1 00:00:00,080 --> 00:00:02,560 Michael, welcome to the Network State podcast. 2 00:00:02,560 --> 00:00:05,560 We're going to do a special episode today where we go 3 00:00:05,560 --> 00:00:10,120 through Michael Saylor's new road map and digital assets 4 00:00:10,120 --> 00:00:11,520 framework. Michael, welcome. 5 00:00:11,800 --> 00:00:14,120 Yeah, thanks for having me. Really happy to be here. 6 00:00:14,800 --> 00:00:15,840 Awesome. OK, great. 7 00:00:16,079 --> 00:00:18,600 So you just published this digital assets framework, the 8 00:00:18,600 --> 00:00:20,640 principles and opportunity for the US, right? 9 00:00:20,800 --> 00:00:24,040 It's PDF, it's got in more than half a million views. 10 00:00:24,280 --> 00:00:27,600 Maybe you can talk through it, say you know what what you were 11 00:00:27,600 --> 00:00:29,720 thinking about when you're writing this and and what the 12 00:00:29,720 --> 00:00:31,360 goal is. Sure. 13 00:00:32,240 --> 00:00:36,280 So first of all, for the past four years I've been watching 14 00:00:36,280 --> 00:00:41,080 the the crypto debate go on, you know, in the United States and 15 00:00:41,080 --> 00:00:43,640 everywhere else in the world. And I think a lot of times 16 00:00:43,920 --> 00:00:47,480 everybody's yelling and there's a lot of talking past each other 17 00:00:47,480 --> 00:00:50,360 and, and there's a lot of friction. 18 00:00:50,800 --> 00:00:55,080 And it seems to me that if our goal is to move forward in a 19 00:00:55,080 --> 00:00:58,840 constructive, progressive fashion, we'd benefit from a 20 00:00:58,840 --> 00:01:01,560 framework. So I put together a digital 21 00:01:01,560 --> 00:01:04,319 assets framework along with a set of principles. 22 00:01:04,680 --> 00:01:09,360 And I try to talk a bit about the ideology, what's the vision 23 00:01:09,360 --> 00:01:12,280 and what's the opportunity. And I did it from the United 24 00:01:12,280 --> 00:01:15,840 States point of view because I think the United States really 25 00:01:15,840 --> 00:01:20,000 needs to lead in the digital assets arena. 26 00:01:20,000 --> 00:01:24,080 And if they do, I think it's quite likely that'll provide the 27 00:01:24,080 --> 00:01:26,760 air cover that will allow similar digital assets 28 00:01:26,760 --> 00:01:30,640 frameworks and in the Middle East and Singapore and Japan and 29 00:01:30,640 --> 00:01:32,280 Europe, etcetera in South America. 30 00:01:32,520 --> 00:01:35,000 So let's look at the different steps. 31 00:01:35,440 --> 00:01:38,680 I've got a taxonomy, a taxonomy of different assets. 32 00:01:38,680 --> 00:01:45,400 We talked about how we legitimize these assets and then 33 00:01:45,400 --> 00:01:49,120 what are the practices we need in order to make, how do we make 34 00:01:49,120 --> 00:01:52,840 this practical? And then the fourth section is 35 00:01:52,840 --> 00:01:56,160 on the vision and the fifth section is really the 36 00:01:56,160 --> 00:01:59,320 opportunity for the United States, so. 37 00:02:00,280 --> 00:02:03,160 So why don't we start with the, yeah, exactly the taxonomy, 38 00:02:03,160 --> 00:02:05,480 right. So you have 6 definitions there. 39 00:02:05,520 --> 00:02:06,800 Most of them I think people have heard. 40 00:02:06,800 --> 00:02:08,800 Why don't you go through them, commodity security, currency 41 00:02:09,080 --> 00:02:12,640 token, NFT and A/B TI hadn't heard the last term in that 42 00:02:12,640 --> 00:02:15,040 acronym, the asset backed token. But go ahead. 43 00:02:15,360 --> 00:02:18,240 So there's a lot of types of digital assets. 44 00:02:18,320 --> 00:02:22,840 A digital commodity is an asset without an issuer, backed by 45 00:02:22,840 --> 00:02:26,200 digital power. A digital security is an asset 46 00:02:26,200 --> 00:02:29,440 with an issuer, and it's backed by a security. 47 00:02:29,440 --> 00:02:33,840 The third digital currency, it's an asset with an issuer, but 48 00:02:33,840 --> 00:02:38,120 it's backed by a Fiat currency. A digital token would be a 49 00:02:38,120 --> 00:02:42,080 fungible asset with an issuer. Then you've got digital NFTS. 50 00:02:42,080 --> 00:02:46,040 It's a non fungible asset with an issuer offering digital 51 00:02:46,040 --> 00:02:48,280 utility. But the difference is you could 52 00:02:48,280 --> 00:02:51,760 have 10 million fungible tokens and we get that. 53 00:02:51,760 --> 00:02:56,200 But if you have 100 different NFTS and they give you 100 54 00:02:56,200 --> 00:02:58,640 distinct rights, then it's something different than the 55 00:02:58,640 --> 00:03:01,600 token. Now the last one, digital ABT 56 00:03:01,640 --> 00:03:06,080 asset backed token, a digital asset with an issuer, but backed 57 00:03:06,080 --> 00:03:10,320 by a physical asset, backed by a bar of gold, backed by a barrel 58 00:03:10,320 --> 00:03:12,640 of oil. So that's the taxonomy. 59 00:03:12,640 --> 00:03:15,960 They're all tokenized assets and we're talking about tokenizing 60 00:03:15,960 --> 00:03:19,720 the capital markets and each one of these is a different form of 61 00:03:19,720 --> 00:03:22,240 property. I actually like this because it 62 00:03:22,240 --> 00:03:24,280 carves it at the joints pretty well. 63 00:03:24,520 --> 00:03:27,360 Let me let me go through and you see you tell me if I'm playing 64 00:03:27,360 --> 00:03:29,600 this back correctly according to your definitions, right. 65 00:03:29,600 --> 00:03:33,000 So digital commodity that would be Bitcoin. 66 00:03:33,240 --> 00:03:36,040 That may be the only in your view is is do you think that's 67 00:03:36,080 --> 00:03:38,160 the only digital asset without an issuer? 68 00:03:39,040 --> 00:03:41,200 I won't say that I won't go that far. 69 00:03:41,200 --> 00:03:46,600 I will say it's a very high hurdle to issue a digital asset 70 00:03:46,600 --> 00:03:48,320 without an issue. It's very hard, right? 71 00:03:48,560 --> 00:03:53,040 It can be done. I could, I could imagine other 72 00:03:53,040 --> 00:03:56,320 digital commodities, for example, you could, I mean, 73 00:03:56,320 --> 00:04:00,600 China could take Bitcoin, fork Bitcoin, create China coin and 74 00:04:00,600 --> 00:04:05,120 they could say China coin is like Bitcoin, but it has special 75 00:04:05,120 --> 00:04:09,040 tax privileges in China and it's only interesting to the Chinese 76 00:04:09,040 --> 00:04:12,920 people and 1.5 billion people. Maybe something as simple as 77 00:04:13,160 --> 00:04:16,880 you're allowed to mine China, China coin in China with Chinese 78 00:04:16,880 --> 00:04:19,320 power and you're not allowed to mine Bitcoin. 79 00:04:19,440 --> 00:04:23,800 You would have if everything else was the same, if there was 80 00:04:23,800 --> 00:04:27,760 no issuer, you would have, in theory, a digital commodity. 81 00:04:28,000 --> 00:04:32,520 Maybe it's not global property, maybe it's China property. 82 00:04:32,840 --> 00:04:35,760 But the point is the real key is if you want to create a 83 00:04:35,760 --> 00:04:39,480 commodity, you need to create a network, disclaim beneficial 84 00:04:39,480 --> 00:04:42,640 ownership. And you can't point to anybody 85 00:04:42,640 --> 00:04:48,600 that has control of the destiny of the network or has some major 86 00:04:48,600 --> 00:04:51,480 beneficial ownership of it if you're going to achieve 87 00:04:51,480 --> 00:04:53,680 commodity status. Interesting. 88 00:04:53,760 --> 00:04:56,840 OK, great. So so let's say for now at least 89 00:04:57,160 --> 00:04:59,520 digital commodity is sweet, generous, that's Bitcoin. 90 00:04:59,600 --> 00:05:02,200 And then for your other things, all the other 5 categories have 91 00:05:02,200 --> 00:05:05,800 an issue or so an example of a digital security would be we 92 00:05:05,800 --> 00:05:08,960 would actually legalize crypto equities or crypto debt, crypto 93 00:05:08,960 --> 00:05:13,080 derivatives, for example, Uber in theory could now put its 94 00:05:13,280 --> 00:05:16,800 assets on chain. And, you know, in, in another 95 00:05:16,800 --> 00:05:20,960 world, Uber could have given assets, you know, in its, in its 96 00:05:20,960 --> 00:05:24,840 company to its driver so that they grew with the with the 97 00:05:24,840 --> 00:05:27,640 organization. Can I offer just simpler one 98 00:05:27,640 --> 00:05:30,480 which is yeah, go ahead. Just MicroStrategy stock, if it 99 00:05:30,480 --> 00:05:36,480 was trading on Coinbase or Binance 24/7, 365 would be a 100 00:05:36,480 --> 00:05:40,320 digital security, right? Apple, Apple could be, you know, 101 00:05:40,560 --> 00:05:43,480 AAPL could be a digital security. 102 00:05:43,760 --> 00:05:46,440 Now, I'm not saying it would only trade on finance or coin 103 00:05:46,440 --> 00:05:48,240 base. It could trade on a, it could 104 00:05:48,240 --> 00:05:53,120 trade on any, you know, layer 2 or any tokenized network to 105 00:05:53,120 --> 00:05:56,240 speak of. But the point is it would be one 106 00:05:56,240 --> 00:06:01,240 share, a token that represents a share of Microsoft stock or 107 00:06:01,240 --> 00:06:04,600 Apple stock. It's backed by the stock, but 108 00:06:04,600 --> 00:06:07,960 it's tokenized trading in the in the crypto world. 109 00:06:08,640 --> 00:06:10,280 Yes. And also I think one of the 110 00:06:10,280 --> 00:06:14,120 things we've been talking about offline was you could imagine a 111 00:06:14,120 --> 00:06:19,240 site that allowed mom and pop restaurants or you know, like 112 00:06:19,240 --> 00:06:23,920 small real estate operations to raise equity or debt once crypto 113 00:06:23,920 --> 00:06:26,040 equity was legalized. And you could have people from 114 00:06:26,040 --> 00:06:28,600 around the world do it. Obviously you'd need lock UPS, 115 00:06:28,800 --> 00:06:31,520 you need, you know, various provisions for alignment. 116 00:06:31,760 --> 00:06:34,160 But conceptually you could actually get a cryptographic 117 00:06:34,160 --> 00:06:36,960 stock certificate. You could see all the provisions 118 00:06:36,960 --> 00:06:38,560 of it. The blockchain would enforce 119 00:06:38,640 --> 00:06:40,240 time stamps, all that kind of stuff, right? 120 00:06:40,520 --> 00:06:44,160 If I'm not mistaken. If you had just just equity in a 121 00:06:44,160 --> 00:06:47,720 private company, equity in $1,000,000 restaurant, equity in 122 00:06:47,720 --> 00:06:51,760 a $10 million hotel, you know any kind of private equity, 123 00:06:51,760 --> 00:06:57,000 venture capital equity, you know any partnership interest, any 124 00:06:57,000 --> 00:07:02,240 claim on future cash flows, Maybe you own 1100 share of my 125 00:07:02,240 --> 00:07:06,880 Airbnb business, right? Any of those look like small 126 00:07:06,880 --> 00:07:10,640 Private Securities, but if you had digital assets framework, 127 00:07:10,640 --> 00:07:15,240 maybe you would publish, publish the relevant disclosures, sign 128 00:07:15,240 --> 00:07:19,720 up to the relevant obligations and you would put those on a 129 00:07:19,720 --> 00:07:23,400 digital exchange and they trade 24/7, 365 globally. 130 00:07:23,800 --> 00:07:26,640 To me, this is so obviously what should happen because let's say 131 00:07:26,640 --> 00:07:31,760 you've got a hotel in, I don't know, Australia or, you know, an 132 00:07:31,760 --> 00:07:33,720 inn and in Brazil or something like that. 133 00:07:33,720 --> 00:07:36,360 They can put up a website, they can advertise for customers 134 00:07:36,520 --> 00:07:39,200 around the world. And in fact, they can process 135 00:07:39,240 --> 00:07:40,560 credit cards from around the world. 136 00:07:41,280 --> 00:07:44,800 You've got a motel in the Midwest and they they're already 137 00:07:44,800 --> 00:07:46,600 processing cards. They've already got a website 138 00:07:46,600 --> 00:07:48,080 that anybody in the world can access. 139 00:07:48,320 --> 00:07:50,680 But they can't use capital formation, which is the obvious 140 00:07:50,680 --> 00:07:53,240 thing to do on chain. And of course you need all kinds 141 00:07:53,240 --> 00:07:55,320 of, you know, procedures and so on for this. 142 00:07:55,320 --> 00:07:56,880 But that's solvable, right? Is it? 143 00:07:57,000 --> 00:07:58,600 Would you agree with? That I do agree with that. 144 00:07:58,640 --> 00:08:05,040 I I think that the existing capital markets, they require 145 00:08:05,040 --> 00:08:08,560 you take four years and $40 million in order to create a 146 00:08:08,720 --> 00:08:12,360 equity which trades with A4 letter ticker. 147 00:08:12,840 --> 00:08:15,840 And that's the 20th century why we did it. 148 00:08:16,080 --> 00:08:20,600 But what if we could do it in four hours for 40 bucks? 149 00:08:21,440 --> 00:08:24,680 And, and I think there's another argument which is, you know, 150 00:08:24,680 --> 00:08:30,960 maybe in the 20th century, most businesses worse municipal based 151 00:08:30,960 --> 00:08:34,120 or state based or nation based. There's a lot of international 152 00:08:34,120 --> 00:08:36,760 podcasters. I could have a, you know, I 153 00:08:36,760 --> 00:08:40,559 could have an international chess podcast with 800,000 fans 154 00:08:40,919 --> 00:08:44,320 spread across every country on earth and it and it would be 155 00:08:44,320 --> 00:08:48,160 very easy for me to appeal to the fans to raise capital. 156 00:08:48,320 --> 00:08:52,240 What if I wanted to sell half the interest in my podcast to 157 00:08:52,240 --> 00:08:53,880 them? They would want to buy it. 158 00:08:54,160 --> 00:08:58,200 I would want to sell it. But right now there isn't really 159 00:08:58,560 --> 00:09:02,840 a straightforward path to legit, a practical path for me to do 160 00:09:02,840 --> 00:09:07,520 that in a legitimate fashion. And so if I use the 20th century 161 00:09:07,600 --> 00:09:12,840 techniques, I'm at a huge disadvantage and and I won't be 162 00:09:12,840 --> 00:09:15,200 able to raise money. And so we're really crippling 163 00:09:15,200 --> 00:09:20,200 the 21st century global economy with 20th century rules for 164 00:09:20,200 --> 00:09:22,000 capital formation. Absolutely. 165 00:09:22,000 --> 00:09:24,360 And that actually brings me to the next definition, the digital 166 00:09:24,360 --> 00:09:27,000 currency, right. So by your definition, which is 167 00:09:28,200 --> 00:09:30,960 what we call maybe a stable coin, right, an asset with an 168 00:09:30,960 --> 00:09:36,280 issuer backed by Fiat currency. So example USDC or if you put 169 00:09:37,520 --> 00:09:40,880 some other Fiat currency on chain, the USDT might be that. 170 00:09:41,440 --> 00:09:45,320 But USDC would be the clear version of this where you have 171 00:09:45,320 --> 00:09:49,520 an on chain USDC, you have an off chain USD in a bank account. 172 00:09:49,880 --> 00:09:53,120 And if you combine that with a digital security, you could, 173 00:09:53,120 --> 00:09:56,680 taking your chess example, raise USDC from people around the 174 00:09:56,680 --> 00:09:58,280 world. All those payments would be 175 00:09:58,280 --> 00:10:00,760 tracked on chain and actually you could potentially click a 176 00:10:00,760 --> 00:10:03,960 button and do your accounting. And if those people had 177 00:10:03,960 --> 00:10:06,840 whatever, you know, profile information, you could 178 00:10:06,840 --> 00:10:08,720 automatically and send them stock certificates. 179 00:10:08,920 --> 00:10:12,040 It'd be the equivalent of what Excel was. 180 00:10:12,040 --> 00:10:13,960 You know, people used to do accounting by hand, as you may 181 00:10:13,960 --> 00:10:16,200 remember, with, you know, piece of paper before spreadsheets 182 00:10:16,200 --> 00:10:18,160 came. I think corporate accounting is 183 00:10:18,160 --> 00:10:20,480 kind of like that now. But you could in theory, have 184 00:10:20,960 --> 00:10:23,520 all the transactions on chain, hit a button and it'll just 185 00:10:23,520 --> 00:10:26,280 prepare your books for you. At least, you know, you decide 186 00:10:26,280 --> 00:10:28,160 which pieces of that to have. But if you have both digital 187 00:10:28,160 --> 00:10:30,440 currency and digital security, you could automate a ton of 188 00:10:30,440 --> 00:10:32,120 compliance work. Let let me know your thoughts. 189 00:10:33,160 --> 00:10:36,760 I, I think you've got, I agree. What we're talking about is 190 00:10:36,760 --> 00:10:42,880 tokenizing a Fiat currency or a tokenizing a checking account. 191 00:10:42,880 --> 00:10:47,920 So I mean, the, the, the trick to this is there's no question 192 00:10:47,920 --> 00:10:50,120 everybody in the world wants digital dollars. 193 00:10:50,120 --> 00:10:54,920 And there's no question that if I, if I live in China or if I 194 00:10:54,920 --> 00:10:58,640 live in Europe and I have to pay in euros or see and why I want 195 00:10:58,640 --> 00:11:02,000 tokenized local currency in those two frames of reference as 196 00:11:02,000 --> 00:11:04,240 well. Just like in Brazil, you might 197 00:11:04,240 --> 00:11:09,720 want tokenized real. So why do you want it? 198 00:11:09,720 --> 00:11:12,120 While you want it to be a programmable, you want to move 199 00:11:12,120 --> 00:11:14,880 it at the speed of light, you want to vibrate it a million 200 00:11:14,880 --> 00:11:18,640 times a second, You want 8 billion AI to be able to trade 201 00:11:18,640 --> 00:11:21,880 with each other 97,000 times an hour. 202 00:11:21,920 --> 00:11:24,880 You know, it's like the utility is obvious. 203 00:11:25,200 --> 00:11:29,200 The challenge is or you need the nation state that issues the 204 00:11:29,200 --> 00:11:35,120 Fiat currency to recognize it as a legitimate and then you need 205 00:11:35,120 --> 00:11:39,400 to overcome the privacy and the money transfer issues that you 206 00:11:39,400 --> 00:11:41,880 know which which pop up from place to place. 207 00:11:41,880 --> 00:11:46,680 I think we make huge progress simply by distinguishing the 208 00:11:46,680 --> 00:11:50,800 difference between digital currency, which is really circle 209 00:11:50,800 --> 00:11:55,840 or Tether versus digital commodities, which is Bitcoin 210 00:11:56,160 --> 00:11:59,600 versus digital securities, which is your tokenized Apple share 211 00:12:00,120 --> 00:12:04,320 versus a digital token, which might be any number of crypto 212 00:12:04,320 --> 00:12:07,920 tokens with an issuer that are come, you know, that have 213 00:12:07,920 --> 00:12:10,840 functionality in cyberspace or digital utility. 214 00:12:11,160 --> 00:12:15,720 But they're not securities and they're not currencies and 215 00:12:15,720 --> 00:12:20,200 they're not commodities. And the entire cryptocurrency 216 00:12:20,200 --> 00:12:25,000 industry has been saddled by this one name currency. 217 00:12:25,400 --> 00:12:30,160 And all four of those things I just mentioned are sometimes are 218 00:12:30,160 --> 00:12:32,800 sometimes referred to as a cryptocurrency. 219 00:12:33,000 --> 00:12:37,200 And the result is you just get massive pushback and fear and 220 00:12:37,200 --> 00:12:41,320 uncertainty and and doubt. And we need to break them into 221 00:12:41,320 --> 00:12:44,840 four different categories so that people understand they're 222 00:12:44,840 --> 00:12:47,560 four different things for four different purposes. 223 00:12:48,000 --> 00:12:50,280 I like this a lot. And so an example of the fourth 224 00:12:50,280 --> 00:12:53,560 that be what most people think of when they think of crypto as 225 00:12:53,560 --> 00:12:56,520 opposed to Bitcoin. So that's Etherium salon, AZ 226 00:12:56,520 --> 00:13:00,120 cash Manero, something that you know, a fungible asset that 227 00:13:00,120 --> 00:13:03,760 offers digital utility that's in a portfolio and then something 228 00:13:03,760 --> 00:13:06,640 like a digital NFT and non fungible asset with an issuer. 229 00:13:07,000 --> 00:13:10,080 Now NFTS are actually kind of interesting because historically 230 00:13:10,080 --> 00:13:12,840 people have thought of them as, you know, a really expensive 231 00:13:12,840 --> 00:13:15,320 piece of digital art like $1,000,000 for an NFT. 232 00:13:15,720 --> 00:13:18,560 But now you can issue 1,000,000 NFTS for a dollar. 233 00:13:18,720 --> 00:13:23,280 So you can issue like the equivalent of likes or you know, 234 00:13:23,280 --> 00:13:25,760 Reddit style upvotes. You can issue those on chain as 235 00:13:25,760 --> 00:13:30,840 little markers of things. You can issue a ticket for a 236 00:13:30,840 --> 00:13:33,800 digital for a conference either online or offline. 237 00:13:33,800 --> 00:13:36,520 You can use NF TS to open digital locks. 238 00:13:36,800 --> 00:13:40,680 So so NF TS I think are pretty interesting. 239 00:13:40,720 --> 00:13:44,840 If a smart contract is on chain code, NF TS are on chain data. 240 00:13:45,320 --> 00:13:48,800 And I'm glad that you have a distinction between the fungible 241 00:13:48,800 --> 00:13:51,000 and non fungible here at the digital token and digital NFT. 242 00:13:51,000 --> 00:13:53,600 Any thoughts on Because NF TS are on Bitcoin too as well? 243 00:13:54,600 --> 00:13:59,200 Yeah, I, I, I think if you, if you just characterize them as 244 00:13:59,200 --> 00:14:01,600 digital art, you're kind of underselling them. 245 00:14:01,880 --> 00:14:07,640 I think we got to think of them as, as a unique digital right. 246 00:14:08,200 --> 00:14:15,160 And I think about, I think about other types of rights like maybe 247 00:14:15,160 --> 00:14:20,920 I'm Tom Brady and I post on some channel like on X and I'm going 248 00:14:20,920 --> 00:14:25,680 to actually sell 10 superfan tokens and numbers one through 249 00:14:25,680 --> 00:14:28,960 10 actually get ranked. And their response is underneath 250 00:14:28,960 --> 00:14:30,360 me. And if you always want to be the 251 00:14:30,360 --> 00:14:34,000 number one respondent, you buy NFT Brady 1. 252 00:14:34,480 --> 00:14:36,920 And if you want to be #2 you're Brady 2. 253 00:14:37,240 --> 00:14:39,480 And if you're #10 you're Brady 10. 254 00:14:39,480 --> 00:14:43,200 And, and if you owned Brady tokens one through 10, maybe 255 00:14:43,200 --> 00:14:46,560 that guarantees you for all of eternity, you'll always be one 256 00:14:46,560 --> 00:14:49,160 of the top 10 responses in that order. 257 00:14:49,400 --> 00:14:52,640 And there might be some super fan who's willing to pay 258 00:14:52,640 --> 00:14:58,080 $100,000 to make sure that their comment is always number one. 259 00:14:58,400 --> 00:15:02,280 You know, underneath Brady, it's like, it's a special, right? 260 00:15:03,120 --> 00:15:07,000 Maybe it's a, it's a, it's a key to unlock something, you know, 261 00:15:07,000 --> 00:15:10,400 maybe it's some, maybe it is a piece of art. 262 00:15:10,840 --> 00:15:16,040 But I, I think I get, you know, this is not quite true. 263 00:15:16,920 --> 00:15:20,760 I'm going to give you a physical analogy and abt if I said to 264 00:15:20,760 --> 00:15:24,120 you, this is a token that represents one acre out of 265 00:15:24,120 --> 00:15:27,880 1,000,000 acres in Kansas and they all look the same, right? 266 00:15:27,880 --> 00:15:31,920 That's a fungible token. But if I said this is 2 acres, 267 00:15:31,920 --> 00:15:36,680 you know, in Palm Beach on the beach next to the country, 268 00:15:36,680 --> 00:15:38,920 cough, right. When you get to the point where 269 00:15:38,920 --> 00:15:41,160 it's a specific piece of, of real estate. 270 00:15:42,040 --> 00:15:45,720 And now we think about specific real estate in cyberspace. 271 00:15:46,160 --> 00:15:49,680 I can create real estate in cyberspace, right? 272 00:15:49,680 --> 00:15:55,520 With proximity and priority. So if you, if you start to 273 00:15:55,520 --> 00:15:59,600 create things that have some kind of priority or proximity 274 00:15:59,600 --> 00:16:07,360 or, or, or, or Providence or, or some uniqueness, maybe there's 275 00:16:07,360 --> 00:16:09,160 something there that's interesting. 276 00:16:09,160 --> 00:16:12,960 And, and of course, the idea of the framework is let's just give 277 00:16:12,960 --> 00:16:18,720 people the asset classes and let create a Cambrian explosion of 278 00:16:18,720 --> 00:16:23,160 innovation, of which 99% probably won't be economically 279 00:16:23,160 --> 00:16:27,240 successful. But on the other hand, the 1% 280 00:16:27,240 --> 00:16:31,680 might be the Instagrams, the the metas, the, you know, the the 281 00:16:31,680 --> 00:16:35,040 Teslas of the world. And that'll be worth all of the 282 00:16:35,120 --> 00:16:36,800 other trouble. Absolutely. 283 00:16:36,800 --> 00:16:39,320 And I think actually, you know, one thing I would just say on 284 00:16:39,320 --> 00:16:42,000 that is I think of there being a spectrum of fungibility. 285 00:16:42,000 --> 00:16:45,320 For example, you could have a one of one like a digital Mona 286 00:16:45,320 --> 00:16:47,200 Lisa. You could have, right. 287 00:16:47,200 --> 00:16:50,480 You take your Miami example, you've got maybe 10 acres of 288 00:16:50,480 --> 00:16:53,880 land and each acre is its own NFT plot. 289 00:16:53,880 --> 00:16:57,000 So that's like, you know, 9:50 and then you could get all the 290 00:16:57,000 --> 00:17:00,400 way, for example, to, for example, IP address space. 291 00:17:00,400 --> 00:17:04,000 As you may be aware, you've got 4 billion unique IPV, 4 292 00:17:04,000 --> 00:17:06,680 addresses. And in theory, each of those 293 00:17:06,680 --> 00:17:10,640 could be tradable as an individual NFT and that would be 294 00:17:10,640 --> 00:17:13,599 finite, that'd be capped. There'd be a logic to it, but 295 00:17:14,119 --> 00:17:17,960 it'd be sort of once you start to get to that point there they 296 00:17:18,000 --> 00:17:20,880 are non fungible. You can't actually exchange one 297 00:17:20,880 --> 00:17:23,640 with each other, but the pricing on one might be similar to the 298 00:17:23,640 --> 00:17:26,040 pricing of another. And so then, then you get all 299 00:17:26,040 --> 00:17:27,880 the way to like a fully fungible token. 300 00:17:27,880 --> 00:17:32,280 So I think of there's being an interesting continuum here and 301 00:17:32,280 --> 00:17:33,960 if you have any thoughts on that, then we can go to AB TS. 302 00:17:33,960 --> 00:17:38,400 Yeah, it's a it's, yeah. It's just obviously a million 303 00:17:38,440 --> 00:17:41,280 thoughts part spark up and we probably want to go down this 304 00:17:41,280 --> 00:17:43,840 rabbit hole, but I just think about all the domains, you know, 305 00:17:43,840 --> 00:17:47,440 like when you think about owning, owning a domain like I 306 00:17:47,440 --> 00:17:51,160 bought frank.com and emma.com and hope.com and Angel. 307 00:17:51,160 --> 00:17:53,160 Dot com great one, yes. Yeah, yeah. 308 00:17:53,200 --> 00:17:56,200 Like, well, I don't, I don't know if they're actually 309 00:17:56,200 --> 00:18:01,000 physical assets or intellectual property assets, but but you 310 00:18:01,000 --> 00:18:06,760 might very well attach an NFT to all sorts of interesting unique 311 00:18:06,880 --> 00:18:10,560 things in in cyberspace. And then they start to trade 312 00:18:10,560 --> 00:18:14,520 with the price and they can be transferred at high speed, 313 00:18:14,520 --> 00:18:16,320 right? It's just a a license. 314 00:18:17,040 --> 00:18:24,600 Love OK great abt. So this is essentially something 315 00:18:24,600 --> 00:18:28,600 which is like gold or silver or oil. 316 00:18:29,640 --> 00:18:32,880 It's interesting you this is what it's useful to distinguish 317 00:18:32,880 --> 00:18:36,320 that from a digital commodity because when you use the term 318 00:18:36,320 --> 00:18:39,560 digital commodity, you mean an intrinsically digital commodity, 319 00:18:39,560 --> 00:18:42,400 namely Bitcoin and perhaps uniquely Bitcoin, at least at 320 00:18:42,400 --> 00:18:46,480 this point, as opposed to digital ABT, which is often a 321 00:18:46,520 --> 00:18:51,040 commodity like gold or silver or oil that is traded on chain. 322 00:18:51,080 --> 00:18:54,480 And so it's it's a commodity, but it's a basically traded on 323 00:18:54,480 --> 00:18:56,120 chain as opposed to being intrinsically digital. 324 00:18:56,280 --> 00:18:57,120 Would you would you agree with that? 325 00:18:57,520 --> 00:19:01,680 Yeah, the distinction is a digital commodity is an asset 326 00:19:01,680 --> 00:19:04,600 without an issuer. And and in order to create an 327 00:19:04,600 --> 00:19:06,640 asset with an issuer, you're going to have to back it with 328 00:19:06,640 --> 00:19:14,640 some kind of digital power. Whereas a a digital ABT is a 329 00:19:14,640 --> 00:19:18,360 tokenized physical commodity. And that means at the end of the 330 00:19:18,360 --> 00:19:22,920 day, you're going to have a warehouse with 100,000, you 331 00:19:22,920 --> 00:19:28,800 know, little gold coins or, or 100,000 barrels of oil or 332 00:19:28,800 --> 00:19:32,480 100,000 bushels of soybean. And that means there's going to 333 00:19:32,480 --> 00:19:36,600 be a custodian, there's going to be an issuer repping to this 334 00:19:36,600 --> 00:19:40,320 custodian getting audited. And now you're going to tokenize 335 00:19:40,320 --> 00:19:43,400 whatever that is. And you're going to tokenize it 336 00:19:43,880 --> 00:19:48,320 so that people can move it at the speed of light, so you can 337 00:19:48,320 --> 00:19:50,680 slice it, so you can fractionalize it, so you can 338 00:19:50,680 --> 00:19:53,160 finance it, so you get liquidity on it. 339 00:19:53,680 --> 00:19:55,520 So you got transparency on 2nd programming? 340 00:19:56,280 --> 00:19:58,080 Amazing. So OK, great. 341 00:19:58,080 --> 00:20:03,880 You know, in math, one of my old professors used to say you can 342 00:20:04,160 --> 00:20:05,760 define your way out of a problem. 343 00:20:05,760 --> 00:20:07,600 And if you have the right definitions, lots of things 344 00:20:07,600 --> 00:20:10,320 follow, like abstract algebra of the group, the ring, the field, 345 00:20:10,320 --> 00:20:12,520 and then you can kind of just go downstream from that. 346 00:20:12,520 --> 00:20:15,920 So with these definitions, why don't we go to Section 2? 347 00:20:15,920 --> 00:20:17,560 Legitimacy. So like rights and 348 00:20:17,560 --> 00:20:21,680 responsibilities, right? So what you want to go through 349 00:20:21,680 --> 00:20:23,160 this? The path to legitimacy Issuers 350 00:20:23,160 --> 00:20:24,560 exchange? Owners, go ahead. 351 00:20:24,560 --> 00:20:26,280 Yeah. I mean, I think this all boils 352 00:20:26,280 --> 00:20:29,520 down to there's three general types of actors. 353 00:20:29,520 --> 00:20:32,040 There are issuers, people that issue digital assets. 354 00:20:32,040 --> 00:20:36,360 There are exchanges, anyone that trades custodies, and then there 355 00:20:36,360 --> 00:20:38,360 are owners, people that own the digital assets. 356 00:20:38,360 --> 00:20:40,880 Everybody needs a set of rights that are clear. 357 00:20:40,960 --> 00:20:42,760 And then there's set of responsibilities. 358 00:20:42,760 --> 00:20:46,200 If we do it right, you could in theory have millions and 359 00:20:46,200 --> 00:20:50,480 millions of issuers and you could have a lot of owners. 360 00:20:50,480 --> 00:20:55,000 And then I don't know why there couldn't be 100,000 exchanges 361 00:20:55,000 --> 00:20:58,480 dealing with millions and millions, if not 10s or hundreds 362 00:20:58,480 --> 00:21:02,080 of millions of issuers dealing with billions of owners. 363 00:21:02,320 --> 00:21:04,560 What are we trying to do? We're trying to create a global 364 00:21:04,880 --> 00:21:10,760 real time uninterrupted process to issue trade and own digital 365 00:21:10,760 --> 00:21:15,400 assets. So, so in this phase, you're 366 00:21:15,400 --> 00:21:16,800 good I. Was going to say I was. 367 00:21:16,840 --> 00:21:21,960 I was very closely involved with this at Coinbase because when I 368 00:21:23,640 --> 00:21:26,480 I joined the CTO at the time couldn't just only had four 369 00:21:26,480 --> 00:21:30,040 assets which are Bitcoin, Bitcoin cash, Litecoin and 370 00:21:30,040 --> 00:21:33,440 Ethereum. And an important paradigm shift 371 00:21:33,440 --> 00:21:38,320 was for us to internally realize that asset issuers were also a 372 00:21:38,320 --> 00:21:41,360 kind of customer. And taking your 3 definitions, 373 00:21:41,520 --> 00:21:44,600 you can think of it as A2 sided market where you have millions 374 00:21:44,600 --> 00:21:49,320 and millions of owners and a few 1000 issuers or much smaller 375 00:21:49,320 --> 00:21:52,440 number of issuers on this side. In the middle is the exchange, 376 00:21:52,520 --> 00:21:56,040 much like let's say the New York Stock Exchange has whatever 100, 377 00:21:56,200 --> 00:21:59,480 you know, stock issuers on one side and millions of traders on 378 00:21:59,480 --> 00:22:00,760 the other side. So it's like a 2 sided 379 00:22:00,760 --> 00:22:02,360 marketplace with these three actors. 380 00:22:02,760 --> 00:22:05,560 And then realizing that the issuer is a customer, sort of 381 00:22:05,560 --> 00:22:09,520 like Airbnb has guests and hosts or or Uber has riders and 382 00:22:09,520 --> 00:22:13,760 drivers in exchange has in your, you know, framework owners or, 383 00:22:13,760 --> 00:22:16,160 or buyers and issuers or sellers. 384 00:22:16,680 --> 00:22:19,440 And the issuer is like a special kind of customer. 385 00:22:19,440 --> 00:22:21,920 And of course, an issuer in one context could be a buyer in 386 00:22:21,920 --> 00:22:24,200 another context. And you know, often market 387 00:22:24,200 --> 00:22:26,800 participants are both buyer and seller in different contexts. 388 00:22:27,200 --> 00:22:35,560 And I think that just having, you know, some routines and some 389 00:22:35,600 --> 00:22:39,720 conventions, you know, with venture Capital, One of the 390 00:22:39,720 --> 00:22:43,200 things I learned over the years is that every term that we had 391 00:22:43,200 --> 00:22:47,320 in a deal was actually something that came from some train crash 392 00:22:47,320 --> 00:22:49,560 in the past 20 or 30 or 40 years ago. 393 00:22:49,880 --> 00:22:55,080 Like, for example, you know, four year vesting or lock UPS or 394 00:22:55,320 --> 00:22:57,920 Co sale rights. All that kind of stuff is meant 395 00:22:57,920 --> 00:23:01,600 to align, you know, you know, dozens, sometimes hundreds or 396 00:23:01,600 --> 00:23:04,640 thousands of people towards the same economic goal or one party 397 00:23:04,640 --> 00:23:07,080 can't just dump on the other party or what have you. 398 00:23:07,080 --> 00:23:10,320 All the, all the low trust stuff that happens, you know, in, in, 399 00:23:10,360 --> 00:23:13,320 in certain parts of, of crypto markets, they're actually 400 00:23:13,320 --> 00:23:16,440 solutions for it. If you actually have a organized 401 00:23:16,440 --> 00:23:20,720 2 sided marketplace of buyers and and sellers of of owners and 402 00:23:20,720 --> 00:23:25,080 issuers. Here is to let all three of 403 00:23:25,080 --> 00:23:30,160 these players operate in real time, uninterrupted globally. 404 00:23:30,160 --> 00:23:35,560 But they need to be able to issue trade or own those assets 405 00:23:35,560 --> 00:23:38,680 and and you need to see transactions between 406 00:23:38,680 --> 00:23:41,320 individuals, corporations and machines. 407 00:23:41,880 --> 00:23:47,400 So how do you actually create an API or a framework such that the 408 00:23:47,400 --> 00:23:52,520 machines can trade a million times an hour with each other 409 00:23:52,520 --> 00:23:55,840 and they're all working for exchanges or representing 410 00:23:55,840 --> 00:23:59,720 exchanges and they're all representing issuers or 411 00:23:59,920 --> 00:24:04,480 individuals. So you want a high speed, low 412 00:24:04,480 --> 00:24:07,800 friction market. I mean, I think about, you know, 413 00:24:07,800 --> 00:24:10,720 where would we be in the world if it costs $40 million set up a 414 00:24:10,720 --> 00:24:14,400 website. Or it used to be, if we think 415 00:24:14,400 --> 00:24:18,200 about computing and all the computing was centralized to IBM 416 00:24:18,200 --> 00:24:21,960 mainframes in the back office or it used to be with publishing, 417 00:24:22,000 --> 00:24:25,240 you, you know, first it was just the New York Times and the 418 00:24:25,240 --> 00:24:27,320 Washington Post and the Wall Street Journal. 419 00:24:27,840 --> 00:24:30,800 And then all the sudden people could set up their own website. 420 00:24:31,040 --> 00:24:36,120 But then you got those blog services where, I mean, 80 421 00:24:36,120 --> 00:24:40,480 million people or 120 million people could kind of use some 422 00:24:40,480 --> 00:24:42,800 software as a service, blogging service. 423 00:24:42,800 --> 00:24:47,200 And, and it all comes down to, you know, to structuring this 424 00:24:47,200 --> 00:24:51,160 the right way. So if you look at the, the next 425 00:24:51,160 --> 00:24:54,960 few paragraphs, right, what we're talking about is issuers 426 00:24:54,960 --> 00:24:58,440 should have a right to create an issue digital assets and the 427 00:24:58,440 --> 00:25:02,400 obvious responsibility is fair disclosure and then ethical 428 00:25:02,400 --> 00:25:05,440 behavior. The exchanges should have a 429 00:25:05,440 --> 00:25:10,320 right to custody, trade and transfer assets between their 430 00:25:10,320 --> 00:25:15,280 clients and with the other between the other exchanges and 431 00:25:15,280 --> 00:25:20,280 and the responsibility is is publish the asset disclosures, 432 00:25:20,720 --> 00:25:24,160 protect their client assets and then avoid conflicts of 433 00:25:24,160 --> 00:25:27,960 interest. And then for owners, owners want 434 00:25:27,960 --> 00:25:31,040 the right to self custody, trade and transfer their assets. 435 00:25:31,040 --> 00:25:33,280 So it's, you know, you're, you're back to the not your 436 00:25:33,280 --> 00:25:37,520 keys, not your coins, but it's not so much an obligation to 437 00:25:37,520 --> 00:25:42,120 self custody that, but a right to self custody and, and the 438 00:25:42,120 --> 00:25:44,680 right to trade, the right to transfer. 439 00:25:45,160 --> 00:25:49,320 That's important and the responsibility comply with the 440 00:25:49,320 --> 00:25:51,960 applicable local law, whatever that might be. 441 00:25:52,560 --> 00:25:57,440 And of course, what, what I think is the big idea here is 442 00:25:57,440 --> 00:26:01,000 create some foundation principles like nobody has the 443 00:26:01,000 --> 00:26:03,720 right to lie, cheat or steal. By the way, this is kind of 444 00:26:03,720 --> 00:26:05,240 obvious. I, I don't even know if you have 445 00:26:05,240 --> 00:26:08,200 to, you would have to say it except for the fact that if you 446 00:26:08,200 --> 00:26:11,600 started from, from the observation that people don't 447 00:26:11,600 --> 00:26:15,200 have the right to lie, cheat and steal, there's probably 100,000 448 00:26:15,200 --> 00:26:17,960 pages of regulations you wouldn't have to publish because 449 00:26:17,960 --> 00:26:20,120 most of them all boil down to that. 450 00:26:20,120 --> 00:26:24,600 And if you simply made those, those 3 observations and then 451 00:26:24,600 --> 00:26:28,040 you noted that participants are civilly and criminally liable 452 00:26:28,040 --> 00:26:33,280 for their actions, you might very well eliminate 100,000 453 00:26:33,280 --> 00:26:38,560 pages of regulations, years and years of review and somewhere in 454 00:26:38,560 --> 00:26:44,160 the range of $10 million a year of compliance costs with lawyers 455 00:26:44,160 --> 00:26:48,000 and all the back and forths that go that go into this process. 456 00:26:48,000 --> 00:26:52,280 So I I think that that's the place to start. 457 00:26:52,720 --> 00:26:54,600 Well, the thing actually, it's funny, when I looked at this, I 458 00:26:54,600 --> 00:26:56,320 was like, wait a second, there's only three pages. 459 00:26:56,680 --> 00:27:03,480 And but I like how you've set it up because you're right that by 460 00:27:03,480 --> 00:27:06,920 just articulating those sort of 10 commandment like principles 461 00:27:07,400 --> 00:27:12,680 that actually does distill the the intent, or at least the 462 00:27:12,680 --> 00:27:16,680 stated intent of so much regulation is all the disclosure 463 00:27:16,680 --> 00:27:19,480 stuff says you're not hiding something. 464 00:27:19,480 --> 00:27:21,360 It's not a material misrepresentation. 465 00:27:22,400 --> 00:27:25,600 AK don't lie, right? Or you're, you know, for 466 00:27:25,600 --> 00:27:29,440 example, a disclosure of when an executive is going to sell, what 467 00:27:29,440 --> 00:27:31,320 amount of stock don't cheat, right? 468 00:27:31,440 --> 00:27:35,880 That kind of stuff, right. So lots of specific things are 469 00:27:35,880 --> 00:27:38,240 sort of downstream implementations of these sort of 470 00:27:38,240 --> 00:27:41,560 very simple 10 commandment style moral directives. 471 00:27:41,840 --> 00:27:46,480 And yet it's it's back to this issue of of it pops up in 472 00:27:46,480 --> 00:27:51,080 censorship. You know, the question is, do I 473 00:27:51,080 --> 00:27:57,760 have to hire 100 lawyers and file paperwork with the 474 00:27:57,760 --> 00:28:02,600 regulator for three years before I can publish my opinion on X? 475 00:28:03,360 --> 00:28:08,280 Or can I actually publish the thing that I wrote on X with an 476 00:28:08,280 --> 00:28:12,640 understanding that if I slandered someone, you know, if 477 00:28:12,640 --> 00:28:17,440 I lied, if I lied or I cheated or I stole through my 478 00:28:17,440 --> 00:28:21,680 misrepresentation, I have civil liability. 479 00:28:22,000 --> 00:28:25,960 If I publish something to get somebody else killed, maybe I'm 480 00:28:25,960 --> 00:28:27,840 going to get tagged for manslaughter. 481 00:28:28,760 --> 00:28:33,720 But, you know, we have examples in product development and in 482 00:28:33,720 --> 00:28:35,600 the media. Yeah, you don't. 483 00:28:35,600 --> 00:28:39,480 It doesn't take $40 million to design a product and sell it to 484 00:28:39,480 --> 00:28:42,600 someone. But if if you create a product 485 00:28:42,600 --> 00:28:46,400 that's unsafe and you sell it to them and it kills them, you do 486 00:28:46,400 --> 00:28:49,680 have civil liability that the thing you sold killed the 487 00:28:49,680 --> 00:28:53,360 person, right. So there's a lot of industries 488 00:28:53,360 --> 00:28:56,480 that function with this this set of observations. 489 00:28:56,760 --> 00:28:59,640 And those are industries where people can do thing in one day 490 00:28:59,640 --> 00:29:02,640 or do something in one week. But at the point that you 491 00:29:02,640 --> 00:29:06,480 implement a nanny state and you take the position that no one's 492 00:29:06,480 --> 00:29:10,520 allowed to say or do anything until it's gone through 493 00:29:10,920 --> 00:29:15,320 progressive layers of sensors, what you really do is you choke 494 00:29:15,320 --> 00:29:25,240 off 99.999% of all innovation. Everything stops. 495 00:29:25,520 --> 00:29:28,320 It's the difference between, you know, pre market review versus 496 00:29:28,320 --> 00:29:32,120 post market review. Do you presume everybody's a 497 00:29:32,120 --> 00:29:38,840 criminal or do you allow people to transact and then make clear 498 00:29:38,840 --> 00:29:41,280 that criminals will be punished afterwards and what criminal 499 00:29:41,280 --> 00:29:44,160 behavior actually is? It's not really, it shouldn't be 500 00:29:44,160 --> 00:29:46,880 a process violation. It should be a principal 501 00:29:46,880 --> 00:29:48,880 violation. You know, one other thing I 502 00:29:48,960 --> 00:29:54,240 wanted to say is that the the concept of buyers and sellers 503 00:29:54,240 --> 00:29:59,000 being connected by an exchange as A2 sided marketplace is so 504 00:29:59,000 --> 00:30:01,680 obvious. But there is actually one very 505 00:30:01,680 --> 00:30:05,040 unique aspect of crypto versus traditional stock markets. 506 00:30:05,040 --> 00:30:06,320 And maybe you have some thoughts on this. 507 00:30:06,720 --> 00:30:09,280 But traditional stock markets, like when a tech company files 508 00:30:09,280 --> 00:30:12,800 to go public, it's only choosing between nicey and NASDAQ, let's 509 00:30:12,800 --> 00:30:15,440 say at that time. And they do compete for the 510 00:30:15,440 --> 00:30:17,000 business and you know what have you. 511 00:30:17,640 --> 00:30:20,480 But then after that, it's not easy. 512 00:30:20,480 --> 00:30:24,160 I don't think it's actually, I'm not, I'm not aware of prominent 513 00:30:24,160 --> 00:30:27,320 examples. Maybe maybe it's possible, but 514 00:30:27,760 --> 00:30:32,880 to, to move the asset from one exchange to another from Nike to 515 00:30:32,880 --> 00:30:34,880 NASDAQ is not that easy number one. 516 00:30:34,880 --> 00:30:37,960 And then number 2 is there's no equivalent of send and receive. 517 00:30:37,960 --> 00:30:41,880 People can't like load their Nike shares on or they're let's 518 00:30:41,880 --> 00:30:45,120 say they're FB shares on to Nike, pull them out self 519 00:30:45,120 --> 00:30:47,520 custody, load them on to NASDAQ and trade there. 520 00:30:47,720 --> 00:30:49,400 It's not the equivalent that you have with Bitcoin. 521 00:30:49,760 --> 00:30:53,880 Now, conversely, in offline markets, if you have, let's say 522 00:30:53,880 --> 00:30:56,800 a farmer has a bunch of apples, they can go and sell them at 523 00:30:56,800 --> 00:30:58,800 this supermarket or that supermarket. 524 00:30:59,040 --> 00:31:02,640 They have the send and receive equivalent, but they don't have 525 00:31:02,640 --> 00:31:05,520 the speed and the global aspect of the digital. 526 00:31:05,760 --> 00:31:10,400 So this kind of two sided marketplace combines the scale 527 00:31:10,400 --> 00:31:14,880 and speed of digital markets with the optionality of physical 528 00:31:14,880 --> 00:31:18,000 markets where you can withdraw from 1 market and you know, go 529 00:31:18,000 --> 00:31:20,880 and sell another market. Let me know if if you have any 530 00:31:20,880 --> 00:31:21,520 thoughts on that. Yeah. 531 00:31:21,520 --> 00:31:26,880 Well, what we're talking about is conveying property rights to 532 00:31:26,880 --> 00:31:32,120 all of these 20th century assets that don't currently exist, for 533 00:31:32,120 --> 00:31:37,080 example, right, I have a bunch of Apple shares, but I can't 534 00:31:37,080 --> 00:31:40,440 take custody of them. The 20th century world is, is 535 00:31:40,640 --> 00:31:46,040 one or two settlement networks, one or two custodians, one or 536 00:31:46,040 --> 00:31:50,200 two exchanges. You have a very limited set of 537 00:31:50,200 --> 00:31:54,440 options and there isn't really a competitive market. 538 00:31:55,320 --> 00:32:00,680 So in a world where you had 1500 digital exchanges in every place 539 00:32:00,680 --> 00:32:05,880 in the world and they could all handle any of these assets. 540 00:32:06,720 --> 00:32:10,960 Sorry, you might, you might see someone that wanted to give you 541 00:32:10,960 --> 00:32:13,720 a credit line on your Apple stock or they wanted to give you 542 00:32:13,720 --> 00:32:16,880 a yield on it. Or, you know, maybe your bank 543 00:32:16,880 --> 00:32:20,960 will give you an advance ratio of 50%, but there's a bank in 544 00:32:20,960 --> 00:32:24,480 Europe that'll give you advance ratio of 95%. 545 00:32:24,480 --> 00:32:27,440 Or they'll actually give you a mortgage where you can top up, 546 00:32:28,000 --> 00:32:32,920 you know, with tokenized, you know, barrels of oil or right, 547 00:32:32,920 --> 00:32:36,480 you could have competition if there was competition. 548 00:32:36,720 --> 00:32:41,920 But the problem is there isn't competition that the owner of 549 00:32:41,920 --> 00:32:46,480 the asset doesn't have the right to transfer, to take custody, to 550 00:32:46,480 --> 00:32:52,440 transfer custody to, to shop out the asset to the near to the 551 00:32:52,440 --> 00:32:55,120 highest bidder. And maybe more to the point, 552 00:32:55,120 --> 00:32:59,120 what if I had an AI program and it had my entire portfolio of 553 00:32:59,120 --> 00:33:03,160 assets And every minute of the day while I'm sleeping, it's 554 00:33:03,160 --> 00:33:08,680 actually gathering a bid from 150,000 corporations all around 555 00:33:08,680 --> 00:33:12,800 the world asking them for the highest bidder for me to loan 556 00:33:12,800 --> 00:33:16,600 out the assets or custody assets or, or, or whatever they want to 557 00:33:16,600 --> 00:33:20,320 do with them. And, and it's just in a fluid 558 00:33:20,320 --> 00:33:24,840 way moving my capital all around the world in order to get me 559 00:33:24,840 --> 00:33:27,880 what I want within my risk parameters that that can happen 560 00:33:27,880 --> 00:33:32,080 in a tokenized world. But if your asset is 100 acres 561 00:33:32,080 --> 00:33:37,240 of Kansas City real estate in the suburbs, there's like one 562 00:33:37,240 --> 00:33:40,880 bank in Kansas City that may or may not want to finance it. 563 00:33:41,160 --> 00:33:46,320 And if that bank is not interested, no other, none of 564 00:33:46,320 --> 00:33:50,000 the other 100,000 banks in the world are going to want to touch 565 00:33:50,000 --> 00:33:51,920 that asset. Yeah. 566 00:33:51,920 --> 00:33:56,480 And I think one thing that's interesting is scale enables the 567 00:33:56,480 --> 00:33:58,440 long tail. Scale is actually good for the 568 00:33:58,440 --> 00:34:02,880 small because if there's only 10 lenders, one of those lenders 569 00:34:03,160 --> 00:34:05,440 may not want to take a chance on some small business. 570 00:34:05,800 --> 00:34:09,920 But if there's 10,000, then one of them may actually want to 571 00:34:09,920 --> 00:34:11,360 take a chance on that small business. 572 00:34:11,360 --> 00:34:16,080 There's more risk tolerance. If you have larger markets, you 573 00:34:16,080 --> 00:34:18,840 know, there's people who are willing to try out smaller 574 00:34:18,840 --> 00:34:23,480 things, you know, and it's kind of like, you know, with enough 575 00:34:23,480 --> 00:34:26,520 drivers, somebody will be able to pick you up it, you know, 576 00:34:26,520 --> 00:34:29,199 that they will take the job of picking up from this street in 577 00:34:29,199 --> 00:34:32,239 this suburb and drive you into New York or, or what have you, 578 00:34:32,239 --> 00:34:34,800 right? So there's a sense in which the 579 00:34:34,800 --> 00:34:38,760 scale is actually very good for the little guy because it allows 580 00:34:38,760 --> 00:34:41,760 them finally to have access to the same capital markets that 581 00:34:41,920 --> 00:34:44,639 the big guys do. You know, and I get to that in 582 00:34:44,639 --> 00:34:48,000 my Section 4 of the framework on vision. 583 00:34:48,120 --> 00:34:50,560 So why don't, why don't we go when we go to Section 3 and 4? 584 00:34:50,560 --> 00:34:55,000 So 3 practicality, right? Rational compliance to empower 585 00:34:55,000 --> 00:34:58,440 innovation. And so I think this is related 586 00:34:58,440 --> 00:35:01,280 to thou shall not lie, cheat or steal. 587 00:35:01,280 --> 00:35:05,320 You're really trying to bring it back to simple short go back to 588 00:35:05,320 --> 00:35:07,440 the spirit of the law rather than the letter of the law. 589 00:35:07,680 --> 00:35:11,400 Why don't you talk about this? Well, the first principle is we 590 00:35:11,400 --> 00:35:15,600 want to prioritize efficiency and innovation over friction and 591 00:35:15,600 --> 00:35:19,760 bureaucracy. The existing system prioritizes 592 00:35:19,760 --> 00:35:24,040 friction and bureaucracy. Everything takes too long, too 593 00:35:24,040 --> 00:35:28,840 many lawyers, too much money. So how do you how do you 594 00:35:28,840 --> 00:35:31,280 prioritize efficiency innovation? 595 00:35:31,680 --> 00:35:34,120 Well, you start with simple principles like don't lie, 596 00:35:34,120 --> 00:35:38,640 cheat, and steal. Then you define data structures 597 00:35:38,640 --> 00:35:41,720 for each asset class. You know what, what are the 598 00:35:41,720 --> 00:35:44,560 common data structures, right? This is, I mean, this is how you 599 00:35:44,560 --> 00:35:48,120 write a computer program, right? It's not that complicated. 600 00:35:48,120 --> 00:35:52,200 If you know, if, for example, you want an ABT, you want to 601 00:35:52,200 --> 00:35:55,920 know what kind of asset is it, Where's the assets stored? 602 00:35:55,960 --> 00:35:57,880 You know, how do I know the assets there? 603 00:35:57,880 --> 00:35:59,160 How many of the assets are there? 604 00:35:59,160 --> 00:36:01,480 Who's the counterparty, etcetera. 605 00:36:01,760 --> 00:36:05,200 And you would have a different data structure for a currency 606 00:36:05,200 --> 00:36:09,880 versus a token versus an NFT versus a, you know, a commodity. 607 00:36:10,520 --> 00:36:12,960 But once you define the data structures, every digital 608 00:36:12,960 --> 00:36:17,160 exchange in the world can support those data structures. 609 00:36:17,160 --> 00:36:19,760 And then you can publish, you can create a client that 610 00:36:19,760 --> 00:36:22,440 publishes the data structures, you create all the audits. 611 00:36:23,280 --> 00:36:26,640 So that's standardized disclosure that reduces the 612 00:36:26,640 --> 00:36:29,600 friction. You know, instead of like 200 613 00:36:29,600 --> 00:36:34,920 pages of custom legalese for every security, you've got one 614 00:36:34,920 --> 00:36:40,000 data structure and you convert a three month process into a three 615 00:36:40,000 --> 00:36:43,040 hour, 3 minute or three second process. 616 00:36:43,720 --> 00:36:46,920 And the second idea is industry LED compliance. 617 00:36:46,920 --> 00:36:50,920 If you define the data structures, then the exchanges 618 00:36:50,920 --> 00:36:54,520 can collect and publish the data, you know as a service to 619 00:36:54,520 --> 00:36:59,640 the, to the issuers, to the investors, to the other traders, 620 00:36:59,640 --> 00:37:03,320 etcetera. And that helps you get to the 621 00:37:03,320 --> 00:37:06,560 third element here which is cap the cost. 622 00:37:06,840 --> 00:37:10,280 If you want it to be a real business, you can't afford to 623 00:37:10,280 --> 00:37:16,560 spend more than 100 basis points of the assets you issue in order 624 00:37:16,560 --> 00:37:19,160 to issue them. So if you're going to, if you're 625 00:37:19,160 --> 00:37:21,320 going to raise a. 100, that's a lot, by the way, 100 basis 626 00:37:21,320 --> 00:37:24,120 points for people, for people who don't know, like one basis 627 00:37:24,120 --> 00:37:28,520 point is 110 thousandth. So 100 basis points is like 1% 628 00:37:28,800 --> 00:37:30,840 of your asset. That's extremely expensive. 629 00:37:31,360 --> 00:37:34,760 To go ahead, what I'm saying is if you wanted to raise 100 630 00:37:34,760 --> 00:37:37,560 million, you definitely can't spend more than 1,000,000, not 631 00:37:37,560 --> 00:37:40,400 1%. Might be a big investment banker 632 00:37:40,400 --> 00:37:44,240 fee or a fee you might pay. I came public and when we came 633 00:37:44,240 --> 00:37:48,920 public sometimes, you know, the fees were up to 6% for a small 634 00:37:48,920 --> 00:37:54,560 deal, 3% for a bigger deal. But, you know, we might pay 1 or 635 00:37:54,560 --> 00:37:58,200 2% for a big deal if we're doing a bond deal. 636 00:37:58,200 --> 00:38:01,360 But here's my point, the big point. 637 00:38:01,440 --> 00:38:06,080 It costs $10 million a year in order to stay public, to be 638 00:38:06,080 --> 00:38:08,560 compliant. And you might spend 30 or $40 639 00:38:08,560 --> 00:38:12,720 million to get public. And so it's pretty obvious that 640 00:38:12,720 --> 00:38:17,080 if you want to raise 1,000,000 bucks, you can't pay $40 million 641 00:38:17,080 --> 00:38:20,320 for an insurance policy and you can't spend 10 million a year in 642 00:38:20,320 --> 00:38:22,840 order to raise $1,000,000, right? 643 00:38:22,840 --> 00:38:27,320 It's kind of like saying you got to basically buy a $10 million 644 00:38:27,320 --> 00:38:31,880 insurance policy to publish a website or express opinion on X, 645 00:38:32,240 --> 00:38:36,080 you know, it's it's or to post a video on YouTube, you got to buy 646 00:38:36,080 --> 00:38:40,080 a $10 million a year, you know, liability insurance. 647 00:38:40,080 --> 00:38:41,920 Policy. They were trying to push the 648 00:38:41,920 --> 00:38:44,160 world in this direction over the last few years. 649 00:38:44,160 --> 00:38:47,400 The establishment was and unfortunately they lost, but 650 00:38:47,400 --> 00:38:51,600 they were trying to do this. Yeah, I I definitely can see it. 651 00:38:51,960 --> 00:38:58,200 And here's the sad fact, Balaji, which is they did do it in 1933 652 00:38:58,200 --> 00:39:01,000 for all for all publicly traded assets. 653 00:39:01,000 --> 00:39:04,440 They didn't lose. If you read the history of Money 654 00:39:04,440 --> 00:39:08,720 and Banking by Murray Rothbard, like something like 50 years 655 00:39:08,720 --> 00:39:13,560 ago, in the last century, he wrote about the formation of the 656 00:39:13,800 --> 00:39:17,120 modern SEC and he writes about the SEC 33 Act. 657 00:39:17,440 --> 00:39:20,320 And one thing that he points out, long before the crypto 658 00:39:20,320 --> 00:39:27,160 industry was formed, as he says, the SEC 33 and 40 Acts, they 659 00:39:27,160 --> 00:39:30,440 were put in place to centralized control over the capital markets 660 00:39:30,440 --> 00:39:33,960 in Washington, DC and limit access to the capital markets to 661 00:39:33,960 --> 00:39:40,400 a very small cartel of large issuers that could be overseen 662 00:39:40,400 --> 00:39:44,440 by the government. And, you know, he has another 663 00:39:44,440 --> 00:39:46,040 observation. He thinks it was the 664 00:39:46,040 --> 00:39:49,880 Rockefellers interest edging out the JP Morgan interest and 665 00:39:49,880 --> 00:39:53,360 shutting down too much entrepreneurialism in New York 666 00:39:53,360 --> 00:39:54,720 City. It was a it's. 667 00:39:54,720 --> 00:39:56,880 Funny to say that because I wanted I wanted to put something 668 00:39:56,880 --> 00:39:59,320 on screen for a second, which is exactly this. 669 00:39:59,480 --> 00:40:05,600 The SEC essentially was set up to limit self allocation. 670 00:40:06,040 --> 00:40:09,440 Right, to put allocation of a capital economy placed under 671 00:40:09,440 --> 00:40:12,600 federal control, a planning agency would assign capital 672 00:40:12,600 --> 00:40:15,680 industries and then apportion the allotted capital, right? 673 00:40:15,880 --> 00:40:18,840 The need would decline, right? So a federal planning agency, 674 00:40:18,840 --> 00:40:20,680 not the security industry, would operate the process by which 675 00:40:20,680 --> 00:40:22,160 capital is allocated through the economy. 676 00:40:22,480 --> 00:40:29,520 So the this was the whole point of the SEC was step one, control 677 00:40:29,520 --> 00:40:33,080 capital allocation in the economy itself, right? 678 00:40:33,360 --> 00:40:36,360 And just go ahead. Yeah, you think about it is. 679 00:40:36,400 --> 00:40:40,200 And yeah, I think there's a certain Stockholm syndrome or 680 00:40:40,200 --> 00:40:43,840 remember in the in Star Wars, they say these are not the 681 00:40:43,840 --> 00:40:46,600 droids you're looking for and there's a Jedi mind trick. 682 00:40:47,200 --> 00:40:50,920 It's like, you know, raising money from the capital markets 683 00:40:50,920 --> 00:40:52,760 is not for you. You're too small. 684 00:40:53,320 --> 00:40:54,760 That's not for me. I'm too small. 685 00:40:54,960 --> 00:40:58,320 That's only $4 billion mega corporations, but you're not 686 00:40:58,320 --> 00:41:00,920 that. So raising money is not for me. 687 00:41:01,360 --> 00:41:02,520 And it didn't used to be like that. 688 00:41:02,600 --> 00:41:05,600 It used to be that a small cap could, you know, could, could 689 00:41:05,600 --> 00:41:07,680 get out there. It's it's modern Starbucks has 690 00:41:07,680 --> 00:41:11,240 made it so expensive. Yeah, yeah. 691 00:41:11,240 --> 00:41:16,520 So it comes down to the issue of are you going to let adults take 692 00:41:16,520 --> 00:41:19,160 risks and lose their money, right. 693 00:41:20,000 --> 00:41:23,520 Are you going to impose a $10 million insurance policy to keep 694 00:41:23,520 --> 00:41:25,960 someone from taking $100,000 risk? 695 00:41:26,520 --> 00:41:32,320 And if you do that, the result is that 99.9999% of the action 696 00:41:32,320 --> 00:41:36,520 can't take place because of the crippling regulatory burden, 697 00:41:36,520 --> 00:41:41,080 because the government wants to keep anybody from taking a risk 698 00:41:41,480 --> 00:41:44,720 or, or losing their money or making an investment that might 699 00:41:44,720 --> 00:41:47,920 not pay off. And, and you know, it, it comes 700 00:41:47,920 --> 00:41:51,920 down to a, a free market view. Do you believe that free markets 701 00:41:51,920 --> 00:41:56,200 will make the right decision or do you want a centrally planned 702 00:41:56,200 --> 00:41:57,800 economy? And do you think a set of 703 00:41:57,800 --> 00:42:02,040 bureaucrats at the headquarters should just decide every single 704 00:42:02,040 --> 00:42:06,200 business decision and every allocation of Labor and capital, 705 00:42:06,280 --> 00:42:09,880 you know, and talent in the economy so as to quote, UN 706 00:42:09,880 --> 00:42:12,480 quote, not make a mistake. Well take a look at this. 707 00:42:12,480 --> 00:42:17,560 So this is the peak number of listings was mid 90s and then 708 00:42:17,720 --> 00:42:21,760 especially after Starbucks and so on, it basically just fell 709 00:42:21,760 --> 00:42:25,960 off a Cliff to almost, you know, 70% drop in the number of, you 710 00:42:25,960 --> 00:42:28,360 know, listed equities because the price went up so high. 711 00:42:28,360 --> 00:42:31,440 And I thought you're phrasing just now of $10 million 712 00:42:31,440 --> 00:42:35,000 insurance policy to prevent $100,000 loss by somebody. 713 00:42:35,000 --> 00:42:36,440 It's really good way of thinking about it. 714 00:42:36,440 --> 00:42:40,680 Where the insurance is so expensive, basically people are 715 00:42:40,680 --> 00:42:42,200 only thinking about risk, they're not thinking about 716 00:42:42,200 --> 00:42:44,760 reward, and they're not properly calculating the cost of that 717 00:42:44,760 --> 00:42:46,320 risk. And the whole thing is just a 718 00:42:46,320 --> 00:42:49,480 pile of paperwork versus being rational about it. 719 00:42:50,040 --> 00:42:53,240 Yeah, I've lived through it that Bellagio because I came public 720 00:42:53,240 --> 00:42:57,120 in 98 and I think there were about 10,000 plus public 721 00:42:57,120 --> 00:43:01,720 companies. But over the next 20 years 60% 722 00:43:01,720 --> 00:43:05,040 of them disappeared. And basically what what happened 723 00:43:05,040 --> 00:43:11,200 was with Sarbanes-Oxley and, and with, with the encroachment, the 724 00:43:11,200 --> 00:43:14,960 progressive encroachment of the regulators on the public 725 00:43:14,960 --> 00:43:19,920 markets, it just became so brutally painful and expensive 726 00:43:19,960 --> 00:43:24,240 and risky and anxiety inducing to be a public company. 727 00:43:25,400 --> 00:43:28,040 People just said, you know, screw it, I'm just not, I don't 728 00:43:28,040 --> 00:43:32,120 want to do this anymore. And they all went private and. 729 00:43:33,000 --> 00:43:35,960 Paradoxically, that led to the rise of the great tech companies 730 00:43:36,240 --> 00:43:40,960 because it meant that Zuck and others did not could not for 731 00:43:40,960 --> 00:43:44,840 many years. In tech the the wisdom was don't 732 00:43:44,840 --> 00:43:47,560 go public, go public as late as possible. 733 00:43:48,160 --> 00:43:51,040 And the good thing about that is it meant that they controlled 734 00:43:51,040 --> 00:43:54,640 their companies all the way up and so they could have voting 735 00:43:54,640 --> 00:43:58,280 control and they could make bold decisions and so on for the 736 00:43:58,280 --> 00:44:00,360 public. The bad part is that they 737 00:44:00,360 --> 00:44:02,920 actually missed out on the upside of that with Bitcoin or 738 00:44:02,920 --> 00:44:04,920 with, you know, cryptocurrencies, they actually 739 00:44:04,920 --> 00:44:06,280 have an ability to get that upside. 740 00:44:06,280 --> 00:44:09,480 But for many of the giant tech stocks, most the upside happened 741 00:44:09,480 --> 00:44:11,320 before the public markets. There's exceptions, the big 742 00:44:11,320 --> 00:44:14,640 exception being NVIDIA but or Apple arguably. 743 00:44:14,840 --> 00:44:16,760 But still it's something where a lot of the upside was not 744 00:44:16,760 --> 00:44:18,760 available in public markets. Because for that let me know 745 00:44:18,760 --> 00:44:22,240 your thoughts. Well, I, you know, I think 746 00:44:22,240 --> 00:44:25,760 there's about 5040 to 50,000 publicly traded companies in the 747 00:44:25,760 --> 00:44:30,280 world. There's 4000 in the US, but that 748 00:44:30,280 --> 00:44:34,480 even that really understates the problem because of the 4000 in 749 00:44:34,480 --> 00:44:38,440 the US, there's only about 400 or so that are well known 750 00:44:38,440 --> 00:44:41,720 seasoned issuers. So that means there's 400 751 00:44:41,720 --> 00:44:45,920 companies, maybe 600 that can file a registration statement 752 00:44:45,920 --> 00:44:49,760 and sell securities the next day or within a couple of days 753 00:44:49,760 --> 00:44:54,320 without waiting for approval from the SEC or from a 754 00:44:54,320 --> 00:44:58,920 regulator. On the other hand, there's 400 755 00:44:58,920 --> 00:45:03,760 million businesses that can express an opinion or create a 756 00:45:03,760 --> 00:45:07,800 product or improve a product. So if you look at, if you look 757 00:45:07,800 --> 00:45:11,960 at the economy for products and services, it's evolving at a 758 00:45:11,960 --> 00:45:15,680 very rapid rate. But if you look at the economy 759 00:45:15,840 --> 00:45:18,880 or the in the capital markets and you look at the rate at 760 00:45:18,880 --> 00:45:23,000 which we can develop capital assets, they're crippled and 761 00:45:23,000 --> 00:45:27,680 evolving at a very slow rate. If I want to do something as 762 00:45:27,680 --> 00:45:31,400 simple as maybe I want to tokenize the Picasso painting, 763 00:45:32,240 --> 00:45:35,600 well, you own the painting. It's worth 10 million bucks and 764 00:45:35,600 --> 00:45:38,920 you want to sell 100 shares of it and you'd like to float that, 765 00:45:39,480 --> 00:45:42,440 you know, on an exchange. There's a global market for IT. 766 00:45:42,440 --> 00:45:48,440 People would like to own it, but it would cost you $40 million to 767 00:45:48,440 --> 00:45:50,840 take a company public and 10 million a year. 768 00:45:51,200 --> 00:45:58,280 So you see at some point it just you can't capitalize, you can't 769 00:45:58,280 --> 00:46:02,240 legally practically tokenize an asset that isn't a billion 770 00:46:02,240 --> 00:46:05,920 dollar asset. So what we've done is we've 771 00:46:05,920 --> 00:46:10,440 just, we've capped the market such that if you're not running 772 00:46:10,440 --> 00:46:15,000 a billion dollar to trillion dollar enterprise, the capital 773 00:46:15,000 --> 00:46:17,200 markets don't work for you, right? 774 00:46:17,200 --> 00:46:20,280 And, and the crypto economy, the crypto markets, they've tried to 775 00:46:20,280 --> 00:46:24,200 overcome that and they've issued millions and millions of crypto 776 00:46:24,200 --> 00:46:28,040 assets, but they, they haven't been legitimate. 777 00:46:28,040 --> 00:46:29,440 They've been deemed illegitimate. 778 00:46:29,440 --> 00:46:31,560 And that's why we've had the war on crypto. 779 00:46:32,000 --> 00:46:36,720 And so this framework would allow us to create legitimate 780 00:46:36,720 --> 00:46:39,760 digital assets. And the way you'll know it 781 00:46:39,760 --> 00:46:44,640 worked is you can actually tokenize a $10,000 asset, 782 00:46:44,640 --> 00:46:47,760 100,000 a million dollar, 10 million, a 100 million, a 783 00:46:47,760 --> 00:46:53,280 billion, a 10/10 billion. It's like it's hard to defend 784 00:46:53,280 --> 00:46:57,680 the status quo even because yeah, there are examples of 785 00:46:57,680 --> 00:47:01,280 successful companies that are monsters, but they would have 786 00:47:01,280 --> 00:47:06,440 been successful despite regressive regulation. 787 00:47:07,520 --> 00:47:12,880 I would argue that Apple stock would be more valuable if it was 788 00:47:12,880 --> 00:47:19,040 tokenized and it could travel to any iPhone or any Android phone 789 00:47:19,040 --> 00:47:21,800 anywhere in the world on Saturday afternoon. 790 00:47:22,240 --> 00:47:24,960 People would find it to be better collateral than it is 791 00:47:24,960 --> 00:47:27,040 right now. It would there would be a lot of 792 00:47:27,040 --> 00:47:31,160 innovations. My point is it's not practical 793 00:47:31,160 --> 00:47:35,080 to issue an asset if it costs more than 10 basis points a year 794 00:47:35,080 --> 00:47:38,920 to stay compliant. And you can pull that number by 795 00:47:38,920 --> 00:47:42,480 looking at the ETF industry and you'll see that any democratized 796 00:47:42,480 --> 00:47:47,920 asset issued by BlackRock or look at like SPY or or others, 797 00:47:47,920 --> 00:47:52,520 when they get to more than 10 to 20 basis points, they get 798 00:47:52,840 --> 00:47:56,520 crippled. You can spend 10 basis points. 799 00:47:56,760 --> 00:48:01,040 10 basis points means that over a decade you give up 1% in order 800 00:48:01,040 --> 00:48:03,880 to stay compliant. But when you get to more than 801 00:48:03,880 --> 00:48:06,840 that, it means it's kind of a regulatory encroachment. 802 00:48:06,840 --> 00:48:08,720 It's so much friction is crippling you. 803 00:48:08,720 --> 00:48:12,160 If you want the industry to come to life, you need to take the 804 00:48:12,160 --> 00:48:16,000 regulators off the critical path of issuing assets. 805 00:48:16,280 --> 00:48:21,160 You can't file to to tokenize your Picasso and wait for three 806 00:48:21,160 --> 00:48:22,640 months. Oh my God. 807 00:48:22,880 --> 00:48:24,800 Right. It's, it's the thing about this 808 00:48:24,800 --> 00:48:27,440 is it's actually dead weight loss, right? 809 00:48:27,680 --> 00:48:33,160 Those delays make less money for actually the government, for the 810 00:48:33,240 --> 00:48:37,120 seller and for the buyer. They they just the, the whole 811 00:48:37,120 --> 00:48:40,800 concept of imposing queues and waits and delays for no reason 812 00:48:41,320 --> 00:48:44,120 is something that just costs everybody in the system money 813 00:48:44,120 --> 00:48:47,360 and doesn't gain anybody anything maybe obviously. 814 00:48:47,760 --> 00:48:51,800 And I'm the case is worse than that, Balaji, it's like I said, 815 00:48:51,800 --> 00:48:54,560 three months. But the truth is, if you want to 816 00:48:54,560 --> 00:48:57,520 actually tokenize an asset legitimately in the United 817 00:48:57,520 --> 00:49:00,280 States, it would be 3 years of work. 818 00:49:00,600 --> 00:49:04,960 It's three years of work, 30 to $40 million of accounting and 819 00:49:04,960 --> 00:49:08,080 lawyering. Then it would be 3 months of 820 00:49:08,080 --> 00:49:11,280 filing the paperwork. Then it would be $10 million a 821 00:49:11,280 --> 00:49:14,960 year to stay compliant. So, so if you think about 822 00:49:14,960 --> 00:49:18,920 everything else in our world, think about the entire 823 00:49:18,920 --> 00:49:21,840 innovation economy, if it took you 3 years to publish a 824 00:49:21,840 --> 00:49:26,560 webcast, if it took you 3 years to come up with a new idea, 825 00:49:27,360 --> 00:49:29,520 right? It just takes too long. 826 00:49:29,520 --> 00:49:34,400 And so, and, and the answer is it's like, imagine if it took 827 00:49:34,400 --> 00:49:38,000 you 3 months to get permission to drive your car out of your 828 00:49:38,000 --> 00:49:42,040 driveway to go across the city, right? 829 00:49:42,040 --> 00:49:46,120 Or it took you 3 months of to get permission to put food in 830 00:49:46,120 --> 00:49:49,120 your mouth. It should, or to breathe, right? 831 00:49:49,360 --> 00:49:56,160 It's just, it's just ridiculous. But that is the problem we have 832 00:49:56,160 --> 00:49:58,520 today. And the answer, of course, in an 833 00:49:58,520 --> 00:50:02,400 enlightened society is if you drive your car out of your 834 00:50:02,400 --> 00:50:05,400 driveway and you run over a bunch of school kids because 835 00:50:05,400 --> 00:50:09,680 you're speeding and drunk, you have criminal liability and 836 00:50:09,680 --> 00:50:13,200 civil liability for operating the vehicle in an unsafe 837 00:50:13,200 --> 00:50:16,080 fashion. So what we ought to do, and we 838 00:50:16,080 --> 00:50:19,280 do the same thing with like posting things, and we do the 839 00:50:19,280 --> 00:50:25,640 same thing and every part of our economy that works, we let 840 00:50:25,640 --> 00:50:30,080 people think for themselves and innovate and create and find a 841 00:50:30,080 --> 00:50:34,200 customer, and then they're civilly and criminally liable 842 00:50:34,200 --> 00:50:38,880 for their actions. And so here what we need to do 843 00:50:38,880 --> 00:50:42,000 is just take the regulators off the critical path. 844 00:50:42,360 --> 00:50:44,800 We need to have a set of data structures. 845 00:50:45,680 --> 00:50:48,800 The industry will create a set of services. 846 00:50:48,840 --> 00:50:51,880 And then if you have 100 Picasso's and you want to 847 00:50:51,880 --> 00:50:55,240 tokenize all hundred of them, you know, you take the photo, 848 00:50:55,240 --> 00:51:00,000 you post the certificate of ownership, you upload it, you 849 00:51:00,000 --> 00:51:04,840 publish it, you offer it to the public, the market forms. 850 00:51:05,000 --> 00:51:08,680 Maybe the IPO fails, maybe they succeed. 851 00:51:09,000 --> 00:51:13,480 Maybe, you know, maybe you, you know, you sell the thing and 852 00:51:13,480 --> 00:51:16,960 you're a cheating criminal. And then someone sues you and 853 00:51:16,960 --> 00:51:20,520 you go to jail because you committed criminal fraud. 854 00:51:20,880 --> 00:51:25,080 All that stuff just needs to happen right in a rational 855 00:51:25,080 --> 00:51:27,720 fashion, needs to happen a million times faster. 856 00:51:28,640 --> 00:51:33,000 So that's the idea of a practical framework to do this. 857 00:51:33,560 --> 00:51:38,960 The only thing I'd I would just say about that is there there 858 00:51:38,960 --> 00:51:42,800 is, it's it's possible. One thing I think about is 859 00:51:43,000 --> 00:51:45,360 regulation is like binary classification. 860 00:51:45,640 --> 00:51:49,360 If you know the concept of a binary classifier, for example, 861 00:51:49,360 --> 00:51:55,560 you're you're you for each security issuer, either they are 862 00:51:55,840 --> 00:51:59,840 good or bad and then what you detect them as being good or 863 00:51:59,840 --> 00:52:01,320 bad. So you could have a true 864 00:52:01,320 --> 00:52:06,320 positive, a false negative, a true negative and a false 865 00:52:06,320 --> 00:52:09,120 negative. And so you know, for example, 866 00:52:09,160 --> 00:52:12,160 you know, you're detecting good guys versus criminals in terms 867 00:52:12,160 --> 00:52:14,600 of issuers. Or you know, you're, you're, 868 00:52:14,960 --> 00:52:16,640 it's like similar to a molecular diagnostic. 869 00:52:16,640 --> 00:52:19,280 You're looking at someone who's, whether they've got a disease or 870 00:52:19,280 --> 00:52:22,120 don't have a disease. And then your readout, your test 871 00:52:22,120 --> 00:52:23,640 says, you know, positive or negative. 872 00:52:23,920 --> 00:52:26,160 It's you can have all four possibilities, true positive, 873 00:52:26,160 --> 00:52:27,960 false positive, true negative, false negative. 874 00:52:28,360 --> 00:52:32,600 And we actually start measuring the regulatory state by the 875 00:52:32,600 --> 00:52:37,000 speed and quality and cost by which it actually makes these 876 00:52:37,000 --> 00:52:40,320 classification decisions. And so you mentioned one 877 00:52:40,320 --> 00:52:42,160 variable, which is they should do it a lot faster. 878 00:52:42,440 --> 00:52:45,680 Another thing is we should have independent regulators. 879 00:52:46,360 --> 00:52:50,600 You know, for example, if you have regulators from different 880 00:52:50,600 --> 00:52:54,280 states or cities or countries and they have the same judgement 881 00:52:54,440 --> 00:52:56,880 about somebody, that's actually one thing. 882 00:52:57,000 --> 00:53:00,040 Versus if they have different judgements, it's sort of like, 883 00:53:00,080 --> 00:53:03,320 let's say there's a driver and you know, they don't like their 884 00:53:03,480 --> 00:53:07,440 rating on air on, on Uber. You know, they can actually go 885 00:53:07,440 --> 00:53:09,800 to Lyft instead. And maybe they just had a bad 886 00:53:10,000 --> 00:53:14,200 experience on Uber, for example. So I think that there's there's 887 00:53:14,200 --> 00:53:16,320 something to that where you actually have some check and 888 00:53:16,320 --> 00:53:19,240 balance on the regulator itself where you start looking at their 889 00:53:19,240 --> 00:53:21,400 history of correct classifications. 890 00:53:21,400 --> 00:53:25,040 Because the reason I say that is with the SEC over the last 3-4 891 00:53:25,040 --> 00:53:28,640 years, they were not going after FTX. 892 00:53:29,040 --> 00:53:32,000 In fact, they're meeting with Sam Baker and Freed while they 893 00:53:32,000 --> 00:53:34,240 were attacking many of the legitimate projects in the 894 00:53:34,240 --> 00:53:35,880 space. And Ben Horwitz has talked about 895 00:53:35,880 --> 00:53:39,000 this, that it was almost like an intentional thing where they 896 00:53:39,000 --> 00:53:41,880 wanted the space to be littered with scams and frauds and go 897 00:53:41,880 --> 00:53:45,120 after legitimate projects so that this way it would just kind 898 00:53:45,120 --> 00:53:49,920 of corrupt the whole space and, you know, go ahead. 899 00:53:50,440 --> 00:53:54,760 Yeah, I'd say being charitable, it's it's just hopeless for a 900 00:53:54,760 --> 00:53:59,120 government agency to to do some of these things, but. 901 00:53:59,120 --> 00:54:00,920 In the West, I would agree with you, yes. 902 00:54:01,200 --> 00:54:03,160 And that's why I think a lot of this is going to be led by tech 903 00:54:03,160 --> 00:54:04,920 companies. So go ahead. 904 00:54:04,960 --> 00:54:06,920 Well, let's take let's take eBay, right? 905 00:54:06,920 --> 00:54:11,160 What we really want is a marketplace to form like eBay, 906 00:54:11,160 --> 00:54:14,600 where you didn't need to get government permission and wait 907 00:54:14,600 --> 00:54:17,680 for three months in order to list, you know, your comic book 908 00:54:17,680 --> 00:54:22,160 collection on eBay. But at some point the sellers 909 00:54:22,160 --> 00:54:26,040 have a reputation or the issuers in that case have a reputation. 910 00:54:26,320 --> 00:54:29,880 But eBay had an interest. And over time, the free market 911 00:54:29,880 --> 00:54:33,400 kind of figured out how to, how to figure out who to trust, who 912 00:54:33,400 --> 00:54:36,720 not to trust and how to take risk and how to clear the 913 00:54:36,720 --> 00:54:39,960 market. So, you know, you would think 914 00:54:39,960 --> 00:54:43,560 that digital exchange like Coinbase or Binance will start 915 00:54:43,560 --> 00:54:47,920 to apply, you know, AI and modern techniques to figure out 916 00:54:47,920 --> 00:54:50,880 whether someone's getting ripped off or not getting ripped off. 917 00:54:50,880 --> 00:54:55,840 And, and, and over time, people will work it out. 918 00:54:56,320 --> 00:55:01,080 But what's clear is you kind of, that's why I think we wouldn't 919 00:55:01,080 --> 00:55:04,480 have 1500 exchanges. You might all of a sudden see 920 00:55:04,480 --> 00:55:08,560 Apple and Google and Meta get into the business and Microsoft 921 00:55:08,560 --> 00:55:12,520 and you might get see all the banks and you might see lots of 922 00:55:12,520 --> 00:55:14,400 Wall Street firms and hedge funds. 923 00:55:14,400 --> 00:55:17,240 And then you've got the natural short sellers and the natural 924 00:55:17,240 --> 00:55:20,600 arbitragers. And in a world like that, 925 00:55:20,800 --> 00:55:24,120 there's a lot of people that will write a computer program 926 00:55:24,160 --> 00:55:27,880 that sifts through 10 million things at, you know, at the 927 00:55:28,240 --> 00:55:31,120 speed of the computer. And they form an opinion about 928 00:55:31,120 --> 00:55:34,040 whether it's a good thing or a bad thing and they short it or 929 00:55:34,040 --> 00:55:38,960 they go along it and just let the market cook, right. 930 00:55:39,640 --> 00:55:44,080 The key point here is the market just doesn't work if there's a 931 00:55:44,080 --> 00:55:46,880 regulator on the critical path. So they need to publish some 932 00:55:46,880 --> 00:55:50,920 standards and guidelines and get out of the way. 933 00:55:50,960 --> 00:55:57,800 And, and then you will actually have a, a practical path to 934 00:55:57,800 --> 00:55:59,600 compliance. And then you can empower 935 00:55:59,600 --> 00:56:02,360 regulation or sorry, empower innovation. 936 00:56:03,600 --> 00:56:06,040 And then, you know, what you're getting is exponential 937 00:56:06,040 --> 00:56:08,120 improvements. You know, you're going to get 938 00:56:08,120 --> 00:56:11,880 exponential improvements in cost and speed and accessibility. 939 00:56:12,520 --> 00:56:14,960 You know, just like what's happening with all these AIS 940 00:56:14,960 --> 00:56:17,080 right now, you're looking at these things and they're 941 00:56:17,080 --> 00:56:21,560 changing every week, right? And, and, and on the other hand, 942 00:56:22,840 --> 00:56:25,360 you know, Balaji, I can legitimately tell you that I 943 00:56:25,360 --> 00:56:30,680 came public in 1998. You survived quite a downturn. 944 00:56:30,680 --> 00:56:33,320 You yourself are actually like, that's why you can be in 945 00:56:33,320 --> 00:56:35,760 Bitcoin, because you survived this giant downturn and you 946 00:56:35,760 --> 00:56:37,400 survived all the way through and rebooted. 947 00:56:37,480 --> 00:56:46,600 I did, I, I lived through 99.999 point 8-7, maybe 99.9% downturn 948 00:56:47,120 --> 00:56:50,800 there and back again. But here's the point I'm going 949 00:56:50,800 --> 00:56:53,440 to make. I haven't seen an innovation in 950 00:56:53,440 --> 00:56:57,160 the way to my stock trades on NASDAQ since we came public. 951 00:56:58,480 --> 00:57:01,000 Not one. It trades the same way. 952 00:57:01,720 --> 00:57:04,960 It's literally the same thing for 26 years. 953 00:57:05,480 --> 00:57:08,200 You know, the only innovation is just HFT guys, which is not 954 00:57:08,200 --> 00:57:12,440 really an innovation That's like it's it's it's arbitraging the 955 00:57:12,440 --> 00:57:15,000 thing that shouldn't matter, which is like the ping time to, 956 00:57:15,600 --> 00:57:18,120 you know, where the actual exchange is in downtown New 957 00:57:18,120 --> 00:57:18,800 York. Go ahead. 958 00:57:19,400 --> 00:57:22,520 I'm like, well, for the issuer, we got one thing, we got the at 959 00:57:22,520 --> 00:57:26,320 the market ATM, we got that one thing that was somewhat useful 960 00:57:26,320 --> 00:57:28,400 to us, but but there was nothing else. 961 00:57:28,480 --> 00:57:32,600 So if you think about what happens when the regulators get 962 00:57:32,600 --> 00:57:36,560 out of the way, you would have 1000 exchanges all competing to 963 00:57:36,560 --> 00:57:41,720 provide the best service. The irony is within about a year 964 00:57:41,720 --> 00:57:46,360 of us getting into Bitcoin, Binance was trading MSTR token 965 00:57:46,360 --> 00:57:52,040 on Binance 24/7 365. So we actually had the first 966 00:57:52,040 --> 00:57:57,840 innovation in the crypto economy from a company not even in the 967 00:57:57,960 --> 00:58:00,960 US. And of course, and of course the 968 00:58:00,960 --> 00:58:05,480 result was the German regulator shut it down like like the one 969 00:58:05,480 --> 00:58:08,600 innovation that took place. And the regulator's view was we 970 00:58:08,600 --> 00:58:13,240 just have to stop that as opposed to let that continues. 971 00:58:13,240 --> 00:58:18,600 Let's go on to the vision. So the, the vision is instead of 972 00:58:18,600 --> 00:58:22,160 taking 10 to $100 million to issue an asset, we move the 973 00:58:22,160 --> 00:58:27,600 price or the cost to issue an asset to $10 to $100,000, right? 974 00:58:27,600 --> 00:58:29,840 Let's let's change my orders of magnitude. 975 00:58:30,160 --> 00:58:35,680 Instead of taking months and years to issue assets, let's 976 00:58:35,680 --> 00:58:40,040 change it to hours or days. The amount of time it takes you 977 00:58:40,240 --> 00:58:43,640 to post on Airbnb or at the amount of time it takes you to 978 00:58:43,640 --> 00:58:47,720 post on eBay or the amount of time it takes you to post on X 979 00:58:47,720 --> 00:58:49,960 or YouTube. Let's change it. 980 00:58:50,600 --> 00:58:55,640 And then instead of having 4000 publicly traded issuers in the 981 00:58:55,680 --> 00:59:03,000 US, let's shoot for 40 million. And instead of limiting access 982 00:59:03,000 --> 00:59:06,600 to the capital markets to very, very large companies, let's 983 00:59:06,600 --> 00:59:10,000 empower small businesses. Let's empower artists, 984 00:59:10,040 --> 00:59:12,960 celebrities, mid size enterprises. 985 00:59:13,400 --> 00:59:16,280 Let's a lot. Let's empower them to tokenize 986 00:59:16,280 --> 00:59:23,200 assets and let's, let's expand dramatically the asset classes 987 00:59:23,200 --> 00:59:26,000 right now. People think about things that 988 00:59:26,000 --> 00:59:28,400 trade on Robin Hood. It's like, what can you trade? 989 00:59:28,400 --> 00:59:31,000 You can trade like equity for the most part. 990 00:59:31,440 --> 00:59:36,080 But if you look at the market of, of preferred stocks and 991 00:59:36,080 --> 00:59:41,040 assets and commodities and collectibles and IP and brands, 992 00:59:41,440 --> 00:59:44,840 most of those things don't trade via four letter ticker on Robin 993 00:59:44,840 --> 00:59:46,960 Hood. It's, it's, you know, there 994 00:59:46,960 --> 00:59:49,600 isn't that much art that's tokenized. 995 00:59:49,600 --> 00:59:52,360 It's very difficult to do it. It's hard to tokenize real 996 00:59:52,360 --> 00:59:54,800 estate. It's hard to tokenize other 997 00:59:54,800 --> 00:59:59,360 things people might want to buy. If you look at publicly issued 998 00:59:59,400 --> 01:00:04,240 fixed income instruments, which is 300 trillion of them, most of 999 01:00:04,240 --> 01:00:08,400 them trade over the counter. The spreads the bid ask are very 1000 01:00:08,400 --> 01:00:09,760 wide. They're illiquid. 1001 01:00:09,760 --> 01:00:14,520 So it's like a 300 basis point spread to buy or sell a bond. 1002 01:00:14,920 --> 01:00:19,000 There is no quote. Is a dark market. 1003 01:00:19,280 --> 01:00:23,120 You need a $25,000 subscription of Bloomberg to even get the 1004 01:00:23,120 --> 01:00:30,560 quote. So why is it that we block 99% 1005 01:00:30,600 --> 01:00:34,520 of the investors and then we have 300 basis point spreads 1006 01:00:34,520 --> 01:00:36,600 instead of three basis point spreads? 1007 01:00:37,680 --> 01:00:41,560 And why is it that so much asset is sitting? 1008 01:00:41,920 --> 01:00:44,920 Why is it the most of the art in the world is sitting in vaults 1009 01:00:45,000 --> 01:00:49,440 underneath mountains in Switzerland and not trading, 1010 01:00:49,600 --> 01:00:51,680 right? They're they're, they're state, 1011 01:00:51,680 --> 01:00:56,160 they're dead assets in cold storage, just like your cryptos 1012 01:00:56,160 --> 01:01:00,080 in cold storage. And it's because we haven't 1013 01:01:00,080 --> 01:01:03,520 really democratized access to all these things. 1014 01:01:04,040 --> 01:01:10,760 So I think I think with the right framework, we can usher in 1015 01:01:10,760 --> 01:01:17,200 a renaissance where you can tokenize hundreds of trillions 1016 01:01:17,200 --> 01:01:21,120 of dollars of assets. And I'm not talking about just 1017 01:01:21,120 --> 01:01:23,240 Bitcoin. What I'm thinking is Bitcoin is 1018 01:01:23,520 --> 01:01:28,280 just the capital asset. I'm thinking that there's that 1019 01:01:28,280 --> 01:01:33,480 we'll get to $500 trillion worth of equity, real estate, 1020 01:01:34,000 --> 01:01:40,840 commodities, collectibles, arts and DID and new digital assets 1021 01:01:40,880 --> 01:01:44,240 that will be created and legitimized, digital NFTS, 1022 01:01:44,240 --> 01:01:48,960 digital tokens that never existed before, right? 1023 01:01:49,640 --> 01:01:54,880 And then there'll be a whole range of products and services 1024 01:01:55,240 --> 01:02:00,640 that come to life on top of those digitized assets that are 1025 01:02:00,640 --> 01:02:06,640 inconceivable right now. Like most people, if they hold 1026 01:02:06,640 --> 01:02:11,440 equity, like if you, if you hold $100,000 of equity, it's not 1027 01:02:11,440 --> 01:02:14,640 likely somebody wants to give you interest. 1028 01:02:14,640 --> 01:02:18,520 It's very difficult to pay, get paid interest, but there's 1029 01:02:18,520 --> 01:02:20,640 someone that wants to short that equity. 1030 01:02:20,640 --> 01:02:25,000 So in theory, you ought to be able to collect five 450 basis 1031 01:02:25,000 --> 01:02:28,240 points. Like if you have $1,000,000 of 1032 01:02:28,320 --> 01:02:33,560 of of equity, why can't you get paid SOFR on the $1,000,000 by 1033 01:02:33,560 --> 01:02:38,360 someone or half of SOFR? Because in theory, a bank might 1034 01:02:38,360 --> 01:02:44,040 very well post that block of asset and charge the SOFR rate 1035 01:02:45,160 --> 01:02:47,440 and split that interest with you. 1036 01:02:47,720 --> 01:02:51,560 And the reason that you don't get paid interest on $1,000,000 1037 01:02:51,560 --> 01:02:55,400 of equity, but you do get paid interest on $1,000,000 of 1038 01:02:56,360 --> 01:03:03,960 treasuries is because one asset gets superior treatment by your 1039 01:03:03,960 --> 01:03:08,080 bank and the other asset, the other asset the bank feels like 1040 01:03:08,080 --> 01:03:10,200 it doesn't really need to. Right. 1041 01:03:10,200 --> 01:03:13,880 But it could be you could have, you could have the benefits of 1042 01:03:14,240 --> 01:03:19,360 full custody while also maybe getting some return on that 1043 01:03:19,360 --> 01:03:22,160 asset where it's just much more agile. 1044 01:03:22,160 --> 01:03:27,000 It's more, it's more liquid, it's more visible, it's more 1045 01:03:27,960 --> 01:03:30,120 more collateralizable if it's on chain. 1046 01:03:30,200 --> 01:03:34,240 Or or maybe I would just say you ought to have the option to have 1047 01:03:34,240 --> 01:03:37,400 the benefits of full custody, which is you own it, it's a 1048 01:03:37,400 --> 01:03:41,240 bearer instrument, it's tokenized on on your handheld. 1049 01:03:42,120 --> 01:03:46,800 Or if you're willing to loan your assets out to a bank and 1050 01:03:46,800 --> 01:03:51,560 let them re hypothecate it, you ought to have a choice of 1000 1051 01:03:51,560 --> 01:03:55,200 different banks. And maybe there's someone in 1052 01:03:55,200 --> 01:03:58,040 Singapore that'll give you a better deal than the bank in New 1053 01:03:58,040 --> 01:04:03,000 York City or somebody in London or Paris or fill in the blank. 1054 01:04:03,320 --> 01:04:07,000 And you know, granted, maybe they're untrustworthy 1055 01:04:07,000 --> 01:04:09,080 counterparties and they're going to rug pull you. 1056 01:04:09,880 --> 01:04:15,320 But the, the real point is people ought to have the freedom 1057 01:04:16,080 --> 01:04:19,920 to own their own assets or trade their assets or custody their 1058 01:04:19,920 --> 01:04:23,200 assets. And the marketplace ought to be 1059 01:04:23,200 --> 01:04:29,120 able to form capital markets. Maybe it's not, Maybe it's I'll, 1060 01:04:30,120 --> 01:04:32,640 I'll give you a loan against it. Maybe it's, I'll give you 1061 01:04:32,640 --> 01:04:36,160 interest on it, but maybe, maybe it's something different. 1062 01:04:36,160 --> 01:04:38,280 Maybe it's I'll form a derivatives market. 1063 01:04:38,880 --> 01:04:43,200 Like for example if I can tokenize a bunch of old masters 1064 01:04:43,200 --> 01:04:47,720 art, then maybe someone else can create a derivative of old 1065 01:04:47,720 --> 01:04:50,560 masters arts and and sell me futures on it right? 1066 01:04:50,560 --> 01:04:54,120 Or maybe I can I can short it or go long or. 1067 01:04:54,120 --> 01:04:56,400 Basically, we can make, we can make all these combinations that 1068 01:04:56,400 --> 01:04:57,840 we couldn't make before. Yeah. 1069 01:04:58,480 --> 01:05:03,000 And, and, and that market comes to life when you were able to 1070 01:05:03,000 --> 01:05:08,240 pull a billion dollars of liquidity on a global basis. 1071 01:05:09,280 --> 01:05:12,680 And that market and by the way, when you publish it and you 1072 01:05:12,680 --> 01:05:17,520 trade it 24/7. But when you have an illiquid 1073 01:05:17,520 --> 01:05:22,320 pool in a dark market with someone with a monopoly on it, 1074 01:05:22,880 --> 01:05:28,360 when one of the problems is you've got one bank in Kansas 1075 01:05:28,360 --> 01:05:32,120 and they're the market maker on real estate in Kansas. 1076 01:05:32,520 --> 01:05:37,640 And they set the price, they set the bid ask and no one else gets 1077 01:05:37,640 --> 01:05:40,960 to enter that market. No one else has transparency. 1078 01:05:40,960 --> 01:05:44,680 And so instead of them giving you the highest common 1079 01:05:44,680 --> 01:05:47,960 denominator, they're the lowest common denominator. 1080 01:05:48,800 --> 01:05:50,720 And there's a pretty big difference in the way the 1081 01:05:50,720 --> 01:05:56,000 markets function when everything is up forbid to everyone all the 1082 01:05:56,000 --> 01:05:59,560 time in real time with with transparency. 1083 01:05:59,560 --> 01:06:02,600 And that's a world where everybody just gets treated 1084 01:06:02,600 --> 01:06:04,400 better. Absolutely. 1085 01:06:04,400 --> 01:06:07,440 So let me see if I can recapitulate your PDF. 1086 01:06:07,440 --> 01:06:10,680 You have these six definitions which cut the space in a useful 1087 01:06:10,680 --> 01:06:12,200 way. Next we define these three 1088 01:06:12,200 --> 01:06:14,480 categories. We have the buyer, the exchange 1089 01:06:14,480 --> 01:06:17,680 and the seller, and anybody can be any of these three things. 1090 01:06:17,680 --> 01:06:21,280 But the overriding principle is not paperwork, it's not cost, 1091 01:06:21,280 --> 01:06:23,080 it's not delay, it's not bureaucracy. 1092 01:06:23,080 --> 01:06:25,920 The overriding principle is just don't lie, cheat and steal. 1093 01:06:25,960 --> 01:06:30,840 And this 21st century securities and markets regulation, if 1094 01:06:30,840 --> 01:06:33,880 designed in this way, would be something where any mom and pop 1095 01:06:34,000 --> 01:06:36,880 could raise money, where it's similar to just like any 1096 01:06:36,880 --> 01:06:40,560 business can go online, any asset can go on chain, where 1097 01:06:40,560 --> 01:06:43,320 people can raise debt. Where if you've got a chess 1098 01:06:43,320 --> 01:06:47,000 podcast or a chess website in Florida which has a global 1099 01:06:47,000 --> 01:06:48,840 audience, you can actually raise from that audience. 1100 01:06:48,840 --> 01:06:52,040 All these things that are obvious to us that should happen 1101 01:06:52,040 --> 01:06:54,600 could happen. And the new administration could 1102 01:06:54,600 --> 01:06:57,080 be a leader in this. Is that a fair summary of your? 1103 01:06:57,080 --> 01:06:58,920 Analysis. Yeah, that is a fair summary. 1104 01:06:59,640 --> 01:07:01,440 Awesome. Well, Michael, this is great. 1105 01:07:01,440 --> 01:07:03,360 Thanks for being here. And we will. 1106 01:07:03,920 --> 01:07:06,520 We'll see you soon. And maybe I'll, I'll, I'll see 1107 01:07:06,520 --> 01:07:07,680 you in Miami next time I'm out there. 1108 01:07:07,840 --> 01:07:08,800 Yeah, thanks for having me.