Freedom Money Ep10

Welcome to the podcast, Tim Enneking.

Thanks, I'm very, very happy to be here because, uh, because of the Bitcoin focus you have. It's awesome.

Amazing. Well, I have a lot of questions for you, Tim. So, um, where to get started? Um, how about what's the moment that leads you to managing the first Bitcoin fund? In the world in 2013.

It's funny, Kevin, you bring that up because I agreed to run this fund.

I was working with a company and they had started this fund. It wasn't my fund. And they asked me to help them with some marketing and a few other things. And they said, hey, you've got a lot of fund management experience. And the reason I was helping them, because they heard me speak and they said, hey, we're having this We have this big award ceremony, Porto, Portugal. Would you be the master of ceremonies? I said, yeah, sure. So that's how I started working. Not exactly my main profession, but I'm a decent public speaker. And so they grabbed me for that. Then they said a couple of months later, they said, you know, you've got a lot of fund experience. We started this Bitcoin fund. Would you manage our fund? And I said, what the hell's Bitcoin? And they told me what it was. And they said, look, The fund is quite simple. It's kind of like, uh, once a month, uh, an ETF with once a month liquidity. So what they said, that's how I describe it now, where people subscribe to the fund, you buy Bitcoin, people redeem from the fund, you sell Bitcoin once a month, no discretionary management. And I said, okay, look, I can manage your fund in my sleep, that's not a problem, um, but as long as I don't have any discretionary management, because this Bitcoin thing is just weird. And so I dug into it. I dug into it for months. I mean, reading books about Charles Ponzi walking the streets of New York. I read 50 articles if I read one on the tulip mania, which, you know, we apply our current time, time sense of timing to it, right? Nothing lasts more than 15, 20 minutes. A long time is 6 months. The tulip mania lasted almost 6 years, right? Crossing the crossing from the 16th to the 17th century. So a long time ago, but it was tulip mania. We think, oh yeah, yeah, it's like a boo-boo, you know, it lasted 8 months and then dried up. No, no, no, it lasted for a long period of time. In fact, I dug into the tulip mania thing so much when we did the award ceremony in Porto, the theme was Holland and tulips and all this other stuff because it was the guys I was working with just sort of laughing at me because I dug into it so much. And at the time, this is '13, Russia had just peeled off a couple pieces of Georgia, and I was running a fund of funds focused on Eastern Europe. And I thought, okay, I'm shutting this down. I don't like the way this is going. This is well before Ukraine. And so I was starting to shut it down same year, and I went through looking at Bitcoin, and I thought, you know, to me, fiat at the time— fiat was way up here, Bitcoin was way down here. I mean, I do this in the, in the, in the, there I get it all in the, in the video. And as I studied Bitcoin, I realized that it wasn't getting any worse, wasn't getting better, it wasn't getting worse. And so I thought, well, let me look at the other half of the comparison. And so I really dug into what fiat money is, especially post-August 15th, 1971, when Nixon really finished what Roosevelt started and took the US off the gold standard. Which, by the way, never, ever, ever in the history of the United States involved the one-to-one exchange of dollars to gold. If you dig into it, you find out there's just so much misinformation. But anyway, so I looked at it and I thought, okay, dollar fiat isn't here anymore. And it just sort of like fell to the point where, okay, what's the real difference between this Bitcoin thing and fiat? And the very interesting metaphor application I like to use is is the invasion, the Greek invasion of Cyprus in 1974. And so now you're going to look at me and say, what the hell is he talking about? It's because when the Greek colonels took over Cyprus, there was a Cypriot pound. It was an independent country. They took over and the pound collapsed. And Turkey invaded from the north a bit later, and they have the northeast part of it. You know, the country is recognized by— that Northern Cyprus is recognized by Two countries, uh, Turkey and Russia, nobody else. But the South is recognized, it's now in the eurozone, etc., etc. What those colonels did— and this is the first new company after Nixon's decision, and within 7 days every member of the OECD followed, and the Bretton Woods Agreement from 1946 collapsed, so no more fixed exchange rates— this is the first country that was created. And these colonels said, okay, new Cypriot pound. We're creating this. The exchange rate is 2 US dollars to the Cypriot pound and 2 Cypriot pounds to 1 British pound. This is back in the heyday of the British Empire still, where it was 4 US dollars to a British pound. And boom, it was created. They created it out of nothing. They didn't even have gold reserves. They just had this big war. The green line that goes—

that went through it where they stopped fighting is still there today, and it's still guarded by British soldiers. And the currency did just fine. It was one of the few currencies in the world that was nominally stronger than the US dollar. US dollar arguably had something behind it, you think, traditionally with Fort Knox. They have nothing. And so I thought, wow, why is it that 1.6 million people co-located on an island the Eastern Mediterranean can go, currency exists. And 1.6 million or more people scattered around the globe can also go, currency exists. There is no reason. There's literally no reason for it. So, uh, that's how I got involved in it. And then as a quick conclusion of the story, I was— as I said, I was pulling out my, my, uh, shutting down my fund of funds focused on Eastern Europe. And I thought, well, let me just put a little slice of this fund of funds into this Bitcoin fund and see what goes on. Well, if you look at 2013, the beginning of 2013, Bitcoin was at 50 cents. It did 50x after I went into it. And so through complete serendipity, my fund of funds held for a long time. As far as I know, still holds all all-time annual return average— oh, not average— all-time annual return record and the all-time monthly return record for any fund of funds in history. Because I put this little slice into this, into this fund, in it, into the Bitcoin fund, it just blew up. So that I converted into something else, and eventually I, I shut it down, created a U.S. fund that is now over 8 years old. And then I recently, 5 years ago, I created Sallion, which is venture capital on one side and yield farming on the other. And one of our focuses is Bitcoin yield.

So, Tim, when I'm listening to this, it seems like you're kind of describing this race to the bottom among all the fiat major currencies or fiat currencies. Was there something specific about Bitcoin that told you it was going to be big?

There was something specific about Bitcoin that told me it could be big, and that is I looked around and I didn't see any reason for it not to take its place among fiat currencies. And that's as far as I went at the time. I would say, look, crypto, using an old hackneyed phrase, Bitcoin isn't even a pimple on a gnat's ass.

Pardon my French.

And over time, it's like, you know, it is a pimple on a gnat's ass. Yeah, get a little bigger, a little longer. Hmm, might be the gnat's ass now, right? So anyway, it started growing, and at some point in time, like about 2015, I said, okay, 2013 I wasn't sure would survive. By 2015, I thought, okay, this is definitely going to survive. It's got enough inertia, it's got enough legs, it's got enough popular interest. It's going to survive. How big it is going to be is still an open question, and even today, frankly, it's still an open question. But, uh, it seemed very clear to me that it was still going to be around. So I, I stopped managing that somebody else's fund. I converted my fund of funds into a a crypto at the time, only Bitcoin trading fund. And I accidentally created the world's first crypto trading fund, as far as I know, in late 2014. And trading is hard, especially in the crypto space, because partly because it's just crazy and new, partly because it's unregulated. And so now I went into two very, very close, closely related, related areas. Neither of which involve active trading. One is generating yield because it's just, you're just printing money really. And the other is VC where you're betting on the next big players. And much better. I, I don't have to stay awake 24/7 to try to trade in either of those.

I want to, I want to get to the companies, but, but first I kind of want to go into your understanding, your view of You know, I would say we've seen a real shift towards centralization and institutional ownership of Bitcoin. And, you know, I want to bring this back to Satoshi's original vision, where he was talking about a currency where trusted third parties may not be required. Any thoughts on that and kind of how these two worlds go together?

Two thoughts.

Let me take the second one first, and that is, uh, third parties. The entire financial system— this is my opinion, how I look at it— the entire fiat financial system is built on an absence of trust. It's not mistrust, it's not distrust, it's just you don't know people. And the best way to explain how the fiat financial system deals with that is by looking at letters of credit, well before the current financial system existed. So you had a buyer, you had a seller, they didn't know each other, they were in different countries. He had a bank, he had a bank, and they didn't know each other because they were in different countries. With these really big banks that had, you know, branches all over the place, they had a— these banks had a relationship with them, and they had a relationship with each other. And so the buyer and seller were able to take advantage of that trust relationship up here because they had no— their absence of trust for each other. And so you have a letter of credit which has to be very, very particularly written. And it worked. It allowed international trade. And for a long time, that was the only way international trade was done. And it's a really good illustration of what the current financial system is based on, because even if you're buying and selling stock, you don't know the buyer, you know the seller. Ignoring dark pools for the moment, you can't possibly put those two together. You have to have an intermediary to be able to overcome the absence of trust. So crypto doesn't so much— Bitcoin doesn't overcome the absence of trust. What overcomes the absence of trust is the blockchain. And as I say, crypto needs the blockchain, but the blockchain doesn't need crypto. Blockchain can function just fine without trading tokens. I actually don't like calling them cryptocurrencies. But anyway, because of that absence of trust, it allows for the—

the—

it overcomes the absence of trust because you can trust the information on the blockchain, not blindly. And you can put fake information on the blockchain. So there's still some other considerations, but it massively disintermediates, especially the financial system, because the financial system is so widespread. And all of these institutions are built on overcoming an absence of trust. They're also built on aggregation, which is a slightly different story, but it's related to the absence of trust. Once you have something you can trust, you don't need so many intermediaries, and you don't need intermediaries that are just there to overcome that absence of trust. And that's just absolutely huge. As far as the players in the crypto space, there's something I modestly call Anyking's Law, stolen from Moore's Law. Anyking, my last name. And that is the profile of the average crypto investor changes every 18 months. And you can really see it if you look originally, you know, bleeding-edge libertarians to bleeding-edge tech guys, to, uh, to guys that were, were really more just interested in, in the privacy aspects of the security aspects of it. Everything from not wanting to pay taxes to whatever. And then it gets a little bit more serious and you get small institutions and you get— you go from high net worths, or you go from low net worths to high net worths to ultra-high net worths to slightly larger institutions to, to real institutions. And now then you had companies— countries rather— starting to play in it. And then that shifted again and went into DAX and, and what's now called Strategy, used to be called MicroStrategy. And the countries are, are one of the next 18-month shifts. But as you look at— you want to know how a market functions, look at the players. So if Henneking's Law is correct and the players change every 18 months, right, the, the average description of the average players changes every 18 months, the behavior of the market is going to change. And the behavior of the crypto market, the Bitcoin market in particular, has radically changed, just renewed itself roughly 18— every 18 months for the last 15 years because you have different folks playing in the space.

Interesting.

I'll come back to that. I'll come back to that. But so, so now you're managing 3 major platforms you also founded: Salion, Presearch, and Digital Capital Management. And so you mentioned, uh, Salion and, uh, printing money. So I'm curious if you can dig in a little bit on how the yield strategy works.

Sure. The, the issue with yield farming— horrible term, we now generally call it yield generation— is that if you take the NASDAQ, the LSE, the Hang Seng, when someone wants to sell a stock, right, they've got— pick an American one— 10,000 shares of Amazon. They want to sell those shares of Amazon. They almost never find a buyer that wants to sell— buy 10,000 shares of Amazon, it's like she sells— she sells at the CFA. Um, uh, I should use it— pick a different stock. Anyway, at the same time for roughly the same price, you don't find it. They sell the intermediaries. The intermediaries are called market makers, MMs. And so when you sell, you sell the market maker. When you buy, you buy from a market maker, ignoring some recent nuances— dark pools being the— actually not so recent, not really a nuance anymore. But let's look at how things arose originally. And the market maker does what the name implies, and the market maker will make a market in 500— there are 3,500 stocks on the NASDAQ nowadays. You'll make— they'll make a market 500,000 or 1,500, whatever it is. Takes a lot of money to do that. They borrow money from LPs— not limited partners, liquidity providers. So they borrow billions hundreds of billions of dollars from these guys, and they make prime plus something. It's a good deal, relatively low risk for the LPs. Then the market makers make money on, you know, bid-ask spread. They make money on, on the hedge, and, and it's a very complicated business nowadays with HFT, with high-frequency trading. Crypto does the same thing except two differences. One, that's more mechanical. It's 24/7. There's no close. And that's the difference there is sort of fading away over time as, as fiat markets realize they also have to go 24/7. But the other difference is that market makers who make a market in huge numbers of stocks and billions, trillions of dollars of transactions in crypto, they're binary. You'll have a liquidity pool, a DeFi liquidity pool, BTC on one side, ETH on the other, and people are going back and move. Then you— because those prices change, they change with respect to the dollar, and there's a cross rate, they change with respect to each other. There's risk there, there's pricing risk. And if you want to go in a liquidity pool, you have to put 50% on each side of the liquidity pool. Again, there's some single-sided liquidity pools, but just talk about the mainstream ones. We have a risk there because the prices move. And then you have the wonderful oxymoronic phrase impermanent loss. And how do you avoid that? And if you're allocating liquidity pools, people lose all of their money. They're promising 2, 3, 400% returns. If you hear an investment like that and that's what they're promising, run the other way. One of the weird things about crypto, though, is you have different tokens that are native to a given blockchain and you have lots of blockchains. So people want to move their token from one blockchain to the other, you know, wrapped BTC being the easiest example. But the reality is they don't move them. They sell them on one blockchain and buy them on another. To them, it feels like movement, and it's not a horrible metaphor, but it's not exactly what happens. So you have all of these liquidity pools and there are thousands of them that have effectively the same asset on each side. Wrapped Bitcoin here, unwrapped here, USDC here, USDT here. Now with a lot of non-EVM blockchains, you have ETH here, wrapped ETH here. And that's where we provide liquidity. So we've been providing liquidity, our own for the first year, and OPM, other people's money, for the last 4 and a half years. We've done over half a million allocations of liquidity pools. We've allocated in total $14 billion to liquidity pools. We've never had a non-positive result from an allocation. And every day people have seen the, uh, their assets grow. And when I say grow, I don't mean they give us 10 Bitcoin and it's worth $100,000 today and it's worth $1 million tomorrow. I mean they give us 10 Bitcoin today, at the end of the year they'll have 10.5 Bitcoin. So it only grows up. What the Bitcoin-US dollar exchange rate is, we neither know nor care. So we're doing the closest thing we've found to risk-free liquidity allocations. And, you know, we've got a quarter billion dollars under management. People absolutely love us because they don't have to worry. They can be in the crypto space. They can keep their exposure to BTC or ETH, but the number of BTC or ETH they own increases.

So the alpha is generated on the bid-ask spread.

No, when you have— if you, if you have a liquidity pool, let's say BTC on one side, ETH on the other, the— there's a transaction fee charged by the pool, which is really the market maker in this case, right? And we're the LPs, to use the fiat tradfi metaphor. They charge a slight fee for that. We get a piece of the fee, and that's it. So it's— the beauty of it is it's completely market neutral.

Mark—

the market has an effect because if it's a bull market, there are lots of transactions. You get a little piece of the fee for each transaction. So when, like in March and April of 2024, when you had both the halving and the spot, uh, BTC ETFs approved, our yields in fiat went to 18, 19, 20%. Not because we had any price exposure, we didn't, But there are just so many transactions. And historically, we're running somewhere between 10% and 12%. It's actually record lows now. It's just under 8%. But hell, if you're getting 8%, I can't say risk-free. Nothing is risk-free. But with extremely low risk and we have a Sharpe ratio, right? A good Sharpe ratio is above 2. Fabulous one is above 3. Our Sharpe ratio is above 6. It's been as high as 10. Because it doesn't go down. It can go up at varying rates, but it doesn't go down.

Really interesting. Really interesting. We got a lot of companies to cover here. So you're deeply invested in decentralization through both Bitcoin and Presearch. Why is decentralization so important?

Let's go back to the blockchain and trust, right? You have frequent flyer miles, I assume.

Every now and then, yeah.

What's your, what's your favorite airline? Where do you have most?

Uh, probably Air Canada these days.

Air Canada. Okay, so you've got Air Canada frequent flyer miles. That is very similar. Those frequent flyer miles, which nowadays trade, you can buy and sell them, you can buy stuff for them. Those are your tokens. And the, you know, blockchain is decentralized ledger technology, CLT, DLT. Air Canada's CLT, centralized ledger technology. So it's probably got a main copy of your Air Canada frequent flyer miles and a backup copy or two, you know, as part of their, their business continuity plan, the famed BCP. But if somebody's really good, they can hack the original and they might be able to be clever enough to hack the two backups. And suddenly, if the guy likes you, you go from having a million frequent flyer miles on Air Canada to 10 million. If they don't like you, you go from having a million to having 3 frequent flyer miles, and there's nothing they can do about it. The blockchain has literally millions— nowadays you probably say tens of millions—

of copies.

Depends on the blockchain, of course, but let's take Bitcoin, right? Certainly millions of copies of the BTC blockchain. You cannot hack millions of computers simultaneously and give you suddenly an extra 9 million frequent flyer miles on Air Canada or take away all but 3. So effectively can't happen.

So sorry, it's security in short.

Absolutely. There are other advantages too. There's robustness. Right. Let's say you're running your, your Google, you're running a search engine and your main server goes down. It happens, right? You're screwed. Let's say you have a decentralized search engine like Presearch has. We've got, we've had up to 80,000 nodes that need that many. We're running about 20,000 now. We've had entire continents go down and nothing changed. Yeah, because the other nodes just picked up the slack. So it's security, it's robustness. The other thing, if you're talking about a search engine or data flows and it's centralized, people know what you're asking about. You do lots of searches, lots of queries, whether it be a search engine or any other context, right? Any work with computers involves queries. Well, if they're all coming from one place, you can profile that, you can attack that, you can modify the results, whether it's a search engine or any other computer. If it's decentralized, like we've got nodes in, I think it's 133 countries. You do a search now, goes to Singapore, next one goes through Cambodia, next one goes to Russia, next one— we don't have any nodes in Iran anymore. We had a couple, but for some reason they stopped working. Uh, the next one will go through Bolivia. You can't be profiled. So there's security, there's robustness, there's a privacy, lack of profiling. Censorship or filtering. I mean, there are just a million reasons in the, the data query context. And nowadays we've added— we're selling compute because there are GPUs and CPUs. We're, we're selling MCP surface services, the master— MPC, sorry, the Master Protocol, our Master Context Protocol. MCP, I was right the first time. Um, and all sorts of other industrial enterprise services now because we've built this really robust decentralized network. And now we're basically looking at the search direction, and now we realize, oh my God, the advantages for us, we can also sell those advantages on an enterprise basis. So the Presearch says, uh, as a project is just taking off now because decentralization is just so inherently valuable. And there aren't many people that have a robust decentralized network.

We do.

Yeah, that's amazing. I'm just waiting for people to start showing up in court and having their, you know, Claude searches presented to them through these centralized systems. But maybe that day's further out than we think. So digital capital management, how do you advise institutions allocate to Bitcoin and cryptocurrencies today?

It's the— it's a bit confusing. DCM used to— or is the asset management company for my fund called Cleverly Crypto Asset Fund. And when I— when I stopped trading, Crypto Asset Fund became a fund aspect of the yield generation activities. We do yield on— in SMAs. No lockup, 6-hour liquidity, great stuff. But some people want a more traditional way of investing in that. So for stable— for US dollar only, crypto asset fund now provides yield on— with a monthly liquidity auditor administrator provides yield. But in reality, it just is a funnel into one SMA of Salyam on the yield generation side. And on the VC side, Salion is the largest investor in Presearch. So what's happened is that my various activities have all really come under the, the Salion umbrella right now.

Got it, got it.

So what, um, what challenges do you face as a builder? And I, I kind of want to nudge you towards regulatory issues, if you've run into any of those or if there's any other specific issues that stand out in your journey.

Yeah, sure. I know I can hear the Canadian when you say stand out. The, the, the issue, the biggest issue with building something in crypto is people. And honestly, you could say that. I mean, I was the international VP of mergers and acquisitions for the largest telco, independent telco in Europe for years.. And I started out looking at— I was acquiring companies, M&A. And I started out really focusing on the financial stuff, the legal stuff, and the technical stuff. And then you did some human management due diligence, HR stuff on the end. And the more I did that job, the more management moved to be the number one issue. And in startups, it's— sorry, just one second. There you go.

Okay.

And the— and what I realized that in startup, even in established companies, it's true, but in startups it's much more true. And that is everything depends on people. The issue with hiring people in the crypto space, it's really a bit of an odd one. They almost all have the— you go through some filtering process, you can hire people that have the technical skills you need. That's not even particularly difficult in the crypto space. But the thing is, because some of these, so many of these people have started with crypto when they were very, very young, made some money or not made enough. Work from home has been their lifestyle. They never worked in a centralized environment. And strangely enough, and you usually take this stuff for granted, the general work skills, right? Do what you say you're going to do, show up on time. Stick to, you know, organize your, organize your work. People task you to do something, you keep track of your tasks. You task other people to do something, you keep track of their tasks, right? General employee skills, and then a little bit later, management skills. And the, the issue in crypto is there are very few people that really have those skills that pre-crypto, pre-internet, especially when everyone worked in a centralized, centralized environment, or virtually everyone, is you assume they have all these skills. And now you can't make that assumption. I have fired more people in 10— in the 10 years I've been a manager, for decades, than I fired in all of the years of my life prior to that. And not because they're— usually not because they're technically incompetent. But they're— you can't work with them. You can't count on them. They're not reliable. They have bad judgment. And one of the reasons for that is because they have no experience doing it in any context. But the other reason is in a decentralized workplace, they don't have any role models. And I don't mean, oh, you're great, I want to model my life like you. I mean for little work habits that people see, oh, that works really well for him. No water cooler talk. Nobody has water coolers anymore, but you know, You could just walk down the hall and grab somebody. Nowadays, you got to schedule a Zoom call and climb on 6 Calendlys. And it's just really, really efficient. Because paradoxically, without the centralization, we become more bureaucratic, not less. I mean, you can't pick up the phone and just call somebody spontaneously. You can't just walk down the hall and grab somebody spontaneously. You got to set it up. You got to coordinate. It's going to be Zoom. It's this.

That.

Um, there are some advantages to a decentralized workplace, but I really think we're going to see a, a hollowing out of middle management, or we are seeing it, and that'll eventually lead to worse upper management because there aren't as many good candidates to pick from. So instead of having an employee pyramid like this— and believe me, I'm not saying the good guys always end up at the top of the pyramid, I'm not saying that at all— but when you have a lot of people that pick from, the odds get better that as you go up the pyramid, you're going to have good people. But what happens if you're— if it's not a pyramid, it's a flat thing with a pencil in the middle? You have nobody to draw on. There's no middle level to grow into the guy that's going to be on top, at the top of the pencil or at top of the pyramid. And I'm already seeing that to the point where I— like, there's a sales guy who's fits this exact profile we have in Philadelphia. Great guy, very bright on crypto, very bright on blockchain. He's actually starting to be effective. It took him an entire year to get one new investor because he had so many basic skills that he hadn't learned. And actually, I'm flying him out here again just to sit down and work next to me, not because I'm some sort of paragon, But just because he can, he can see some good habits, I hope, fewer bad habits than usual, I hope, but just understand what the atmosphere is and just pop in and ask a question. It's a real, real problem for a builder in the crypto space.

And I don't disagree.

So I hate that response. I'm sorry. That's just, that's just a wimpy, wimpy response. Kevin, I was like, no, I don't disagree. Do you agree? Do you not agree? Okay, I'm going to aggressively say nothing. I mean, come on, we're interviewing you.

And so what separates the successful crypto projects from the failures? Is this one of the key things? The people?

In terms of implementation, in terms of execution, which is everything?

Absolutely. But there's something that comes before that, and I used to say a lot of words, and I don't know who said it first, but I'm gonna quote somebody, and that is, I'd rather invest in an A-team with a B-idea than in a B-team with an A-Idea. And part of being an A-teamer is having skills I mentioned to you, and there are other things as well. And even an A-team with a C idea is probably going to fail, right? But you almost end up having to— almost always end up having to pivot or adjust or modify whatever your original idea is. And if you're an A team with execution, with experience, you're going to be able to do that without losing a whole lot. So that would be— that's— that I would say is the biggest, the biggest factor to kicking things off. The trick is what's an A idea, what's a B idea, what's an A team. A team, B team is a little bit easier. It's almost a little bit more objective. But B idea, A idea, C idea, that's a little bit tougher. But nevertheless, even when you've gotten to that point, you get to execution. That's when all the issues that I just mentioned.

So looking ahead, where do you see Bitcoin and cryptocurrencies in 5 or 10 years? And I'm not really specifically looking for price predictions, although those would be— I'm more looking for, you know, how do you see the technology impacting our daily lives?

All right, I'm going to— do you know the philosopher Friedrich Hegel, German philosopher?

Not familiar with.

I'm going to quote him. Hegel, you will know indirectly. Have you ever heard of Marx and Engels?

Sure.

I found it— the theory behind communism, right? So Marxism-Leninism, because Lenin added his two cents to what Marx said. What Marx and Engels' theory of communism is built on Hegel's view of history. Hegel wasn't a communist, and he's sort of gotten a bad name because of his affiliation with Marx and Engels, but he had a really fascinating view of history. So let's ignore the communism in the middle. It's been really discredited. Take a look at Cuba and North Korea. And let's take a look at what Hegel said. Hegel said, look, history overall consists of a thesis, right? This is what's happening now in history. And antithesis and a synthesis. When they come together and you form something new that is an amalgamation of them both. And you can look at— go back as far as you want. He really went back basically to Roman history, but look at Roman history, the Ottoman Empire, Chinese history, and the Huns and everything else, Genghis Khan. You see a lot of this. Let's fast forward and you can— I'll answer the question, why the hell is he talking about this stuff? And that is the thesis is trad fi. Yeah, 15 years ago, it's all you had. That is the thesis. The antithesis, the perfect antithesis, because it was created to get around difficulties with tradfi, right? And fiat is crypto.

Are we going to—

is the, is the world binary? Is it black and white? We either go with tradfi or we go with crypto. Hell no. What's happening, and you've been seeing it for probably started really 4 years ago, probably not longer. Maybe some weird examples, one-offs, but you're really seeing it now where we're seeing the synthesis where TradFi is starting to take a lot of— to learn from the best things in crypto or in digital assets. And they even rebranded it, right? So it's now digital asset. And what are they taking? They're taking the blockchain. Look at everything's being tokenized. Not necessarily because they want to trade all these tokens, although that will probably come, but because the T2 problem, right? Trading plus 2 is when you settle with your Merrill Lynch account. If you sell your stock, they let you buy something else immediately. Well, they don't tell you is you borrowing that money because that first trade hasn't cleared and they're lending it to you at no cost because they want you to buy more, right? They want your business. But in reality, if you tried to pull that money out, you'd have to wait 2 or 3 days. Because it's a T2 system, settlement plus 2 days. Blockchain, it doesn't allow real-time settlement, but it allows near real-time settlement for the same reason we talked about early— earlier, trust. You know who bought and sold it, so it can all settle basically nearly instantaneously or near real time. So the RWA, real-world assets, that is— Hegel would go, yep, There's my synthesis right there. The two systems, we're taking the best things of both, hopefully, and combining them together. And that is what is going to happen, is happening. And that's going to accelerate as really the crypto purist projects have, you know, it's the first, first mover disadvantage. They've broken trail, they've taken all the incoming rounds, they've gotten their butt kicked. Some of the concept has Concepts have survived and the fiat space is going, okay, I'll take that one, that one, I'll take that one. And same way on the crypto space, completely unregulated, completely chaotic. 2017 ICOs, 50% of them at least were complete scams. So now we're starting to regulate crypto. And look, I'm not saying that we have to— I'm not a regulation maximalist, but I'm also not a guy who wants the complete Wild West. And everything, everything is, you know, do your own research because people can't— they don't have the skills to do it. So you're seeing that maybe not the best part of TradFi, but a piece of it coming over to crypto. And the two worlds are converging. 50 years from now, maybe not even 20 years from now, people won't even think about digital assets or crypto. Because it's all going to be digital. And in reality, it's digital now. 99% of US dollars on the planet Earth are only digital, but we still, you know, keep some sort of distinction, maybe because it's CLT technology and DLT technology. What we're going to do in the future is people say, hi, do I want to centralize or decentralize? And they'll pick whatever works best for the situation. There will be no black and white difference at all between trad fi and digital assets. And in fact, that very distinction is almost certain to dry up and go away over time.

I don't know if I heard a million-dollar Bitcoin price in that answer.

So, oh, you want a price?

No, no, I'm just kidding. But it sounds like more of the same, right?

Merging—

sorry, what do you mean more of the same in terms of merging of these systems, the institutionalization of Bitcoin and the Bitcoinization of tradfi?

Um, I actually strongly disagree. It's not more of the same. First, that sounds sort of fatalistic and discouraging, and I'm, uh, by definition much more optimistic than that. But secondly, thesis, antithesis, remember. All right, let me, uh, let me use a better example then. You don't like my hands. Here's the thesis, here's the antithesis, and the synthesis looks like my car keys. Okay, they're different animals. They're very, very different animals. The synthesis is not— is neither the thesis nor the antithesis. It's something new. So this combination we're going to find of TradFi and digital assets, it's going to be very different than digital, than crypto was in 2010. It's going to be radically different than what was— what TradFi was in 2010. It's going to be a third animal, as lawyers like to say, sui generis, right? It's going to be a unique thing all on its own. It's not going to be same old, same old.

All right, I will digest this later, but I really appreciate, appreciate your time, Tim. Appreciate all the information and obviously everything you've done for the sector. So thank you. Where can I send people if they want more information?

Oh, very simple. It's Sallyon, but remember, it's like psychology. P-S-A-L-I-O-N, or PSA Lion. So tim@psalion.com. And you didn't ask the, the, the question that's— that gets begged in something like this, and in French you pronounce the P, so a psalion. What the hell is a psalion? And the answer is quite simple: all the good names were taken in, in Western European languages, so, uh, Sallion. Sallion is ancient Greek for chain.

Ah, really interesting. Cadena Bitcoin is, uh, Spanish for chain.

Yes, that I knew, that I knew. And everyone— but you couldn't just get Cadena, it was taken, so you have to make it really, really long. Just for, just for, for grins, there are two places more and more people go to get domain names, short domain names, because the modern European languages and increasingly modern Asian languages, they're all taken. So you go to ancient Greek or modern Finnish, because Finnish is not an— it's a Finno-Ugric language, it's not Indo-European. So the words are just very, very different, and they're more often available.

I stayed away from the question because I wasn't sure I was going to pronounce it correctly.

Just drop the P. Sallion works just fine.

Uh, anyway, Tim, thanks again. I really appreciate the time and look forward to connecting more and talking about Bitcoin yield.

Absolutely, Kevin. Thanks very, very much for the invitation. Really appreciate it.

Awesome.