YouSaid · the spoken record

Adam Ludwin

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77
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2017-12-05
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2017-12-05
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  1. “So the only argument you'll ever hear that's the sort of the bulls make repeatedly is this version of like you just can't see it yet argument on both the technology and the societal use of them Here's my problem with, and what I struggle with, and by the way, I kind of agree with those arguments. So let me just tell you what I struggle with though, which is at the beginning of other kind of paradigm shifting technologies like the Internet itself, people actually were not making that argument. If you go back and you read magazine articles from 1991, 1992, 1993, where it was like just before the web, but people were like on BBS systems and connecting to Prodigy and CompuServe services like that. The question was only how big and what things we couldn't see. But a lot of what people were excited about were things that they were already doing then. So for example, there were already chat rooms and message boards. There were sports scores. There were stocks, stock quotes, there was news. There were funny cat pictures. And there was email. There was file sharing. It was kind of janky and weird to use.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Really, just decimate the others, and that's possible. It's a similar argument, though, to those who say, even though no one's using DAPS today, it's just because we haven't seen yet the kind of emergent phenomenon.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Again, the counter argument to that is like, well, Adam, you're not smart enough to see that we're going to be able to have our cake and eat it too. We're going to, there are going to be technologies that will allow us to maintain censorship resistance, maintain decentralization, have these peer-to-peer networks not compromise on that, and get 10x or 100x performance, 10x or 100x privacy, 10x or 100x usability. So far, it's too early to tell. There are certainly not any compelling examples of where we're seeing that today, but I'm sure this podcast won't age well. And when I listen to it in 10 years, I'll be like, wow, like I was an idiot. So it's very possible. I think to sort of sum up the best argument for that is what you said, which is like, we just can't see yet the breakthroughs that will enable these networks to.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “blocks, even though the file size is bigger and therefore it will tend to benefit those that have better computers, faster internet connections, which will tend to centralize the network around them. It would be worth it because we'll be able to process more transactions on the network versus the sort of purists that say that will defeat the whole purpose of Bitcoin because tends towards centralization, it won't be as good as pure centralized services like a PayPal. It just still won't be, it'll still be 10x slower, but we'll lose the one thing we have, which is censorship resistance. And ditto for, again, if you store your Bitcoin at an exchange, it makes it way more usable, way more user-friendly, but you don't have control over your funds anymore. Exchange has control, and we've seen.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Has a roughly consistent view with every other updated every 10 minutes with every new block. And that's the only reason it works and maintains its competitive edge over competitive edge over something like PayPal on that dimension of censorship resistance. Most of the proposals that seek to make, let's just stay focused on Bitcoin for a moment, Bitcoin faster, more scalable, do so by and more usable, do so by actually recentralizing elements. So the so-called block size debate where proponents of increasing the block size meaning the number of transactions per batch that are validated and then distributed. And that argument is the reason it's so contentious is that it boils down to one side saying let's have bigger”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “It's a great question, and I'll start by saying it'd be foolish of me to sort of draw a really hard line in the sand and say never because the history of technology is sort of arguing. Overwhelming never. Yeah, exactly. I think the greatest challenge for decentralized applications is that they're decentralized, which is to say that Bitcoin worked because it maintains global shared state, meaning every node on the network.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Major technology companies and major financial institutions disrupted. But the likelihood of that is still low. So people are sort of waiting it at 1 to 10 percent. That's an academic way of sort of justifying it.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Is that centralized services just continue to be so much better? And again, you know, even if decentralized services get better, decentralized apps get better. Centralized apps are getting better as well. I mean, look at the new iPhone relative to the first one in 10 years. It's a miraculous improvement. So they're not going to stand still. So the net of all this is just nobody knows where it's all going. And I think if you look at the $200 billion market cap of all crypto assets, like you say, where does that valuation come from? The way I think of it is like first of all, it's probably coming from nowhere. Like let's just start with like, it's Mr. Market and Mania and all that is true. We should come back to that. But maybe a more academic way to argue it would be to say the $200 billion represents a small probability of a very large outcome. And the very large outcome is trillions of dollars of sort of economic value across.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Even though there are really no killer daps, again, through my definition of people using them, if one emerges, Facebook won't be able to buy it because by definition won't be created by an acquirable company. If Mark Zuckerberg decided he wanted to buy Bitcoin today, the question doesn't even, you smile when you say it because it doesn't make sense being buy the whole project. Or if you said, oh, Ethereum, I want to go buy Ethereum. Like you can buy some Ether, but you can't take over Ethereum. So really this presents a bit of a paradox to the software incumbents and the bank incumbents. Because even though they're not really threatened yet, the genie is out of the bottle. And if something does emerge that is used widely, there is nothing they can really do short of maybe regulatory pressure to compete and their best hope.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Zuckerberg swoops in, he buys Instagram threat neutralized and also new growth on mobile. Oculus Rift looked like the killer app. Next platform is going to be virtual reality. Great, let's swoop in and go get the Oculus, go buy that. So killer apps are acquirable because they're created by companies that have equity under them and have investors who want to return. Like the whole model works.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, we can't take Netflix out and still have a workable acronym. But anyway, you look at these incumbents and people go, wow, how will we ever have innovation again when they can just buy any company as soon as it's successful? Well, what's interesting about decentralized applications with respect to something like Facebook and Mark Zuckerberg in particular is even though there are no killer dApps. You know, you've heard this term killer app. Instagram was like a killer app on mobile. Great.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Essentially, what they're betting on is that there will be emergent phenomenon that are very hard to anticipate right now when you look at the way the world is that could in ways it's hard to predict and hard to anticipate embrace these technologies, embrace decentralization, and seek the sort of refuge from the more centralized systems. And in a way, this whole market, this whole arena of decentralized apps and cryptoassets and crypto.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “When you saw the first iPhone, it was sort of easy to predict that you would see people taking photos with it. It had a camera. It had a built-in camera app and photos like, okay, yes, I could see that cameras are going to sort of slowly, that market's under threat now, and that these mobile phones might really challenge the traditional camera market. That's sort of easy to predict. What was extremely hard to predict was Snapchat. That's because Snapchat wasn't didn't emerge because of technology alone. It emerged because of the way young people engaged with technology, their reaction to oversharing, their desire to sort of reclaim their privacy, et cetera. Those things are super hard to predict.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Telegram. Exactly. Notice they're using WhatsApp, maybe because it's end to end encrypted, is remarkable. And so something I always point out to skeptics around crypto assets is that it's fairly easy to predict how a technology will evolve. We know that public blockchains are structurally going to be difficult to scale, but they'll get a little bit more scalable. We know it's structurally difficult to have privacy at scale, but they'll become more private. We know the user experience isn't great. It'll get a little better. But we also know that structurally it's going to these things are largely going to be relevant to folks off the grid who want to be off the grid, who want censorship resistance, who want more privacy, who want more anonymity, and so on. And so that sort of easy to predict. What's hard to predict is how society is going to change to either be more accepting or less accepting a technology.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “But if you fast forward post Edward Snowden, post WikiLeaks, post even Donald Trump and sort of a New World order that people aren't sure about yet, the number of people in the sort of Escella corridor between New York and Washington and out in the Bay Area, who, if you just sort of glance over on a train or a plane and see them on signal.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “And this is what makes, I think, a lot of folks in the traditional banking world a little uneasy to say politely or just dismissive of this whole asset class because they will point at these examples and say, I told you so. Like this is just, you know, this is just stuff for criminals we have properly run services. Like, why do you need a censorship resistant network? And it's sort of hard to argue with that. At the same time, I pointed in my article to counter example, which was encrypted messaging, which is the ability to send a message to someone and ensure that there's no third-party snooping in the middle. And encrypting your email was something that even five years ago was sort of the exclusive domain of hackers, spies, paranoids. Normal people didn't do that.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Right, and Monero and privacy coins are better. If you're trying to transact anonymously, if you're trying to buy something you shouldn't be buying, to date, the best way to do that was to show up with a briefcase of US government issued currency. Now there's this alternative, and by the way, that still might be the best because there's some open questions about whether you'd really want to use a public blockchain to transact in illicit goods. But in practice, it doesn't take much slew thing to find very robust dark web marketplaces that essentially denominate everything in Bitcoin. And so people that want to be off the grid, because they're buying something they shouldn't be buying because they want to evade taxes, because they want to get money to a group that they shouldn't be getting money to. Those are, again, leaving the moral and legal arguments aside, functionally relevant for people.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “It's a lot of people. It's a lot of people. So, people that are off the grid. The other cohort of people are people who want to be off the grid. They're here in New York City and anywhere else where you can access all the sort of traditional software from companies, payment systems, et cetera. But they want to be off the grid. And this is usually, you know, when you hear politicians or others talk about Bitcoin, they'll usually just say, you know, Bitcoin's great for criminals. And they're right, actually.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Yes, the unbanked or people who are living under governments that are, for example, hyperinflating their currencies, or where there aren't competitive market mechanisms that will give them better options or where they're trying to move money out of a place where there are tight capital controls. So leaving those sort of legal and moral arguments to the side functionally, that's”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Censoring my Starbucks transactions. I was really sick and tired of the Amazon cloud every time I tried to run a computation. They just said, sorry, you know, you're a funny looking guy and I just don't like, I'm not going to process it. So for most people, this doesn't, this isn't a selling point. But there are at least two cohorts of people where it is a selling point. And the first cohort are people who are sort of off the grid, right? They don't have access to competently run centralized services.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Uploading it to Filecoin. Nobody can stop two traders on Wall Street from entering into a contract and having that contract be executed by Ethereum. And that's a very powerful idea, that for the first time we have unstoppable software. There's no company that can kind of intercede. And now for most people, especially in the United States, that doesn't strike them as like, oh, finally. Yeah, I was really sick and tired of Venmo.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Even if you use a hardware wallet like a trezor or ledger, it's a lot more complicated than using, for example, like a password manager. And unlike a password, if you lose your private keys, you don't get to hit reset private key. Your money is gone. It's like losing the key to the safe deposit box that's holding your money. And there's no recourse. So all of that's to say decentralized apps are sort of worse on all these dimensions. Yes, they'll incrementally get better, but structurally they have these trade-offs. And those trade-offs are there intentionally. And by design, in order to get decentralization, and coming back to your question, the real value of decentralization is censorship resistance, which means that nobody can stop me from sending Bitcoin to someone in China. No one can stop you from taking this podcast.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Decentralized model with Bitcoin. I've got to manage my own private keys. If I stick my private keys or my funds with an online wallet or an exchange, I am back to PayPal. It's exactly the same, right? So I've re-centralized. Coinbase is an amazing company, but it's helpful to remember they're an app. When you log in to see your balance in Coinbase, you're not looking at the Bitcoin blockchain. You're looking at the reading from a Postgres table, a database table. If you really want to spend Bitcoin and remain in a sort of decentralized mode, you've got to maintain your own private keys.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Limited at roughly seven to ten transactions per second visa on Christmas will do sixty thousand transactions a second. So we've got a big gap there and a lot of that gap isn't closable in the sense that well it's just early and we'll get to bigger scale. A lot of that gap is the fundamental design of any decentralized system. And so we have sort of these performance and scalability and throughput questions. We also have usability questions. In order for me to again retain”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Yeah, of course. So, part of the reason no one's using these services, and again, I want to separate out for your listeners. When I say no one's using them, I don't mean that there's no trading activity. We all know there's tons of investment in speculation in the underlying crypto assets. But like I pointed out, those crypto assets serve and enable something new, which is decentralized apps. And very few people are using them. And the reason for that is that decentralized applications are just worse on virtually every dimension by virtue of their design than their centralized counterparts. It's much more efficient to store files in a centralized cloud like AWS than it is to try to parcel them out in a distributed way across a network of computers and then reassemble them and have a mechanism to order those transactions and maintain global state. And the same is true for a Bitcoin payment. We all know Bitcoin is sort of”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Last year, maybe it's one or two, but that is the stated purpose of Bitcoin. The stated purpose in paragraph one or two in the first page is this is a means to have commerce on the internet be more seamless.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Big question in the market right now is will anyone ever use these decentralized applications? Will anyone actually buy things with Bitcoin at scale? Will anyone actually do meaningful computation on Ethereum? Will traders begin to enter into high value contracts and run them on Ethereum? Will people store files in file coin instead of in Dropbox, instead of on S3 if you're a company? And so far the evidence is that very few people are using these services. The shorthand of this is just to say like nobody's using Bitcoin. Everyone's investing in it hundred billion market cap. But if you talk to 10 people who have purchased Bitcoin and ask them, how many of you have spent Bitcoin to buy something in the last week, usually the answer is zero.”

    2017-12-05 · Invest Like the Best · Adam Ludwin - A Sober View on Crypto - [Invest Like the Best, EP.66] · IDENTIFIED FROM THE TRANSCRIPT · source