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

“Yeah, I think that's a little overrated because at the end of the day, there's the old XKCD cartoon, which is, you know, hands. I've got this RSA 3 million-bit password. You'll never be able to break this. And they're like, well, why don't we just go around his house with a rubber hose and a $5 wrench and just beat him and then we'll get what we want. Governments have been around for a really long time and they know how to get stuff done. And sometimes that stuff can be incredibly unpleasant. I agree with Adam in that Bitcoin is a very censorship resistance system, more so than almost any other than any other distributed system or network system I can think of. But is that why people use it fundamentally at the end of the day? I don't think so. I think it's more basic than that. People use these things primarily for gambling and speculation. I think that's the main use case is that it's an unregulated penny stock casino of the 21st century. And whether we want to admit it or not, that's always been a compelling proposition. People have always wanted to.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Blockchain's kind of ape real world assets and real world things. They feel like them, but they're not legally the same as what you would understand to be a stock or a bond or a share. So if I have a stock or share in a company somewhere or a”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. So it's very, very, the wealth in Bitcoin is concentrated in very few hands, in fact more so than if it were a standalone economy than any other economy on Earth. So it's really hard, and then people will say things like, well, Bitcoin will disrupt governments and render them obsolete. So there are all of these forward-looking statements that we see being made about this currency, which is basically operates in society as an investment, but which no one really has standing to challenge. And if they do, they get shouted down by legions of people on the internet who say, no, no, no, you're wrong about everything. So we have this very compelling sales pitch with not a lot pushing back against it.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“This can never possibly work. You need the mining in order for the Bitcoin to happen. And you're like, well, no, you don't. That's just a consensus mechanism. You can swap it out and use something else. So they wrap their heads around that eventually. So I think there's a degree of misunderstanding as to how the technology actually works, what its limitations are, what it can do. That tends to be quite serious on the regulator side, somewhat serious on the VC's side. But then again, the VCs have the interest in making sure that the startups they're funding attract public interest and that people buy and use their services and that sort of thing. So I don't think generally across the industry we're having a serious enough conversation about how serious the limitations are on the technology. And in particular, people are very reluctant to stand up and challenge claims that are made by people who support the technology. So if someone says Bitcoin will make the world more equal and make things financially great for everybody, and you look at it and you go, well, actually,”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in terms of who is influencing when new regulation will come about, and this isn't necessarily US specific, it's going to be when a prosecutor needs to make their career on something or when some politicians get spooked because they start getting angry letters from their constituents, which I don't really think has happened anywhere. And then on the flip side of that, of course, who are the formal lobbyists in cryptocurrency? You have Perry Anne Boring's group down in DC, and you have CoinCenter with Peter and Niraj& Co. But really, apart from that, there isn't a formal lobbying effort. So what it is, is you have the regulators looking in from outside and seeing all of the glorious claims that have been made. And the cryptocurrency can do this, and it's wonderful, and it's going to bank the unbanked and do this and do that. They don't necessarily have the technical chops on the regulator's side, or frankly, on the venture capitalist side either, to really sense test those claims. I remember about two years ago when people were starting looking at enterprise blockchain. There were VCs who were saying, well, this”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Whether this is going to spook the regulators into making very aggressive action and demanding reform by market participants. So that's the regulatory angle. And a lot of entrepreneurs don't care usually when you go, you know, you could wind up in an orange jumpsuit for this. They're like, whatever, yellow. I could be Mark Zuckerberg as well. So why don't we do that? But my background is as an English structured finance lawyer. So I clearly look when the only tool you have is a hammer, the whole world looks like a nail. So my training is to go and identify those risks. And so that's just how I look at it.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“It was the zombie marmot apocalypse. So, by way of background for your listeners, I wrote a series of blog posts called The Bear Case for Crypto in several parts. And basically in broad strokes, the first bit is that there's a huge regulatory risk. The second bit is that there is a limit.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“And then what happens is they just carry on and the thing runs itself. So the Nakamoto scheme is basically just saying, look, it's not a Ponzi scheme. It's not a pyramid scheme. Someone figured out a way to automate those kinds of interactions for a peer-to-peer cache system. But when you introduce speculation into that equation, it starts operating a heck of a lot like your classical Ponzi scheme.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“Victims and the scheme collapses under its own weight. Nakamoto scheme, the term Nakamoto scheme, is really a way of thinking about Bitcoin as a sort of updated Ponzi pyramid scheme, but one for the digital age. So Bitcoin operates very much like a pyramid scheme or a Ponzi scheme legally. There is no underlying subject matter which makes it valuable. It is simply valuable because other people want to buy into it and people buy out with new investor funds that have entered this game. So that is very classically a kind of Ponzi-ish arrangement. But where it differs is that it's headless. So what the scheme does instead of having identifiable cash flows to identifiable people is it puts the cryptocurrency exchange between the buyer and the seller. It then abstracts the demand to enter the scheme and the demand to leave it as aggregate demand and aggregate supply. There's no fundamental underlying thing that the law recognizes as a legitimate subject of a sale”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So basically, eventually, if you have a rush on withdrawals, of course, the cash flows don't meet the outflows. And so what happens is the scheme collapses under its own weight. Alan Stanford, another prime example. So with a pyramid scheme, slightly different, that's a little more decentralized in that you have a person at the top of the pyramid who then recruits two or three or four more, and then they recruit two or three or four more, and they pay commissions to people up the ladder until eventually you go down a sufficient number of levels and the person at the top, if they've managed to recruit another sixteen people, gets a big payout. And then the 16 say, well, he got rich, so I'm going to go do the same and go recruit more. Of course, that also runs out because it's like the old Persian king with grains of rice on a chessboard. If you keep doubling and doubling and doubling, you run out of space really, really quickly, especially after 64 of them, for example. You wind up having more people than there are atoms in the observable universe. So that doesn't really work either.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source
“So Ponzi schemes and pyramid schemes are what a lot of people who have first, particularly old men, in my experience, they look at Bitcoin and they go, well, this is a Ponzi scheme. And they look at it as a Ponzi scheme because particularly lawyers, a lot of old lawyers I've spoken to. They look at it and they say, well, there's no rights or obligations. There's no one to deliver. They see this shell and they just see people putting money in and somehow getting money out. So they say it's a Ponzi. What a Ponzi scheme is, is when you have one person who sits on cash flows. So money comes in, money goes out, and they use the money that's coming in to pay the returns to earlier investors in the scheme and presumably to enrich themselves at the same time. So basically, it's one operator centrally managing a scheme where they're fraudulent, you know, they're saying, well, the accounts are fraudulent, the scheme's fraudulent. Bernie Madoff, prime example.”
2018-01-16 · Invest Like the Best · Preston Byrne - Crypto-pocalypse - [Invest Like the Best, EP.72] · IDENTIFIED FROM THE TRANSCRIPT · source