's to be used and provide utility to DAPs and then over time and economy forms and it allows the ledger to sustain itself just like any of these others. And then eventually you get many different services and there's there's so many social networks, large language models and AI telecommunications, storage and infrastructure and hosting, you know, to replace the inferiors in alchemies, privacy as a service.

You know, you can look at medical records, you can go down the line and you create this spoke infrastructure. What's really cool though, is because they settle in their own domain, those transactions don't bloat the main card Ono network because you think about it like a world Mobile. Let's say they get to their goal of a billion subscribers. Well, every single time your cell phone connects to a tower, that's a transaction. Okay, so that's

a lot of juice. And does that value anything that you're doing. Does that help your NFT collection or your financial settlements or these things. No, but that's an example of what that network will need the process. So they need slightly different technology than what Ethereum is going to offer, a base is going to offer, Solona is going to offer, Cardono's going to offer,

So they really need kind of their own blockchain. But at the same job token it's not their primary prerogative to go and figure out how to replicate or

boris or our security network effects or these types of things. So really you want to be a partner where you have the parts of the chain that you can build in a modular way for you, and then the parts you don't care about that are commoditized, like security and consensus, you can borrow that from a different system, and the process of doing that you pay for it. So that's the partnership of the partner chain, two blockchains coming together and

partnering with each other, which is a really cool concept. We don't typically think this in the cryptocurrency space. It's always master slave, like Bitcoin will dominate all and you'll all be side chains, or Laier too is a bitcoiner, Ethereum will dominate all, or a Solana will dominate all. It's well, I'm sorry, business doesn't work this way. Microsoft's existence doesn't put Google

out of business, or Apple's existence doesn't put Microsoft out of business. Somehow, they've all coexisted and at times they're competitors, but the market's large enough to sustain that. So I do believe there's going to be an internet of blockchains, and it's really important that they can talk to each other and transact with each other. That's the missing link we have right now, interoperability.

Now, speaking of partnerships, and you mentioned Elon muss folks wanted me to ask you that are their plans to engage with Elon and is it along the lines of using like the Midnight side chain for things that he's doing at SpaceX

or Twitter or x or Tesla, whatever it may be. It's strange because there's such a strong overlap and some of the things that we both mutual we think about and we've reached out numerous times to try to engage with various people, whether it be at X where we even offer to do free work like with verified tweets or other things, just because it's so bad right now with

bots and these other things, and it's just always silence. I even know Kimball Musk and I've talked to him on several occasions, and I know many people in Eland's orbit, and never once has he mentioned Cardona or me or anything. President Argentina just retweeted us. Yes, it's like, you know, a lot of people know about us, but for some reason, we can't break through. And I don't know why. He's certainly where of Crypto, he's ware of Doge. She's said things like I agree with metallic you

know, he's friends with Lex Friedman. I'm friends with Lex Friedman. We share mutual friendships, So I don't know why we haven't been able to square that circle. And maybe he's got some people in his social circle that don't like me, and so he's gotten some intel that I'm a bad person to work with there. Maybe it's just he wants to do his own thing.

I don't know. You know, it makes me sad because I'm an ex user and I have a million followers there, and it would be problematic for that platform to fall apart or not be relevant anymore, because that social capital is so valuable to us and it's quite useful. So I would like to see X succeed and grow, and if we could ever be part of helping that out one way or the other, we'd like to do that. But anyway, you know, there's an old saying, the dog parks, but

the caravan moves on. And you know, Elan does his thing, and he's Elan Musk and he's a legendary entrepreneur and no one can challenge that, and people are pretty stupid if they do. You know, all the people who said Twitter was going to die in two weeks not only did it thrive and survive, it survived was one tense of the staff. And he just raised twenty one billion. He just raised six billion dollars out of twenty one

billion dollar valuation for a company who's comes from the Twitter data set. Yeah, so he's already gotten half his investment back just off of that one play, and there's a lot more to do. So the guy's a business genius.

You can never count him out. I think the issue is that politically he's gotten to a point where in certain circles he's become kind of a giga troll, and so people conflate that with the fact that there's a guy right now sitting quadriplegic in a wheelchair playing Civilization six with his brain because of Elin Musk, and they conflate that with Starship now landing, you know, when it was blowing up on the pad beforehand, and that's probably the platform to

take us back to the moon in Mars, and that's going to happen within our lifetimes, likely the next ten years. That's this guy, you know, he does these things for better or for worse, and he's ruthless and has very bizarre social skills. And ten kids from a pile of different women. There's probably more we don't even know about. He's just one of those guys. He's a magical guy. So it's really like a sphinx hard to understand his motivations and understand why he does what he does. Why does he

have this bizarre fetish for doge coin. Is it that he owns twenty percent of the supply or is it just he's just like the fucking logo. You just don't know. With the guy like that, that's the magic of Elon Musk. So it's a lot of fun and where I think things are very unfair, like Twitter, the Tesla compensation issue, I thought that was horrendously unfair for a judge to overrule the will of the shareholders and the board.

Seventy three percent of the non Musk holders of Tesla stock voted to give him this pay package, as did the board. The judge overruled that, and in the process of doing that created an avenue for the lawyers who brought the lawsuit on behalf of a single shareholder who had nine shares which went in value

from two hundred dollars to two thousand dollars five billion dollars. So this particular affiliated with Joe Biden basically said that it's in the interest of the shareholders to retroactively overrule them for a very fair deal and hand five billion dollars to attorneys on behalf of a single shareholder who made a ten x on his investment, claiming his investment was hurt by that pay package. I just I've never seen anything in my life, you know, like this. It's an unbelievably unfair

judgment. And it just shows you never to incorporate a business in Delaware, So you know, put your politics aside. It's you call it how you see it. There's plenty of things Must does that you know, bothered the hell out of me. And there's other things that he does that I think

are quite fair or he's been treated unfairly because the positions he's taken. I can't, for the life me understand, for example, why he has not put did sinto Twitter so that we can do verified tweets and much more security. And I can't, for the life we also understand why he hasn't embraced things the app protocol or the fetiverse or other things that Twitter Blue was trying to achieve project Blue s guy. There's a lot of really good ideas in

the decentralized social networking space that I think would be quite valuable. I can't understand, you know, why he hasn't integrated a crypto wallet yet or partnered with a vendor like Brave for example, to do these types of things. There's a lot of low hanging fruit who would be dying to partner with them.

And he could make doge the currency of Twitter for example, if he really wanted to, and actually connected to state channels, so payment channels, so you can do micro twipping and tipping on tweets and these types of things. There's a lot there. Now. I know he's moving that direction, like he's getting money service business licenses. I think he has him more than twenty states, and he's starting to turn on features. But I mean,

X space is still suck. You know, it's been three years. They suck and I use them all the time, and I just need a little bit more, and it would be such an effective tool. You know, in our own community, there's this neckathon where this next community came together and they've been going for twelve days straight now and they're going to still and they're going to keep a twenty four to seven X space open for until Finance lists them. So I told them, guys, Binance, you might be in

it for the long haul on this one. So that's neckathon might be one hundred days or two hundred days or three hundred days. But I've joined a few times and just to wish them well because I admire the effort. But the point is that they've had to restart that space numerous times because it's rugged. It'll last like one hundred and twenty hours, one hundred and thirty hours

and it just collapses. It's not enterprise grade software, you know. And that's okay as a beta, but this product I think has been around for three years or so forth and it's still where it's at. On the other hand, I don't know of any other platform where you can just create an X space and four or five US senators will join, you know, a president of a country will join. You know, you get a CEO of a Fortune five hundred company that it's just like on a drop of a hat.

They just see it there and they join. It's pretty remarkable as a town square. Yeah, that's pretty amazing. Obviously, it kicked off with Clubhouse I think it was, and then uh, you know, yeah, adopted it. But yeah, they have to fix it. I get I

have a bunch of problems with it. Anyway, we have to talk about the building on Cardano because I use, for example, a platform called Sentiment where I look at different cryptometrics, and Cardano just recently wasn't number one, or it has been in the top three of developer activity, which is awesome. You know you mentioned snack. Is there What insights can you give us as far as what developers are doing on Cardano, you know, anything big

happening that you can share. Yeah, well, there's a lot of really cool projects like Indigo or Axo or Mehun. There's the usual suspects, and there's some interesting meme coins too, Like the Hosky community is awesome and I always enjoy talking to those skies. And then obviously sneck is doing its thing, and then there's a lot of cool tooling. Like there's this misconception that you have to know Haskell to be able to program on Cardona. Well,

Aiken is the fastest growing language in the Cardinal universe. It's based on Rust, so very different dialect, much easier to use for a lot of developers. Typescript is also coming to Cardona JavaScript dialect, So the developer diversity of the tooling has really improved over the last year in particular. And that's how long it should take. You know, there's this enormous impatience in the cryptocurrency

space. But I talked to both Rich Hickey and Martina Durski about this years ago, and I said, you know, you guys created Cloakture in Skala, respectively. How long did it take to actually get that language where it needed to go? And they said, hey, three to seven years is how long it takes for when you create a programming language where it to mature and stabilize to a point where people actually feel comfortable using it building actual applications

with it. So twenty twenty one, late in twenty twenty one is when Plutus came out for its first version. So we're about three years into it twenty twenty four, and lo and behold, now you have a vibrant ecosystem and all this great tooling, which is exactly how long, by the way, it took for Ethereum and for Solana and for these other ecosystems to kind of get their sea legs and get people to do that. So we haven't. We're not really super slow. We're following what the best in class languages

like skull Cloature or Python or Rust. By the way, it came out in twenty fifteen, and it took about eight years for RUSS to really reach a prominence where it started displacing real C plus plus jobs or these tipsing. Only recently has Rust really taken off. So it does take a little while for new languages, new tooling, new platforms, new paradigms, especially when it's not just a language. We don't have an account style model with Cardono.

It's an extended UTXO, so it's a different accounting model, so you have to write your apps differently. So it's much akin to like single thread to multi threaded, you know, like single core to multi core, where there needed to be a translation when people are writing programs to take advantage of those processing cores that are inside your system. And we're working our way through it, and the community is doing really a phenomenal job building tooling and making

that devex better. I'd say we probably have about another twelve to twenty four months of rough edges. How dishonest the crypto media is. Oh, that means you can't build anything on kard On for another twelve to twenty four months. Well, first, go fuck yourself. Second, there's hundreds of great

projects that are building every day. When I say smoothing it out, I say you get to a usability where the set of developers that you can work with comfortably broadened to the beginner because it started out advanced and now we're kind of at the intermediate level and it's moving to the beginner set, meaning that basically any script kitty can come in interface. I don't necessarily know for a blockchain system if that's really a good thing or not. You know, it's

inevitable. You can't stop it because people always want to improve accessibility. But you are dealing with distributed systems, key management, a lot of security, and if you write these things in the wrong way, regardless of how accessible the tools are, you will introduce security problems and you'll get hacked, which is why there's like, you know, billions and billions and billions of dollars

every year of DeFi theft that occurs. I think it's like eighty million dollars a day or something like that of hacks that occur, and a lot of that comes from poor application design. And yes, you can audit, and yes you can use quick check and formal methods and these types of things, and you can certainly get a higher degree of quality, and maybe through static

analysis you can get some good suggestions. But at the end of the day, if you don't know what you're doing, you're going to get yourself killed. And so at some point, as you move your boundaries of developer accessibility, you move to a level where you're actually inviting non productive applications inside this

system, and it's inevitable. You can't stop it. My job as a tool builder is to try to at least give people as many tools and social processes like certified applications and testing frameworks and auditors and kind of you know, quality assurance stuff, DAP stores, these types of things, and we try,

you know, where we can. But all things considered. To see the progress year by year from twenty twenty one to twenty twenty two with Vassal to what we achieved in twenty twenty three to where we're at now with plutes P. Three, it really is impressive, and by every metric transaction volume and TVL and other things, it's growing the way it should grow. The problem is just people lie. They say there's no TVL, no DAP activity,

there's no stable coins. There are stable coins do You might not like JED and USDM and these types of things, but they do exist, and the foundations and tough negotiations with Circle back and forth. I view it like Coinbase. Remember everybody's when coinbased, When Coinbase, when coin Base, if you're remember back in twenty twenty one. There's an inevitability behind it, but there's also a responsibility in these types of things where you probably don't want Walmart

to come and shut down all the small businesses in your town. So analogously, maybe just maybe if you bring a circle in, it'd be good to shore up the smaller, you know, stable coins as well, so they don't get obliterated by the existence of USDC inside the system, because there are people who've invested millions of dollars in their time in building that infrastructure up.

And as stable coin's a stable coin, you know, it's as long as you can find the right bridging and translation of these things that ought to work, so you know, it is what it is. There's an inevitability behind it. But I think there's a great impatience where people don't see the price moving up and so they instantly infer well, if that's the case, it

must mean that it's a dead ecosystem and it's in a great decline. Meanwhile, we're just about to do the greatest governance upgrade in the history of the project and probably the history of the industry. We have the best ailability plan.

We have a very vibrant, rich community. When you look at rare Evo and you look at the Cardono Foundation summit, you look at all the cool things the communities building, and there's all these cool DAPs and DeFi projects, but you're all homegrown and they don't have ponzonomics or any of these other things. It's a cool ecosystem to look at, and it's a fast growing ecosystem. And then I'm just told again and again on Twitter and by the

cryptomedia it's dead. There's nothing there, And you say, okay, well, all that stuff doesn't exist. Even bank List was a great example of this. It's a microcosm of the broader macrocosm. Where they petulantly and arrogantly say, come kiss the ring and come on our show and explain to us why it's not a dead ecosystem. I said, okay, well, if you're really serious about it, why don't you just come to rare evo and you literally can see all the different projects building, and then what are you

going to do? Go up to them and say, tell us why you don't exist, tell us why you have no transactions? Tell us, and they'll be like, but we do exist, we do have try, we do have people. It's here, it's running. Uh huh uh huh. Yeah, yeah, but you can't because our thesis is you don't exist. So what they and that's the issue. It's like you. Then then they say no to that offer, and they try to say, well, you're a coward, you're afraid. You just don't want to have the debate.

Guys. I went on a stage eighty five thousand people at web Summit with what's his name, Ben Ben Kingsley or whatever it is, the guy from the OC who hates crypto and the thesis of the panel Ben McKinsey. I think it was. The thesis of the panel was is crypto a scam. Yeah, okay, so I'm sorry if I did that in the US Commerce at Congress. I don't think I'm super scared of sitting on a podcast for

an hour or two of these two clowns. No, it's more principles of saying, are people actually giving us a fair consideration or have they already made up their mind and they're just looking for evidence to confirm a preconceived notion that they have or not. And I think that's the biggest issue right now in marketing is there's already this preconceived notion that's fomented, and Arthur Hayes will throw his shade at us, or well, Paul will throw shade us. He

just saw that, you know, and they dance around it. But they're always from three generations ago. Well, Solana went from nothing to where it's at in six months. Well that's different. What about Ethereum, Well that's different, guys. Crypto, everything moves super fast here. You're dead today, big tomorrow, dead again. Rights, It's okay. It's really about

your fundamentals. And the question is do we lose community And the answer is not usually, And in many cases we develop an immune system and certain projects that aren't compatible with that immune system, they don't get a good time here, and they naturally get pushed out. I won't name names. Pictures do disappear from walls, you know. And that's a good ecosystem. That's a

healthy vibranty system when it has that immune system. And the fact that we keep growing, we keep gaining, we keep evolving, and we keep challenging the you know, taking on the biggest challenges and problems. That's a good indicator that this thing is going to be around in five years, ten years, and twenty years. It's not dying, it's growing. But then you

get no acknowledgment from cryptomedia from that because they're bought paid for. So on that note, I was about to ask a follow questions on that bought and paid for? Is this crypto VCS pulling some strings? You know, we don't want capital going to Cardinal because we're backing this specific asset or assets, so we need to frame the narrative. And I don't know which media is bought and so forth like that. In addition, there's also a natural tribalism

that takes place in crypto because of the financial incentives. So what are your a BDC MAXI even though you're slow high fees, you still I No, don't worry about Cardano, don't worry about smart contracts right right? Or is it all of it above? Right? All the above with these things? Yeah. I mean people talk their book and they talk their money, and I can't speculate why a particular VC views them some things the way it does.

I mean, look at the Farcaster investment. They have almost no utilization or adoption. I'm sure that there's plenty of cool and interesting things in that project, but there's been several statistics that I've looked at where the daily active user count other things really don't justify a multi billion dollar valuation for a social network. Yet they got a very significant investment. I think it was from A sixteen and Z. So why are they doing that? Well, the

more cynical people say, well, it's because of tokenomics. You know, they get access to something and they make quite a bit of money. Less cynical people say maybe they're investing in the future and they think they're going to get the hockey stick, whatever have you. There's no rationality behind the valuations and inflows and outflows of things you can't chase the price. That's something I've learned from being in the cryptocurrency industry for twelve years. Then markets are just

going to do what they do and you can't predict them. You can't chase them, and you can't wake up and do some magical kabuki, and then suddenly you've doubled the price or tripled the price. Like there's no greater example of that than when Stellar burnt a gargantuan pile of coins. They destroyed like ten years of runway for their foundation, burnt all those tokens and they got a little blip and the market took all of it. So you see all

these people burn aid to do this. Do that first there's nothing to burn. And then second, even if you could, it doesn't really do anything for you because the markets do what they do and you can't predict them. So what you got to do is you go put your nose to the grindstone and say, are we producing real value? Are we building real things? I don't care if we're in the club that vcs love or the media loves for these types of things. Is this useful to the country of Argentina?

Is this useful for all the people in Kenya getting their loans? Is this useful for Midnight and its ability to offer computational privacy to people? Is this useful for identity systems that can basically give credit scores to millions of unbanked people, or put academic credentials on a blockchain? You know? Is this useful for my synthetic biology companies where I have track and trace glowing plants? You

know? Is it useful? Does it solve real problems? And if it does, it has a right to exist, and it's going to be here in five years or ten years or fifteen years. The markets eventually will recede from this madness that they have, and eventually it's going to pick the right winners and losers like it did with Amazon versus pets dot Com and you know

these other things. So on that note, you know, in regards to narratives and media and so forth, I saw you put out a poll regarding card potentially Cardano treasury being used to create a non for profit, not not for profit media now that fairly reports crypto news across the industry. Tell us about what you're thinking there? Well, you know, I just like pulling people. You know, it's always funny. The minute you put up a poll, people say, I guess they're doing that, and then they instantly

start criticizing. You start the conversation. You know, I thought about buying coin disk a few years back, and I and we eventually got their data room, and we thought that they were wildly optimistic about their their value. And obviously, whenever you're so far off on a meeting of minds, you don't pursue it. But and of course they one of their podcasters mocked me

for that, for that acquisition. But okay, but anyway, why because I thought it had been really cool to actually run a fair media organization. See, here's the thing. It's like we did EDI and even though we started it, it's at an academic institution, it's neutral, and there's already a federation of entities forming around it to start talking around how do you fairly measure a blockchain? The news should not be in facts should not be partisan

concerns. But we're so fucked up from lim in a world of hyper propaganda and partisanship that we automatically believe it's not possible to be objective. Guys, When we report the temperature when we say it's thirty degrees outside, it's thirty degrees or not in a specific place is specific time. Okay, it's a fact that happened. George Washington was President of the United States. It happened. It's a fact. It should not be partisan. We should be able

to converge to objectivity in these types of things. So here's the thing. You create veracity markets, so marketplaces for truth. So they're called prediction markets. Robin Hansen did foundational work there. You create veracity bonds that if somebody publishes a story and if it turns out not to be true, they have a bond that's connected to the story, they lose their money. So you create marketplaces for fact checking in these types of things, you crowdsource knowledge.

That's what Oracle systems are doing. We see them all the time, and apparently those are nonpartisan. But we just can't do it when news involved use

AI summarization. Grock is experimenting with this on Twitter, where you take a plurality of different things that people do, and so you can put open source lolms to inject these types of things, and then you do allow editorialization to occur by balancing things so you know you do is you say, okay, well let's go to all the major crypto projects and let them every month write an article about their ecosystem. Now, of course that's not an objective article.

It's subjective because it's written from the perspective. But you know, it's a salon article written by and for the salon of people, and it gives them a showcase of what their ecosystem is about. And if people challenge those types of things, then you invite people on the other side wright op eds criticizing that or saying that there's stuff there. And what you do is you create a dialogue, okay, and people start creating content around that, so

you can easily curate this entire thing as a doubt. And if you, the reader are interested in the truth of something, you can put a bounty up so you can say, you know, I because one of the things I always bothered me. I'll give you a great example. I live out here in Colorado and there was a fast food restaurant where somebody drove a truck into the restaurant and I happened to drive by the restaurant shortly after it happened. So I was looking as like that pickup truck should not be in that

McDonald's. That doesn't make any sense. So they wrote an article about it, and it's in the papers somewhere, but I never got a follow up article, so I never really found out what happened to the driver. You know, why did he drive into the McDonald's. Was it alcohol or drugs or lost attention or had a heart attack or you know what happened? And you know, did the restaurant go out of business or these things? Because it changed ownership after it happened, became something else. So it was there

was so many open questions there. Well, if I had the ability to put a truth bounty up, I could actually put it up there and say, hey, this story, read a follow up story on what happened with that. Just that's something so simple, right, yeah, but it's so powerful because then things never die. Could you imagine the bounties that would be put up for the Epstein story. Keep it going, keep it going, you know, keep the eyeballs going, keep people looking at it. Maybe

just maybe we're interested in that client list. It's Eric Winstee calls it anti interesting. So ordinarily, when markets are fair and free, every person in the world would be trying to write a story about this, because you talk about some of the wealthiest, most powerful people in the world doing despicable, terrible things with kids. Do you think about the effect of publishing something. You would get more clicks and more advertising than you've ever seen in your life.

So why don't they do it? Because those people also happen to own the organizations and they prevent anybody from writing stories about it. Well, if you have to centralize media, you can't stop it because the inputs of the system are done bottom up. So people can put a veracity bond in when they make an assertion, can put a bounty to find something. You can use prediction markets the way the likeliness of something that happens, and people can

make bets on outcomes or these types of things. You can use AI summarization and you can balance it amongst different political persuasions. And then you use the editorial process and you just invite people to have a dialogue and a conversation and you create a comments for news to come through, and over time it eventually converges to a mechanism to get to a pretty objective reality. Now you create

that who will criticize it. Two groups of people, the group of people that don't like the media that's being written about them, fairly or unfairly, and the other group of people is the group of people you're firing with a system like this. So the mainstream media will say, well, that will be a cess pool for misinformation. The existence of that will be a fundamental threat to our democracy and the force of state of democracy, a fair and

balanced mainstream media. In other words, we've lost our monopoly on truth. We can't possibly allow such a thing to exist, and it is dangerous. You're going to go back to elon Musk. He had fifty six billion dollar pay package, and the politics worked in a certain direction, and lo and behold, one shareholder with nine shares could convince a single judge in Delaware to overturn one hundred plus years of business precedent and overrule the will of the shareholders

and the board and strip him of money he made. By the way, Norwegian Sovereign Wealth Fund, who's voting against must pay package, Are you going to give back the ten x that you made from your position on Tesla? Because he kind of did take it from a fifty billion dollar company to a trillion dollar company. That was the deal, and he gets five percent. I take that deal. I mean Tony, if I called Jeb say, if I make you a trillion dollars, will you give me five percent?

Yeah, most people take that deal. It's a good deal, and he did. And he's one of a few people allow to ever have done that. So it bollowed us too much. We can't pay them. Well, the shareholders alread approved it. Why do they do this because of politics? He's being punished, you know. SpaceX is another example. There's this immigration lawsuit with the DOJ brought where SpaceX doesn't want to hire asylum seekers and people who aren't citizens of the United States. Well, hang on a second here.

To have a security clearance, you need to be a US citizen. SpaceX launches spy satellites. SpaceX deals with classified technology on a daily basis. So the Department of Justice is saying, well, even though the Department of Defense and the intelligence community is telling you that your employees have to have this criteria, hire people who could never meet that eligibility. So what does SpaceX

do do They just sweep the floors. You go hire this engineer and they're not allowed to read anything or look at anything because they can't get the clearance for it, so they don't hire them, and then suddenly they have a discrimination lawsuit. Huh yeah, I wonder why they're bringing such a thing. Battery power cars. The White House has a convention on battery powered Cars for making battery power cars in America. I think Tesla makes like ninety percent of

all the battery power cars in America. They weren't invited. It's crazy, you know, because the politics don't align, and a lot of the stems from the purchase of Twitter, because they went from a controlled source of media to an uncontrolled source of media, and that is the single biggest threat to

the establishment. So we do have to be careful as an ecosystem in embracing a news now because if we're too good at it, it actually becomes a replacement for how people get their news, not just in the cryptocurrency space, but more broadly across many spaces. So that is something that even if there is a desire, we have to do it a very considered and deliberate way because it'll put a big red target on the back of the cardinal ecosystem and

in ways that we currently haven't experienced. It's a threat to power structures when they no longer have a monopoly on truth, and anybody who tries to chipway at that monopoly, they really do not do well long term. You see Julian Assange and you know all these other people. Alternative preveyers of information seldom survive long Charles, I want to get your thoughts on meme coins. We talked a bit about it with Snack. I have a love hate relationship with

meme coins. On one hand, it's amazing to see the crowdsourcing and culture and the blockchain and all these things. But on the other other hand, they're so risky and volatile. Don't get me wrong, there are certain meme coins that have a track record liquidity. They've been around multiple bull market and bear market cycles. What are your thoughts on it? And you know, maybe you have the same sentiment. I don't understand them. You know,

it's but I'm not hostile to them. You know, I've been in space for twelve years and there's a lot of things that I've seen in this industry. I just can stand like EOS raises four billion dollars and then they say they have no fiduciary obligation through ecosystem. They keep the money settle with the SEC and now they're just living off that four billion dollars they raised. I

got so angry when that settle a came. But that was the only time in my life I ever threw my laptop and it because I was there. I saw them take over Consensus and have the fucking billboard with eos and these other things, and it was just extraordinary to me. And we've all forgotten about it as an industry. You know, turned the page have to move on certain exchanges listed bitconnect and I called them out. We never got listed

on those exchanges and it took years to get listed because of that. There's no consequences for it. But yet CZ's the one who goes to prison for compliance issues because Elizabeth Warren's angry with them. Okay, great, huh. The coin basis one filing. You know, they are allowed to publicly do an IPO and SEC says it's perfectly fine. Then the same agency suites them

for an illegal business model. Yes, okay, maybe you shouldn't allow them to do an IPO because they're kind of exposing all those retail investors to like illegal equities, right, I don't know. I so mean points are another example. I just don't understand. I don't know where the value comes from. I don't know why, because yeah, there's a society and a culture, but there's not an intention with a lot of people in these ecosystems to even be a member of it. The only reason they're in it is to

profit and leave and then they always look for another one. So it's not like I can get doge from a perspective that it seems to be almost like a lifestyle or like a culture or something like that. Okay, yeah, people collect Pokemon cards and magic and these types of saying. I say, I get that, that's like a culture. People like that doge lifestyle. They're very committed to their doge you know. Okay, it's kind of a religion at this point. Yeah, all right, but dog that you know,

you know, all this stuff is what is it? I don't understand it. And you talk to people, because I've gone to several mean coin spaces on X and you say, hey, you know, why are you buying this mean coin? And they say, I want to make money? Okay, but do the math here? You have to understand that if there's

one hundred x, where does that hundred x come from? There has to be a counterparty who's purchasing, and if that person's motivation is to make money to a Ponzi scheme, And if you're in early, you do really well, but ninety nine percent of you are going to lose all your money. You do understand that it's not really anything new. I mean, Charles Ponzi invented it. You know, it's it's been around for a long time.

So all the power to them, but I do believe that they have a strong tendency to devolve into ponzonomics that are super unproductive and there's no circular economy Like you know, bats is a perfect economy because you have a situation where tokens are given to you for sharing, and then the process of sharing creates a channel for advertisers to buy to get your eyeballs. So you are the

product and it's a medium to make you that product. But that's every single advertising model and web two whether it be Google or Facebook or so forth. You get the product for free. The only difference between Brave and the other guys is that they're cutting you into the action. And because there's an incentive for a person to buy the token to get ads, you have a circular economy inside this system. So so okay, that makes sense to me.

This attention token, and there's a reason why it's issued, and there's a reason why it's consumed, and it's completely irrespective of the price of the underlying asset. If I'm an advertiser, I don't care if the token's at price fifty or price one hundred. I'm just going to buy it for what it is and as much units as I need, and that's my price of advertising. Okay, So that makes sense when you have a mean coin, the person buying off of your one hundred x to divest you so you can realize

that value. They're not getting anything other than a belief that it's going to have another one hundred X. And how many times can you do that before the system goes down catastrophically. And once it goes down catastrophically, who covers the losses? No one, So you're entering into a game where ninety nine percent of the people lose all their money. There's no circular economy, there's

no natural consumption or utility inside that system. So that's my big issue with mean coins is the best case scenario, they're kind of clubs, and they're social groups, and people are there to participate in a culture, and I get that, and I understand that, and if they're having fun with it, who the fuck is us to say that that's a problem. You know,

it's like Baldar's Gate three. I think at this point has like sixty thousand years of playtime or something amongst the communities, the single biggest waste of productivity amongst white collar professionals and certain age demographics, says of for twenty twenty three. Great, it's not our business to say whether that was a good thing or a bad thing. On the other hand, if it's not about

community and culture, it's just about profit return. I can't endorse a system where ninety nine percent of people lose all their money for some insiders to dump on them and walk away from it doesn't make any sense to me. Yeah,

final question herefore, I let you go to Charles crypto regulations. I mean, we've seen an incredible one pint eighty from the government, you know, in getting cryptoregulations through repeal ABSAB one two one in the House and Senate fit twenty one out of the House Democrats sighting with Republicans Donald Trump coming out and supporting crypto, it seems like crypto is going to be have an impact

on elections coming up. You know this this cycle. What are your thoughts and could we see that the FIT twenty one make it through the this year or next year? Well, there's no companion bill so now, and this really bothered me. I reached out to some senators who shall remain nameless, and I was like, why could we not retrofit X, Y and Z to be the companion bill, because basically that guarantees that FIT twenty one can't get in this legislative session through and that was by design. So yes,

it was very impressive that many Democrats broke rank in the House. But the parliamentary procedures prevent this from actually becoming law this year, which is sad because it's such a simple law all things considered. It's a very common sense, reasonable framework. So I'll go to DC and you know, we'll talk to some people and we'll see if there's anything we can do to put our finger on the scale. But you know, we've been talking to politicians since twenty

twenty two. You know, our first engagement was with the Financial Linovation Act Senator Lumis's bill and Julibrand's bill very similar to FIT twenty one, and went nowhere because of FTX and Luna. So why is there a sudden interest. It's very simple and very cynical. There's more than fifty million Americans. I've seen countsil all the way up to ninety three million Americans who hold crypto.

Most are under the age of thirty, and most are liberal. And if you're Joe Biden and you're sitting here staring at a very very close twenty twenty four election, if you're seen as the person destroying the gains of liberal young people, they might get radicalized and mobilized because you've just cost the money.

His party is the party of Everything's free. You know, your student loans get canceled, and this is an entitlement, and this is an entitlement, and this is you deserve this, and you deserve this, and here's your handout and your Obama phone and these types of things. You know, and you don't want to be the party of take ee taki. And so if you go and person's got ten thousand dollars in crypto and then suddenly the sec

shows up and destroys all their gains. They're going to hold that very personally and get very angry at Joe Biden. So what the Democrats are doing is pretending like they didn't start a war on crypto. You know, they started Operation Choke point two point zero. Don't fucking tell me that was the Trump

administration. There were certainly people in the Trump administration, like Secretary Amnusi, for example, who was not a pro crypto person, But there wasn't a coordinated all of government response where the administrative agencies systematically sued every single exchange and started going after DeFi and created anti clarity and reverse things like the Hindman ruling or other things like that. That just didn't exist during the Trump administration.

It was more an annoyance and a passive disdain, and the President wasn't even aware of it. Trump really didn't understand crypto at all. Now he does because he knows he can make money from it. He's going to be pro crypto if anything, because it's transactional for him. By being pro crypto, he will raise tens of millions of dollars. He'll make money for Truth Social and he'll sell garbage NFTs it's doing that, he'll make tens of millions of

dollars. And Trump likes anything that impersonally enriches him. That is the one guarantee that is always true about Trump is if it makes him money, he probably likes it. And crypto is the ultimate mcguffin to invent money out of thin air for Trump. So he's going to be very pro crypto in the policy because he wants to keep that cash cow. And Vivic Ramaswami he does. You know, he's part of Trump's campaign, He's part of Trump's infrastructure.

He's super pro crypto. There's a strong possibility that Trump was elected, he'd be the Treasury secretary, so he's definitely pushing pro crypto policy behind the scenes. So I can see something like a FIT twenty one passing under a

Trump administration. I do believe that if Biden is re elected, he will embrace and empower Gensler like people to accelerate the war on crypto because there's no political consequences at that point, and we will see a dramatic damage to the US cryptocurrency industry, every single Layer one be sued, every single US exchange will likely be shut down or under extreme scrutiny, and no cryptocurrency legislation will

pass. Because if this administration wanted to, it could have passed crypto legislation in twenty twenty two. It could have passed it twenty twenty three. When FIT twenty one was coming in the White House could have called Chuck Schumer and said, how do we figure out to get a bipartisan companion bill and get

these things done. They didn't care to do that. So if they put the people in power that are suing everybody, they're calling the banks and telling them to unbank cryptocurrency companies, they're writing their own people are writing documents basically seeing cryptocurrencies like rat poison and it's pointless and has no utility, and they

are not participating in the legislative process, in many cases offuscating it. Like when he vetoed SAB one twenty one's repeal, even though sixty Senators voted on it, including Democrats. You can't with a straight if you're a Democrat look at me and say this administration is giving crypto a fair shake. Also they lie when they say come in and register, and it's just mass non compliance. Well, Coinbase tried to come in and register and you ghosted them and

sued them, you know, so don't lie to me. And it's a lie to say this. You have commissioners telling the general public that it's not possible to comply. The people who are actually on the commission are saying these types of things, you know, and that's just it's so insulting to our intelligence. And then finally a framework comes out to actually clearly articulate what the SEC's role is and what the CFTC's role is, and to create a construct

that the SEC and the CFTC work together on to handle that. And you have the chairman come out and say this is harmful to everybody, because apparently living in a state of paranoia, fear, and ambiguity is a better state of affairs. This is completely at the throne of Biden's completely responsible for it. He hired the people, he appointed, these people, he established the

policy. I'm sorry. The buck stops at the president, and the president has the power to put his foot down on the table and on the floor and say, look, guys, this is what we're going to do and presidents have done that. You had Kennedy say we're going to go to the moon. You had Bill Clinton say we're going to do or balance the budget, and he did. You know, they It's sometimes very hard to do

it, and it takes a lot of political capital. Obama with the Affordable Care Act he never quite recovered from the political blow that he took from the ACA, but he did it. He put his entire political infrastructure on the table for it. So Biden easily could go out there and say, it's madness, what's going on. We're going to end the ambiguity. Come on in, let's talk about FIT twenty one and FIA and these other things. And there's plenty of Democrats who offer to work with him. Rokannah from the

Congress. Senator White was another one who offered to work with him. A lot of moderate Democrats were coming in, but no, there's just one who really really hates it, Senator Elizabeth Warren. And the reason we're in this mess is she dropped out of the race in twenty twenty with an agreement that she would run domestic fiscal policy for Joe Biden. That was the detante that they formed, so she got to pick all the people that right now run

the Treasury Department. So one senator was given carte blanche. They will basically run rough shop over our entire industry, which is just a horrendous situation and it's shameful. But that's why, maybe just maybe the most qualified person in the United States to run the country isn't an eighty three year old person's showing signs of dementia who handed Afghanistan back to the Taliban and sometimes forgets that he's not a senator. You know, maybe, just maybe we should have some

political diversity. I was really hopeful with RFK, you know, and he was running as a Democrat. I said, well, okay, you know, I'm not really a huge Trump fan. We've been there, we've done that. We need to move on as a nation, and so we have a breath of fresh air with somebody totally new who's by the way, his grandfather was the first chair of the Securities Exchange Commission and wrote the sec bill. Okay, been around for a while. He's at a front royal seat

to American politics since nineteen sixty one. He was told straight up by the Democrat Party you could win one hundred percent of the votes in the primary, you still will not be the nominee because the super delegates won't pick you.

So is that democracy and freedom? The party made a decision the most qualified person to be the nominee of their party is an eighty three year old guy showing signs of dementia, who turned Afghanistan back over to the Taliban with our thanks and blessings in our military hardware, and let all our translators get murdered. It's just, it's so far beyond the pale what's going on right now, because at the end of the day, it's about power, and it's

a just about the perception of things. And I saw pull the other fifty six percent of Democrats voting for Joe Biden are voting because they hate Trump, you know, Tony, That's where we're at in America political system. So you can't look at crypto separate from this. You have to look at in the overall trends and tides of where the macro's at, what's going on with Trump, and what's going on with Kennedy, and what's going on with Biden.

And you know, the Democrats only care about crypto at the moment insofar as it has a political cost to them, So if young people are going to vote against them, they're pro crypto until after the election's over. But as far as I'm concerned, there's absolutely no good faith there. If there was good faith, tell Genzler to resign. Yeah, you know, if there was good faith there, then we can have a conversation, because at least you're saying we're going to restart the things we need a fresh, clean

slate. You don't get good faith by saying, well, maybe we'll let a bill pass every now and then, by the way, a bill repealing something that we did wrong SAP one twenty one, right. You know, it's just so out there for them to say that, and there's no good faith negotiations. It's just the same double speak you come to expect in Washington, especially with this particular administration that's made a habit of never answering any questions.

And I know I'm infending some of your audience because they're Democrats and they absolutely love everything from Team Blue and Trump is just literally Orange Hitler to them, and he's such a threat to democracy. The mere even utterance of his name, like Simon's bad ju jew that will haunt you at night and give you turbi answer. But at the end of the day, like I'm keeping my comments to crypto, I'm not talking about the broader, you know situation.

Just in crypto alone, it's very clear there are now differences between the political parties. Rank and file Republicans are pro crypto, and the Republican Party as a whole would be willing to and has demontrated the ability to pass meaningful, common sense legislation. The Democrat Party is the one by and large that is obstructing this process right now. And when you go in November, if

you're a single issue voter, you have two options. You have Robert Kennedy, who showed up at Consensus and spoke there, showed up at f Denver and spoke there and is very pro crypto, and you have Donald Trump. Those are your two options. But you know, unfortunately with Biden, that's not an option for you. If you vote for him, you're voting for the destruction of the American cryptocurrency industry in my view, as demonstrated by four

years of actions he's had. Charles, I wish we had another half an hour but thank you so much for joining me, and I appreciate all your insights, and we'll have to have you back on as things progress, maybe in another couple of months or so, all right, thank you so much, Tony. Cheers, bask boost task stok bakk