YouSaid · the spoken record

Preston Byrne

lines on the record: 61
first: 2018-01-16
most recent: 2018-01-16
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Kindest thing anyone's done or said for me was a friend of mine in New York City when I left Monax sort of earlier in the summer of 2017, a buddy of mine sort of was like, I was a bit disappointed about the circumstances of my departure. And one person, who knows who he is, kind of shook me out of it and was like, dude, get it together. Like, get writing again. And you can tell when I'm in a bad mood because I haven't written anything in six months. And so he's like, dude, get it together. Like, whatever. And we went up to Porkfest in New Hampshire, which is a libertarian sort of anarchist festival and had a great time. And yeah, I would say that person is the one who's shaking me out of my, or getting me back to my senses. That's the nicest thing anyone's done for me in the space.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Did he? Yeah, he did. So he knows his stuff. When we cross paths like about eight or nine, almost a year ago now. And I was like, dude, what? Like, seriously, what? And so, yeah, Ari and Chris both know what they're doing. I'd say in the bull camp, those are the two guys I'd point to.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hands down, one of the more thoughtful guys I've met, he knows what he's doing. And actually, surprisingly, a buddy of mine from high school, a guy named Chris Dannon, I had no idea he was the Ethereum.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Road and they get resold again. So Everledger, my understanding, is that it's a database which designed up the police, the shops, and insurers so that you can figure out if someone has made a claim against a diamond and they said, well, I've lost my diamond, okay, we'll pay out $6,000 to you. Here you go. Go away. Two months later, the same thing turns up in the shop. You go and you interview the shopkeeper who brought that in while it was Joe Bloggs' wife who brought it in and turns out she was the one who made the original claim. You do that and you reduce your insurance fraud. So it's a way that you can spread that out and make sure everyone's looking at the same data, which is verified. And they say, well, I've identified that this diamond was, it originated here. We can track where it went. And in addition to that, we know if it's been stolen, someone can report it stolen, and we can go and put a black mark against it so we can track what happens to it when it turns up later on down the line. So it's a way of getting better information about what's going on in the supply of diamonds in a particular place.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Apologies to Leanne if I mangle her startup, but my understanding of whatever ledger does by way of, so supply chains are supply chains generally supply chains are you've got a box of something and it's got to get passed through a dozen different hands before it arrives at your doorstep. You want to know at every stage what's happened to it, what the condition of the thing is because what you're getting and what you're liable to pay for depend in large part on how it gets to you and in what condition. So it's important to track what's going on with things as they move through the stream of global commerce. Everledger in particular looks to diamonds in that diamonds apparently all have registration numbers and they can be identified by reference to size, light characteristics, refraction, whatever, some scientific magic I don't understand. And sometimes people claim because they say, oh, well, my house was broken into and my diamond was stolen or diamonds actually do get stolen. And then they turn up later at some point.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is when someone understands their use case backwards and forwards and they've figured out why they want a distributed system there. For me as a lawyer, that is the automatic transaction Bible makes perfect sense. I know it very well. I know the space very well. I've said, you know, this is an idea which potentially could get some traction in 10 years. There are people in supply chain, Leanne Kemp, of Everledger. She understands diamonds backwards and forwards, and she said, you know what? A distributed system automates these relationships really well. Can you just”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, there aren't because there aren't. I would say there really aren't any reference sources which are valuable because the important thing when thinking about blockchains is knowing your business extremely well. Knowing what you do backwards and forwards, and then asking yourself very simple question, what does a distributed system that everyone can read have to do with what I'm trying to accomplish here and does it make it more efficient? And that's really that simple. So you can go and dive in and read a hundred different books by 100 different authors, most of whom had no idea what they're talking about and have not built, deployed, or designed a single blockchain system in their entire lives, and they'll sit there and tell you how it's going to revolutionize everything. But fundamentally, the skeptical view of this is to say 99.8% of what's going on in blockchain right now is garbage. And the 0.2%, which isn't garbage,”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“And he and I was trying to explain quantum information to me. And I was like, what is this superposition? And everyone understands it now because there are enough YouTube videos, but nobody understood it back then. That was ancient history. And so he tried to explain it in terms of giving a cookie to a marmot because he knew I liked marmots. So he said, well, you're giving the cookie to the marmot. You're not giving the cookie to the marmot. You're giving it to the marmot and not giving it to the marmot. And you're doing neither at the same time. And I was like, well, this makes perfect sense. And so if you explain things in marmot terms, I can understand software. This is perfect. So anyway, it just became an in-joke. It then spun wildly out of control. And I decided to persist doing it despite the fact that it drove people crazy. It drove my investors crazy. It drove the market crazy. It drove people on Twitter crazy until eventually they broke and they started liking it. So that was my objective there.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So marmots. Marmots are actually my superhero origin story. So I was about 12 years old and we had this issue with wood shucks in our yard. They were everywhere. There were digging holes and everything. Connecticut. So eastern Connecticut. So we had these woodchucks. They were digging up everything. And I was handed a rifle and told to do my duty. And after waging the briefest of wars with these adorable little critters, I just decided I couldn't do it. And they kind of became my spirit animal as a consequence. That then became a in-joke in my early days at Monacs, which was at the time called Eris Industries, one of the three co-founders is a quantum mathematician.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Not XRP, but Ripple, yes. My understanding of what their interledger business was was that exactly. And so my understanding of most of what their bank business is is based around the interledger. I mean, I don't work there. I don't know what it is. But that's as a market observer who has a reasonably good idea of what's going on. That was my understanding of what that was for XRP, totally different kettle of fish, speculative mania, all that. So that's a very separate issue.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, utility settlement coin is a project between four or five different banks. I haven't heard anything out of it in a while. But basically, it's four or five different banks who said, let's do our own distributed ledger where we settle transactions among each other. And we have a client which does it. So they took the theory that they do a lot of business with one another. And so they said, well, you know what? We're just going to have a coin which does it so that way we don't need that third party service provider or whoever else we're using to do it. Similarly, you could take, you could think of something like, I don't know, HSBC and Citigroup do something like 35% of their FX business with each other. So they could turn around and say, you know what? Instead of doing this the way we're currently doing it, why don't we just have all of our trades running on this one chain between us, we have perfect visibility or because we're entitled legally to see what's going on between us. And that way we make our record keeping on either side of this a lot easier.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Someone is going to say, okay, well, we have a service. It'll probably be law firm, to be honest with you, that will turn around and go, we have a service that we offer. It's digital, it's faster, it's cheaper, you don't pay for as many bills, and we manage the ongoing lifecycle, the transaction for you, so it just goes.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Very, very straightforward. The law firms who would be administering those documents in that process, their clients aren't paying $2,000 for some junior associate to look through reams of paper for a day and a half in order to figure out what the state is of Clause 3 of the trust deed or something like that. So it's introducing a lot of digitization into areas which have not been digitized. So that kind of stuff where you just have the ability to pull these things up and in addition you have a really good, so this is really the most important thing. You have an outstanding chain of evidence, which, and that's what law is about, right? You have to go prove that something happened at a certain time in a certain way and you got consent in a certain way, which is why we sit around and shuffle paper and get people's signatures and make PDFs and make 20 copies of them and circulate CDs. It's a nightmare. So I think all of those kind of old world procedures are very much overdue an update and that will happen within the next 10 years is that”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Bible, and you go and get the Bible and you see all the deeds of amendment and you see what the state of play is, and you have to go track it down because it's in document storage somewhere in East London, you know, it's a building somewhere. And then you figure out what's going on based on going through a couple of reams of paper and then checking records on Bloombergs and printouts like that. There is an absolutely no reason whatsoever that shouldn't be on a blockchain, which is running between the various transaction parties so you can see the exact state of the documents, how they've changed over time, what the state of the payments are, whether a payment waterfall has been triggered or not, whether a certain event has taken place or not, what the rating is of that instrument and how that interplays with your waterfalls. So there's a whole bunch of things that you can take that process and make it very, very simple and much quicker to refer to. As a consequence, so let's look at it from the perspective of the various parties, the banks, when they're sending notices, that becomes easier, so that's automatic.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think there's some interesting stuff going on in the broker dealer space. There are a lot of people who are looking at ICOs and saying, you know what? The infrastructure that's being built here is actually more effective and cheaper and faster than the sort of paper heavy infrastructure we've been working with previously. So there are companies who are looking to see whether this crypto infrastructure, although it takes some shortcuts on the legal side, they're also taking its total reimagining of how you should move value around and how you should transfer title to property. So as a consequence of that, there are things about it which are much more efficient than the way we did things before. The idea that, for example, let's look at a bond transaction, right? So a bond transaction has probably five or six banks involved, maybe fewer, maybe three, a bunch of law firms and a bunch of bondholders. And currently the way that they figure out what the state of play is, is each of them has a paper copy of a big document, which we referred to somewhat offensively as intrinsic.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“The objective of doing that is that when you ask yourself in cryptocurrency what role do you want to play, right? Some people are traders, some people are economists, some people start businesses, some people are boosters and community managers, some people are lawyers. And I made a decision, you know what? I'm going to be one of them. And in order to do that best or do better than the others, the way to go about it is to be professionally independent and to give advice based on your clients' needs rather than your own financial interests. There's some lawyers who don't do that, and I think I'm a little uncomfortable with that, but that's why.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“I have, I owned, a very small amount of Dogecoin, which I sold a while ago. And that's it. And there's a reason for, more interestingly, I was offered thirteen thousand ETH from the pre mine, which is now worth about sixteen and a half million dollars. And I turned it down on the basis that it would compromise my professional independence, well, for two reasons. One, at the time, the company, my company was competing with them for Mindshare, so it didn't really make a whole lot of sense to go and take free coins. And two, I had an inkling then that I would probably have a big problem with ICOs later down the line as I do now, and I don't think I could really make a coherent argument. I don't think I could turn around in the one hand and say, I've been made rich by ICO coins, and then on the other say, but I think ICOs are bad. So to answer your question, no, I don't really play. And ultimately, the objective is so that”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Subject to the proviso that I'm not yet a US qualified lawyer and I'm an English qualified lawyer, I will be very happy to, and this is not legal advice. I will be happy to talk about my understanding of that concept. So just starting with the way things work in England, just by way of comparison, in England, they've incorporated a lot of European law, which tends to be big, long codes, which set out everything in full as fully as they can. So they have a list of things, and they say, if it's not on this list, it's not subject to the prospectus directive, and it's not part of this regime. And so I looked at the list.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of got away with it. And since then, there have been a bunch more, and so we'll see more of that. But that's what I mean when I say it's cutting corners. You haven't done the necessary work in order to provide what you're purporting to sell.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“What you're trying to accomplish. But I mean, you're kind of touching on it. It looks right. It feels right. You're selling it. There's a little contract. They get a token. That kind of feels like owning a share. They can see what their balance is worth. If they have it on Coinbase or whatever else. But if you then just kind of dust off the surface and look underneath, none of the machinery that's necessary and none of the work that needs to be done is actually there. So you don't have a mechanism by which, and that'll come out, we'll start to see more of it as people start to get annoyed with ICOs that are non-performant. They'll say, well, hold on a second, you sold me this thing, and there's actually no means for me to connect one and the other. No recourse. No recourse, no nothing. And so I think the SEC went after one guy. There was an emergency order a short while ago who was doing real estate and diamonds. And I think they probably took, I haven't looked into it myself, but my guess is they probably took one look at what was going on and said this doesn't join up. This doesn't make sense. And so there's a lot of that out there, starting with the DAO, which...”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“We turn around, we sell the assets, the proceeds of that sale go to this entity, those proceeds are then distributed in accordance with this waterfall. So it ties all of the little pieces together and makes a coherent whole. That's how a legal transaction works. The Dow and a lot of the ICOs I've seen, they're cargo cult versions of, so the cargo cults of the East Pacific, what I'm referring to, we're after the Americans came in during the Second World War, some of the people who lived on the islands would go and build mock airways and planes out of bamboo in thinking that if they did that, cargo would arrive from the people in the sky. So basically it's, and Richard Feynman called that cargo cult science, it has the appearance and trappings of science. It makes perfect logical sense, but it's missing something. It doesn't get to the essence of what you're trying to achieve. So similarly with the DAO and a lot of these ICOs, I look at it and I go, this is cargo called law. You are kind of brushing over the surface of what”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Looked at all the little moving parts between there, it's like, okay, I take the tokens, I put them into the DAO. There's no contract, which says, what happens? I just know that I get these DAO tokens back for the ether I put in. Then the DAO takes the ether I put in and it gives it to another company. Fine, that still works. That company issues tokens, reward tokens, those reward tokens capitalize back into the value of the DAO tokens, didn't say how. There was no mechanism for some company that went and issued its own ERC twenties to then go and capitalize back into the DAO tokens. It was just kind of like, oh no, no, no, and that will happen. Magic happens because they've done it through the DAO structure. And then I go take that value, which is capitalized in my DAO tokens, and sell it to somebody else who wants it because decentralization, right? If you were a lawyer, you'd go, okay, well, you're paying money in here, and then you're paying money there. And then this company does that. And there are certain rights which you're going to take in exchange for, let's say that company liquidates, and there's a contract which says that when you liquidate,”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“With an investor about an investment that they own and potentially getting them more involved with that investment. Because if you've got, let's say, you've got a smart contract which says this is your share and whatever, you could go and consult that investor automatically about a shareholder meeting. You wouldn't have to actually go and summon them to the shareholder meeting in order to go through the motions and that sort of thing. So that's one potential way of looking at it. The reason I say it's cutting corners is because a lot of people are selling things which are designed like investments, which work like investments, which are treated like investments. But at the end of the day, aren't really investments. So I've seen a couple of real estate coin this or real estate coin that where someone goes, well, it's a real estate investment thing and I'm going to go buy this house and I'll put it all together so that way you get the return or the Dow, another prime example. This is a decentralized company. We're going to go invest in other companies. They're going to have their own tokens and you're going to get the return. People are like, great, this is amazing. Let's go invest in the Dow.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think without being overly pessimistic, I can be overly pessimistic online and on Twitter because there just aren't enough characters and it's just more fun that way to get people riled up because I'm sitting there and someone's getting bent out of shape. I'll send them a marmot picture or something to just annoy them. It's great fun. So I'll try to be more diplomatic here. So with ICOs, I said, yes, it's cutting corners. What they address is a huge demand for higher yield investments. People have been sitting around on very low, you can't get interest in a bank account in the United States. That doesn't happen. And people want to, they have an appetite for a little bit more risk. And so I think ICOs have addressed that appetite for risk. And that tells me that there's a market there, an addressable market, which could use blockchain technology as part of whatever solution you build to give people access to investments, to give them disclosures relating to those investments, to have a more direct way of communicating.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there are a couple of things which need to be fixed from a usability perspective. One of them is key management. There are no really good solutions. There are a couple ledger labs is a fairly good key management solution, but it's focused primarily on cryptocurrency. Similarly, there are no really good outstanding user interfaces for DApps. Ethereum is there, but it's not great. It's slow, it's clunky. So the infrastructure just isn't there yet. We haven't really seen people starting to use this stuff as part of the core of their businesses. It's still a curiosity and a toy. That's not a bad thing. I think it was Chris Dixon. I could be wrong, who said, who said, you know, it's a toy today, but that means, or maybe Chris Dixon or Fred Wilson, one or the other. They say everything, that there is to be said, right? So it's a toy today, but it's still a toy. We're still not seeing someone saying, you know what? I'm going to go put real transactions for real money for real customers running on this system if they're a core bank.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“From at least until very recently, it wasn't coming from the main enterprise vendors. I don't think Oracle has a blockchain offering. I know Intel does now, IBM does, Microsoft does, Oracle does not. Amazon does not. And they weren't going to really jump if you walked in as a small startup and said, hey, why don't we just go redo your whole backend? All this stuff you've been using for 20 years. And trust us, we incorporated last week. It'll be fine.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, the investment side is actually the thing I've learned most about, and that's chiefly that gambling is very, very easy to sell. So if I had to go back to 2014, I wouldn't have ICO'd, but I might have taken some different positions than I ultimately took. In terms of the tech, the adoption curve has been very slow. So it's getting something to production in this world is very, very hard. There are very few companies which are ready to do it. Generally, those companies are large banks. And then the sales cycle for those banks is agonizing. I mean, it takes a year just to get approval for a follow-on from an initial prototype. So it's one of those things which if I could go back and tell myself what I was getting myself into, maybe run a little leaner and a little quieter and wait until there's more budget available to do this because it's taking a lot of time because the technology is so different from everything that everyone's already using and it's not really coming.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Flat on its face because no one had confidence in it, and so they started pulling their money out, and so they had to turn the system off. Similarly, today with Dye and MakerDAO, which is another stablecoin scheme, there was a loss of confidence in that scheme because of some events, we don't know what, caused it, but I'm presuming it's some event extrinsic or external to that system. So they said, well, we built this wonderful little closed system that in theory works really well. But one trader was like, you know what? I don't want to play anymore. I need this money now and I'm not going to play along with this whole dollar price thing. I'll sell it for seventy cents. I'll sell it for 60 cents. Really doesn't matter. Pulled all their money out. And so the peg didn't hold. So it's this idea that you've got these bright young guys saying, well, hey, look, we can build this system, this computerized, automatic money system, which works without really understanding that the reason something has value is because people are looking at it, not because the algorithm says it should.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Will eventually erode itself. And that can happen for any number of reasons. It can happen because people have a loss of confidence. It can happen because the team winds up and goes away somewhere else and goes to Tahiti with their ICO money for any number of reasons. So basically, the schemes are not sustainable except under an environment of ever increasing prices, which is mathematically impossible. This hasn't stopped a bunch of bright young things from Stanford and Princeton from attempting this, but I think the stablecoin is kind of how to put it, it's late stage crypto. It's a bunch of guys who've been trained to think you can unit test everything, thinking you can also unit test human behavior, and predict with certainty all of the outcomes. The problem with that, of course, is that once you know that you're being unit tested and you know the rules of the game, you can go game it because we're self-aware. And that's what stablecoin is basically. That's their inevitable fate. So we saw this with Bit Shares a few years ago. There was a stablecoin that created it within 100 hours.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Down, someone either wins or loses on that trade, and then if it goes too far out of whack on the downside, it closes it out, and then you go and pay someone whatever amount of cryptocurrency they're entitled to. The problem with this is that it's basically a perpetual motion machine because you can't, people say, well, perpetual, that's a criticism, people make a bad technology. Well, no, I mean, it is a criticism. When you say something's impossible, you run the risk of someone who has seen a lot of technological development or someone who thinks they've seen a lot of technological development and know what's going on saying, well, no, you're just being a Luddite and you don't understand how things work and you don't understand how technology advances. In this instance, it's not really a question of the tech. It's just a question of human behavior. And that is that the only way you can maintain those pegs is if people continue to buy the underlying asset which you're selling, which supports that price. If people stop doing that, then the peg breaks and the collapse.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, it's possible for sure. We have electronic money today, which is redeemable against some deposits somewhere. And so it's electronic money. When you hold the thing, there is a deposit somewhere which corresponds to what you were spending. The idea of the stablecoin is that you can take, it's again, getting back to this intrinsic idea. It's that you can take a cryptocurrency on which people are speculating, which has value because people are speculating on it. And then you can set up incentive arrangements around that speculation on the cryptocurrency, together with a price feed, which is determined by some computer external to the system, which allows you to pay the price of a certain amount of collateral in that cryptocurrency to whatever that third party thing is. So it could be a dollar, it could be an ounce of gold, it could be something else. So basically what you do is you set up a derivative contract of sorts where someone has a long position and a short position. And as the price of the underlying collateral pool moves upwards.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just as we have been disappointed before them in the infrastructure that the cryptocurrency world has built. And so that could be something which repeated hundreds of thousands of times then creates something where people say, well, hold on a second, maybe Monero is actually better. I like Monero because I like Ricardo, the guy who found...”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Blockchain's a journey. I'm saying this sarcastically for your listeners. Blockchain, but it is a journey. It's a process where you first get exposed to something like Bitcoin. You have no understanding of it whatsoever. You then dive in because it's profoundly an attractive idea. And then when you pair it up with trading and all those other things, it's very, very attractive. And for me, when I looked at it, I dove in headfirst because I'm generally quite pessimistic about everything, wound up becoming quite pessimistic about it and started sort of deconstructing it. Tim Swanson was another guy who thinks along very similar lines. And so we became the early Bitcoin skeptics back in the day. And so have been continued being so ever since. I think similarly for everyone else who's getting into the market now, they may be enthusiastic now, but the question is what will turn their enthusiasm? Well, I can't spend the damn thing. It's not accepted anywhere. The value's gone down. It's cut in half. I couldn't get my funds out in a week. So there are going to be a lot of really disappointing.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“The money that the issuer claims it is backed by. So in the case of Tether, just for example, they claim it's backed by $1.2 billion of fiat sitting somewhere in a bank account, but there's been no disclosure basically saying that we in fact have $1.2 billion of cash sitting idly in a bank account somewhere, which would be rather a lot of money sitting idly in a bank account. So any one of those things could trigger a loss in confidence. We don't know when it could happen or how or from what, but those are just some proposals. And then this is a meme on the way up. It's going to be a meme on the way down, a change of expectations, a sort of reverse network effect or inverse network effect, which pushes prices down. This can't go up forever. That's a mathematical certainty that that can't happen.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Spending money on credit cards, for example, to go and at 20% interest to go and get exposure to the market. So with that as our background, the thing that will freak people out is the thing that freak people out. We haven't had one of these in a very long time. It's a run on your bank. So if someone goes to Coinbase or somewhere else and there isn't someone on the other end of that trade or there isn't enough liquidity to go and satisfy the withdrawal demand, then what will happen is withdrawals will be cut off and people will panic and they will say, hold on a second, oh my God, I can't get my money out and they'll try to move to whatever dwindling pools of liquidity are left. What could precipitate that potentially an exchange getting taken down by a regulator is one thing which could do it. And there are some, I don't want to name names, but there are some suspicions about whether certain cryptocurrencies are being legitimately issued or some tokens which are meant to be backed by money. People are wondering where's an audit potentially that proves that those tokens are actually backed by”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So I called that a run on the bank and I caught a lot of flack for it, including from Matt Levine, who was like, yeah, okay, great. It's like people are selling. Prices are going down. I don't understand what the point is. This happens with securities all the time. But I think the difference between your crypto sphere and something like shares in Apple or Amazon, the psychology of the buyer is very, very different when they're purchasing some cryptocurrency and they're purchasing stock in a company which is going to go in their 401k or something like that. The difference is that with cryptocurrency they think it's money with cryptocurrency you show a dollar balance. And similarly with a brokerage account, you can also see a dollar balance how much all the securities in it are worth. But I think that here people are really looking at it more like securities, more like cash in the bank, which they were expecting to simply just go up in value. In some cases, there are anecdotal reports, which I expect are true. I have no reason to disbelieve them, that people are doing things like”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Price goes through the roof, so I can imagine they will have to have had changed their stance on that somewhat because it seemed a couple years ago that they were almost like, oh, no, no, that's kind of our red-headed cousin, that we don't pay too much attention to. And we're just going to put them over here in the closet and not pay much attention to XRP because it's blockchain without Bitcoin now. And this was like 2015. But no, of course, things have changed. So Ripple is just, it's a company that has a cryptocurrency. They also have a really interesting distributed ledger proposition. Again, my understanding was that they were going into things like Treasury services. And so, yeah, they're trying to keep a toe in one ocean and a toe in the other sort of enterprise and cryptocurrency. And that's a story we see more than once. I know of other startups which have basically said, look, we're not ruling out the coin thing because there's so much interest in it.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I mean, Ripple's a bunch of different, I mean, Ripple Labs is a company founded by Chris Larson, and then they've got David Schwartz and Stefan Thomas, who've been around forever. And they've done a bunch of different things over the years. Obviously, I've never worked with or for them, but they did, so what did they do? Their first project was XRP, which was basically, you know, if you talk to Peter Todd, he'll tell you it's centralized if you talk to Ripple. They'll tell you it's not centralized. I'm not going to go into that in any depth here. But there's a cryptocurrency. It's proof of stake. Ripple more or less determines the consensus of the network as far as I understand it. And that's that. And then had two other projects. One of them, the name escapes me. It was a sort of smart contract Oracle type project, and the other was called Interledger, which is a very similar project to your hyperledger style, distributed ledger. And so my understanding of what they do is primarily they're doing distributed ledger implementations at Interledger at banks, which is derived from the Ripple Consensus ledger rather than XRP. Of late, of course, we've seen XRP.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Side of the line. We're a mile away on the right side of the line. So in the current environment, it looks like, yeah, go do the token, bootstrap the protocol, get lots of interest, get it trading on an exchange, all of that sends all the right key indicators to a VC. You have tens of thousands of new users a week. It's getting press. People write about it. They're excited, shills on Twitter, running around and harassing people who say, well, maybe we should calm this down a little bit. The XRP shills are just insufferable. I'm just going to put that out there, which is interesting. But right.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Obviously, people can raise a lot of money really quickly and then deploy that very quickly to go and build out these networks. And that pushes all the right buttons for people who support that thesis. It says, hey, people are interested in this, but whether it's sustainable or not depends on whether we can get the regulators okay with it. I don't think that your average Silicon Valley VC has really had a whole lot of interaction with financial services regulators over the course of their career. A Wall Street banker or lawyer, however, will have had that degree of interaction. And I was talking just the other day to a very senior structured finance partner at a very eminent global law firm. And they all had a whip round and discussed it, and they agreed. They said, we have no idea why these guys don't have the same concerns we do, considering for all of our deals, this idea of selling an investment or something that feels like one, and the compliance, which goes along with it, is so central to it that we make sure we're not only on the right”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that the, have you seen the movie Aliens? Of course. You know when they're all sitting in the drop ship, and Bill Paxton's totally freaking out, and then Sigurne Weaver's sitting there, and she goes, I say we take off and nuke the entire site from Orbit. When the SEC published its Dow report over the summer, they effectively nuked the FAT protocol thesis from orbit. That is what they did. And the language that we're using to describe it says it all. It's that in form and substance, we have companies that are saying, hey, we've got this piece of the protocol which you can own as an investment. And so if it's an investment here in the United States, the question is, have you got a prospectus or does an exemption apply? In Britain, same thing. Have you got a prospectus or do you have an exemption? Well, if you don't, or if it's money or money's worth that you're trading with other people, have you KYC'd them? Have you done AML? I don't think that the rules are going to go away anytime soon. And they shouldn't go away. They're there for very good reasons. So I don't think that makes a whole lot of sense in the current environment.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“credit card company. It's taking out the middleman, and you can reskin it and tell it to manage whatever set of legal rights you want as long as you have some trustee somewhere in whom those rights are vested. And when you do that, then you can have it operate totally normal, totally in harmony with the legal system. But what you've done is you've taken someone else's servers out of the equation and you're running the thing yourself. So I think at the end of the day, that's where we're going to wind up, where you'll have companies, they'll be doing their internal treasury services on a distributed ledger instead of doing it through their bank. That's one thing you could potentially do. So one very many. At the end of the day, you don't really need the coins to achieve any of that distributed infrastructure that doesn't rely on third-party cloud services. You can use Hyperledger for that.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Which no one's going to have access to other than you. If you need to, you can run a VPN and do it over that. But this is a way that you can all talk to each other and keep in sync without needing some big stack very far away running all of that infrastructure for you. So you're going to move all that onto your own platform and run it that way. And that's because we saw then, and I think it's just as true now. We saw with centralization has risks. Those risks are political in nature. We saw today that Twitter is actively censoring conservative political opinions, the much maligned conservative political opinions in the United States today, greatly victimized group of people, no doubt, in case you can't tell them, I'm a little biased. But I think there's a major risk in putting too much power into the hands of tech companies, full stop. And I think blockchains allow us with Bitcoin. Yeah, it's peer-to-peer money. But what's it really allowing you to do? It's allowing you to run an accounting system without a bank. It's allowing you to run an accounting system without a bank.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“What's exciting to me is I always thought, and so I started when I started my company back in 2014, we started that with a view that we wanted to take back control of data from the big data service providers. So we were building a prototype on Ethereum, or rather an Ethereum testnet. What we did is we decided we were going to automate organizational governance for a 501 C6 nonprofit organization on a blockchain. So we wrote a paper, you know, your typical crypto white paper, except ours was actually good and wasn't trying to sell anything. We then described the functionality. It was kind of, you know, there was shareholder governance, this sort of thing. And we said, look, this is a way that if you want, you can take a bunch of people in a bunch of different places and you can coordinate your actions like you would in a Google Doc, like you would on Amazon S3 or whatever else. And you can do it without actually using the third-party service provider. So you can have this infrastructure which is yours, which you control, which no one can see.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would rather use Coinbase, to be honest with you than use Lightning, as at least with Coinbase I know where the stuff is.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“The larger it gets. As the price goes up, the fees go up because the fees are priced per bite. And so if it's Satoshi's per bite, so if a Satoshi becomes more expensive, assuming that the transactions are the same size, you're not going to get cheaper transactions. They're going to be more expensive”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is quite fundamental. It's that you're constrained by the speed of light. That is your enemy when you're running a global distributed system. It takes something like 14 milliseconds for the speed of light to go around, halfway around the world, and that's in a straight line, which never happens because it gets routed through all sorts of other things. Every transaction that gets propagated on that network gets propagated to a bunch of other computers who then have to verify it and then repropagate it. Everything about one of these distributed networks in this instance Ethereum is slow. The hardware that is running it is slow. The fact that it's widely distributed means it's going to be slow, no transactions are going to head in a straight line. The fact that you have to go great distances means it's going to be slow. And all of that is going to operate to slow down what this system can do and prevent it from scaling efficiently. So people are making these wild claims about these systems. But the fact is every time we see one of them being used on a global basis, it becomes more unwieldy.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Blockchains don't scale, and the bigger they get, the more unwieldy they get. So there was a claim that was made, let's use just Ethereum as an example, zero hedge, that fine pillar of American journalism, the old gray lady. So zero hedge had an article on it sometime over the summer when the Enterprise Ethereum Alliance, that August group of startups and financial institutions united for a better world, decided to, in their infinite wisdom, or someone in it, I suspect, in their infinite wisdom, decided to tell Zero Hedge that Ethereum was planning to scale to a million transactions per second, sending the price to two thousand dollars per coin. And so I don't know who did it. I don't know why anyone would say that. So one of those is actually, one of those predictions has actually turned out to be somewhat true. I think it's at $1,500 a coin now. The other one that it's ever going to run a million transactions per second is Twaddle. It will never happen. And the reason for that is...”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Ecosystem itself, which is worth something. And so one cryptocurrency will rise and another will fall at the same time and gradually as Bitcoin or Ethereum becomes too unwieldy, something else will rise up to take its place.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Go into a casino, the promise of instant riches, as we've seen, with ripple of late. So there are people who got in at two cents and now it's, of course, worth $2, and so they're running around saying, hey, look, my Lambo, isn't it wonderful? And that's really compelling to people who are weak-minded and even people who are quite strong-minded when they say, well, hold on a second, what am I missing out on? So I think that's the primary value prop of cryptocurrencies. That's what people are using them for. They're not using them for censorship resistance. And the guys who would use them for censorship resistance, like Amir Taki or Cody Wilson or any of the sort of original crypto anarchists, those guys are all using other stuff now. They're all using Monero and other cryptocurrencies that haven't been speculated on so wildly. And so as a consequence, they work. So maybe from a money perspective, what we're looking at is not one cryptocurrency dominating because cryptocurrencies are kind of their own worst enemies. When they become too successful, they become unusable. So maybe it's the...”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source