The Winklevoss Twins and Balaji

I'm 65220 and there's two of me.

Here in sunny Asia with the Winklevoss twins and they have just embarked on a world tour. And this is one of the hops on that world tour. Where are you guys being. Where are you going?

So we'll try and remember we started.

In Miami at the bitcoin conference, Bitcoin 2023. The first world stop was in London and then we went to Ireland, then Switzerland, then Dubai, Abu Dhabi and here we are in Singapore and next stop.

Is Hong Kong and then back to the US Back to the US and how many countries? I mean Gemini is a global operation now. How many countries are you guys in?

About 70 countries.

70.

Okay.

And so and we're like most of the user base is now outside the us. Most of the business is moving outside. Is that right?

So right now the US is our biggest market. But we believe that there's going to be a flippening and that actually APAC region and MENA region will actually become our largest because of the current state of regulatory affairs in the U.S. it's just the environment's hostile and you just can't get anything done. And so we're on this tour to figure out where we want to invest more in the future for Gemini and for crypto. And we often say that crypto is global and so is Gemini. And so if the US is not ready, well, we're not going to wait around and the industry is not going to wait around.

Absolutely. I mean I've heard good things about VARA in particular like the Dubai, you know, the regulator. I'd love to hear your guys thoughts like what are the top jurisdictions, you know, best, best for crypto that you've seen.

Yeah. So VARA is very forward thinking. They're embracing crypto. There's adgm, Abu Dhabi Global Markets, Hong Kong recently released a framework in June 1st I believe so that's super encouraging. We're going to go visit Hong Kong. Of course. Singapore is licensing entities through mas and then we hold the license through the FCA in London as well as the central bank in Ireland. But mica, the EU framework which will I think go into effect this summer, that's also super encouraging. And putting, believe it or not, Europe beat the United States.

I know, yeah, it's actually like actually you want to talk about that? Go, go ahead.

Yeah.

It's just staggering that a bunch of countries in Europe could get their, you know, get it together to create a first principles framework for, for crypto and the US is still infighting and there's all this dissonance. So if you look at the US.

We should talk about the benefits of getting that one license to rule them all, so to speak. Right. So in the US right now to, to operate a crypto company that like, like an exchange or custodian, like, like Gemini, you need to get trust company license, let's say in certain states you need to get MTO licenses in other states, everywhere. So you need to basically go through 50 licensing processes.

And so and then when you're done, you could have the federal government say wait, that's not enough.

And you need to get like fingerprint. Like people don't understand what a pain it is to get even an mtl.

Totally. And we're all willing to do the work. But, but think about the cost. What's the barrier to entry to get into the market. Right. And so in we know the origin stories and the creation stories of our best companies, they come out of garages. Right. Or they come out of dorm rooms. They're oftentimes college dropouts that build these companies that become the fang companies in, you know, Facebook, Amazon, Netflix, Google, Microsoft and they become the biggest drivers of the US economy. And so the barrier to entry in those companies was much for those companies, much lower in crypto you have to raise something like $10 million. Just started.

Yeah.

Hire a battery, an army of, of lawyers just to get license to, then start to see if you have product market fit. And so such a high barrier to entry, it makes it impossible for a lot of founders to innovate and build in crypto. And so it's bad for competition, it's bad for innovation, and ultimately it's bad for, for consumers because it just doesn't ship as much value to them. So having a clear streamlined licensing pathway for, for companies to comply, who want to do the right thing is, is invaluable to the free market economy that, that creates all of this prosperity and wealth.

And it's.

So the trajectory is garage, dorm room, and now law firm.

Yeah, yeah.

And you're sitting around a table with your lawyers trying to figure out I.

Got sort of my law firm's garage. Yeah, exactly.

Yeah.

Not how to build your product, but basically how to stay out of the crosshairs of the regular.

Yeah. I mean, and, and everyone's becoming, you know, part time lawyers. Yeah. And policymakers and whatnot. And we're spending all of our time dealing with this because there's so much confusion and there's so much chaos and I know you were about to say this Cameron, earlier about specifically an example of this confusion in the.

Yeah. So the current CFTC calls ether a commodity. The New York AG Attorney General calls ether a security. The previous SEC said that ether was a commodity. And the current chair of the sec, when asked under oath a question of whether ether is a security or commodity, refuses to answer the question. Yeah, that's the state of play in the US Regulatory establishment.

Is it an. Is ether a commodity or security? And again, it depends on the facts in the law. And if there's a group of. I'm asking about the facts and a law sitting in your seat and the judgment you are making. And so Mr. Chair, I think you would not want me to prejudge because I'm also. You have prejudged on this. You've taken, you've taken 50 enforcement actions. We're finding out as we go, as you file suit, as people get Wells notices on what is a security in your view.

And just imagine if there was that kind of confusion around what a share of Apple stock was. You'd have no Apple, you'd have no Silicon Valley because you can't have capital formation. No one's going to invest in these startups if they're not sure if they're allowed to or not. And so all of these major drivers of the US and the prosperity story and creating and generating generational wealth doesn't happen. Right.

And it's, you know, the thing is it's actually, it's not even in your guys. I mean, some people would say, oh, should I put up regulatory moats and barriers and so on. But you want competition. I think I do. I mean we want free markets, we want entrepreneurship, we want founders.

Yeah, we don't want to win because you have more money to get more licenses.

You know, that's the wrong type of friction.

Exactly.

We want to build.

That's.

We want to compete and let the best company that innovates the most the quickest win.

And you know, the thing about this is there are signs of light. I totally agree with you. At the federal level in the U.S. so there is the McHenry bill that that looks decent. That it's a little bit of a, you know, trying to still force crypto into the SEC CFTC framework, but get under the constraints, it's certainly better than the alternative.

Right.

And then there's also at the state level, there's definitely pro freedom. You know, Wyoming is doing good stuff with the Dow law and Texas has.

Right.

Told bitcoin shall not be infringed. And there's a minor protection acts and anti cbdc. There's some good stuff that's happening at the state level and some, you know, I'm not sure if they'll be successful, but at least efforts at the federal level. And there's guys like, you know, on both sides island like Ro Khanna or Wyden are like pretty good on bitcoin. And of course, you know, there's folks on their side like, you know, Desantis or, or Ted Cruz being pretty positive. But I agree with you. In general, the regulatory state is just fighting crypto tooth and nail, but not elsewhere because much of the rest of the world doesn't take it for granted.

Right? Yeah, yeah, there's a lot of good efforts but right now the SEC and other regulators are just taking a regulation through enforcement.

Yep.

Strategy or attitude to this. So they won't tell you what you need to do to comply. They won't tell you this is. These are the roads, they're paved. There's a speed limit. If you go above, you're speeding. If you go below, you're good. And there isn't that. That path for people who want to comply and do things the right way. But there is a stick.

Yes.

And it's all stick and you're, you're inbounds until you're out of bounds.

And you know, they do this thing where it's totally fake where they'll say, oh, you know, just, you know, to the public they'll say all these guys had to do is come in and register and that's just completely fake, you know. But why don't you tell people how fake that is? Because it's really important that. That get out there.

Yeah, we, we had an application with the CFTC for three years and we, we just pulled it. It was going nowhere for derivatives and it's just simply not true.

You guys have in fact like the Bitcoin ETF that's now 10 years old, if I'm not mistaken.

Like I think we filed in July of 2013, so it's a decade old. We currently don't have an application pending, but there's a lot of other efforts doing that and that just doesn't make any sense. The fact that the. We don't have clarity on ether and it's been out for almost a decade. It's, it's just like.

And just to sort of break this down for, for folks who are newer to crypto, there's this concept in the US And I think in a lot of jurisdictions around the world of a commodity or a security, and they're regulated very different, but in short, a commodity is much loosely regulated. And so with cryptos, there's this concept where a crypto can start off as a security, but over time might become a commodity. Right. More decentralized because it's sufficiently decentralized. And so there seems to be the only thing that us regulars seem to agree on is that Bitcoin is a commodity, but they won't agree on any other crypto. And so the question is, with Ether, even if it did start off as a security, not saying that it did, but let's say it did. And then 10 years later, is it still the same Ether, same Ethereum, is it still the, the same project when it was launched? And so there should be a framework or guidance or criteria around when a token starts as a security, perhaps, and when it becomes a commodity and the only thing we have to look towards is actually an enforcement action and what that judgment might be with Ripple. So the SEC sued Ripple, it said it's a security, and the world still doesn't know the answer to that question because it's being adjudicated right now in a U.S. court. And that judgment may come down and it may say that it's a security, but it very well may say it's a commodity. Yeah. And so there's total confusion. And if Ripple's a commodity, then Ethereum most certainly is as well, and maybe others fall in there as well. So this idea of, of come in and comply. Comply to what? Right, right.

It'd be one thing if you enforced or litigated an existing rule book and you said, okay, these are the rules and you didn't play by the rules. But there's no rulebook.

Yes.

So they're spending hundreds of millions of dollars litigating companies that are trying to do the right thing and working it within the spirit of the existing laws that don't fit crypto, it's square peg, round hole. It's a colossal waste of taxpayer and government resources. It makes no sense. There's no vibrant market with regulation through enforcement.

Yes.

And just to put another point on that, the, the tests that adjudicate or that will we use sort of the acid test of what is the security, what's a commodity, are, are 80 some odd years old.

Yes.

And they revolve around an orange grove. The, the howit test is around an orange grove. And it, they, they predate the Internet, they certainly predate Crypto. Right. And like Cameron said, it's, it's round peg, square hole or square peg, round hole. Right. And why are we trying to fit the. It's like, it's like fitting 100 year old laws to the Internet. Something that's totally new.

Yep.

We should be sitting around and understanding like what this is and taking a first principles approach. And it would be amazing if the regulators, who taxpayers pay to be the expert at this, could just get into a room over a long weekend and hammer this out.

Well, it's funny because basically you made the point that, you know, they're regulating by enforcement, which is like a policeman. The laws aren't published, but they just shoot people at random if they think they cross the line, like the penalty. They, they won't even tell you the street isn't marked, but they just blam, blam, blam that you have to figure out where the lines are that way. Moreover, Hinman actually said Ethereum was decentralized years ago.

Yes.

And so they've actually re injected uncertainty into this whole thing.

Well, and there's also videos of Gary Gensler, the current chair, saying that there's, during a lecture, he was a professor lecturer at mit, saying that there's thousands of cryptos and most of them are not securities.

It's so funny.

You know what, what changed?

You know, they just went after, you know, an exchange, they published a quote and you could just quote Gensler against himself, you know, like back and forth like this. And it's literally something where I think he's in power now and he just wants to try to make a name for himself by attacking people.

Right.

Imagine if the head of the FBI couldn't tell you what constituted a crime.

Right.

That's exactly.

Wouldn't answer the question.

Yeah, like that's, it's so un American. You see this in the movies, you read in the books.

Yeah.

When did our country become so anti innovation?

It's, you know, it's. What's interesting about this is I do think we're going to win this battle overall. And the reason I think we're going to win is 10 years ago the SEC, the regulatory state wouldn't have even had to fight. We wouldn't have had the distribution to have this conversation, to get it onto the Internet, to have people see like they were just won by default because they pointed a company and it dies. Now they're making the unwise decision of attacking everybody at once.

Right.

They're going after everybody in the entire space. And so nobody, you know, Everybody knows that there's. If everybody's a criminal, nobody's a criminal. You know, it's. And moreover, actually, you know, they did miss. I shouldn't say that. They, they didn't go after everybody because they didn't go after ftx.

Right, right, right.

Like all the ones that went bust. SEC was nowhere to be found.

They did sue Floyd Mayweather.

That's true. Oh, that's a huge consumer protection Kardashian.

Getting sued by the SEC used to mean you probably did something wrong, and now it means you probably did something right.

It's, it's becoming an inverted. Like, it's like the Soviet Union.

Right.

Where there were laws on the books, but, you know, the, the good guys were the ones the laws were enforced against. It's like this inversion of, you know, like a Soviet kind of bureaucracy.

Yeah.

And it's become, it's become a rites of passage. Yeah.

And it's, they've diluted their brand so heavily because there's just no signal anymore. What is it? What does it mean? The market's shrugged off all of it. In fact, bitcoin's the best performing asset this year. So I, I think that it's, it's a damaging approach.

I mean, look at, look at the companies who have been sued or about to be sued. Gemini, Kraken, Coinbase, and look at the ones that weren't sued. Yeah. Ftx, Terra, Luna. What, what, what other blowups?

Celsius.

Celsius. Right.

And so they have 100% false positive and false negative rate. It's perfect score. They're perfect. Except in the wrong direction.

Right, right. Yeah, it's, it's, it, it again, it, it does not feel like America. It feels like Third World. It feels like Venezuela. You know, America, we were a land of laws. Right. The Constitution. And there's guidelines and there's clarity and there's habeas corpus and there's Miranda rights, there's due process and there's all these protections. But if you build in crypto, it's a different country. Right.

No, it's, I mean, part of it is if we go to like first principles on this, it is a collision between the network and the seed. This is something, you know, I talk about in the network state book. Right. Like, essentially, are we going to be having a global uniform rule of law through the Internet, where anybody from any country gets the same smart contract and anybody from any country can access the same capital markets under the same terms, which is, in my view, the sort of freedom and Equality that like are part of the American ideal.

Right.

Or is it going to be a bureaucrat that just determines who he likes and doesn't like? And you know, I'm not even sure who he does like besides Sam Bankman Friedman.

Okay.

Besides sbf. I'm not sure.

Again.

Yeah, if you go by the, the amount of times that they met.

Right.

Then he would be.

Yeah, they're number one guy.

The wrong guy. Yeah. And the campaign contributions.

The campaign contributions. So I mean, that's the thing is it's, it's really based on how much you give.

I mean, how much of this is. Is air cover? Because. Yeah, because.

Because.

And we should talk about this.

This crypto bro fraudster bankrolled an election.

Exactly.

And then, oh, is this good CYA air cover? Right. So now go beat down on.

And we should unpack the magnitude. I think it was a hundred million plus for at least SBF and maybe his number two did 70 million. I mean, we're talking hundreds of millions of dollars. It's a lot being donated to the.

Democrat, which put them up as the, the biggest mega donors in the entire.

I think it was a number two.

But yes, it's, it's. Yeah. $100 million puts you at number two. It's not. They're one of a hundred.

Yeah, no, these are, these are huge. And I think it's something where the. I think you're right. The overcorrection is to like cover up the fact that they were basically on sides with the bad guy in this, you know, sort of feels like. But you know, it's funny because, you know, as bad as that is, a lot of other countries are really good. Like Palau has rolled out. It's like RNS id. I mean, even China has better crypto regulations, potentially, at least in Hong Kong, which is incredible. Dubai, El Salvador, I mean, what are places, the spots alike? Because you just did this world tour. You're in the middle of world tour.

Yeah. So I think that Dubai, the, the UAE is definitely a bright spot. I think Singapore is as well. And we have, we have a team here. We've actually had a team here for a couple of years now. About 25 people looking to scale that up and continue to invest in Singapore and this region as a whole. I think MENA is going to be a big part of the next growth. And then also Hong Kong with their new regulatory framework and then MICA in Europe is encouraging. So those are the key areas that we've been visiting and we think that are good for building in crypto. And this, the Japan.

I've heard good things about Japan recently. There's a lady there who's working on this. Waka has been working.

Yeah.

We haven't done research on that.

Yeah.

But now that you say it, we'll look into it.

Yeah, they've, they are, they've, they've done some very smart stuff with AI regulation evidently recently, where they said copyrighted material can be used for AI. For AI training. Right. They're, there's trying to take a tech. They want to get out of their lost decade. They want to bring innovation back. You know, Japan used to have Sony and all this stuff right before the, you know, the iPhone air.

But they disrupted all the US companies. Is there any US television makers anymore? I know, I think Zenith was the last one standing at one point.

Interesting. You know that industry better than I do.

But, but the, yeah. Japanese electronics, they completely disrupted, dominated.

Yeah, they used to be amazing. Yeah. And I think, I think they want to kind of bring innovation back to Japan in a sense. And so I know for sure they're thinking about opening up crypto, banking and stuff like that. So that's just something to.

Right. So if you think of the technologies, if you want to be a home for the future, what are those technologies? It's definitely crypto.

Yep.

It's definitely AI and there's definitely other ones. But the, the human capital that you attract, that you attract, it's, it's Ph.D. students.

Yeah.

They're brilliant engineers. These are, these are people you want, you want in your economy, contributed to it and building in, creating wealth and plowing it back in. And I think there is, I know, or I believe, and I worry that there's this huge complacency in the US because it's been the top dog for so long and so much happened on U.S. soil. The semiconductor industry, the Internet companies, web one, web two. But we live in a different world today. Yep. And crypto and web 3 are up for grabs. There's nothing sacrosanct about the soil in Silicon Valley and people are more mobile than ever. Especially post Covid. We prove to ourselves that we can be productive anywhere. We can hire people from anywhere. And our companies now are in the cloud and our workforces are in the cloud. So the, the, the idea that this will be the same story is, is, is not accurate.

I agree.

Yeah. And, and the, the, I mean, one of the challenges is the, the ruling class is a gerontocracy.

Right. They, they do, they can. They even work Computers. Right.

It's funny, the younger people, like Bukele is like 40 something and he, he gets Bitcoin Macron actually. I've heard like France has reasonably good crypto regulations. He's also like a younger guy may get it. Of course there's some older people who get it and you know, it's a hundred percent. But, but, but I do think that that's a part of it is the system that they've grown up with is the fiat system. It must always be the fiat system. Anything against that is totally bad. You must be evil. Blah, blah, blah.

I mean a lot of them were alive during, when the Marshall Plan was being.

Yeah, like this is like, you know, as much as I respect, for example Buffett or Charlie Munger, they're still in this headspace where it's like, you know, oh, they just don't get something that could not be done by the US government like that. Right.

It's. The US government will settle trade with its navy and it will be in US dollars. Right. And the year is 1945.

Yes, exactly.

But the year today is 2023 and the rest of the world has moved on and they, they want a part of this too. They want a part of the future. And because the US won the pass does not mean it's going to win the future. And we, we had a, A co, A rowing coach who said that gold medals, if you, if you bring them with you, the ones you've won in the past with you to the next race, they get really heavy.

Oh, that's such a great, especially from you guys. That's a great line. Because you just can't rest on your laurels like kids.

Yeah, you can.

And it's moving so fast. And I think that if you don't support crypto, than, than you're short crypto and you're really short the future. And that's just a very dangerous place to be. And it's moving so fast and I think a lot of countries that we visited understand that and, and nobody wants to be left behind. And there is a real risk. I think the US misses this. As Tyler was mentioning that Web one and two were one, you know, in the us largely huge innovation drivers. But Web three is, is up for grabs and it's, it's just not a given at all.

And look at Hong Kong has changed their position. How much? Because they recognize, oh my gosh, this is an amazing opportunity because the US regulators and leaders are fighting like a high school cafeteria.

That's right. And I think another big part of it is crypto is, it's obviously innovations, all the things you talk about. It's also freedom. Like all of these Chinese liberals, all of these folks, you know, I mean, many people in China, like this huge country, they've got different opinions. A lot of the people who are pro freedom there are pro crypto.

What about the, the cognitive dissonance of the folks who, who dislike crypto in the States who say they stand for financial inclusion. Oh, access. So Elizabeth Warren would be a great example of someone who says they stand for the things that crypto actually can deliver. Right. But she's taking the position of, of the bankers in the establishment.

You can, you can show it right there. You don't actually have financial inclusion if you're not allowing somebody to effectively be their own bank.

Right, right.

You're fundamentally setting up a two tier system of those who have banking licenses, which are very, very hard to get nowadays, and those who don't and these guys have administrative privileges and then the average Joe doesn't, whereas we have it flat, you know.

Yeah. And if you, if you think of banking's a pyramid and at the bottom of the pyramid is the, the dispute dispossessed, the unbanked and that's majority of the world. I don't know what the exact numbers are, but it's billions of people don't, don't actually have a bank they can go to and get a bank account. And then you go up the ladder and there's the underbank. So folks who get some amount of banking services, but not really a full fledged bank account. And then you go a little bit higher in the pyramid and you get folks who can be banked, but that's the top of the pyramid. And even inside the, the top of the pyramid of the larger pyramid, it's a pyramid. And so if you show up to JP Morgan with $500, you get a certain bank account with a certain amount of access and privileges. If you show up with a million dollars, they might invite you to join their private wealth bank. Right. And so you get a whole nother suite of services and services. And then if you show up and you're called, you're deemed high net worth at that point. And then if you show up with $100 million, you get a whole nother set of access and privileges because you are deemed ultra high net worth. So even in the, the current system of being banked, it's a complete pyramid. Right. And pyramids are inherently unfair and they're unstable and the only thing that can flatten that pyramid down and level the playing field and put everyone on the same plane is crypto. Yep.

Because you're.

Yeah, go ahead. No, and if the bankers could have figured this out, they would have figured it out. They've. God knows they've had enough time.

So you know, an important demographic for you on this is probably going to be India. Over time you guys are going there this year.

We're actually building an office there right now and we, we'll probably have 50 plus people by the end of the year.

All right, maybe we'll put up the link. Gemini.com jobs.

Yeah, careers, I think careers. We're hiring. Yeah.

Great.

So. So tell me about, you know, your. Obviously I think a lot about India. I'd love to hear your guys thoughts on India.

Yeah. So we are, we're building an office there of technologists and engineers. A lot of people know this, a lot of people don't. But India's got an incredible culture of technology and engineering and most of Silicon Valley has actually been, it's been Indians for, for many decades. And so we're building development center there. But we also think that it's a really important market to provide services and products to. So we'll be working.

I'd say much of Silicon Valley has been Indians. Much, but not most. But a lot. A large percentage.

Yeah, yeah. I'm getting wrong. But a large percentage.

Right.

And so we're almost. We're going back to the.

The source.

Sure. The mother load. It's so funny. That's true.

But yeah, it's a really exciting growing market and we're going to look to find ways to open up there and operate.

That's great. Yeah. I think also India is a constituency that it is, it is a market. It's absolutely a market. But it's also in a sense of political constituency for shifting the world order because you know, a lot of Indians are the underbanked that you talked about.

Right.

There are folks who don't have access to, you know, JPMC and Chase and whatnot, but they have an Internet connection because they've got a smartphone. So they've got access to the blockchain on the same terms as you and I and we wouldn't have it any other way. Right. And that is actually pretty novel now. Yes. India's domestic payment systems have improved a lot. I give a lot of credit to India's infrastructure. But sort of like domestic phone calls and foreign phone calls.

Right.

You have like domestic line, international line, like Domestic payments and then crypto for international is actually pretty advantageous to a lot of Indians. So I think that's an important like just political demographic for the world in terms of reforming the system from the outside with a lot of English speakers that I think can legitimately say look, we don't have a seat at the table and we should. Yeah.

And similar to telcos, there's countries that when, when things went cellular, they didn't lay copper lines, they leapfrogged that. And I think that India could be a great, great example of leapfrogging traditional financial infrastructure and going straight to crypto and the cloud and banking the unbanked with, with smartphones.

I mean it's insane when you, you walk around a town in the US and you see all these brick and mortar banks. Yeah. It's such expensive infrastructure.

It's really.

Why, why do you need that?

It, I mean the only thing about it is it does have in person verification. That part is the only thing where, you know, some kind of proof of human or some verif like that. But that's about it. Everything else should be done.

Push back on that. Go ahead, say we can, we can kyc and understand people better online remotely enough.

Okay, that's it in 90 seconds or less.

Yeah, I think it's going to be interesting because that's an important area of predator prey, because of AI.

Right.

So that's going to make it easier to fake the online stuff. That's why you're seeing projects like World Coin, Proof of humanity and whatnot. I think you're going to need a bunch of signals to prove that somebody's human and that's going to become an important. How we do that is going to be an important thing for the whole world. But it's like the digital passport to online services. I think it's something to keep on your radar. I love your thoughts.

Yeah, we actually talked about this.

Yes.

We had too long ago the idea of crypto being able to authenticate and ferret out something that's real, authentic versus a video that's a deep fake. Right. And so that, that seems like a really important piece of the future to be part of.

Yeah. And I think one of the earliest ideas around that would be something like the spam coin or hash cash.

Right.

Where to send like a fraction of a penny with an email. It sort of verifies that the person's real because it becomes cost prohibitive. If you're sending billions of spam emails that, that becomes expensive. So by requiring A fraction of some token or crypto, you can eradicate spam and create sort of verifiability or authenticity around that.

Yes, or a cost or lock a.

Deposit or something like that.

Yeah. A simple way is you create. If the Internet gave us abundance, crypto gives us scarcity and value. And so it's expensive to send that email and you could toggle that up or down. But like Cameron said, if someone's spamming out a billion emails a day, which I'm sure they probably hit those numbers, than if you charge a quarter or 50 cents or a dollar, that's a billion dollars to. To abuse the system.

And that was actually one of Satoshi's first thoughts about what Bitcoin could be used for, in fact.

Right. So I could make spam and phishing so effective that we finally shift to a standard where you have to send. Attach some value to email, otherwise it just gets out of control. Yeah, I think that that could happen. Could finally tip things over into.

Yeah, you just have to get alternatives. I mean, it's already something where how much of your email are like corporate messages and so on. Most of your true inboxes, your, you know, Signal, your WhatsApp, your DM, your this and those are like the lower spam inboxes. Right. Versus email. Especially like, you know, your slack is within your corporation. Right. Discord within your community. And then email is becoming more and more just like password resets and fishing. Actually, you know, I wanted to ask you guys, like, okay, so obviously we think about crypto a lot.

What do you.

What do you think comes after crypto? I have ideas.

I'd love to hear yours after.

In. In what sense?

Well, like growing out of, like, in the sense of, you know, Web two leads to Web three. Web three uses aspects of Web two. Like what other things are you interested in? You know, like adjacent things, etc.

Yeah, I mean, so we spent a lot of time, I guess the last two years have been dominated a lot by defi. Re architecting traditional financial services in a decentralized, permissionless, trustless manner. And then NFTs creating assets around digital art and collectibles. I think that is just getting started. Obviously NFTs have cooled off quite a bit, but I think they're still here to say, and we're going to see, I mean, everybody. We've collected and created art since the beginning of time and to create that in the metaverse in web three, you're going to want NFTs. That's just a human need, Want, desire So I think that we're going to see more of that. The intersection of gaming in crypto could be pretty interesting. We've talked a lot about interoperability, like can you carry those game shields with you to another game or sell them or trade them or, or store them rather than the wall garden approach. So I, I think that intersection will be cool. I think the, the intersection of crypto and AI is fast approaching and machines.

Are not going to get bank accounts of JP Morgan, right? Machines talk to protocols like Ethereum and Bitcoin and you could argue that crypto is really built for them. And so you, you know, the crypto is, is the Internet of Money. The first Internet 1.0 didn't have money on it. I mean PayPal really skinned the current banking system on it. But crypto is purpose built money for the Internet. And so we talk about it being the Internet of money, the greatest social network of all time. And that's pretty important. Imagine having an economy without money. Then you have a system of barter and we know the short comings there. And so AI is going to want money. You're going to want AI to use money, interact and be part of commerce and trade and the financial system. And crypto is the way to do that.

I should probably, we should flashback to a clip. I don't know if you remember. I think we did a TechCrunch disrupt all the way back in 2013 and I think we were talking about using Bitcoin. Like me, you novel. We were talking about using Bitcoin for self driving cars to like pay them. Like that is going to happen. It's kind of already happening with trading bots, right? The headless version, right? Because those are, those are all trading back and forth and it has to be physically embodied.

Actually kind of found bitcoin totally unexpectedly.

We were on vacation two summers ago in Ibiza and ran into a guy of all places, right?

Just add to what Naval was saying about programmable money, here's like a couple of applications that you could envision. So fast forward five years or something and there's the Uber, Google Tesla merger of dispatching and automatic cars. And you know the, it's built into Tesla cars and you've got them running on the freeway and one car, you know, you want to accelerate and you pay in bitcoin automatically to the cars in front of you. A passing price, right? So you can just boom, like this and just go through the fast lane.

They just move out. It's got to be anonymous. It's Got to be cash, because if.

You'Re doing credit, you could charge back.

As soon as you pass them. Right. So Deep Blue finally beat kasparov in the third match in 1990.

Yeah, I don't. I don't know how many matches it was, but it did take a while. It was 97, I think. Ish.

Okay, 97. So. So AI computer is the best chess player in the world. How long before AI is the best investor in the world? And much better orders met are much better than a Warren Buffett.

Yeah, I mean. Well, it's interesting because in theory, you could have an investor, have an AI that is slurping up all the same information they are.

Right.

And then trained on all the trades they're making.

Yep. Right.

That is. That is feasible to do.

I mean, reading all the S1s, reading.

All the S1s, all the news. Yeah. And it stores it all locally. It's just parsing your screen, your computer screen. Of course, you have to figure out security on this. It's very private kind of stuff.

Right.

But that's actually where crypto comes in also, because you have decentralized storage. Everything is stored locally.

Right.

And so let's talk about the. So I don't. I don't see this a lot being talked about yet, but the current state of AI is going to look like the current state of the Web, Web 2.0, which is basically, it's centralized. It's five data cartels. When you log into the Internet today, you're logging to five companies, Right. Facebook, Instagram, Amazon. It's not the open, decentralized Web that Tim Berners Lee envisioned. And so AI, is that heading down the same path. Right. Of this centralized few companies where you got to run your data, they have it. The privacy, the security, those issues. And it's controlled by a few. And so do we want that world or do we want the decentralized world where there's decentralized AI and you can fund with crypto and control your data and whatnot. So we should talk about how crypto enables a better AI world.

Absolutely. I mean, the way I kind of think about it, you know, some people say, oh, it's buzzword bingo to talk about, like, AI and crypto and so on. Again.

Right, right, right.

Acknowledging that it can sound like that, I think I distinguish AI. Actually, in the Never say book, I talked about this a bit. I'm writing more on this. But I think AI, crypto, and social are actually particular kinds of technologies that are different from. Let's Say electric cars and spaceships, as awesome as those things are. And the difference is that the electric car, the spaceship, you know, the. Those kinds of things are. They're like tools.

Right.

Whereas crypto is how humans, you know, do money and contract. Social is how they communicate. And I actually often replaces the human themselves. Right. So these are like three sort of governance, slash social tools. And they're like tools for how you'd structure a political system, a social system, and so on. Whereas I feel like electric cars, spaceships, stuff like that are awesome, but they're more on the outside. They're more like devices as opposed to like the brain, the operation.

Right. It's like it's hardware that gets you from A to B versus software language.

Yes. How people communicate, how they transact, how they compute and think. Right. It's like thinking transaction, I don't know, talking.

It's almost the tribe versus you by yourself.

There we go. Exactly. That's right. And. And the reason I think that's interesting is if you take that triangle of like, AI social, crypto, you can actually have both decentralized and centralized versions of each. Like, you know, like Teal talked about, AI centralized and crypto is decentralized. And I think that's true to first order. Then second order, you can have centralized AI, like you guys were just talking about centralized crypto, like CBDC and then centralized social, which is, of course, you know, like the original social networks. Now you can have decentralized crypto, of course, the original, you know, and kind of what we all hopefully stand for. You have decentralized AI, which is like stable diffusion or llama, where all the weights are out there in public. And anybody, you know, not your weights, not your model. Right. Unfortunately, that's got a lot of traction. There's a Google memo a little while ago that said Google is losing to. Google and OpenAI are both losing to the decentralized version. Right. To be clear, I have massive respect for everything that they've built at Google and at OpenAI. Respect, Sam, respect, Satya, respect. Soon they respect all of them. But I do want the decentralized version of AI. And we also, of course, want decentralized social. And so it's good that Jack is doing Noster. It's good that, you know, Dan Romero is doing Farcaster. It's good that Elon has decentralized Twitter to a greater extent than it was before. It's like more free speech, you know, so we kind of have, like, decentralized and centralized versions of each. I'd love your. You know, I don't know if you guys have any thoughts on that.

Our view is that decentralized versions will win in the long term. If you look at Meta, they're building a centralized metaverse. I think that some people might enjoy that and there could be pros to that approach, but I think that the decentralized one will ultimately win out. That's where the, the builders and developers want to build because it's, it's open, trustless, permissionless, you're not going to get rugged. And I think that's the, it's really.

The ethos of the value accrues to the users and not five companies and five CEOs.

It's interesting because, you know, we're, we're talking like the day after Apple launched its new headset. And on that topic, I actually think it's possible that Facebook Zuck has talked about open metaverse.

Right.

And Apple generally tries to do things closed. So it's possible that Apple versus Facebook looks like Apple versus Google. That is say Apple did iOS closed and then Android was kind of like the more open smartphone version. And so it's possible that Apple's headset is like the more closed version. And Facebook may lean into openness simply as the same kind of strategy because often you have that, you know, Apple versus Android, Apple versus Microsoft or Microsoft.

You have a Pepsi, Coke, Semic World or Hertz Avis.

Exactly. That's right. So centralized, decentralized, almost like the centralized one is polished, but it's also like enclosed and you can't do anything within your own. Right. And the decentralized version is messier, but it's what the hackers want, the builders want, you know, and so on. And so you have this constant tension between the two. I hope that the decentralized world, I think you're right that it quote, wins, but doesn't have to win to 100% to win. You just need to have a sustainable share of the market so that freedom continues to exist. That's at least how I see it.

Yeah, I think it's going to be really hard for a centralized company to go decentralized because it's cultural. It's cultural. It's changing your DNA, it's changing a zebra, changing its stripes. It's just really hard to do and you have to disrupt and cannibalize yourself. So I think the decentralized options are probably going to come from startups de novo and new efforts. I'm sure Apple will build an incredible experience as they Always do. The question is, are people going to want to pay 30% tax VAT to them every time they purchase something? Right. And so the, right now I don't think the App Store allows any app that sells NFTs unless Apple gets 30%. And so the experience is going to have to be so much better for people to pay.

I hadn't thought of that. So let me, let me ask you guys. So here's, here's what I think is next or part of what's next. You know, just like you start a startup company with a small amount of capital, I think we can now start startup communities with a small amount of political capital.

Okay.

So just like someone has saved some money and they can start a company or they get some venture investment, you've built up some following on Twitter or somewhere else and now you can actually start bootstrapping in person communities, meetups and things like that. This is something I'm interested in. This is what I've written the Network State about. It's basically you can start a small community, you build it larger, you get 100 then a thousand paying members. Now you can actually start crowdfunding even a small town or something like that. Right? And maybe you start by crowdfunding brunch and you move on to crowdfunding buildings. Okay. The kinds of stuff that you can do here, of course you can have like a crypto city, right. Or a crypto town, right. And you know, you could have, I don't know, the, the, I wouldn't call it the Gemini Garage if there's a word for towns that started with G. So I'd love to know the kinds of things that, you know, we talk about in the Network State book is if you could build a small town, a small city, what would you build? And you know, just to motivate that, for example, there's cul de sac.com and that is a startup city that a seed investor in in Arizona, which is like a car free zone, right? Then there's kift and it's the total opposite. It's like van life. Rather than living without cars, you literally live in a van. But you save so much money and you've got these base stations you can drive around the whole Midwest, right? There's like Prospera, which is, then there's like Prospera in like South America. That's like a free city in South America, like English speaking. There's Cabin in Austin which is like almost like a college town trying to rebuild that. So people are trying to Build different visions of the good.

Right.

You know, so what would the, you know, like Romulus and Remus, you know, founding Rome. Okay. Right. Like what is the Gemini? What does the Winklevoss town, you know, look like?

That's a good question. I haven't thought too much on that.

So one that is, that is for innovation.

Yes.

One that is a city where builders can, can build. And if there has to be laws, laws should be hard to create and easy to repeal.

Yes.

In the US Currently it's inverted. Right. They're kind of easy to create and they stay on the books forever. That's why you have these crazy laws in some municipalities where if you steal someone's lobster pot trap, they can shoot you. Right, right. It's really hard to. Laws off the book. So small government, government stays out of people's lives as much as possible. And it's very much. You wrote a great article about the inverse Amish.

Yes, that's right.

And so I think a lot of those principles and values of a place where people can innovate and create really cool stuff and do meaningful work and build the future and deliver as Founders Fund says, you promised us flying cars and we got 140 characters a place where someone could build flying cars.

That's great. That's awesome.

Yeah. I would say that the, the U.S. i, I guess in large part because people had to work to get there. You had to show proof of work to, to show up in the, in the US it attracted a certain psychographic right among people who really believed in that manifest destiny and the rags to riches stories and, and the pursuit of. Of those different things. And I think the framers got it really right. But somehow we seem to have lost our way and people aren't focused on the future and building a better future and the growth and we're focused on all these other things. And I think hopefully it swings back. But I think you could take the Constitution. I mean it's the code of America and it's worked pretty well for, for a while and then maybe iterate on that, but I think it's. It's still a pretty darn good starting point.

So. Right.

So we are kind of like the pro freedom movement that is allowing exit from this, you know, system. We are like the equivalent of Jackson Vanik and, and the USA is. Or the federal government at least has become like the new ussr like that's actually like really. That's why, I mean, of course I believe in innovation and so on, but there's.

It.

It's amazing how important it is what we're doing.

Like and so, and so as, as a consumer, your ability to, okay, I'm going to try this city state for a while. Oh, it's not going the right direction or I'm value misaligned. I'm going to move, pick up and move to another one. Exactly. And so we're, we're very passionate about this. And this is what we think crypto does, is give people more choice, independence and opportunity. And that's why Gemini exists, is to usher in crypto because it provides that it unlocks the next era of personal, financial and creative freedom. And so I think a situation where you can. The right to exit is super important. I'd love to see that more globally because people get stuck. They get stuck with the currency, the current currency, the current laws, the current government and whatnot. And I think the world would be a better place if you could just go Gault more easily.

Yes. From the two party system to the N city system, just be able to choose between them.

Great.

We got. This is great guys. Thanks for coming.

Thank you so much.