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Hi, welcome to epicenter. My name is Sebastian Cujo today
is episode 301. Can attach, whatever,
significance, they like to an episode with a few zeros on it.
But if anything, I think we can use these Milestones to stop and
take a step back and look at our trajectory through a more
mindful lens. It's astonishing that we've been
doing epicenter for five and a half years now, It started as an
experiment in late 2013 or early 2014.
And I don't think that neither of us Brian, or I thought that
it would become one of the most recognized and certainly one of
the longest-running podcasts in the space.
We've recorded 300 episodes with guests who come on the show to
share their stories, their ideas, and their vision for
where the space is going and through that.
We've Learn so much. And our audience also has
learned so much with us. It's been really a journey with
the audience also learning as the space is evolving, and
that's been just incredible. I want to take a minute to
acknowledge our team and the incredible talent that makes
epicenter possible met her sunny and Federica.
They have a passion for Learning and a desire to spread knowledge
with the community. And these are really some of the
founding principles Opals that Brian.
And I found that the show on in 2014.
We started the show because we wanted to learn about the space
and we thought that sharing that knowledge with the space, was a
great way to learn and mayor sunny and Federica, they share
this Vision. There's also a production team
which we rarely get a chance to mention on the show, but they
also play a huge role in making this show possible, and putting
out the episodes every week, so vedran or audio.
Near who's been with us since the very beginning sheena's our
cover designer. He makes those great low poly
images. That a lot of you praise us for
PETA. Our production manager, who
makes sure that everything is running smoothly from scheduling
all the way to putting out the episodes every week Anna, our
accountant who make sure that all our books are in order and
the company's running smoothly and amp are marketing.
Intern who is on social media. Sharing the episodes every week
and creating content on medium. The podcast would really not be
what it is today without them and without their dedication.
It's incredible that tens of thousands of you listen to the
show, every week and many of you have been for several years.
Just last week I was in Berlin and as always when I'm hanging
out at full node I met some new listeners and then one guy who
told me that we were a major part of his Early Education when
he first started getting interested in blockchain and we
hear these stories all the time from people whenever we're in a
place where there's concentration of blockchain
people, We meet listeners and we hear their stories and it's just
so incredibly gratifying because we never set out to really make
a change in people's lives. But it's sort of a secondary
effect that we really didn't anticipate.
So, we meet people who tell us that they found their first job
because of what they learned on epicenter or through the
connections, they made from listening to epicenter.
Brian was telling you what the guy he met recently, who told
him that he made a lot of money from the Investments That He
made from listening to epicenter, so that's always
great to hear every time I meet a listener internally.
I kind of bow with humility from hearing their stories.
So thank you for listening. Thank you for being with us and
for continuing to be with us throughout the years.
I've learned so much from doing this podcast.
I've met so many incredible people traveled all around the
world and I think it's a trip man that my job is to run a
podcast company. With amazing co-hosts with an
amazing team in a fascinating industry and we're going to keep
doing it as long as there's a blockchain space and as long as
we're interested in it and as long as there's a good business
model to run around, it will keep doing the podcast.
So we hope to see you see you here for episode 400 500 600 and
so on. On the heels of that, I've got
an announcement about an important change.
That's coming to epicenter. Starting today, epicenter will
continue as an audio only podcast and the video version
that we've been putting out to YouTube.
For the last several years, will cease to exist will still post
episodes to YouTube, so you can continue to listen to the
episodes there. Only you won't see our faces
anymore. This is a decision that we've
taken a lot of time and care to. Consider and I want to share
some of the reasons why we decide to do this.
The main reason we're doing this is to remove a lot of the
overhead that producing video puts on the production process.
It might not seem like a lot when you're watching the show
but producing video is time and resource intensive.
It puts a strain on scheduling primarily because it imposes.
Our hosts in our guests to use certain types of equipment to
Record the show from a setting that is appropriate for video
recording to have proper lighting, Etc.
There's also the production overhead and time required to
create those videos and push them to YouTube.
And finally producing video ads is incredibly time-consuming.
So, when we looked at all that and then dug deeper into the
actual analytics on YouTube and compared those to the engagement
rates that we see with audio, we thought that it didn't make
sense to continue. So I really hope that for the
few of you who really watch the show on YouTube and expect the
video on YouTube that you'll continue to follow the podcast.
As I said, we'll continue to post the audio to YouTube.
You just won't see your faces anymore.
And you can also follow us on all the other great platforms or
you publish. Whether it's iTunes, Spotify,
Stitcher, or any other podcast app, you can find us there and
we hope you'll continue to follow the podcast.
If you want to learn more about this and the reasons behind this
change, I put a post up on medium medium.com, epicenter
podcast. You can go there and read more
about this change and why we're doing this.
Our last announcement before today's guest dap Khan is coming
next week, it is on August 21st and 23rd at the Technical
University in Berlin. You can still get tickets and
get 20% off with the discount code epicenter.
Adapt con 2019 at def con dot io on the 22nd. 10:00 a.m. in the
main chain. The main room will be recording
the second edition of epicenter live.
Sunny Federica and myself, I'll be moderating a panel on user
experience and ux on the 21st, I know, Sonny is also moderating a
panel on governance and feta is also on a panel, you can get
more details, a.com dot IO and actually, I just found out about
this. There's actually adapt con
podcast, so you can go to dab con dot IO / podcast to hear
those episodes. And then on the Thursday, the
Second will be doing a drinks meet up at a bar next to the
university. You can go to epicenter, dot
rocks, / Berlin, meet up to register and get more
information as it comes out. So come have a drink with us.
It'll be fun. Our Guest today is Erik
Voorhees. Many of you will recognize Eric
as the founder and CEO of shape-shift and we had Eric on
the podcast a number of times in the past.
So they can I interview Derek and we spoke about a number of
things. Our main focus for this
discussion was shape-shifts brand-new product release which
summer calling shape-shift 2.0. It includes a number of
interesting new features, including a portfolio management
platform that allows you to manage all your assets in one
place. They also have Hardware Wallet
support and are built on an entirely new infrastructure.
One important distinction with this new product is the fact
that users are now obligated to create an account and perform
kyc. If you've been following
shape-shift for a while, you know that it's Hallmark has
always been its Simplicity the ability to send tokens to an
address and receive an exchange for other tokens on another
address without having to create an account while this has
changed recently. And we talked to Eric about this
change and why they decided it to start doing kyc as always.
It's great to get people like Eric to open up about where they
think the ecosystem is heading. And so we talked about whether
or not he thinks Bitcoin is still fulfilling its initial
Vision. We talked about aetherium as
well and we also got into the future of money a little bit.
And one can't bring out the topic these days without
mentioning Libra. And so we talked about Libra and
got his thoughts on where he thinks that currency could take
us and what it represents. Hence, for the future of money,
we did disagree a little bit on that topic where Eric's very
u.s. libertarian views did clash with my somewhat more European
liberal views, but it was all in good fun and it's always great
to get Eric's insights from that perspective.
So without further, delay here is our interview with Erik
Voorhees. Hi.
So we're here with Erik Voorhees.
Eric is the CEO of shape-shift and third time, coming to the
podcasts been on. I was just checking before the
show and actually, it's been two years last time was in July of
2017. So iarc, thanks for coming back.
On the show. Yeah, thanks for having me on.
And so we're going to talk about a lot of stuff today including
shape-shifts brand new platform. But also as always think it's
interesting to get your your thoughts and sort of your views
on where the ecosystem is that moment and how things are
progressing since you've been in this, in the space for quite a
while. And so I'd love to get your
thoughts on on that stuff as well.
Yeah, first, let's talk about shapes so you guys celebrate
your fifth anniversary this month?
Congratulations? Yeah, yesterday yesterday, okay?
So as we're recording, this shape shift is Just over five
years old. Let's talk a little bit about
the journey. How did you get here?
And how do you feel about the last five years generally?
Yeah, well when when we started, I didn't set about to create a
company that would, you know, have 75 employees and, you know,
be doing something important. Five years later.
It was just really a simple tool that I felt needed to be built.
And so, you know, in the same way that the Satoshi dice back
in the day, got started as a side project shape-shift
started. As a side project, something
that just seemed seemed useful and interesting to build.
And so we built it and then yeah, it was July 29th of 2014
that the first transaction occurred and ever.
Since then it just you know, just been growing organically.
And we, we've gone through all the, you know, ups and downs of
multiple crypto cycles and through many different products.
And, you know, we've now attached ourselves to the crazy
rocket ship of the crypto industry and but somewhere along
the way, I became a real business.
And so now, I run every day as my as my job.
And looking back. What is it that, you know, has
surprised you the most about how the company has evolved or other
product has evolved since the that first transaction on July
29th? I think like what was the big
eye-opening thing for me was really that once you get past,
you know, ten or fifteen or Twenty employees, the company is
really about building an organization of people and I you
know, kind of naively thought of it as As product first, like I
see products, I build products, I like products and but to do
that at scale requires that the actual building of an
organization of people not a product built on technology and
so that transition I think for me was very difficult and one
that I've been learning and trying to grow into and I've
never done this before at the scale.
And so, just a lot of a lot of stressful, learning of how to do
these kind of things. And we have all the chaos of the
crypto industry. And also all the chaos of a
We'll start up kind of tied into one into one Beast.
So it's been extremely fulfilling, but, you know, huge
challenge any interesting anecdotes to share here about
this journey of learning lessons.
Yeah? Like, when you start a new
project, you you surround yourself with people who are,
you know, your friends are who are people that, you know, and
you can sort of implicitly trust them because you know them.
Well and then as you grow you have this sense that like the
people around you are always going to be trustworthy and good
and and they're not you you get to a certain size and you will
inevitably bring into your organization.
People that are not good and this, you know, this can range
from just someone who's incompetent to someone who is
to, is a thief, which we dealt with that, you know, in 2016,
when we had our internal guy, steal a bunch of money from us.
And that, you know, that's been a challenge to realize that a
lot of people, it sucks to have to put your guard up like that.
But after you get to a certain point in a business it happens
kind of naturally. I understand what is you just
launched shape-shift 2.0. What is it?
And what excites you most about this release?
I've kind of avoided calling a shape-shifting point 0 because
it's so cliche. But really that is a good
description of. It is a brand-new version of our
product and the the good way to describe it is that the
shape-shift 1.0 was a tool to convert one cryptocurrency into
another and to make that fast and easy for people and to do.
So in a non-custodial way. Way, the new shape shift allows
that same thing, so people can still use the new shape shift to
convert one crypto into another, but it also brings that kind of
self custody principle to the rest of someone's crypto
management. So it is a wallet, it is a Fiat
on and off ramp, you can buy and sell Bitcoin from your bank, you
can store all your various cryptos safely it integrates
with Harbor wallet, so you can keep them safely stored offline.
But still Is a normal web browser to interact with your
portfolio. And so, basically, it's meant to
be, you know, a self custody alternative to something, like
coinbase, a really simple and good ux that normal people can
use to interact with crypto Technologies, but done without
us having control of users keys. So that's kind of the theme that
that I've always wanted this company to build on was one, in
which people are sovereign over their own wealth.
And I think if, if the crypto Revolution ins and it just ends
up with a bunch of custodians, new custodians, you know, the
coin basis instead of PayPal's and Banks before it then not
really much has changed at all. And so we're trying to take a,
you know, a more difficult approach but one that I think is
more valuable over the long term which is to build a highly
performance. Great ux crypto platform in a
way that people maintain control of their keys.
So, that's the idea. So we'll talk about about about
the features of this new shape shift.
We'll see. College 5420.
Let's just call the new shapes if I guess.
You know, one of the things I think that people will notice
and have been noticing for some time because this has been the
case for as far as I know at least a year I think is that in
the beginning you would go to shape-shift you would put an
address and you would send money to the address that was provided
by shape-shift and that was it a few minutes.
You you had your current you know the currency was exchanged.
Now you have to register and you have to do kyc.
In fact, I Third, for the new shape shift today and did the
kyc, the process is great. It's like really easy to five
minutes and I was approved in like, no time to talk about
this, the shift from a service which in when shape-shift used
to be a sponsor of the. So we used to say it was as easy
as putting on your slippers. And now they're you, now you
need to tie the shoes laces as well.
Yeah, which is a little bit harder.
Why, why did you go from a product where you didn't have to
restrict your now? Where we have to register and do
kyc in all this. Yeah, it's a great question.
It's obviously not because we wanted to.
So let's start by saying that sheep shift was built really to
to protect customers. And, you know, in the beginning
that meant to me to really important.
Tenets, one was not having any custody at all and allowing the
user to hold their own keys. And the second was, was not
having personal information of the user and allowing people to
keep that to themselves. I don't want You know who
someone is. I don't need to know who someone
is in order to process a transaction for them and they
don't want me to have that information either so that
should be the end of it and when you take people's information,
you are inevitably endangering them.
Because now your warehousing information that can be hacked
and lost and companies, large and small governments, large and
small have problems with these kind of hacks where, you know,
millions of Records get lost and stolen, it's a huge problem.
And so I never wanted to deal with that.
And when we started shape-shift, It was comfortably enough in the
gray area that it wasn't clear, whether whether certain
Financial Regulators would require us to do that.
There were arguments sort of, on all sides of that question.
And we just figured we would continue forward and keep
analyzing it as we grew. And basically, you know, in the
2017, bubble shape-shift group massively and we, you know, we
got to the size where we decided to invest, you know, I literally
millions. Is of dollars in further legal
work to analyze every Contour of these complicated Financial
regulations. And basically from that what
came out of it was that we felt it was too risky to continue
that model without taking kyc from users.
This was really like the most existential struggle I've ever
dealt with in my life it was probably six months of Agony and
and stress trying to figure out what were the rules.
Exactly what were the risks. How were they?
For it in various places. If we needed to collect
information, what would it need to be?
And among all users are just certain ones.
And you know, every every aspect of this question, We examined
and ultimately came to the decision that we had to collect
kyc information on all users that were trading one crypto for
another. This was dismal news for me, you
know, dismal realization and conclusion to come to because we
knew that it would be bad for our customers.
We knew it would be bad for us as a business, but we felt that
we had to do it. So that we I wouldn't get thrown
in a cage and the whole company shut down and that wouldn't be
good for customers or employees or anyone.
And then the story would be over.
So that was kind of the existential problem, we face and
it was rough. Ultimately, I decided we should
play the long game and if I'm going to fight for financial
privacy, I need to be able to do it from a company that is big
and powerful and strong and has that voice rather than trying to
do it, you know, shut down and thrown in a cage somewhere.
Other that strategy is the right one or not.
We will see, you know, check back in with us in five years or
ten years, see what we're doing, and see what we're advocating,
but that principle of, of encouraging and enabling people
to be private in their finances. I think is an important one and
the fact that we can't allow that on our platform anymore is
really unfortunate. And we understand why, why
customers don't like that. We don't like it either.
For now, we have to do it. So can you look beyond the
regulation that you're complying with?
Do you see any good in doing kyc?
Or is it to you? Just is it literally just a
nuisance? It's not a nuisance.
It's worse than a nuisance. I think it's unethical.
I think it is unethical to force people to give up their personal
information when they don't want to.
So I have a moral problem with it and does good come of it
maybe I mean yeah once in a while once in a while by
companies spying on everyone they can sometimes catch a bad
guy a little more easily. But to do that you basically in
danger, you know, all the innocent people and you can go
down a very orwellian Road. Of trying to catch bad guys.
And always, then interfering and impeding on the freedoms of good
people. This is kind of the lesson of of
tyranny, broadly in history, so I don't, I don't support that.
I think, I think most people are good, I think people have a
default right to privacy and I think they should be left alone.
If there is suspicion of a crime, then trying to get
information about that person is one thing, but forcing you to
get information about those people when there's not even
suspicion of a crime, I think is highly unethical.
This is a position that I wholeheartedly agree with and
have been become more and more aware of, obviously, like, since
being in a crypto space, and I've only highly highly
frustrating as well that, you know, it seems to be that
Society is moving in this direction more generally.
I mean, we had Jerry Brito on a few weeks ago who wrote this
paper defending defending cash and the need for cash great
piece. And, you know, they're doing
great work in this field and his position is Is trying to educate
lawmakers and and law enforcement officers who he
feels are mostly Patriots and would defend the right to
privacy and freedom. I guess in the American context,
makes a lot of sense but also you know outside said outside
the American context we're recording this from Germany at
the moment where most places at least here in Berlin you can
only pay in cash. But I think that even though you
know there's this The idea that you people should be free and
have read the Privacy that that is not the directions, in which
the world is going, definitely not.
We look at Inter National regulation.
Financial regulation is not going in this direction.
Payment systems are not going in this direction.
Do you feel that the future is a little Bleak?
Are you lost? Hope for a future in which
people continue to have some form of financial Financial
Freedom and and most Typically privacy and their transactions?
Yeah, I think the world without cryptocurrencies would be very
Bleak and getting worse and worse.
I mean, certainly all governments around the world are
unanimously in favor of Greater surveillance and control of
their people. That's kind of a truism and in a
world where all money is controlled by central banks, and
the banking system, which extends from it really the
world's Financial system is simply a branch or a tentacle of
the Minute self. And I think that's that's pretty
frightening and dystopian and getting worse and then Along
Comes this crazy crypto phenomenon which which does two
things. One it provides technology that
allows privacy so there are certain certain cryptos that are
encrypted in even something like Bitcoin.
Well it's not perfectly private brings privacy in ways that
credit card, certainly do not have but more than that it also
provides complete saw. Aren T over your assets.
Meaning meaning control over them.
So when you can self custody, your own assets, you are not
dependent on anyone else to be able to send or receive that.
And regardless of, whether you can do that, privately, those
are kind of separate questions, but you always have the power to
send Bitcoin. You always have the power to
receive Bitcoin. And that's incredibly inspiring
and hopeful. So I think the future of
humanity is a good one, but as the world struggles with this
question of moving, from a Ott and Bank based Financial system
to a blockchain and crypto based Financial system.
Which I think is inevitable. There's going to be a lot of
struggle along the way because that really changes how the
world Works in. A lot of people are not going to
be very happy about that. So there's an easy way to go
about this in terms of shape-shift.
I mean easy in a theoretical sense, not in a practical sense.
So shape-shift is halfway decentralized in the way that
the settlement there is decentralized, but the
architecture on on top isn't, how was this design decision
made? Do you think if you had gone all
the way towards the centralization, even for the
architecture, on top, you could have fog on the kyc that you
find. So repugnant.
Yeah, great question. Yes, a decentralization exists
on a gradient. It's not a binary thing.
Where you're either decentralized or not, there are
degrees of decentralization shape shift is more
decentralized in something like coinbase but it's not it's less
decentralized than a true decks obviously and even among dex's
you have degrees of decentralization.
So yeah in the theoretically most decentralized design of a
decks where the individual Peter's themselves are
decentralized. There's no corporate entity.
There's no Central party whatsoever.
Yeah, I mean that software doesn't comply with anything
because it can't. So that's that's cool.
And I'm very glad that there are projects like that out there
that are working toward that end.
And then on the full opposite side of the spectrum are
centralized the companies that especially once they grow past a
certain scale have to be very careful about complying with
laws because ultimately they can get shut down and thrown in
cages and and there's there exists, you know, kind of Middle
Ground between those things. Where it's a question of, how
much risk people want to take over the last year, we saw one
or two or three decks has Implement kyc and accounts on
themselves, which people didn't think would happen.
Because the creators of the dex's were known, some of them
are actual corporate entities themselves.
So even though the technology and the exchange was
decentralized, it was it was operated by a central company.
So these are all these are all questions that I think every
Every entity in the crypto ecosystem struggles with.
And frankly, I'm just glad that there are different models for
people to try. That's one of the strengths of
the crypto industries that people can try every model from
from the coinbase model. All the way to the most
decentralized thing like a like a Bitcoin itself and everything
in between. That's what makes this so strong
is that there's no single, there's no single model, no
single weakness because it's diverse.
Let's talk about security, you know, dabs are pretty unique
because unlike other types of software, they can hold
astronomical amounts of value. That's why getting systems
audited, creating robust security processes and fostering
a culture of security in your organization is so important.
And to do this, you should only trust experts with real security
expertise. There are a lot of security
firms in the blockchain space, but few have the experience, and
track record of trails B. And they've been in business
since 2012 long before. Things like the Dow hack or even
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to audit every aspect of your project and smart contract.
Code is just the beginning, they'll help you implement best
practices around things like devops key storage and user
facing applications. Once your software has been
rigorously tested and reviewed by trail of B, they'll provide
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code remains safe over every new commit.
They can even put a software security expert at your team's
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Engineer on staff, but don't take my word for it.
Go to their Publications. Repo on GitHub to read their
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decide to reach out make sure you let them know.
You heard about them on epicenter.
We'd like to thank trail of bits for their support.
Do you have plans in the future to further decentralize the
underlying layers? And the Stag on me?
One thing that I think is an interesting thought experiment,
just to say that shape-shift would integrate with with
something like you to swab or compound or some of these
decentralized Equity pools that are, you know, fairly fairly
easy to, I suppose. I mean, from a technical
perspective, fairly fairly easy to integrate with, is this
something that you feel would be valuable to your users.
Is or could be offered as a secondary product where bky C
would be not as relevant or useful.
Yeah, it's certainly something that we're considering in the
new shape-shift platform Casey is actually not required for
everything. You can use it without kyc, but
to trade through our Market, making, you need a ky seat
account. We need to do some further legal
review on if and to what extent allowing users to directly
interact with dex's through the platform.
Would have kyc requirements. That is unclear.
At this point might be a question of risk tolerance.
So, yeah, it's absolutely absolutely worth.
Considering it's going to be a constant struggle for the coming
years and it's going to be hard for any company to allow people
to be totally Anonymous. And so, you're going to get this
trade-off between companies that can build software.
That's very useful, and easy and convenient and can help grow and
bring more people into the industry.
But that may not themselves be able to be the ones who advanced
privacy that might need to be done more on the on the protocol
level. Okay, so let's talk about the
product little bit because we haven't really touched on that
so far. You talk about what's new in
this new version of shape-shift and what people can expect when,
when they created the account and past this Escape by sea.
Yeah. So again, you don't need to do
that in order to use it, you only need to use do kyc, if you
want to be trading. Obviously, a lot of people want
to trade, so they need to do the kyc then, but a good way to
think about it. For people who haven't tried it
before is right now, it supports two different key storage
mechanisms, Your keep key or a treasure later on we'll add
others. Like Ledger will add a
software-only version will add a mobile version so we'll keep
adding more ways for users to hold their own keys.
But we wanted to start with Hardware both because that's the
best practice, I think, for people who want to get something
that's very easy to use and also very safe men.
Also it just seemed like a more stable foundation for us to
build the first version of this platform.
So right now, if you have a Kiki or a treasure you can use the
shape-shift platform and it basically becomes a much better.
Interface for your Hardware wallet Holdings so you can see
your entire portfolio together. You can watch, you know, the
real time data of the various coins, you can send and receive
the various cryptos, you can trade them, you know, any crypto
for any other crypto directly. So, you know, thousands of pairs
in that sense you can buy and sell Bitcoin with Fiat.
If you're in the u.s. right now, from a bank account and will add
options for Europeans and other regions later on.
So really, you know, Kind of think about what a coin based
does trying to be a One-Stop shop for all basic crypto, but
to do it in a way that allows you to retain custody over your
assets, that was really the key for us.
And then one, you know, one important distinction is that
there are a lot of, a lot of wallets out there that are
multi-asset. But generally, they are like,
only etherium in aetherium tokens.
So, there are tons of those kind of wallets equipped a platform
Works across most of the major block chains and will continue
adding more into the future. So that's kind of the the
current version V1 of this platform and then over time
we'll add new coins. Will add things like staking
obviously will a different key storage mechanisms will add
other ways to interact with with the decentralized financial
systems. You know, lending markets and
money markets as those develop. And so really this is meant to
be like a b2c way for people to interact with the crypto world
and to store their assets safely and retain self custody over
them. As I said, token, the fuck's
token. What does that used for?
Yes, so this has been like a two-year project at this point
and we've had to be extremely careful about the fox token for
all the obvious regulatory reasons.
So we've been taking baby steps with that, but we continue to
move it forward right now, that token exists, it's an actual
your see 20 token but it's not released yet and it's not
integrated into the platform yet that will happen later this
year. And basically, what the Token
does is anyone who holds them will get better rates on the
trades that they have so you can think of it sort of like a
little tea program or a reward system where simply by
possessing those tokens, you get better and better rates on the
trades that will kind of be the V.
One of the fox token and people can earn that token on the
trades they're doing. And then basically it's just a
good way. If you're actually doing trades
to get better and better rates by holding that token, you don't
have to burn it or spend it to get those rates.
Okay, cool. At the way, I see this if you
just think of the this new platform as like a place where
one can manage his or her portfolio and set aside the
training aspect for a moment. It's like a great self
custodial, multi currency wallet, where one can manage
your portfolio, see how the portfolio is doing.
And to me, it feels like an improvement on what like a
ledger live could be like the larger Life Products.
Is great, but I feel like it's lacking a lot of the portfolio
management features that I'd like to see in it.
And this is where I see this new shape-shift product positioning
itself. And then, in addition to that,
then you like, you know, you have all the trading aspect
also, which is like, really nice to have like, within your,
within your wallet. Yeah.
So I'm really looking forward to the, The Legend integration
because I use a larger and yeah, being able to use it with with
my ledger, but for now. So it works with with treasure
And and Kiki treasure and Kiki. Yeah.
And you know, over time the experience on the Kiki will
probably be the best one because we have full ux control over
every layer of that stack from the hardware.
Because we own key key to the to the wallet and the interface,
which is the platform to The Exchange.
So we run all of that and so we can make the ux between those
things. Very very good.
I think we're the only company that sort of has kind of those
three layers. Is all under one house so over
time you'll see that experience with the keep getting better and
better better But we're obviously going to support, you
know all the major key storage mechanisms that customers want.
And are there any criteria that you use to evaluate which tokens
get listed? I mean I know there's some
considerations, I know that like in the last version of shape,
there was a bunch of tokens that were delisted for various
reasons. You can walk us through some of
this reasoning. Yeah.
I mean they're delisted for one reason and one reason only,
which is because we felt that they were too close to the line
from a security perspective. I have my own history with the
SEC and I've been watching them very closely about how Oh
they've interacted with the crypto world so ever since the
start of shape-shift we've been very careful about which assets
we would add. And as the SEC has issued
guidance, we continually revise our own policies on this
ultimately it's it's a bad situation because all we have
are a bunch of tea leaves and we have to try to interpret things.
There's there is zero clear guidance from the SEC on which
tokens they deem Securities in which they do not.
They believe that it's clear but it is, it is not.
They have not released any list of Tokens that they think are
securities in the tokens that are not.
So we continue in this gray area and we simply look at the
various candidate tokens on it on a number of metrics, we have
a very thorough process for this and any token we think is too
close to that wine. We won't add.
And in the case of the the tokens, we delisted we that
happened after there. Is guidance from the SEC that,
that made us change our assessment of those things.
So, something we constantly watch now that is for the tokens
that are available for trading. Tokens that are just held in a
wallet. We can list anything because it
has nothing to do with with the SEC or Securities rules at that
point. Not listening security is a
prevalent problem for all crypto exchanges.
Do you collaborate with other group to exchanges on which
tokens you're going to delist? Are on the legal groundwork that
goes into this? We don't.
We have an internal process that we use ourselves.
We don't talk about it with other exchanges.
Oh, thanks Ma. So, what's the business model of
shape-shift? Yeah, it's quite simple.
I mean, we're a market maker for the trading, so unlike most
exchanges where, you know, buyers and sellers are putting
up the masks and then wherever those prices meet a trade
happens and the exchange takes a commission from those two
parties that traded together. We're a market maker.
So we are always the counterparty so when someone
sell Bitcoin for Litecoin they're selling the Bitcoin to
us as shape-shift and we're selling them the Litecoin to
them. And so in the process Pricing
that we offer to people. We build in a spread there so we
make roughly half a percent on the trades that go through us.
And that's that's the business model.
Interestingly while we've never really competed on price before,
as the shape shift from the past, we're releasing new
pricing engine in several weeks that ultimately will be able to
beat most exchanges, much of the time, especially for larger
orders because we are a market maker and we're not limited to
any specific order. So, that's something that our
platform users will be able to enjoy down the road a little
bit. But, you know, at that point,
they're really we're trying to like, pull people out of these
centralized exchanges, because they're so dangerous for all the
obvious reasons that people in encrypt understand but they
leave their assets at these exchanges because it's
convenient and ultimately cuz they get decent pricing on the
trades. If we can make it as convenient
to self custody and if we can even get in a relatively
competitive on the pricing, we think not only can we grow our
business to be a huge size, but we also will do a big service to
the industry by pulling custody away from centralized places and
allowing that to remain decentralized in the keys of
actual users. So because you're not bound to
order books. But because you can pull the
liquidity of the different order books together with that in
order ring trades or how do you how do you create better the
quality? So yeah we watch all the ordered
books of five different exchanges right now and over
time you know will add more I'm and, you know, let's say someone
is trying to sell 20,000 dollars of Bitcoin into Dogecoin on any
specific exchange. You know, there's going to be an
order book that might you know, the price may move by X percent
on order that size. But if you spread that order out
across all the exchanges, the price would move less than that.
And so because we can theoretically do that by being
the market maker ourselves. We can give better pricing to
users than they would get on any particular exchange and and they
never have to worry. About the custody.
When do you quote, the customer the price is it before you've
actually done the price or is it after, and is there an element
of risk analysis involved for you guys?
Yes, there is shapeshifters always had to order types, one's
called quick, and one's called precise.
Basically with a quick, we show the user a price, that's
updating all the time. And whenever they actually do
the trade, they'll get the price is offered at the time of that
trade. The other way is that they can
lock in a price for a window of time.
And so in that case, they might be getting a slightly worse
rate. But but at least they know what
the price is, you know, exactly on both of those, we as
shape-shift bear, some risk, and we certainly lose Neon some
trade, some of the time. So we build that into our
modeling and, you know, the better we get at that, you know,
the lower, we can tighten the spreads.
And that's, that's sort of part of the business is, that is
doing that. Intelligently have people try to
exploit that? Oh, yeah.
If you know how well you can always try to game it right for
sure. And yeah, and it's always a game
of whack-a-mole. And there have been people who
have successfully traded through us and made a bunch of money and
we lost the money and we see what they do.
And We learn from it and so yeah you know markets are can be
thought of as everyone trying to game everyone else and in that
sense you just have to be careful and prudent.
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We'd like to thank Microsoft and Azure for their support of
epicenter. Can you give us a sense of the
volume today on shapeshifters today's volume like ever since
we implemented kyc last fall volumes have been pretty dismal.
And so we've been in this, this phase of rebuilding the new
shape shift and then kind of rebuilding a whole new business
on that new platform. So today, I think we do an
average of like two hundred thousand dollars a day in trades
which, you know, get for a year or two ago is is really low and
that was like, the thing that we knew would be really So painful
when we Implement a kyc, is because we essentially gutted
the entire customer base that we've been building for, for
several years, all the wallet partners that used us dropped us
because they didn't want their customers to have to deal with
Casey. So yeah, that that's been that's
been difficult. And we just have to rebuild and
a new company with the new model with a half, a percent margin
that that's obviously not enough to support a company.
How are you planning on getting that up in the near future?
I was is going to improve. Yeah, by bringing customers into
the platform and with enough customers comes enough trade
volume. And with enough trade volume, we
get back to profitability. So it's really just a question
of trade volumes. And to do that, we need to build
a product that people like using that they feel safe using and
that is distinct from obviously. The other competitors in the
market, do you see yourself trying to attract a larger
players or institutional investors?
Maybe we're the only company in the world right now.
That's not trying to go after institutional.
Yours. I'm sure a lot of companies will
make a lot of money with that. But our expertise is in B to C
and actually catering to end users of crypto.
And I think our role will be to help the world, you know, of
actual end users transition from a see.and bank system into a
blockchain cryptosystem. And so we're building a product
that will be useful for for normal people.
You know, everyone is just getting into crypto to people
who have a lot of crypto, but themselves are our individual.
So we're not going after business.
Enos is really, we're definitely not going after institutions and
I think there would be kind of a culture mismatch.
If we as shape-shift when after Wall Street institutions that
would be it just wouldn't fit. So it's not us.
We'll leave that field to other companies.
I can see you going down that path now.
But you know since the the volume has gone down quite
dramatically and you mentioned that has affected your revenues
are, there are other business models that you're pursuing even
even in those are Be to see Market.
Nothing that we're trying to replace our core business model
with, I mean, ultimately, we make money as a market maker for
people that are trading between digital assets and so that
fundamental premise hasn't changed.
We've just had to change the product that we offer that
service through. So yeah, it's going to take time
to rebuild a customer base and get those volumes back up but
we're a business and so that's what we do.
One last thing that we want to ask is the last time you were on
two years ago was to talk about prism which was a portfolio
management. Portfolio management platform.
Yes, you shut that product that product down recently, in the
last about a year ago, buddy, Oregon, October last year.
Yeah. How about why?
Why you shut that down? What was the experience there?
Prison was super cool, but it was basically a way it was built
on aetherium and it was one of if not the first commercially
available, smart contract Financial applications built on
aetherium. And basically what it did is
allow people to put up collateral in aetherium and then
create a portfolio. Essentially, a derivative
portfolio of various assets, it was all held in a smart
contract, so it was trustless and then the performance of the
portfolio, you know you make money or lose money.
Over time. And then when you close the
portfolio you you either get back less or more collateral
than you put in based on the performance of that.
It was very cool because it was essentially an easy way to get
exposure to digital assets without having to set up a whole
bunch of different key storage. It had one significant problem
sort of, that didn't exist when we first fathomed it, because it
was all on chain, the ethereum gas costs became prohibitive.
So that it only made sense to create fairly large portfolios.
Which was a little different than its target market that, you
know, over time we could have solved and there were some ways
around it and I think aetherium has to figure that challenge out
in other ways already. But also we have been working on
this new shape-shift platform for about a year and a half and
it became clear to us that the overlap between the two products
was too great and so it didn't make sense to be building both
of them. And so, even though we didn't
mention this at the time that we close prism part of the reason
that we closed, it was that a Out of its features will end up
being built into the new the new shape-shift platform and we felt
we needed to focus on that. So yeah, it was it was certainly
sad to Sunset that product a year ago it was a very
interesting kind of pioneering project to build Financial
derivatives in a trustless way. We thought there was some real
real value and interest there but we just have to make a
difficult decision to not continue that at this time.
Super interesting. That's what she has a little bit
and talk about the ecosystem a little bit more.
So, you've been in this ecosystem very long time, you
spend a lot of time in Bitcoin and some time in the theorem.
How do you see both of them from the outside?
From the perspective of the others?
And how do you see this in the face of Challenge and change?
And it changes protocols. So Cosmos definity, Parker Dot,
and so on. Well, so when I got into crypto
it was May of 2011. Bitcoin was really the only
thing there and the entire crypto Community was the Bitcoin
Community. They were synonymous as this
technology grew and as people started building different kinds
of blockchains and experimenting with different ways of using
this technology, different use cases different types of assets.
The community has obviously fragmented and split into many
different pieces. I See myself, as part of the
entire cryptocurrency ecosystem, not just the Bitcoin ecosystem,
and not just the theorem ecosystem, but really a holistic
approach to realize that this is an entirely new set of
Technologies and asset classes. I think they are mutually
beneficial to each other. I think etherium strength, helps
Bitcoin and vice versa, and it's been really tragic for me to see
that. There are a lot of people that
don't feel that way that they are very tribal.
And this is particularly this particularly apparent within the
Bitcoin Community. There are a lot of bitcoiners
who have utter hatred for every other crypto project out there.
I think it's really sad and unfortunate and a lot of them
spend their time on Twitter you know kind of shitting on every
other project and finding problems with every other
project because they want to just protect Bitcoin or it's
very trouble as it's the same kind of thing.
You see among you know fans of sports teams It's the same kind
of thing, you see among political parties or religions,
it's kind of a phenomenon of humans that they will fall into
this tribalism sometimes, and it's been sad to see that in the
crypto world. But, you know, maybe that was
maybe that was inevitable As you move from a community that was,
you know, 10 or 20 thousand people around the world to one
that is now 10 or 20 million. So looking at both the tribalism
in Bitcoin, any Theory, mm, and I mean even like there's
tribalism even between like, within those communities, not
only among like between themselves.
Do you think there's a way out of this will be the great
unifier. It's like, you know, cause some
of the Char, blows them to go away.
I mean, one potential unifier is when there is a common enemy and
so that would generally be Fiat currencies in Banks and
governments Fiat currencies and Banks and governments have not
taken a hard-line antagonistic approach to crypto.
So that so it's not a clear and present danger in a clear enemy.
I think if like the G20 Nations started trying to outright
banned cryptocurrency some of the tribalism might go away
because then at that point the tribe is all of crypto versus
you know the Fiat were World. But I that's not a guarantee
that that would would solve it either.
I don't know. I mean, maybe it doesn't get
solved. Maybe you just kind of Withers
away 10 or 20 or 30 years from now, when we when this
technology isn't new anymore and people see what Bitcoins places,
and they see what a theorems places and they see how these
things interact in the use cases that they all Phil.
I think some some of it results from bitcoiners being unable to
realize that there are more use cases than just money.
They seem stuck in this idea that like Currency digital
blockchain assets can only be used as money and because
Bitcoin is the most popular and because they believe it's the
most secure in the most decentralized Etc that it should
be the only one and that any other competing money.
You know, will ultimately fail. Just based on the laws of
Economics I would tend to agree with that in some ways, if the
only use case was money but even in that case, there is value in
the experimentation on other blockchains.
It is not clear that Bitcoins. Blockchain and its structure, is
the optimal way to do money, the world deserves a period of
experimentation of 10, or 20, or 30 years to vet that out.
But more importantly, money is only one of the use cases of
digital assets and I think digital assets there will be
millions of them. I think there will be one to 100
major blockchains something like that, there's not going to be a
million popular blockchains because that doesn't make sense,
but there's definitely going to be millions of different digital
assets on these major block chains and they optimized for
different Things. You know, aetherium has features
that Bitcoin can't do today. And Bitcoin has structural
reasons why it is more secure and safe than a theorem right
now. Both of those are useful and I
think the market is better off by having both of them.
At the same time, you have new coins.
Like you know, the EOS is in the cosmos is of the world that are
operating on a proof of stake model and those have advantages.
They're extremely fast very high throughput, that doesn't mean
that they should replace Bitcoin or that they would be a better
form of money. But they are certainly better in
some use cases than Bitcoin is and certainly better and some
use cases and ethereum is and I think that's okay.
I think it's a healthier industry when you have multiple
Technologies, providing multiple products for people and so you
know I just see all that as good stuff at the same time.
There's a lot of total crap projects that are either scams
or totally pointless. So this doesn't mean that every
crypto project deserves recognition or respect, but I
think a lot of them do and so I don't know how the tribalism
ends but it's been it's been kind of Pointing we often talk
about more about etherium than Bitcoin.
This is why I'm asking for Bitcoin, this time, what's your
vision for Bitcoin at this point?
And where do you think it's going?
And has this changed over the last couple of years.
So my fundamental view of Bitcoin has not changed ever
since I got involved many years ago and that is that, I believe
it has a good chance of ultimately replacing by
outcompeting Fiat, currencies around the world, and becoming a
new monetary standard for the whole world.
I think that that was its initial promise and I think it
is with each day that goes by it gets closer and closer to that.
I am one of the people that believes that Fiat currencies
will go away. I think that over time when
people realize they can have money, that cannot be created
out of thin air, or they can have money, that can be created
out of thin air by politicians over time.
They will they will choose the former but it's going to take a
long time and at least a generational shift if not too.
So one thing that has changed though with Bitcoin is also
early on it was seen as Really good payment system, like a very
easy, quick way to pay people around the world that was fast
and cheap. It's still quite fast,
obviously, it's the same speed. It used to be and for
international transfers, or for anything that is, you know, call
it high value. Which means, you know, a few
hundred dollars or more. It's still a great payment
system, but obviously, as it gets, bigger and bigger, the
fees are going to get worse and worse than it's going to be
useful for fewer and fewer payment.
Use cases, maybe that's okay, or maybe things like lightning
network will. Really take off and handle those
smaller transactions and that would be okay too but that's
that's something that's definitely different from when I
first got involved to see kind of something that used to be you
know send money for essentially nothing to now.
You know it doesn't make sense to send a ten dollar Bitcoin
transaction ever. And at the worst case you know,
back in the last bubble the average fee on bitcoin
transactions was $50. We had we had customers sending
us a hundred dollar trade you know of like went into Bitcoin
and they would end up with With with $50 on the other side and
think that we scammed them. And you know, someone who's new
and is like why that why in the world did you take $50 of my
transaction? That was an uncomfortable
conversation to have with thousands of different people.
So that's certainly not ideal for payments, but payments is
just one of many things that crypto can be used for.
And if Bitcoin does not become the widespread payment Network
that people thought at first, that might be okay, too.
My view is that if Bitcoin is money and is meant to be money
that the ecosystem, like should should really be working hard to
make it money. I feel like lightning network is
a good step in this direction. But do you see anything that the
Bitcoin ecosystem, specifically could be doing better to move
closer to this goal of being a replacement for Fiat?
I think you have to separate the the money from the payment
system. Obviously, a money that has easy
Payment Systems attached to. It is better than one that
doesn't, but it's not clear that if Bitcoin is going to be money,
it needs to be able to have cheap five dollar transactions.
Maybe it does not, that's that's unclear.
It is also very possible that a different crypto starts
emerging. That is simply because it is
faster and cheaper. It ultimately takes more
economic activity. Activity and it becomes money
and it's totally possible that Bitcoin fails because it did not
optimized for Speed and transaction.
Throughput, I don't know. I don't know where that will
come out. But again, that's why all this
experimentation is really important.
Stark where is organizing the star quartz sessions Conference
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What are your thoughts on Deborah?
So you had a tweet storm in which he welcomed.
Libra. My first tweet storm.
Yeah, I know. I saw.
Can you explain your reasoning behind?
Why are you.why? You think is good for the
ecosystem? So, I've been interested in this
mysterious Facebook cryptocurrency, you know, kind
of ever since the news about it started leaking, kind of mid
late last year. I assumed that it would be kind
of some watered-down centralized coin.
That was not very interesting, really just like a dollar pegged
centralized, you know, quote, unquote digital currency.
That's what I assumed would happen, but when the actual
details of Libra were revealed, I was quite enthusiastic.
A stick about it. Certainly it is not a censorship
resistant, self Sovereign crypto currency like Bitcoin but it's
also something that is much more interesting, much more
decentralized and much less, you know, tied to government policy
than Fiat. So they did to kind of really
important design decisions. One was that it is actually
built on a blockchain, sort of a, you know, an open-source
permission lists Ledger that people can be building on.
That was a big design decision that was important and into is,
it's backed by not. It's not a one-to-one peg with
the dollar which would have been there.
Easy way to do it. It's actually backed by a basket
of Fiat and bonds. And what that means is that it
is sort of above or greater than any specific National currency
and because Facebook has 2 billion users.
It's really the first credible near-term competitor to
something like the US dollar. I found that to be extremely
exciting. I think a world based on, you
know, large companies, issuing their own currencies would be
much better than one, where governments are issuing their
own currencies and something even better than that.
Is where is a purely decentralized cryptocurrency,
like Bitcoin. But I see Libre has a really
good stepping stone between those two worlds and then I was
pleased to see what may be pleased is the wrong word
entertained, to see how quickly, the governments of the world
came out against Libra. The they were Very uncomfortable
about what Libra was doing and this was largely because they
saw it as a threat to their Monopoly, over money creation.
And now we have hearings in the major major branches of
government in the US and elsewhere, where they're
actually talking publicly. About the qualities of money,
the attributes of money, and whether, you know, central banks
to create money or private markets, you create money, these
kind of discussions, never happened.
Ten years ago, they haven't even really happened within the
Bitcoin world, because the politicians haven't taken
Bitcoin seriously as an existential threat to Dollars.
I'm glad they're not taking it as a threat, even though it
absolutely is that threat. But when Facebook comes out and
does it, they see that immediately as a existential
threat to dollars in and other Fiat and that's just
fascinating. I mean, at this point, Facebook
has become the lightning rod to which all the ire of these
various politicians is going to be drawn.
I don't know that. Libra Ever actually launch
because I think the government is going to be so upset with
them that they can actually get it out the door that
demonstrates yet again, why decentralization is so valuable
and ultimately, I think that's good for Bitcoin and I think if
Weber launches, it's good for Bitcoin because it pulls people
further out of the Fiat world and into a more digital currency
world. So, I'm excited about the whole
thing. I applaud Facebook, for making
some design decisions that would be obviously controversial and
really push the envelope. I think You know whenever I see
bravery from a company that large I think that's very
respectable. So yeah.
We'll see how this goes. I think I agree with you on the
the interesting design aspects of Libra.
I think that we really weren't expecting that to emerge out of
this project and and it has been entertaining as well to see
regulators and lawmakers and politicians throw their arms up
at this project. And and it It's sort of like,
you know, we're scoring points like, cryptocurrency, the group
of currency or ecosystem is scoring some good points in
this, in this fight, on the other hand, fervent critic of
Facebook or its numerous privacy transgressions over the years.
And, you know, we're learning more details now, about some of
the things that are to come and like sort of thing.
It's Messaging App, Suite, Etc. I think it's absolutely
inevitable. Inevitable.
That if Libra ever launches, the Facebook would use the data to
fulfill his mission, which is to sell advertising to its
advertisers and exploit people's financial data.
What are your thoughts on that? Like, where do you sit in
between these sort of this is great because it goes against
government and National currencies and on the other
hand, you know, the the risk to users?
Yeah, the Privacy. I'm not one of most people who I
think Facebook is evil because they use people's data.
I think people that use Facebook as customers and they want a
free service and then expect the company to just build them a
free service without taking their data and selling it are
naive and frankly, frankly unfair I think any private
business that you can opt out from you can opt out from.
So if you don't like what Facebook does with privacy,
don't use it. If you don't like what Libra
does with privacy, don't use it and that's the marketplace at
work. I would much rather have a world
where Facebook has the predominant currency and takes
information from it to sell. You advertising versus a world
in, which the Federal Reserve issues, the main currency and
they're able to debase it and print it at the whim of
politicians which impoverishes the entire world slowly over
time, I think that's a huge improvement over the status quo
better than both of those of course would be a world in which
a properly decentralized cryptocurrency like Bitcoin
exists and is the dominant money but it really kind of depends on
what you're comparing it to. So in fact, that Libra is a
currency that's that's issued by a non-state actor.
That is nevertheless, extremely powerful in the Legacy world so
something that can't be said of Bitcoins and the like so even if
you just look at the total market cap of Bitcoin in the
theorem that is completely dwarfed by Facebook and all the
other companies that are attached to Libra.
Now, do you think this is going to change how we think about
State and non-state actors? And I think this is going to
blur the line because in effect so far money issuance has been a
monopoly for, you know, nation-states and I mean
discounting Bitcoin. But I mean basically in the
grand scheme of things Bitcoin and etherium, they're really
smart phenomena so they're not going to throw off entire
government's yet. But do you think in hindsight
will see this as a pivotal moment?
Yeah. Yes, I think it's definitely a
pivotal moment. I think there's generally an
impression that governments have always managed money and thus
the fact that Bitcoin is this new thing and or Libras.
This new thing is something entirely different from history.
The reality is that governments have only really been issuing
money at the base layer for a few decades.
I mean, basically since 1971 when the dollar went off the
gold standard, we've had a purely Fiat system prior to
that. It was really a gold end.
In commodity money system in an imperfect one but one that was
still at the foundational layer built on on gold so this isn't
something entirely new at all. It's really a return or let's
say it's really the world leaving the context of
governments, being responsible for money and going back to
something that is that is outside of the control of any
politician or any government. Now obviously something like
Bitcoin is far more powerful. Powerful than gold because it
can move around the world so easily, and it works in a
digital economy. Gold doesn't really work that
way unless you centralize it an issue, electronic notes for that
which has its own problems. So there's definitely like
newness to this whole phenomenon.
But I think a world where government wasn't behind money
would actually be back to normal, it would not be
something new. Interesting.
I think that there is a contextual aspect that comes to
play here. That needs to be considered as
well as that the world of 100 or 200 years ago and the economy of
100. 300 years ago was far less complex than what we have today,
in terms of activity, Market, activity population, Supply
chains, Etc. Do you feel that?
It makes sense in today's massively complex economy to go
back to a fully unregulated money system.
As was the case may be like 200 years ago, or yeah, I think the
more complex system the less able to properly handle it, a
centralized structure becomes so when a simpler system
centralization can work really well as you add Complexity
centralization causes all sorts of all sorts of problems.
A great example of this is politics and governance, the
biggest problems in politics are the ones in which you have the
most people involved. So a Town Council never commits
like genocide or or, you know, crazy Global issues and most
people feel reasonably, okay, about their Town Council, when
you get up to like a city or a state level, there's more
controversy and more problems but but still nothing.
Which you get it national governments, especially when it
comes to markets, which are incredibly complicated.
And there are no people on Earth who are smart enough to really
understand them. That, that kind of, that
humility is completely lost within politicians.
They all believe that. If you get a few economists in
the room, you can understand something as complex as the
global economy. I think, because something is
that complex, it has to have a decentralized structure.
And when you have Central Banking where they are literally
controlling the price of money, they're essentially.
Planning the price of money for the entire world that is the
same kind of central planning that took down Soviet Russia.
The same kind of central planning.
That's taken down Venezuela. That kind of thing is really
dangerous. And so I think the world would
be much better off to the degree of this complex.
It is much better off of the decentralized system in which no
Central party is trying to have all the information because it
certainly cannot have it. Even if it wants to I'ma I'd
like to touch on something. You said their words, I think
it's relevant to your and obviously I agree that Central.
Planning to the extent that we saw in Soviet Russia or that we
see in Venezuela is an extreme that at some point does collapse
and you know we can see what's going on in Venezuela right now.
And we've seen this in the last 50 years and many places.
But you said something about people not being smart enough to
understand what's going on in their in their own market.
And yeah, I'd like to tie that back to Facebook and the sort of
Checked, aggressions and transgressions on people's
privacy and the fact that sure like people can use Facebook if
they like, or they can stop using it.
I think that in the aggregate people don't really understand
or appreciate the risks of such a, such an unchecked power.
That is governed only by markets such as Facebook.
And we've seen that in the last couple of years with what
happened in the US. Elections.
And I think that is just the tip of the iceberg, because in
reality, I think, you know, there wasn't really that much AI
or machine learning in behind that, you know, you do you think
that companies like Facebook should be and this sort of off
topic? You think, the companies like
Facebook should be allowed to you, just do as they please and
grow to nearly like too-big-to-fail size and not be
regulated at all. I need my general moral
philosophy. Is that anything peaceful should
be permitted and I can always walk away from Facebook.
I cannot walk away from the US federal government.
I am taxed and stolen from buy them, regardless of what I want
to do. I I just see them as completely
different threats in in their character.
I mean, I don't see Facebook as a problem because people can
stop, they can opt out of that if I could turn.
Knopf. My support to the federal
government. That would be incredible.
You know but but I can't I'm I'm trapped and I'm the the federal
government and not only that but Facebook does not have a
military that goes around the world.
Killing hundreds of thousands of people.
So yeah. Is it bad that they use your
data to sell to advertisers? Sure.
I guess that that's bad and people should certainly be more
cognizant that that's happening. I agree with that but they're
not killing people. Facebook isn't killing people.
The US federal government is literally killing Thousands of
people to even put them in the same boat, I think, is unfair
and I would much rather have large peaceful corporations,
like Facebook, that are market-based and regulated by
markets Running Money systems versus large governments.
That literally kill people and have the legal protection of
theft and murder. I think that is, that is the
great Injustice of the world. And so, the more that the
control over money moves out of that world and into into the
private Marketplace, Ace the better.
Well, I would say that once Facebook has its own money and
control over money, it can definitely at that point, start
going around and killing people or events.
Then my, my opinion will change. I mean, if you but but private
companies, don't do Facebook. Doesn't is not an elected body
of people. Totally disagree.
So you have more control in your election of Facebook, then you
do in the election of us politicians, if you don't like
Facebook, you can sell their shares.
Well, American pleasure. Okay.
Well, right, but, but users users of Facebook.
They can sell their shares that can close our account.
That, that is democracy, that is opting out of something.
And that is much more powerful than the, than this, the charade
of political votes that elects the, the stupidest people among
the population to leave them. I mean, I don't understand how
anyone can possibly advocate for a system like democracy when it
leads to people like Hillary Clinton.
And Donald Trump being the two greatest candidates that the
country is able to Choose from. I mean that's just totally
Preposterous that whole system is I think worthy of being shut
down immediately, totally agree. I completely agree with that,
with that premise. So what do you think about the
future of money Eric? So basically, in principle
blockchains enabled organization, so basically
assets become easily transferable.
Do you think we will actually still need Fiat money, or even
company issued money in the future?
Now, we don't need Fiat money now, so yeah.
Money is a scam. It's the greatest scam ever
perpetrated on mankind. The sooner people abandon it and
moved to private Market based money.
The better Bitcoin obviously kicked off a phenomenon that I
think is Unstoppable at this point, it is a phenomenon of
this decentralized trustless technology which is really well
suited for something like money that needs to be Global and
which no one should have the power to control.
I think it's inevitable at this point and that, you know, I
don't know if it takes five years or 50 years for this all
play out. Out, but I think, you know, to
two generations from now, people will look back and see how
obvious it was. That a group calling themselves,
the Federal Reserve should not have been trying to control the
price of money for god, sakes like that.
That'll be something that's laughed at, by people in the
future as something. Preposterous just like bleeding
people to rid them of the plague was Preposterous and we see that
now. So this will this will take some
time to change, but I think a seismic shift in how money Works
has occurred. And we're all just while we
might be Is fading in this world just kind of along for the ride
at this point. I think this is this kind of
leads us to our last question. So looking back at the last five
years that shape-shift has existed.
So anything that you would have done differently in hindsight.
Yeah, I mean there's always a million mistakes that any
entrepreneur makes and I I'm certainly of that.
Probably our biggest strategic mistake was simply building too
many different products. At the same time we've seen so
many Opportunities in crypto, that we kind of pursued too many
of them too early on, instead of focusing just on our core
business. So that was a lesson I've
learned, and we've corrected that now, by by building this
platform, that is the entire company.
All of our energy now goes into this platform.
So that's something that I've learned and something I would
change, you know, regarding the the whole kyc question.
I think that was the right decision for us to take.
It's been immensely painful in the short and medium term.
I think it was the only way for us to keep building a company
over the long term. So I will have to, you know,
assess whether that was really the right decision, 10 5 or 10
years from now. But right now it's I think too
early to say great. Well, I would love to be able to
talk more in debate more. I agree with you on some on some
levels but I also think that like you know, Soviet Russia or
Venezuela and all the transgressions there and the
extremes there is sort of extreme libertarian.
Viewpoint also has As has its flaws.
And so, certainly, not perfect. Certainly not perfect.
But we'll have to leave it there because we're we're running out
of time here. But thank you so much for coming
on and start again. Eric, and look forward to having
you back on again, in the future.
Yeah. Great discussion really, really
enjoyed it and for anyone that wants to check out the new shape
shift. It's at shape-shifts.com and we
look forward to working with you.
So, thanks a lot. Thanks Eric.
Thank you, Eric. Thank you for joining us on this
week's episode. We release new episodes every
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Well thanks so much and we look forward to being back next week.
On Twitter and please leave us a review on iTunes helps people
find the show and we're always happy to read them.
Well thanks so much and we look forward to being back next week.