บทถอดความฉบับเต็มของ Is Quantum Computing About to Save Crypto, Not Kill It? - Franklin Crypto

It's almost like the crypto story all over again. 00:04:09.520 --> 00:04:12.719 But why is it a clear and present danger right now? 00:04:13.039 --> 00:04:17.839 It's because the whole idea of like harvest now, encrypt later is very scary. 00:04:18.160 --> 00:04:23.759 You have all of these blockchains that have public key encryption that can be broken by quantum. 00:04:24.000 --> 00:04:29.439 And so the first thing you're gonna see at this intersection is what we call post-quantum cryptography. 00:04:29.600 --> 00:04:33.360 And like, I don't think this is being discussed enough. 00:04:33.759 --> 00:04:41.040 And and people are, you know, the Bitcoiners, the Doomers are like, that's the end of crypto, you know, three trillion dollar industry is dead. 00:04:41.360 --> 00:04:43.120 I think it's the complete opposite. 00:04:43.279 --> 00:04:45.519 I think the world got this completely wrong. 00:04:45.920 --> 00:04:55.279 I think that in crypto, we have this concentration of the best cryptographers in the world to develop post-quantum cryptography. 00:04:55.360 --> 00:04:59.120 You don't need a quantum computer, you need excellent cryptography. 00:04:59.519 --> 00:05:03.920 Who do you think is gonna lead us out of the world out of this threat? 00:05:04.079 --> 00:05:05.120 It's crypto. 00:05:05.360 --> 00:05:18.079 And my sense is that quantum, the threat of quantum, is gonna be one of the greatest tailwinds that ever hit crypto because the rest of the world's gonna say, uh oh, you know, I need to be post-quantum ready. 00:05:18.240 --> 00:05:22.480 All my regulators, the governments are saying I have to have my critical systems migrated by 2030. 00:05:22.720 --> 00:05:23.759 What do I do? 00:05:24.079 --> 00:05:33.439 Oh, wow, Ethereum is migrating by by 2029, Stellar said by 27, XRP, like all these guys, all these blockchains are moving. 00:05:33.519 --> 00:05:40.879 Now it's no panacea, it's not that easy, but like that gets me excited because I think crypto is gonna lead the world out of this. 00:05:41.120 --> 00:05:47.199 And then we kind of get back to where we were with crypto in the early days infrastructure investment. 00:05:47.279 --> 00:05:57.920 Like, I don't want to say like fat protocol thesis, but infrastructure, infrastructure, infrastructure investment, and then ultimately um applications, bringing those three technologies together. 00:05:58.160 --> 00:06:00.480 So it's like the roadmap to me is very clear. 00:06:00.560 --> 00:06:04.480 I don't know why more people aren't talking about it, but that's what gets me out of bed. 00:06:04.639 --> 00:06:11.279 Like, I it it's it's kind of an insane time to be alive when we're about to see everything getting turned on its head. 00:06:11.360 --> 00:06:14.720 Like the innovation across those three verticals is insane. 00:06:14.879 --> 00:06:26.000 Like, you know, I'm old, I saw the internet come up, that was pretty amazing, singular technology, but now we're dealing with the pace of change, the pace of innovation is like nothing I've ever seen before. 00:06:26.160 --> 00:06:30.000 And maybe I'm biased because I'm on the front lines every single day, but it's pretty amazing. 00:06:30.240 --> 00:06:41.040 Yeah, I I think your point about the investment in cryptography coming from the crypto space, the blockchain space, is really interesting. 00:06:41.120 --> 00:06:42.800 And it's something I've thought about for years. 00:06:42.879 --> 00:06:50.480 I've always thought that like I remember meeting guys working on zero knowledge proofs back in like 2016, 2017. 00:06:50.639 --> 00:06:58.639 And it was like two, like the Aztec protocol guys, I'm specifically thinking of them, meeting them in Paris at the what is that I can't remember the name. 00:06:58.720 --> 00:06:59.759 It's some Ethereum conference. 00:06:59.839 --> 00:07:00.560 I can't remember what it was called. 00:07:00.959 --> 00:07:01.519 You're at ECC. 00:07:01.680 --> 00:07:02.319 ECC, that's right. 00:07:02.399 --> 00:07:03.120 Ecc, yeah. 00:07:03.279 --> 00:07:09.120 I met them when there were two guys, and and since then, I met like dozens of teams working on these different kinds of cryptography. 00:07:09.279 --> 00:07:12.160 And that that investment, I don't think would have happened at that level. 00:07:12.319 --> 00:07:20.800 We're talking like hundreds of millions, maybe even billions of dollars that it got put into cryptography because of our industry that otherwise I don't think would have gotten into. 00:07:20.879 --> 00:07:29.920 And I've always thought that there would be some other application that people weren't thinking of that isn't necessarily related to blockchain technology where this would be important. 00:07:30.000 --> 00:07:31.199 And you just closed the loop for me. 00:07:31.279 --> 00:07:34.319 Like I hadn't really, I don't know why it seems so so obvious now. 00:07:34.399 --> 00:07:37.199 Like I hadn't put the two and two together with quantum. 00:07:37.360 --> 00:07:48.240 But I do think you could be totally right that that's where the solution comes from, is people are forced to try to fix cryptography and encryption for blockchains because there's so much value on those networks. 00:07:48.399 --> 00:07:50.079 And then that has applications all over the place. 00:07:50.240 --> 00:07:52.879 Can you educate people on the applications outside of crypto, though? 00:07:52.959 --> 00:07:54.720 Cryptography is what secures blockchains. 00:07:54.879 --> 00:07:58.560 What else does cryptography secure for people who maybe don't know? 00:07:59.120 --> 00:07:59.680 Everything. 00:07:59.920 --> 00:08:00.720 It secures everything. 00:08:00.959 --> 00:08:07.199 Public key encryption secures health records, it protects about 500 trillion in assets. 00:08:07.680 --> 00:08:12.399 Going back on some numbers over the weekend, I think it's about 500 trillion with a T, not a B, a T. 00:08:12.800 --> 00:08:18.160 I believe there's about um two quadrillion worth of

payments that happen. 00:08:18.720 --> 00:08:19.759 Oh, and get this. 00:08:20.480 --> 00:08:21.040 You know Swift? 00:08:21.199 --> 00:08:22.079 You know what Swift is? 00:08:22.240 --> 00:08:22.560 Yeah. 00:08:23.040 --> 00:08:24.399 But help for people who don't know, yeah. 00:08:24.480 --> 00:08:25.199 So you go ahead and get it. 00:08:25.360 --> 00:08:28.079 Yeah, it's like this uh payments messaging system, right? 00:08:28.160 --> 00:08:34.720 That allows sovereign well, like all like 11,000 institutions to message each other around payments. 00:08:35.440 --> 00:08:43.840 You know, they used to have these 1970s technology, and in 2018, they're like, uh-oh, we gotta upgrade this stuff. 00:08:44.000 --> 00:08:46.480 Do you know how long it took to upgrade the messaging protocol? 00:08:46.799 --> 00:08:48.320 I mean, are they are they even done? 00:08:48.720 --> 00:08:50.399 It took them seven years. 00:08:52.240 --> 00:09:01.919 The problem that we have is that the governments are freaking out now because they're looking at literally quadrillions of money movements, of assets, health records. 00:09:02.000 --> 00:09:05.919 And like I said, some people are harvesting now to encrypt later. 00:09:06.080 --> 00:09:09.120 And they're like, listen, guys, like the G7's talking about it. 00:09:09.279 --> 00:09:13.919 NIST, which is a government organization around uh standards, they they publish standards. 00:09:14.080 --> 00:09:18.159 The EU is even talking about it, they're kind of freaking out, and the timelines just don't work. 00:09:18.399 --> 00:09:22.320 And so they're saying, hey, you have to migrate critical systems by 2030. 00:09:22.720 --> 00:09:24.159 And think about that. 00:09:24.720 --> 00:09:25.840 And there's no solutions yet. 00:09:25.919 --> 00:09:28.720 I mean, they but there are a lot of cases that have the way to do it. 00:09:29.279 --> 00:09:30.240 There are solutions. 00:09:30.399 --> 00:09:34.960 There are there are some interesting solutions on the horizon that are that are starting to be implemented, particularly in crypto. 00:09:35.039 --> 00:09:36.799 Crypto's leading the way, right? 00:09:37.200 --> 00:09:43.440 But it took 11,000 organizations across finance seven years to do a messaging upgrade. 00:09:43.759 --> 00:09:48.720 How long is it gonna take for them to do an entire ripout of their encryption foundation? 00:09:49.039 --> 00:09:50.240 That that's pretty nuts. 00:09:50.320 --> 00:09:51.440 So the time is scary. 00:09:51.679 --> 00:09:54.080 Regulation quantum, it's a forcing function. 00:09:54.159 --> 00:09:58.000 It's a it's a it's a cryptological forcing function. 00:09:58.399 --> 00:10:04.159 And I haven't really talked about this much, but it's just so obvious to me that that that people are gonna have to move. 00:10:04.240 --> 00:10:05.759 They're gonna say, oh no, what do I do? 00:10:05.840 --> 00:10:06.559 Where do I go? 00:10:06.799 --> 00:10:16.159 You know, meanwhile, this concentration of cryptographers is are building in the hostile public environment that we work, like, and they're testing it real time. 00:10:16.320 --> 00:10:23.440 Uh, and again, you don't need to have a quantum computer to have quantum cryptography, uh post-quantum cryptography. 00:10:23.600 --> 00:10:25.919 So it's all coming together, it's a forcing function. 00:10:26.240 --> 00:10:34.080 And again, it's easy to say, you know, I was I was talking to a good friend of mine at a conference who's been a big um doomer on quantum. 00:10:34.159 --> 00:10:36.080 He's like, Oh, it's destructive technology. 00:10:36.399 --> 00:10:40.879 I'm like, no, dude, this is gonna be the biggest unlock for crypto. 00:10:41.440 --> 00:10:48.399 It's it's I'm just remembering uh another conference I went to at UCSB in Santa Barbara, and this was again like 10 years ago. 00:10:48.559 --> 00:10:53.759 And it was a really small conference, a couple hundred people, and it was like the best cryptographers in the world. 00:10:54.000 --> 00:10:58.159 Um, and it and some of them were crypto people, like blockchain people. 00:10:58.320 --> 00:11:01.039 Like Zuko was there, you know, Vitalik was there. 00:11:01.120 --> 00:11:05.519 There was and there was like all this like deep research discussions and presentations happening. 00:11:05.600 --> 00:11:09.600 And so like it's literally been a decade of work leading up to this. 00:11:09.679 --> 00:11:11.600 And people knew about quantum back then, right? 00:11:11.679 --> 00:11:13.120 Like it's not like this is a new thing. 00:11:13.360 --> 00:11:14.559 Vitalik gets it, by the way. 00:11:14.639 --> 00:11:15.600 I mean, look at the EF. 00:11:15.679 --> 00:11:18.320 They have an entire team, they published that their goal is 29. 00:11:18.399 --> 00:11:20.559 They're like, hey, we'll be quantum ship here by 29. 00:11:20.799 --> 00:11:27.279 Well, and I somebody was just telling me this the other day, but like we're not that far away from quantum computing being like production ready. 00:11:27.440 --> 00:11:29.600 I mean, it's not that far, right? 00:11:30.080 --> 00:11:38.799 We don't know, but like, you know, we one of the lucky things about you know being in my seat, I get to I got a chance to speak to some of the top researchers in the world. 00:11:39.039 --> 00:11:42.720 There's tail risk that it's around 2030. 00:11:42.879 --> 00:11:45.840 I've heard some very aggressive venture capitalists say sooner than that. 00:11:46.320 --> 00:11:53.759 But like I would say the um the tail risk that the consensus tail is 2030, that that that could be the earliest. 00:11:54.080 --> 00:11:57.919 Consensus is probably outwards of 2035 or so. 00:11:58.559 --> 00:12:01.360 But that's but the thing that gets me is AI. 00:12:01.519 --> 00:12:08.879 Like AI is optimizing hardware, it's optimizing software, and and like and AI is moving so fast. 00:12:09.519 --> 00:12:18.240 I believe ASI, artificial superintelligence and quantum, they're probably gonna go close

to hand in hand because they're accelerating each other. 00:12:18.399 --> 00:12:19.919 So could it be 2030? 00:12:20.000 --> 00:12:20.799 Some people say yes. 00:12:20.960 --> 00:12:22.000 Could it be after that? 00:12:22.080 --> 00:12:23.600 Yeah, but it's coming. 00:12:23.679 --> 00:12:27.120 And the other thing is like again, you have to have these defenses now. 00:12:27.200 --> 00:12:32.240 You don't have a choice because if someone captures your encrypted data and they safeguard it, they're just waiting. 00:12:32.320 --> 00:12:36.159 And some of that, some of that data becomes very valuable if you don't points in the future. 00:12:36.399 --> 00:12:38.480 So and and again, the numbers are humongous, man. 00:12:38.720 --> 00:12:39.679 Yeah, I'm I'm curious. 00:12:39.759 --> 00:12:41.039 So, I mean, I have so many questions. 00:12:41.120 --> 00:12:45.759 So, one is what do you think are the biggest opportunities for entrepreneurs in that context, like today? 00:12:46.000 --> 00:12:50.159 Yeah, there's a there's a lot of folks right now that are looking at solving that PQC layer. 00:12:50.320 --> 00:13:01.039 And so I was talking to one recently, and what he's doing is he's he's running agents to identify vulnerabilities because you know, and again, the other thing about uh post-quantum cryptography is it's not like oh I did it and I'm done. 00:13:01.200 --> 00:13:02.080 It needs to be dynamic. 00:13:02.159 --> 00:13:04.559 You need to to to constantly evaluate modern upgrades. 00:13:04.639 --> 00:13:19.039 So there I think the initial investment case is around those infrastructure layers that help close the gaps and help migrate that quadrillion dollars in assets, that$500 trillion in assets, you know, over to a secure arena. 00:13:19.200 --> 00:13:22.559 So a lot of it will be focused on security and infra. 00:13:23.279 --> 00:13:32.480 I think ultimately phase two will be how do I invest in the stack, whether that's the hardware stack or the software stack, and then phase three is applications. 00:13:32.879 --> 00:13:37.039 You know, like the amount of compute that you have is is insane. 00:13:37.279 --> 00:13:48.960 How do you use that compute to drive and optimize like every scientific field, whether it's biology, geomes, physics, astronomy, like you can crunch numbers in a way and optimize numbers or even finance. 00:13:49.039 --> 00:13:50.559 How do you develop advanced models? 00:13:50.639 --> 00:13:52.000 So that's how I think see it. 00:13:52.080 --> 00:13:56.559 Like phase one, defense, phase two, infra, like that protocol, and then phase three apps. 00:13:56.879 --> 00:14:03.200 Well, what's so interesting about that thesis is it there's a pattern there to what we just went through over the last like 10 years with crypto. 00:14:03.279 --> 00:14:06.720 I mean, I'm just thinking about, you know, I was pretty early at Solana. 00:14:06.799 --> 00:14:10.399 There was a really big effort to build out the network, the physical infrastructure of the network. 00:14:10.480 --> 00:14:19.200 Yeah, that whole process was something I became really fascinated with when I got into crypto in 2016 because we were building a decentralized VPN protocol called Orchid. 00:14:19.279 --> 00:14:20.320 And yeah, I remember it. 00:14:20.559 --> 00:14:23.440 Yeah, so it's like, how do you get a node in every data center on the planet? 00:14:23.600 --> 00:14:25.200 Was the question we were asking ourselves. 00:14:25.440 --> 00:14:35.360 And this is something that, like, probably I was just telling somebody a minute ago before we got on together, there was this conference in Vienna that I went to that was at the Austrian National Library. 00:14:35.440 --> 00:14:36.559 It was magical, it was really cool. 00:14:36.639 --> 00:14:45.519 And it was like only a hundred people, and all of us were solely focused on physical infrastructure and data centers for a secure decentralized network. 00:14:45.759 --> 00:14:52.639 And that specific problem is one of several that you have to solve to have the future you're talking about. 00:14:52.720 --> 00:14:57.279 And it's just gonna and it's kind of happening with AI right now in a different context, right? 00:14:57.360 --> 00:15:00.559 Like they're not, it's not about decentralization, but the same problem. 00:15:00.639 --> 00:15:04.320 How do we get enough compute to meet the demand of all of this? 00:15:04.399 --> 00:15:08.720 You know, they're not transactions, but you could like token usage, which is another irony. 00:15:08.799 --> 00:15:09.519 It's all called tokens. 00:15:10.159 --> 00:15:11.279 That makes me crazy, by the way. 00:15:11.360 --> 00:15:16.320 I'm like, come on, man, like we want these tokens that like this is the wrong tokens, but maybe it's not. 00:15:16.399 --> 00:15:17.440 Maybe these things are coming together. 00:15:17.519 --> 00:15:17.840 I do think that's a good idea. 00:15:18.000 --> 00:15:18.559 I think they will. 00:15:18.639 --> 00:15:20.480 I really do think that they that they merge. 00:15:20.559 --> 00:15:26.480 I think that I think, especially in the open source world, you know, token consumption is going to become a commodity on shared hardware. 00:15:26.639 --> 00:15:26.960 Yeah. 00:15:27.200 --> 00:15:28.720 And probably consumer grade hardware. 00:15:28.799 --> 00:15:30.320 And that is another innovation that is exciting. 00:15:30.799 --> 00:15:41.039 I talked to Jake about it the other day, you know, coming from the decentralized space is token uh inference and training on decentralized consumer grade hardware is another really big unlock, I think. 00:15:41.279 --> 00:15:47.200 But the pattern of how do you you know get through those three phases you just talked about is pretty interesting to me. 00:15:47.279 --> 00:15:57.600 And that and it's it feels to me like there's this a team from our space that has worked on that problem that's going to be invaluable, that knowledge of like the first cycle of trying to

figure this out. 00:15:57.759 --> 00:16:03.039 Um and it's and it's I guess there was every phase of the internet has had has had something similar. 00:16:03.120 --> 00:16:10.240 It just didn't, you just unless you were playing where like bits meet the atoms, you know, you're not like uh aware of it fully of like what's happening. 00:16:10.399 --> 00:16:11.919 Um I don't know. 00:16:12.000 --> 00:16:14.639 I'm on I'm wondering what lessons we can carry with us. 00:16:14.799 --> 00:16:16.639 So don't repeat the same mistakes. 00:16:16.960 --> 00:16:19.279 Yeah, CPU to GPU to QPU. 00:16:19.360 --> 00:16:20.320 That's probably the future. 00:16:20.480 --> 00:16:21.039 Yeah. 00:16:21.360 --> 00:16:22.480 But man, these data centers. 00:16:23.039 --> 00:16:24.720 Where are we buying our QPUs? 00:16:25.679 --> 00:16:26.720 We should be buying QPUs. 00:16:26.879 --> 00:16:27.840 Come back to you on that one. 00:16:28.000 --> 00:16:29.039 Come back to you on that one. 00:16:29.120 --> 00:16:34.639 Um I feel like you know something that I don't ask you offline. 00:16:35.600 --> 00:16:36.080 Yeah, man. 00:16:36.320 --> 00:16:37.840 I'm worried about these data centers though. 00:16:38.000 --> 00:16:38.240 Yeah. 00:16:38.480 --> 00:16:43.919 We're marching toward mids through midterms here, and uh, there's a big bullseye on their back, isn't there? 00:16:44.240 --> 00:16:51.919 Yeah, well, I there is, and I think there's also just the the gambling that's happening with some of these contracts, right? 00:16:52.000 --> 00:16:54.960 Like I like the Doomers, I think you're right. 00:16:55.039 --> 00:17:04.079 It's good to be optimistic, but there's also like just a lot of evidence just looking at public markets and how these investments are happening in these data centers that causes me a lot of concern, right? 00:17:04.160 --> 00:17:11.680 Like, and I hear a lot of VCs, a lot of venture capitalists that I've been talking to are like early 27, you're gonna see uh a reckoning. 00:17:11.839 --> 00:17:15.839 And you know, these these contracts are very difficult to manage. 00:17:15.920 --> 00:17:20.400 And if you can't pay your bills, you know, open AI is like fully leveraged to the hilt. 00:17:20.559 --> 00:17:22.400 Oracle leverage to the hilt, right? 00:17:22.480 --> 00:17:23.599 To like support these things. 00:17:23.680 --> 00:17:31.119 Like, I think the companies that could that are gonna come out on top are like SpaceX and Anthropic because they haven't made those bets and they can afford to own them. 00:17:31.279 --> 00:17:36.720 I think Microsoft too, like all the stocks are gonna get hit, but like you can't be short-term minded about stuff. 00:17:36.880 --> 00:17:37.519 At least I'm not. 00:17:37.599 --> 00:17:40.079 I don't like look, I'm not thinking six months out. 00:17:40.160 --> 00:17:42.480 I'm thinking like who's gonna be around 10 years from now. 00:17:42.640 --> 00:17:54.559 And to me, the companies that own the infra and that that that own the

hardware and the data centers, and they're not like taking on tons of debt, and they can afford to then scoop up all the losers, you know, that still have great technology. 00:17:54.640 --> 00:18:01.519 Like, I wouldn't be surprised if OpenAI gets bought, you know, for for pennies if if they get wrecked, you know, in in next year, right? 00:18:01.599 --> 00:18:02.240 Or something. 00:18:02.400 --> 00:18:05.680 Like Damn, I don't think Sam's gonna like to hear that one. 00:18:05.920 --> 00:18:08.079 Yeah, probably not, probably a controversial take. 00:18:08.160 --> 00:18:12.799 It's nothing personal against them, but like I just and look, I don't have inside baseball. 00:18:12.880 --> 00:18:14.559 I don't know what's going on in an inside there. 00:18:14.640 --> 00:18:19.200 I just look at what I can see in public in the news, and I'm like, wow, that's that seems sketchy. 00:18:19.440 --> 00:18:23.359 Trillion dollars in data center commits is uh a hard thing to fulfill. 00:18:23.680 --> 00:18:24.319 Yeah. 00:18:24.960 --> 00:18:31.680 I think that we're right now it's a very positive capital capitalist environment. 00:18:31.839 --> 00:18:32.880 And what do I mean? 00:18:33.119 --> 00:18:36.000 You're seeing competition, which you've got to love, right? 00:18:36.400 --> 00:18:40.319 You have anthropic, well, we're gonna take the everything, we're gonna win. 00:18:40.400 --> 00:18:42.160 There's we're the only company in the world. 00:18:42.319 --> 00:18:47.039 Then bam, open AI comes out, like in certain cases, some will say leapfrogs them. 00:18:47.279 --> 00:18:49.759 Then you got Elon coming out of nowhere with Grok. 00:18:50.079 --> 00:18:54.000 Uh, then you've got Jensen Huang with Hugging Face, then you've got the Chinese open models. 00:18:54.160 --> 00:19:02.559 And so you're seeing the competitive pressure of capitalism right now is is is pushing advancement, which you like. 00:19:02.799 --> 00:19:05.200 Do we tend to get over our skis sometimes? 00:19:05.440 --> 00:19:06.960 Yeah, uh, we do. 00:19:07.680 --> 00:19:11.920 Eventually, my guess is that we're gonna have a layer of regulation. 00:19:12.799 --> 00:19:22.000 And if there's one thing that I know that's a universal truth between besides death and taxes, is that regulation forces consolidation. 00:19:22.319 --> 00:19:26.960 Because what it does is it says, hey guys, um, here are the common rule set. 00:19:27.359 --> 00:19:29.519 Sorry, you all have to do this. 00:19:30.079 --> 00:19:36.160 And what it forces them to do is have all have a dedicated fixed cost that's pretty much the same. 00:19:36.319 --> 00:19:42.400 You try to optimize it, but to comply with that regulation, you have a fixed cost, and it commoditizes the business. 00:19:42.640 --> 00:19:44.079 And so, what does that mean? 00:19:44.240 --> 00:19:51.680 That means that margins get cut, and then the only way to win is if you scale because your margin's been cut. 00:19:51.839 --> 00:19:56.720 And so it forces consolidation, and that's probably gonna be the next phase. 00:19:56.880 --> 00:20:03.839 You know, probably what's gonna happen is here we're gonna move forward, there's gonna be some kind of hiccup, there'll be blood on the streets, as many of your people are saying. 00:20:03.920 --> 00:20:09.440 I don't know when that's gonna happen, but by human nature, things go through cycles, eventually there'll be a down cycle. 00:20:09.599 --> 00:20:14.160 We're already seeing public sentiment moving against AI. 00:20:14.400 --> 00:20:23.039 And and you know, shame on the industry for not investing more in education and and addressing some of the concerns that are being brought to bear, whether they're real or not. 00:20:23.519 --> 00:20:30.160 But eventually uh that'll translate to regulation, then you have consolidation, and then maybe one day you're left with Pepsi and Coke. 00:20:30.400 --> 00:20:31.359 Yeah, and that's not good. 00:20:31.440 --> 00:20:38.960 And I I think I think in the consolidation phase when there's blood on the streets, that's an opportunity for open source to create a little more diversity. 00:20:39.200 --> 00:20:39.680 I hope so. 00:20:39.920 --> 00:20:49.759 Because I think you will have a ton of GPO GPUs in that bloodbath that are available at for cheap, because people maybe there'll be a big fire sale if they can't afford to pay their bills. 00:20:49.920 --> 00:20:50.319 We'll see. 00:20:50.480 --> 00:20:54.319 It's interesting too because and I think on the education piece, you're totally right. 00:20:54.480 --> 00:21:00.799 I think there's been a lot of fear mongering that was somewhat intentional for marketing purposes. 00:21:01.119 --> 00:21:13.359 That you know, I kind of wish they'd invested those dollars in getting these tools in more and more people's hands and teaching them how to use them because I still feel like it's still the AI space and the agency space still feels very small to me. 00:21:13.440 --> 00:21:16.160 It feels like 2017 again, all over again. 00:21:16.319 --> 00:21:23.440 And there are a small number of people who think everyone's using them, but really it's just them using these tools. 00:21:23.680 --> 00:21:26.240 And it is it is a massive unlock, right? 00:21:26.319 --> 00:21:31.839 Like it's it's the it we live in an age of creativity and invention that we've never seen before. 00:21:31.920 --> 00:21:40.799 And the people who like ride the lightning out of here are gonna end up in the you know, the utopia people talk about, which I don't believe it's gonna be even out of the gate. 00:21:40.880 --> 00:21:45.200 Like it's this this whole thing is gonna take decades to sort out because it's just too fast. 00:21:45.440 --> 00:21:49.920 But the people who invest in learning to use these tools are gonna be have a massive leg up. 00:21:50.160 --> 00:21:52.240 And I don't know, it does feel a bit unfortunate. 00:21:52.319 --> 00:21:56.079 And I I I I would love to ask you, you know, your perspective on

the midterms. 00:21:56.480 --> 00:21:59.680 Do you think like the Democrats are gonna just clean house and then run 00:22:03.920 --> 00:22:09.119 Look, I would just say file prediction markets, it's really yeah, it can go in a number of different directions. 00:22:09.279 --> 00:22:12.960 I mean, I think it's probably conventional that the Democrats will probably take the House. 00:22:13.119 --> 00:22:15.519 Maybe it'll be difficult for them to take the Senate. 00:22:15.839 --> 00:22:31.279 The challenge that you have is that if you're the president, you're gonna pull out all the stops that you can right now because you don't want to go through the potential of having a hostile Congress because then you could see the same, you know, impeachment again and again, and it's just it's it's very tiresome. 00:22:31.440 --> 00:22:35.200 But look, our government was designed to be inefficient. 00:22:35.279 --> 00:22:36.720 That's how our founders made it. 00:22:36.960 --> 00:22:41.599 From a crypto perspective, does clarity get done or does it not? 00:22:41.759 --> 00:22:45.839 I was talking to folks in Washington over the weekend, they were kind of bullish. 00:22:46.000 --> 00:22:47.440 And they're like, you know what? 00:22:47.759 --> 00:22:49.839 President, you never know what's on his mind. 00:22:49.920 --> 00:22:54.880 He may surprise you and he may come out with additional um compromises on ethics. 00:22:55.039 --> 00:22:56.960 And then what do you do if you're a Democrat? 00:22:57.119 --> 00:22:59.680 You can either take those compromises on ethics. 00:22:59.839 --> 00:23:01.359 You know, what do you do if you're a bank? 00:23:01.440 --> 00:23:08.160 You take that compromise on interest, or you say, screw it, I'm not passing this bill, and you're left with a status quo. 00:23:08.640 --> 00:23:12.000 With potentially gaps in ethics, gaps in stable coins. 00:23:12.079 --> 00:23:17.440 So, like, is the world in a better place if you're a Democrat or Republican if you sign this thing? 00:23:17.680 --> 00:23:20.000 That's what we're gonna find out around September 15th. 00:23:20.160 --> 00:23:33.599 And and I know the president wants to get it done, and the reason why I know is this if you look carefully when Iran started, when Epic Fury started, and the bullets first started flying, he put out something on true social, he said, let's get clarity done. 00:23:33.759 --> 00:23:35.200 So it's very high in his agenda. 00:23:35.440 --> 00:23:36.880 And he has political chips. 00:23:36.960 --> 00:23:40.319 If he wants to cash them, he has the power to get things done. 00:23:40.559 --> 00:23:44.640 I think consensus mainstream says it's clarity doesn't get done. 00:23:44.960 --> 00:23:45.759 And that's fine. 00:23:45.839 --> 00:23:57.920 Um we'll be left with where we are today, but we'll be in a much better spot because you got Chairman Sealing, you got Chairman Atkins, who are working very aggressively and thoughtfully to move as quickly as possible to provide us certainty. 00:23:58.079 --> 00:24:01.759 Like basic certainty, like, hey, what's a commodity and what's what's not. 00:24:02.000 --> 00:24:08.720 The beauty of clarity is that you get what we call federal preemption, meaning that you're a company, you just got to follow one law. 00:24:08.799 --> 00:24:11.119 You don't have to go to 50 states if it's a commodity. 00:24:11.200 --> 00:24:13.119 Um, but you're gonna get certainty either way. 00:24:13.279 --> 00:24:18.079 And I think that's another fundamental indicator for crypto. 00:24:18.400 --> 00:24:22.960 Yeah, and I, you know, I've been talking to a couple other people who've been doing some work in DC on this. 00:24:23.119 --> 00:24:30.079 And one sentiment that I think is positive that people may not realize is there have been a lot of people on both sides of the aisle working on this. 00:24:30.240 --> 00:24:34.079 Like it crypto is nonpartisan, right? 00:24:34.160 --> 00:24:40.640 Like lots of people hold stable coins, lots of people hold Bitcoin, lots of people hold Solana and Ethereum, like XRP, whatever. 00:24:40.799 --> 00:24:41.359 They're invested. 00:24:41.440 --> 00:24:44.480 The whole United States, it's like a hundred million people on both sides of the aisle. 00:24:44.640 --> 00:24:57.920 So I think it's gotten big enough that hopefully the i if things are like air quotes negative here on a negative outcome or don't go fully the way we want them to, it doesn't, the pendulum doesn't swing as hard as we might have thought it would. 00:24:58.000 --> 00:24:59.039 And I I think it won't. 00:24:59.119 --> 00:25:00.000 Not not with crypto. 00:25:00.160 --> 00:25:01.519 With data centers, that's a different story. 00:25:01.599 --> 00:25:03.680 There's like a data centers are a different story. 00:25:03.839 --> 00:25:04.079 Definitely. 00:25:04.160 --> 00:25:08.799 I mean, I saw like a put like an ad by Bernie Sanders that was like ban AGI. 00:25:08.880 --> 00:25:10.960 It was like ban superintelligence from existing. 00:25:11.039 --> 00:25:12.960 And I'm like, dude, I like Bernie. 00:25:13.039 --> 00:25:14.640 I think he's authentic as a human. 00:25:14.720 --> 00:25:15.519 I like that about him. 00:25:15.599 --> 00:25:17.440 I think he's an honest like person. 00:25:17.920 --> 00:25:22.640 But banning superintelligence is like setting America back massively. 00:25:22.799 --> 00:25:23.440 You can't do it. 00:25:23.519 --> 00:25:24.880 Like, I we can't let it happen. 00:25:24.960 --> 00:25:27.599 It will be a disaster because the Chinese are not banning it. 00:25:27.759 --> 00:25:29.680 And and frankly, the open model's already out there. 00:25:29.759 --> 00:25:34.160 Like, this is gonna happen with or without us, and we definitely want it to be us that makes it first. 00:25:34.559 --> 00:25:36.319 Yeah, listen, I agree with your statement. 00:25:36.400 --> 00:25:39.200 So, more work has gone into clarity than like Dodd-Frank. 00:25:39.440 --> 00:25:43.359 And Dodd-Frank

completely transitioned global financial markets after the crisis. 00:25:43.519 --> 00:25:44.960 And yeah, like what do we want to do? 00:25:45.119 --> 00:25:46.960 Should we outlaw cars when they were invented? 00:25:47.039 --> 00:25:49.279 I mean, people did have a lot of anger about cars. 00:25:49.359 --> 00:25:54.160 Like around here, they used to have like people and horses running around in front of them. 00:25:54.319 --> 00:25:56.720 But like, this happens with any new technology. 00:25:56.880 --> 00:25:58.240 To your point, you can't hold it back. 00:25:58.400 --> 00:26:00.000 Open source, you can't hold back. 00:26:00.160 --> 00:26:04.000 The question is, how do we move forward as responsible as possible? 00:26:04.240 --> 00:26:07.039 And like, guys, technology is not good or bad. 00:26:07.279 --> 00:26:08.240 Like, enough. 00:26:08.480 --> 00:26:11.519 By the way, like if you're a Democrat, Al Gore invented the internet. 00:26:11.680 --> 00:26:12.960 Remember, he that's what he said. 00:26:13.119 --> 00:26:15.839 Like, come on, like like technology is not good or bad. 00:26:16.000 --> 00:26:17.359 It's the people that use it. 00:26:17.519 --> 00:26:21.359 And why would we ever want to restrict our access to intelligence? 00:26:21.759 --> 00:26:22.000 Exactly. 00:26:22.079 --> 00:26:31.119 And the and that's the piece, the restrict your access piece is the part that I always harp on because people, I think there's also been a ton of FUD on open source. 00:26:31.359 --> 00:26:34.720 And that is the most accessible version of technology. 00:26:34.880 --> 00:26:40.799 Like anybody with a what we say, like internet connection and a in the will to learn how to use these tools can. 00:26:40.960 --> 00:26:46.160 And the in in right now we're getting our butts kicked on open source as far as models go in the United States. 00:26:46.319 --> 00:26:50.079 If you're gonna, you know, instead of banning ASI, make everybody open source their models. 00:26:50.160 --> 00:26:51.359 Like do that instead. 00:26:51.519 --> 00:26:55.119 That would be much better for humanity than like banning them in the US. 00:26:55.200 --> 00:26:58.720 Um, and I get you, I I'm not advocating for private companies. 00:26:58.880 --> 00:27:02.319 They can make they should be able to control what they do with their source code. 00:27:02.559 --> 00:27:04.160 I think that's also equally bad. 00:27:04.240 --> 00:27:06.400 I don't think the government should force people to open source. 00:27:06.559 --> 00:27:11.359 But hypothetically, if we're talking about like what direction to go, yeah, ensure maximal access. 00:27:11.440 --> 00:27:14.160 I don't want equity in anthropic because they used our data. 00:27:14.319 --> 00:27:15.279 I want their model. 00:27:15.440 --> 00:27:18.319 I want it to be accessible to anybody if that's what we're gonna do. 00:27:18.559 --> 00:27:23.839 I feel like it's really gotten away from us in some in some respects with some of these groups that are that are fighting against it. 00:27:23.920 --> 00:27:26.079 And that's again where like the education really matters. 00:27:26.319 --> 00:27:28.799 Yeah, I think there's been an underinvestment in education. 00:27:28.880 --> 00:27:33.039 And and look, the I think there will be lessons from the crypto industry. 00:27:33.119 --> 00:27:38.960 I think we did mobilize pretty effectively in recent times to educate people on the benefits of the tech. 00:27:39.119 --> 00:27:40.799 So yeah, we'll see what happens there, man. 00:27:41.039 --> 00:27:46.720 I'm curious a little more about your work at Franklin and how you guys are using agents in AI in the in the org. 00:27:46.799 --> 00:27:50.960 Like, what's the high level of what's going on that you can share? 00:27:51.279 --> 00:27:54.720 Yeah, I will tell you that we have amazing access. 00:27:54.880 --> 00:27:56.799 The tech teams here are so forward-thinking. 00:27:56.960 --> 00:27:58.799 It really starts with our CEO, Jenny, on down. 00:27:58.960 --> 00:27:59.759 She was in tech. 00:28:00.000 --> 00:28:02.160 She rose up through the tech ranks. 00:28:02.400 --> 00:28:05.839 So we have access to frontier models as part of our day-to-day. 00:28:06.079 --> 00:28:16.720 And we we make use of them, obviously, uh in responsible ways to really condense our research cycles, to really dig in fast into things that we may not know about. 00:28:17.039 --> 00:28:20.960 Yeah, AI is really part of our culture, tech is part of our culture. 00:28:21.279 --> 00:28:24.559 Jenny and the team here, they they were they got into crypto like 2017. 00:28:24.799 --> 00:28:25.839 People forgot about that. 00:28:26.160 --> 00:28:34.480 Like you have to have real forward thinking and forward thought to make a make a jump like that when you have an 80-year-old multi-trillion asset manager. 00:28:34.640 --> 00:28:39.359 So the philosophy is spot on, the vision is is exactly where you want it. 00:28:39.519 --> 00:28:40.720 They they see the opportunity. 00:28:40.799 --> 00:28:51.599 She we had a town hall today, and and Jenny was talking about what an amazing time it is to be alive, you know, particularly with with these AI tools that we have, you know, and with these technologies coming together. 00:28:51.759 --> 00:28:53.279 Um, so it's been great. 00:28:53.519 --> 00:28:56.799 We're building, hiring people, we're hiring investors. 00:28:57.119 --> 00:28:58.319 It's this crazy time. 00:28:58.480 --> 00:29:05.039 I talk about this often where if you talk to investors around the world, they wouldn't have touched crypto five years ago. 00:29:05.200 --> 00:29:06.799 In fact, there's a lot of risk if you did it. 00:29:07.039 --> 00:29:07.839 Franco did it. 00:29:08.079 --> 00:29:09.119 I did it, you did it. 00:29:09.279 --> 00:29:12.559 Like, but to be an institution in the space, you were taking a lot of risk. 00:29:12.880 --> 00:29:23.279 And a lot of institutions don't have that type of appetite to take risks in things that they

don't control, like regulatory risk, reputational risk, cyber risk. 00:29:23.440 --> 00:29:24.559 They just don't have the expertise. 00:29:24.720 --> 00:29:26.720 They have plenty of expertise in market risk. 00:29:27.039 --> 00:29:33.519 But now when you speak to clients, and I'm talking about institutions all over the world, um, they're like, I need to understand this space. 00:29:33.599 --> 00:29:35.920 I need someone to help me navigate into this space. 00:29:36.160 --> 00:29:40.799 Yes, it's trustless, yes, it's permissionless, but I need someone I can trust. 00:29:40.960 --> 00:29:44.319 And damn it, I can't like do something and then lose all my assets. 00:29:44.559 --> 00:29:49.279 So, you know, do you have the enterprise robustness that we can trust as we get into this space? 00:29:49.440 --> 00:29:51.200 And that's what we're trying to deliver. 00:29:51.440 --> 00:29:51.920 Very cool. 00:29:52.000 --> 00:29:58.799 Yeah, I think a lot of institutions who haven't invested, you know, they don't have somebody on their team who's invested like 10 years in this space. 00:29:58.880 --> 00:30:00.400 They don't even realize how far it's come. 00:30:00.480 --> 00:30:06.640 You know, I remember walking around at conferences and seeing all these startups claiming all these things that we just couldn't do back then. 00:30:06.720 --> 00:30:11.920 And then fast forward 10 years later, we finally have a lot of underlying technologies, like uh Superstate. 00:30:12.000 --> 00:30:13.200 Like I bring them up a lot. 00:30:13.359 --> 00:30:30.319 You know, they've done a lot to bring uh equities and RWAs on chain, and they've got you know, whitelisted wallets on Solana, for example, where you like any any wallet that's been KYC'd has an identity and they can trade these assets permissionlessly across all the different DeFi protocols, which is like amazing unlock. 00:30:30.400 --> 00:30:32.880 You know, 24-7, it's it's rather simple, right? 00:30:32.960 --> 00:30:36.720 It's like 24-7 global liquidity is enough for it to be really innovative. 00:30:36.880 --> 00:30:42.160 Forget all the other DeFi protocols that have been developed over the last decade that now work with these assets. 00:30:42.319 --> 00:30:46.319 Um, but but you know, still a lot of institutions don't know about that, but we have come so far. 00:30:46.400 --> 00:30:47.279 That I agree with you. 00:30:47.359 --> 00:30:54.720 One like the last three years, I would say, we really crossed like a Rubicon where people started to take it seriously. 00:30:55.119 --> 00:30:55.519 100%. 00:30:56.000 --> 00:30:56.480 Love Rob. 00:30:56.720 --> 00:30:58.000 Uh, I just spoke to him last week. 00:30:58.160 --> 00:30:59.920 You know, Franklin's on Solana too. 00:31:00.079 --> 00:31:00.400 Oh, yeah. 00:31:00.559 --> 00:31:01.119 Yeah, I did know. 00:31:01.200 --> 00:31:03.039 I know you guys have been huge Solana supporters. 00:31:03.119 --> 00:31:05.839 Uh, it's one of the reasons why I like why I like Franklin. 00:31:06.000 --> 00:31:11.599 I'm not like a Solana only person, but you know, I spent five plus years working on Solana. 00:31:11.680 --> 00:31:14.000 So uh I'm uh I'm I'm rooting for the team. 00:31:14.319 --> 00:31:15.200 Great ecosystem. 00:31:15.359 --> 00:31:15.839 Last question. 00:31:15.920 --> 00:31:19.599 I wanted to know more about your role as the CFTC, the markets advisory committee. 00:31:19.680 --> 00:31:20.799 What does that even mean? 00:31:20.960 --> 00:31:21.359 What do you do? 00:31:21.599 --> 00:31:24.000 Yeah, so that started under under uh Commissioner Fam. 00:31:24.400 --> 00:31:40.240 And what we do is it used to be like I was like one of the few DGens on there, and it was um back in a very different time when I was trying to tell the banks, damn it, like we need to go to the regulators, they need to give us clarity, and the banks are like, oh, we don't want to piss the regulators off. 00:31:40.319 --> 00:31:41.440 And I'm like, what do I care? 00:31:41.599 --> 00:31:42.960 Like, you know, we're gonna go for it. 00:31:43.119 --> 00:31:44.160 That was back in the day. 00:31:44.319 --> 00:31:46.000 It was in a much different environment. 00:31:46.319 --> 00:31:52.319 Today, the environment is um, hey, we really want to leverage your expertise. 00:31:52.480 --> 00:31:55.359 We really want to help help us think through these challenges. 00:31:55.680 --> 00:31:59.440 We want to get it right, and we want to move as quickly as possible. 00:31:59.599 --> 00:32:03.039 We want to position the US as the crypto capital of the world. 00:32:03.279 --> 00:32:06.240 And I can't tell you how positive the engagement's been. 00:32:06.400 --> 00:32:07.839 Like, it's insane. 00:32:08.400 --> 00:32:10.559 And honestly, that's the way it should be. 00:32:10.799 --> 00:32:15.279 Regulators are not your adversaries, they have a job, they have a super important job. 00:32:15.359 --> 00:32:20.640 They want to make sure that our capital markets stay safe and liquid and are a place for capital formation. 00:32:20.960 --> 00:32:24.319 CFTC wants to ensure that there's no market manipulation. 00:32:24.720 --> 00:32:27.759 These are all like principles that normal people share. 00:32:27.839 --> 00:32:33.519 And if we're going to achieve the true potential of our technology, like that's a good thing. 00:32:33.680 --> 00:32:40.559 The way regulatory relationships should be is one of trust, one of thought, and sharing thoughts and sharing perspectives and solving problems. 00:32:40.720 --> 00:32:42.720 And that's what the GMAC really is. 00:32:42.880 --> 00:32:44.559 And like, so we would come together. 00:32:44.720 --> 00:32:46.400 There's massive amounts of governance. 00:32:46.480 --> 00:32:50.160 I failed over and over again in some of that governance to get my points out. 00:32:50.400 --> 00:32:58.400 But one of the highlights for me was um we were presenting in a public forum, and I remember BlackRock chimed in and said, you know what?

00:32:58.559 --> 00:33:05.200 We want ETFs with treasuries underneath them to be recognized as collateral for derivatives. 00:33:05.359 --> 00:33:08.000 And like collateral for derivatives is a big thing. 00:33:08.079 --> 00:33:10.720 It's about a$600 billion pool in the US. 00:33:10.799 --> 00:33:13.519 Um, uncleared margins under$700 billion. 00:33:13.680 --> 00:33:16.799 So you're talking about a trillion dollar margin pool. 00:33:16.960 --> 00:33:24.319 And BlackRock's like, yeah, I want ETFs supported by like you allow treasuries today, but if I have an ETF with treasuries, why don't you accept that too? 00:33:24.480 --> 00:33:26.000 The wrapper shouldn't matter. 00:33:26.240 --> 00:33:32.079 And I chimed in, I'm like, guys, fine with what BlackRock said, but I want tokens. 00:33:32.240 --> 00:33:38.240 I want tokens to be accepted collateral, provided that underneath that token are the assets that are okay. 00:33:38.559 --> 00:33:43.839 And like these are the types of things that they're saying now, yeah, that makes sense from a principal perspective. 00:33:44.160 --> 00:33:46.319 I mean, think about this if you're the CFTC. 00:33:46.720 --> 00:33:53.440 And I don't want to get too technical, but if I trade a derivative with you, Alex, we have to hold collateral, and that's how it works. 00:33:53.599 --> 00:33:55.279 Kind of like perps and other things. 00:33:55.519 --> 00:33:59.440 That collateral is set by regulation, and usually it's 10 days if it's unclear. 00:33:59.839 --> 00:34:01.920 It could be five or seven days if it's clear. 00:34:02.000 --> 00:34:03.680 So you're holding all this collateral. 00:34:03.759 --> 00:34:04.160 Why? 00:34:04.559 --> 00:34:11.440 Because if the market blows up, you can lose three days of collateral off the bat just if it's a long weekend because everyone's asleep, right? 00:34:11.519 --> 00:34:12.880 So you have to hold all this collateral. 00:34:13.599 --> 00:34:22.800 What tokenization does, and I've never seen this in my entire career, it almost never happens, is you can actually lower collateral and lower risk. 00:34:23.440 --> 00:34:23.760 Yeah. 00:34:24.159 --> 00:34:25.679 Makes no sense, right? 00:34:25.840 --> 00:34:26.400 But you can. 00:34:26.480 --> 00:34:26.880 Why? 00:34:27.199 --> 00:34:31.039 Because now, because I can settle the token in like in near real time, yeah. 00:34:31.199 --> 00:34:32.719 Why am I holding 10 days of margin? 00:34:32.960 --> 00:34:33.760 I'm holding seven. 00:34:33.840 --> 00:34:36.159 I can I can balance the books faster. 00:34:36.400 --> 00:34:38.719 So these are the types of discussions that we have. 00:34:38.960 --> 00:34:43.599 The good news is that they're listening and and and there's movement. 00:34:43.679 --> 00:34:44.880 It's it's been amazing. 00:34:45.039 --> 00:34:47.199 So anyway, that's the way I'm thinking. 00:34:47.519 --> 00:34:48.159 I love stuff like that. 00:34:48.320 --> 00:34:50.639 I mean, it's like Ethan Buckman, do you know him? 00:34:50.800 --> 00:34:52.559 He was one of the co-founders of Cosmos. 00:34:52.639 --> 00:34:56.800 He just started a new company that does this for settle uh settling. 00:34:56.960 --> 00:35:01.679 It's like if if three parties owe each other, I forget what the term is that he told me about, but he was on the party? 00:35:01.840 --> 00:35:09.679 Yeah, if there's like three people that owe each other money, you can you can instantly settle the debts between all three people, even though like person Abe owes a slightly different. 00:35:09.840 --> 00:35:12.079 It's like a way of just like netting it out. 00:35:12.239 --> 00:35:12.719 Yeah, yeah, yeah. 00:35:12.880 --> 00:35:16.480 And he's like building a blockchain protocol to do that because it happens at real time. 00:35:16.719 --> 00:35:17.039 Yeah, yeah. 00:35:17.280 --> 00:35:19.119 That's a huge part of traditional finance. 00:35:19.199 --> 00:35:25.920 There's an entire this there's this like an FX, like much of the FX spot market is really built around that. 00:35:26.000 --> 00:35:30.320 It's called CLS, where there's like everyone throws their stuff in and it's like it nets it out. 00:35:30.639 --> 00:35:34.320 So what what's um what's one question that I haven't asked you that I should have asked? 00:35:34.480 --> 00:35:35.840 I always asked this at the end of the show. 00:35:35.920 --> 00:35:38.320 We're at the top of the hour or top of the top of the show. 00:35:38.559 --> 00:35:39.920 We didn't talk about privateers. 00:35:40.159 --> 00:35:41.519 What well tell me about that. 00:35:41.679 --> 00:35:42.800 What are privateers? 00:35:43.280 --> 00:35:43.760 Yeah. 00:35:44.079 --> 00:35:45.119 Uh okay. 00:35:45.280 --> 00:35:46.320 So pirates. 00:35:47.360 --> 00:35:48.000 Yeah. 00:35:48.320 --> 00:35:57.119 So I wrote a paper with Christian Carlo about 18 months ago, and one of the things that we were struggling with was that security is not where it needs to be. 00:35:57.280 --> 00:35:59.760 Here we have all these bare assets or$3 trillion industry. 00:35:59.840 --> 00:36:03.360 We're getting hundreds of, you know, we're getting billions of dollars stolen from crypto. 00:36:03.440 --> 00:36:05.039 You see it every day, these hacks, right? 00:36:05.280 --> 00:36:06.800 AI is making it even worse. 00:36:07.039 --> 00:36:08.159 So we know we have a problem. 00:36:08.320 --> 00:36:10.400 I don't know about you, but I hadn't heard any solutions. 00:36:10.800 --> 00:36:11.920 Did you ever hear any solutions? 00:36:12.159 --> 00:36:14.079 No, I just see people get wrecked. 00:36:14.880 --> 00:36:15.440 Like it's getting worse. 00:36:16.400 --> 00:36:18.719 The scams are getting just insane too, man. 00:36:18.800 --> 00:36:20.639 Like the I don't even answer my emails anymore. 00:36:20.719 --> 00:36:23.920 Like, literally, you can't get in touch with me because I get so many phishing attempts. 00:36:24.480 --> 00:36:25.599 It's so scary, right? 00:36:25.679 --> 00:36:27.039 But no one's doing

anything about it. 00:36:27.199 --> 00:36:28.480 So I'm like, you know what, Chris? 00:36:28.559 --> 00:36:30.719 And I grabbed Chris, he's former chairman of the CFTC. 00:36:30.800 --> 00:36:32.000 I'm like, let's do something about it. 00:36:32.159 --> 00:36:34.400 And what we did was we looked at history. 00:36:34.719 --> 00:36:44.639 And if you go back in history to the founding of our country, I would argue, and I'm an old naval officer, I would argue that George Washington wasn't solely responsible for winning the Revolutionary War. 00:36:44.960 --> 00:36:47.760 He did a good job, and good on George. 00:36:47.920 --> 00:36:51.360 But what happened was we unleashed what we call privateers. 00:36:51.440 --> 00:36:57.679 And we said, hey, all you guys with boats, wherever you are, like you're really good at seamanship, like you're better than us. 00:36:57.840 --> 00:36:59.360 We don't have the money for our Navy. 00:36:59.599 --> 00:37:07.440 So we're gonna give you a license, you're gonna give us a bond, and then you're gonna go out and you're gonna go out and you're gonna attack British commerce. 00:37:07.679 --> 00:37:18.000 And they ravaged British commerce so bad that if you go to the newspaper headlines in the time in London, the Londoners are like, get out of this war, they're destroying our economy, this is not working. 00:37:18.159 --> 00:37:19.119 And we know what happened there. 00:37:19.280 --> 00:37:22.559 War of 1812 kicks off, and same thing happens. 00:37:22.639 --> 00:37:23.760 Madison's like, that's it. 00:37:23.840 --> 00:37:25.679 Let's privateers get after them. 00:37:25.920 --> 00:37:30.159 And he he issued 500 of what we call letters of mark, and we know what happened there. 00:37:30.400 --> 00:37:32.079 You didn't think I was gonna go down this route, did you? 00:37:32.159 --> 00:37:32.639 This is kind of weird. 00:37:32.800 --> 00:37:33.679 No, but it's fascinating. 00:37:33.840 --> 00:37:34.880 It's kind of weird, right? 00:37:35.039 --> 00:37:44.400 And so the funny thing is, is that our founding fathers love this so much because it helped found our country, they put it in the Constitution. 00:37:44.559 --> 00:37:56.159 So your homework tonight is to go read the Constitution, look in Article 1, Section 8, and gives the Congress the authority to issue letters of mark and reprisal allowing this practice to happen. 00:37:56.400 --> 00:37:59.599 So I went to Chris, and I'm like, I really like where this is going. 00:38:00.159 --> 00:38:01.599 I'm like, we got to do something. 00:38:01.760 --> 00:38:03.119 We have this asymmetric threat. 00:38:03.280 --> 00:38:06.559 Like to your point, we have state actors destroying our startups. 00:38:06.719 --> 00:38:08.159 No one's doing anything about it. 00:38:08.320 --> 00:38:12.800 Our government would like to, they don't have the skills, they don't have the surface area. 00:38:13.199 --> 00:38:15.760 I have a bunch of really awesome white hat hackers at my company. 00:38:15.920

--> 00:38:17.119 We should just unleash them. 00:38:17.360 --> 00:38:18.320 So guess what? 00:38:18.480 --> 00:38:19.679 It's it's happened. 00:38:19.840 --> 00:38:23.920 So Chris presented to Lutnik and he presented to Bessent. 00:38:24.079 --> 00:38:25.119 They like the idea. 00:38:25.280 --> 00:38:31.920 And a lot of people missed this, but an executive order recently came out and said, Oh yeah, we're gonna do it. 00:38:32.000 --> 00:38:35.119 They made it bigger than crypto, but but the program is now live. 00:38:35.280 --> 00:38:40.239 And um, it's just kind of amazing when you have an idea, you bring it to the government, and the government responds to you. 00:38:40.400 --> 00:38:40.800 That happened. 00:38:40.960 --> 00:38:42.079 There's a what's the mandate? 00:38:42.159 --> 00:38:44.320 Is it is it just spelled out in the executive order? 00:38:44.400 --> 00:38:48.000 Like if you get one of these licenses, you can go after the scammers and try and steal their money? 00:38:48.239 --> 00:38:51.519 It's it's actually modeled based on like this the founding of our country. 00:38:51.599 --> 00:38:58.719 Back in the day, ship captains used to have to post bail because if they were bad and they became pirates, they would capture the bail and they would get in trouble. 00:38:58.960 --> 00:39:06.320 So you literally have to you have a bond of like a million bucks, you have a company, and they're still going through the final, I think, details, but it's out there. 00:39:06.480 --> 00:39:13.039 And um when I saw that EO, I'm like, oh my god, that's so is this your call to arms like rally the crypto white hat? 00:39:13.440 --> 00:39:16.880 Because there's a lot of these people, you know, on Twitter, like really solid. 00:39:16.960 --> 00:39:24.079 I can't I think of like the Zach XPD guy, like you know, who goes and sleuths all the hackers and like uncovers what they did to scam people. 00:39:24.239 --> 00:39:25.920 Yeah, that's that's pretty exciting. 00:39:26.159 --> 00:39:28.480 Yeah, so got done, and then it's even in clarity. 00:39:28.559 --> 00:39:29.760 There's a version of it in clarity. 00:39:29.920 --> 00:39:34.239 I don't want to get into constitutional law, we can do it next time, but it it's a super interesting concept. 00:39:34.400 --> 00:39:36.079 But look, why why is that important? 00:39:36.239 --> 00:39:40.960 Because like security is a problem, and we gotta fix it if we're gonna if we're gonna, you know, particularly in the age of AI. 00:39:41.039 --> 00:39:42.880 So, where can I go to read about this? 00:39:43.199 --> 00:39:45.280 Do I just Google like what do I look up? 00:39:45.519 --> 00:39:56.400 You gotta start following me on Twitter first, and then yeah, you can just Google uh the executive order on um on privateers and Google Christian Carlo and me and our and our original uh and you guys helped get that through. 00:39:56.480 --> 00:39:56.880 Well, I don't know. 00:39:57.039 --> 00:39:57.519 It's pretty crazy. 00:39:58.079 --> 00:40:05.760 We're the ones who wrote it, and we're the ones and he brought it pretty much and it came out, so yeah, maybe it's more him than me, but we're uh all right. 00:40:05.840 --> 00:40:11.599 What's your Twitter handle so people can go follow if they if they listen to this and they want to go privateer the scammers? 00:40:12.320 --> 00:40:14.320 It's just Perkins CR97. 00:40:14.719 --> 00:40:15.519 Let's go. 00:40:15.679 --> 00:40:17.360 Well, thanks so much for coming on. 00:40:17.599 --> 00:40:18.480 Thanks, Alex. 00:40:18.639 --> 00:40:19.840 Always good to see you, man. 00:40:19.920 --> 00:40:21.519 Have a great day, you too.