Worldcoin: The Power & Pitfalls of Proof-of-Personhood | Roundup

Transcript

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-hosts today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode thanks everyone we've got a great episode here but before we do I just wanted to give a quick shout out to permissionless this is the biggest and best conference in all of defy it's the one that we do with bankless who's a great partner for us last year we had almost 7 000 people there in West Palm Beach we are moving this year to Austin Texas from September

11th through the 13th and if you are a listener bell curve any of these last five seasons this conference is basically custom made for you we're going to be talking about liquid staking the theme of this season we've got a bunch of great panels on Mev if you listen to the app chain thesis we've got a bunch of Cosmos folks out there in full force we're talking about the converging architecture of Solana the roll-up space in eth and Cosmos so I would love to see all of you there and to reward you for being such great listeners to Bell curb you get a special 30 off code it's bell curve 30. that'll get you 30 off tickets click the link in the show notes and then head over to the permissionless site and make sure that you get your ticket today again that is bell curve 30 click the link in the show

notes alright everyone welcome back to another bell curve weekly Roundup you got Michael's one and two band chance and you know guys good to be back it's been a while since we've got the whole gang back together two weeks yeah you can tell who's living in like uh who's living in hot New York right now and who's living in like probably cold San Francisco huh [ __ ] freezing here it's cloudy it's like you're gonna dress like it's November 60 degrees Yeah and then in November we dress like it's just absolutely freezing meanwhile Mike's on the beach later today swamp yeah look at this it's like 105 degrees Jesus yeah yeah how's it going over there how's New York booming not but yeah other than that trash smell that hot trash yeah for some reason

the the weather in Paris I thought was going to be brutal but it was really nice there all their workers are on strike but somehow ours is the one that smells like trash and it's just like a general disgusting mess but um Harris is great I heard uh I've actually read an article about uh the cleanup that's going on in Paris right now to get ready for the Olympics next year apparently they hope that by summer 2024 for the for the Summer Olympics you can actually go swimming in the river in the Sun it'll be the first time that it's available for people to go swimming in 100 years next summer let's take a little dip wow that's bullish Paris bullish Paris fans

I'd be curious to get your your take um what did you think of ECC like any big takeaways from the conference I thought generally it was it was a great conference really good vibes um a mixture of kind of like ogs uh from you know previous Cycles but also a lot of young you know new kids from frankly everywhere A lot of people from Europe I also met a few teams from San Francisco of like 21 22 year old kids who are just excited and kind of have that like first cycle of naivete about what they're building and what they're going to do and you kind of need that that's like a function of just you know belief in the space and I think that's great to kind of have

new people in the industry um the other thing that's striking every time I go to a conference in Europe is just there is no domestic technology industry and Mike we talked about this a little bit but you know I feel like Michael and I and probably you guys to some extent like kind of starting our careers in California most of the people we knew who had like made money who had you know nice houses like they either had worked in tech companies or had been acquired by tech companies or started a startup and there was like a very robust ecosystem for us to go from tech company to Startup or Venture firm or raise capital and kind of like go on that Journey ourselves there really is nothing of that same version in Europe there's no large tech companies there's no

there's something there's some but there's no real domestic startup industry you know I feel like if you ask you know an average person in you know a millennial in France that's probably you know a young guy like us like you know how did your friends get wealthy they would they wouldn't say technology they would say crypto like for them crypto is like the Super Bowl of everything it's not as much about kind of like the y combinators or like the raising Venture money like crypto is kind of the BL end-all and I thought the attendance at Etc kind of bore that out but also you have kind of like this like cryptographer cyberpunk vibe that you don't really get in the US maybe maybe it's a little bit more present in New York but like it it does feel like there's more of

like uh emotional commitment to the ideology of crypto because that's been the centerpiece of you know young people making money young people building things um and you know I look at like the ogs that we kind of you know met or saw around there you know Constantine from Lido um he's Eastern European you have roon you know he's from I think Denmark Copenhagen uh Kane a little bit different context but he's like from Australia and you know is in Europe a bunch but it's uh it's not as American as a movement especially in like the OG kind of centric circles and I thought that was pretty interesting so very bullish Europe very bullish ECC will be back I'm definitely going to make it a Cornerstone of our trips in

the future I have a thesis on that which is that people who come into crypto in the US oftentimes come in it for the money right away and so then when the money gets tough like in a bear Market a lot of people get wiped away but if you actually look at Europe and specifically Eastern Europe so I I first time I heard about Bitcoin I was living in Budapest and it wasn't even introduced as a thing that you could make money on yeah Mike knows this story um it was basically the story was just like you you know my parent you know all these hungarians their parents lived under Soviet Union communist regime and they were used to like grown uh you know Hungary 1950s 1960s horrible place to be after the war and um you know if you go on like the trams for example in

Budapest nobody talks and the reason nobody talks is because there's like their parents remember when there was like mics and video cameras that would be watching you so the way they thought about Bitcoin and the way it was introduced is like self-sovereign money it was very like ideological so then when you go into so if you come into the industry for an ideological reason the when when a bear Market happens you it's the the ideology hasn't changed at all whereas folks maybe who come in in New York or San Francisco very very volatile uh emotionally because you ride the volatility of the prices yeah I I had a I did I had lunch with like this crypto whale uh just won't name him uh for privacy sakes but just

even the way he was talking about kind of how he thinks about money and his his stack is very interesting he's like yeah I have all my coins and then I have some stable coins and I'll diversify my stable coins at some point but like why would I ever sell my my coins it's like Americans are usually just trying to get back to real dollars but it does feel like there's more of the emotional commitment to the ideology which is cool um and even the characters you know like the the pink hair the long dyed beard you know the cryptographers that are trying to make you know something private and secure to the nth degree it's cool I love having that in crypto and I think the US brings more of the consumer more of the Trad Phi um experience to it but to your point

Yano like when things get bad in the U.S you can rotate to AI you can rotate to you know building a consumer app a fintech app like you don't have to stay in crypto Europe like the options are a lot Slimmer and uh yeah for for all of the beauty of Paris and what I thought was just like an absolute jumping conference I looked at this Wall Street Journal article you know Paris house prices are down only for the past like 10 years like there is no domestic tech industry that's kind of like pushing everything up it's like only crypto that really is the wealth generation vehicle there you know there's I was asking someone I was like how many some guy from Spain I was like how many unicorns are there in Spain he's like well there used to be one it was the

food delivery app and we're not really sure if it's still a unicorn so it's like that's kind of what you're working with over there it's just very different from the US where I think there's like 1200 unicorns or at least there used to be um I have a question on the content for you guys uh if like the the Twitter talk was you know in the in the kind of Recaps was like oh yeah everyone's building infrastructure no apps everyone's building infrastructure and I feel like that's a thing people like to say in all bear markets I'm I'm sure that was true I'm sure everyone was talking about infrastructure not really the apps do you guys think that is a problem at this phase of the industry or that's just look that's that's where we're at is the infrastructure phase I think there's I think it's probably

it's not a problem but eventually I think there's a middle ground and one of the one of the things I kind of feel like about apps versus infrastructure is there's first of all obviously there's a lag in between uh infrastructure and apps where you actually need good infra to build the apps and so it tends to lag like you know 6 or 18 months or whatever it is but the other thing is there's kind of this like chicken or egg problem when it comes to this which is that in order to build good apps you need infrastructure that will support those apps but ultimately the infrastructure should be in service of the apps like you need an app that has product Market fit that will tell the info guys like hey this is actually what I need to build and what we're lacking is that one thing right

that will like give the infrastructure providers it's like they're trying it's very exciting right there are all these different takes on infrastructure like just to give you a sense of the moment in time that we're in there was a conference called uh modular Summit which was awesome it was great but like you know that's literally it's like the nerdiest thing ever right it's like you build a monolithic stack or modular stack and like switch components out like it just shows you the sort of moment in time that we're in right now and I think what these guys are sort of lacking is like one like ah this is there's a great app this was the stack that supported it and like sort of this I did a rally behind that that um I think what you're starting to see is really good entrepreneurs building a

product like an app and then supporting infrastructure around it and you see that on the layer two so like ZK sync and ZK eras like their version of the L2 but then they're going to build a stack that will allow different apps to build like their app specific environments with different modular components they could shift in so it's kind of their bet that like this is how we think it should be built but like by the way here are all the components and like if you want to change some stuff you could build it custom the way you need it too uh Scott sonardo Argus lab sky and gaming is actually very similar to this he's got like a game but then he's also building this set of set of developer tools where it's like this is kind of how I think the infrastructure should look but

there's enough flexibility where if you wanted to customize it you could do that as well so I kind of think it's like not a huge problem but it definitely was very infra heavy and to say the obvious thing we you know it would have been nice to actually see more app more apps you could make the argument Kane is doing the same thing in synthetics right with synthetic that you know they built the protocol for liquidity here and then now they're also building infinix yeah yeah you're not going to see a lot of app developers at the infrastructure conferences though just as a rule you know you're going to see them at the gaming conferences you know the D5 people don't really get invited to the tradfly conferences but like you know it's like it's a it's a bit of uh just you're never really gonna see the apps there

just because that's not who they're being built for but I also think there's this other concept of you know would you call Liquid staking an app would you call you know stablecoins an app like I would probably call those like money apps in in some ways it's not going to look like one to one I think there is like this prototypical you know we know what an app and web 2 looks like and therefore it will exist in web 3 or it should at least I think they're coming but they're mostly gonna look like games but um I feel like people want us to build like photo sharing on chain and that'll be like a killer app and it's like you know it's just not really the form factor of the technology but that's getting funded I will say that like we see a lot of infrastructure at

the conferences but there's a ton of games and weird consumer apps that are that are raising rounds and I'm pretty confident they're coming yeah they're definitely coming I I would also say I think we're just at that point in the cycle where they either have been funded and they're building like there are tons of games that have been funded in our in our building but if you're starting a new game from scratch right now and you need to get some seed Capital get off the ground or you need to be able to build a team of 50 to build the game it's going to be incredibly difficult and we saw that this week with star Atlas you know they announced their uh I don't know how many they announced in this specific reord but they've they've dropped 75 percent of their staff and they're desperately looking for funding

like the apps are coming but I think it's also just a terrible time to be raising for an app because you have to be able to prove success and you have to be able to prove usage to get the valuation that you had last time or to be able to raise any Capital whatsoever so I think it's also just like really simple infrastructure can get funded right now whereas apps are having a tough time yeah you might be right there another um another take that I had as well this was a little bit more on the um I sort of kind of I sort of walked away from the conference thinking interop interoperability was still a pretty big problem uh especially between it's like the good news and bad news like different L2 ecosystems like different Stacks what it sounded like

from a lot of these guys who are building these protocols is that there are two problems which is one there's not a agreed-upon set of Standards it's hard to agree upon that set of Standards because everyone's built their own and it's like well if we're going to use one it should be mine so there's this sort of strategic incentive not to do that but then also because in order for there to be a set of standards that everyone agrees on there probably needs to be some amount like some something enshrined on ethereum actually which just takes a really long time to do but the good news is that interoperability seems to be solved Within These layer twos which is like a ZK stack like all of these different um app chains that'll like hyper chains or whatever it's called that'll be built will be interoperable same thing with OP

stack app chains arbitrum orbit chains whatever it is so that was kind of good news but the big action in between the lack of interoperability between big L2 sort of roll-up environments is that market makers and Builders are going to be the ones that kind of step in and Abstract away that complexity um so you can see it like I don't know I I thought that chain link ccip was a pretty huge announcement I mean that that it is exactly getting it to the problem of how do you build a cross-bridge messaging layer between you know an OP stack versus a ZK stack versus L1 uh I mean to go back to it I think synthetics is going to be one of the first to use that protocol and you're able to transform you know mint

natively on L1 and on uh op right now which is the the platforms that they they work on um but yeah I don't know I thought I thought there was some cross-chain messaging that came out um that I was excited to see at least I was I was there for for the announcement like we've held chain link forever and uh we've been waiting for it to get past kind of just like price feeds and on to I guess that's like a a broader theme for all of the ogs the projects that are like doing well that have like really usage is like there's kind of this conception of you know just to borrow from maker like end game for everyone else like it feels like CCP is the ccip is the end game for chain link it feels

like infinix and all these front ends are the end game for synthetics it feels like right unit swap backs it feels like people kind of like you know put the final chapter on the table or maybe not the Final Chapter but like you know the bridge that would lead them there and at least for chain link it was like I was uh there with Sergey and Kane before before they announced him but it was kind of just like this feeling of like you know finally like it's you know and it makes sense for chain link it's like the internet of contracts there's gonna be a thousand l2s it doesn't really make any sense like you want to know where everything is living you should connect it be watching agnostic like they already have all these tie-ins um and so I I think like the winners are

just gonna really compound their advantages here I'm a little bit more suspect on like the newer infrastructure I'm sure things like espresso and Suave and the monolithic stack are very interesting but like they're playing catch up to a large degree um the other takeaway I had just from everything is like there's going to be so many interesting things that you can do with your youth you know you can stake it you can put an eigen layer you can you know in the future stake it with espresso or steak with Suave or like there's gonna be more restaking systems like you know it does feel like there's just a lot there with eth in a way that in previous years it was not as eccentric it was like go to salon a good avax go to Luna go to Anchor you know whatever so it's cool to see that

yeah I agree with all that I think I'm actually pretty starting to get kind of bullish on the D5 1.0 like OG guys actually there's a funny I think we're within one week of when remember when D gen Spartan started that like dude audio second 2023 he started in November which was like six months early before like D5 went up like 10x before like you know the bear Market started but I was just like [ __ ] you know this guy's calling it and he knows what he's talking about too I was like this is this is probably not good on a long-term time Horizon and a lot needed to be fixed in D5 and you know everyone was just incredibly just cash flow negative the

economics were upside down but you now you look at the OG protocols and it's like they're fixing it no no fixing or or fixed you know like snx like did a 500 million dollar 600 million dollar day the past couple days if you stake us and actually earning 30 apy like that's a real cash flow protocol makers spitting off I think like 100 million in earnings Lido is close to 100 million of error and like they added I think I think it was yeah the 25th they added a hundred thousand eth into their liquid staking vertical in one day so like these things are all working and then it's wild like they're growing so quickly or they're already so profitable and like again if you were dropped in

crypto and you didn't know anything and you were told to point to the endogenous profit centers they would be liquid staking derivatives and stable coins and that's where like the ogs have really prospered and it feels like there's a lot of room to run and then kind of like you know there's uni swap too but then beyond that it's like there's a big distance between one and two in each of those categories I would say I would add to that spot exchange just historically yeah that's uniswap but like even unit swap has this new end game right you know swaps are kind of crushing it actually I think they have like all the layers of the stack it looks like they're trying to do it's like they've got the front end and they've got the consumer wallet then they've got unit swap X which is the

aggregator then they've got unit swap V4 which is the liquidity layer right it's like the only the only thing they need and I actually do wonder if they've thought about this is the settlement layer uh below it which would be their own chain or their own roll up or something like that I mean I'm sure that's I have a V5 that's got to be right yeah but like dude they're they're kind of yeah it's been they're the winners are keeping on winning and like I remember in 2016. I was like there's literally no shot we're gonna be trading Bitcoin in three or four years like the Market's totally Gonna Change like eth probably is gonna get knocked out it's like just like it's the same ones and Michael and I talked about this with

apple where it's like if you wanted to play like the iPhone Revolution and all the apps like what what should you have done with with you know knowledge of hindsight probably just buy Apple the math the math is from the from the time that the iPhone was announced until today Apple has done a 65x there there's no series of one to two Venture funds over that period of time that I've also done a 65x when was the iPhone it was announced in I think March of 20 2007 launched in June or July of 2007. that's crazy so 15 years or 16 years it's 65x when I was in like sixth grade my dad was like I want to get you into investing so you

pick a stock pick a stock and I will buy that for you and we can track it together and the iPod had just come out came out and I was like I want to buy apple and my dad was like I will buy you some Apple stock but he thought it was overvalued and he bought no yeah yeah he bought like polymer like like Rochester polymer or something um that bad boy ripped don't sleep on Rochester Baltimore yeah when you when you're looking when you're like you know I'm sure you didn't know this at age whatever age you were when you tried to buy apple with with your pops but like when you're thinking about something that can you know literally change the structure of you know the human fabric optimizing for like price slippage or

like is this is the RSI oversold or like you know like just [ __ ] buy it I remember we had um when I was in college freshman year this guy came in and he big like New York hedge fund manager and uh someone was like where do you get your like info like what's the best source of info on on like how you like what like do you read research or whatever he goes you know what's the best source of alpha my daughter he goes you know what I thought I bought Apple when my daughter started and all of her friends started requesting Apple uh the iPhone you know what else I bought Snapchat uh or I invested in the in the like second round of Snapchat when everyone started like using snapped and he just had like five of those examples I've got that exact story there's a guy

named Barry Eggers who is a partner at Lightspeed uh for a number of years I don't know if he's still there his 15 year old daughter went to Saint Francis High School here in the Bay Area and she and all of her friends just became obsessed with Snapchat right when it launched I think in 2012 or 2013 and he basically her his daughter comes to him and says you need to look at this you need to invest in this and so that's how Lightspeed did the seed round coincidentally the Endowment for that high school put in I think twenty five thousand dollars at the the seed seed round like the initial Capital that came in and it like was on the tap table when they went public

not founded 2011 or 2012. I think they started working on it in 2011 and then found it in 2012. just to call it you know it's been now over a decade without a new consumer entrant that has had staying power or scale I have another crypto question to tie back to ECC for a second in crypto um Mike you were mentioning like one of your takeaways was uh interoperability will will work but it won't be like on chain basically it'll be market makers and and funds become the main bridges in crypto can you like can you just expand on that I had um yeah this is actually Michael you mentioned this in uniswap uh uniswap X and the the connective tissue in between

different chains is these market makers that like there's some sort of there's an RFQ sort of model where actually the Brian I'm gonna blank on his last name the founder of layer zero um but he had a great quote like Bridges solve an inventory problem which is you want to do something on chain a uh like move something on chain a or transact on chain B which sounds a lot like market makers right like they Warehouse risk and they manage inventory and like that's how they make their money and the a lot there's like three big forces I you can kind of see they're driving towards like a frankly a huge bull market for centralized Builders and um and market makers to abstract a lot of these problems away one is like the

way that there could be inoperability between different layer 2 ecosystems is shared sequencers but sequencers are just pipes they're just like they're really good for inclusion so they can sequence but they don't they're not stateful they don't actually execute transactions and they aren't aware in order to like really get the full benefits of interoperability you need a very large expensive Builder to sort of plug in and execute these transactions and then it would actually be a really useful tool so there's an incentive for like an SCP or someone to do that and then there's um their proliferation of these like is actually Cal swap that was kind of the first these intense space decks designs there's Cal Swap and uniswap x and the end game of intense is like what a Noma

and like Chris goes is building but the in the more intermediate basically what they're saying is like hey instead of like if I want to do a transaction that has multiple different steps I should just be able to express the end outcome and then I'm going to farm that out to a whole bunch of different sophisticated on-chain actors that will then go and execute that against some you know best execution sort of Benchmark or something like that and they will then manage the complexity of interacting on different chains so like there's a big incentive because unit swap backs and Cal swap exists for these like solvers or fillers or things like that and this is there's another one that vitalik explained he gave a big talk on um

Builders and why we need them there's some something he called it like aggregating proofs right like he's very obviously bullish on like ZK Tech once you like make a proof about one thing you can aggregate all of those into like one thing you can have many many different layers of proofs and the end end state is like one relatively computationally expensive um proof but you can also like it's not enormously variable based on the amount of like roll-up proofs into that so it sort of shifts the cost structure of transactions and it's being higher fixed cost which is good it's cheaper overall but it's a higher fixed cost thing that's good for again big Builders um so that was kind of my takeaway is if you like I actually don't think that's

necessarily a bad thing because the that's the whole reason you have PBS you've separated the proposers from the Builder so I think it's a pretty acceptable compromise actually to give users a much better experience uh while we sort out the technical stuff but that was a takeaway for me I don't know what you guys think so I think uh the thing that we'll be able to do cross chain the best comes down to two variables and one is just sort of like a table states you have to have native minting on each ecosystem you have to be able to say this is this is canonical usdc on avalanche on base level eth and L2 eth uh and that's going to have to happen across every asset that you really want to have cross-chain

functionality and then the second variable is going to be fees and if you're going through a market maker or you know some third party to be able to facilitate that transaction there's obviously going to be some fee that's associated with it um this is actually where I think cross-chain Communications or messaging protocols if given the ability to have native mint functionality for those assets across those two different ecosystems you're burning on one end and minting on the other and so long as you trust in that that Network that information protocol you can have lower fees I would say than someone who's having to do inventory management across like you know if you've got a market maker across uh Avalanche and ethereum it means that they have to have you know enough assets on both sides that they're

holding on to to be able to facilitate that transaction which means that you know their cost of capital is going to be a lot higher than just a messaging protocol and so we're not there yet with the messaging protocols but I I would say that you know moving in that direction is probably where I see things going um but yeah no I hear you I mean in the short term like I've been waiting for the I don't know let's say the coinbase eth to optimistic eth Bridge you know one for one swap just like you have with USD and usdc on coinbase for you know a year now where's that I agree the uh I'd agree with all that but one thing I would say though if there's a big hedge fund that like a bunch of flow ended up moving through

basically you could find ways of monetizing that I'm sure like totally pretty creative ways yeah like one one of the big problems for a lot of like on-chain dexes is like the price Discovery happens on binance and Eve has 12 second block times and there's this problem where all the prices are basically stale and LPS are subsidizing an enormous amount they're basically just making bad trade after bad trade after bad trade every 12 seconds and the fees don't really make up for the amount of loss they incurred doing that which is a problem and I I I I think it will get solved I think price Discovery will move on chain and once that happens it will solve an enormous amount of other infrastructure challenges that are just

occurring because of finance and that actually could be a silver lining of frankly the sec's like over exuberant like take on finance like probably isn't good for the industry for finance to be what it is I would guess but I think Discovery I think price Discovery starts to move on chain once you have a structural bid on chain and that's just you know a way of saying once token BuyBacks start of a lot of these protocols that are that are profitable you know the unit swap fee switch is like step one but then actually they're buying the tokens back or giving it to the fee people on chain is the other once that happens I think most of this volume is going to go on chain at least for those tokens and then it's really not going to go back should we talk about wellcoin a

little bit let's talk it let's talk about the orbs yeah did you scan your eyeball I scanned wow didn't you I did but I was wearing contacts and so they were you know not happy oh that doesn't oh wait actually that might when my mind didn't go through I I did scan and I was wearing contacts and it like was very janky it didn't really work yeah I had a protective shield on it yeah you had your mask on uh did you claim you did your fingers crossed yeah claim yeah of course a minute it's uh it's wildly bullish for optimism that they chose that chain it just also shows

how early we are in like the the L2 like Wars skirmishes whatever you want to call them but you know you get one app that's hot and all of a sudden you have the same amount of transactions as arbitrary when you close the gap entirely it's interesting yeah yeah so optimism just passed arbitrum I think in Daily users for the first time in several months right today or yesterday users are transactions or transactions transactions their context for worldcoin is like it's a what it is is it's a proof of personhood system vitalik actually wrote a really good piece about that this week and there's like kind of different ways of doing that and there's reasons for doing that like you could do worldcoin is a biometric sort of solution where there's a set of public and private keys that get generated you

there are these orbs that literally just I guess exist in various places around the world and you can go and scan and it will match up and you have to at the same time you scan your irises you also have to present your app with your public key and then a hash will get created that's entered into the database so what it says is that it doesn't store your actual Iris data but you know it's linked to that specific cache and so you can prove if you know that unique hash is is in their database um and that's the way that it works there are other there are other methods which is based off like a social graph and a vouching sort of system where you know Alice and Bob are real you know Mike gets added to the chain Allison Bob are like yeah we believe Mike's real and

like by the way here's a penalty in case we're like lying about you and there's some sort of Challenger sort of system uh they're they're like various pros and cons to each one of these things I think world coin specifically has been um there's been some pushback because of the token allocation they had there's like 20 of the tokens were allocated towards investors and the entrepreneurs of the system the problem with Hardware is that there could it's really hard to prove that there isn't a back door you know you just can't really prove that um and I think understandably the human element of like you know scanning your eyes just feels very 1984. you know I I just it's hard for me to you can explain it all you want to me but I still get a little heavy-gbied out by it so um

I don't know what are you guys what did you guys think about the whole project I went into worldcoin's office in February or March and met with Alex their co-founder to like get the get the full pitch um it's uh it's something that we do every day already um so proof of personhood is like a very important thing that we already do every day for a couple of things right like if you've ever signed up for a C5 exchange like remember like you take a picture of your license oh yeah hold it up to your face and then like send it over to like Finance where there I'm I can assure you they're not keeping that thing safe like that is you have to write like the proof of life as well on the piece of paper literally today's date yeah that's proof

of humanity uh you're you're moving too quickly on online and you have to like fill out a captcha that's proof of humanity um you join if you ever like raise money and maybe you need to like get a big wire or you're sending a big wire or something like that and you have to jump on a call with someone and they have to like verify you as they send the wire proof of humanity so like proof of humanity is something that you have to do every single day um and then and then the last one is your your iPhone right like you scan this is more like less proof of humanity but more just like privacy and security I don't use the the touch thing on my iPhone anymore I like probably 90 of people just use face scan and I'm sending that over to Apple and that's so

like we're doing that every day basically the thing with proof of humanity is that it's not something that occurs that often it's like you don't have to do a captcha online that often you don't have to do a um you know send a send a picture of your license to an exchange that often what Alex the uh World coin founder laid out for me is like a world where you have to do that hundreds of times a day basically and if you think about GB so we're like gbt so they so Sam Alvin's the co-founder of world coin he's also the co-founder of Chad openai which founded chat gbt or which created chat gbt chat gbt right now you put in like a prompt and spits out a thing what chat gbt will eventually look like is not just uh like giving read access but uh write access

to your computer and so what that looks like is Imagine chat gbt 6 for example or Chad gbt7 what you're going to do is you're going to give right access to your computer and you say right now you're not going to do that but eventually you're gonna but you're gonna do it because all your colleagues are doing it and they have a huge competitive advantage on you it's like they're all taking steroids and you're not so you're going to take the steroids and it you're going to basically be able to put in for example hey pull up metamat I know that this I know that GMX is launching a token I want to farm GMX go go uh go use the 10K in my metamask account and do the optimal farming strategy on GMX to farm for tokens that I think are coming in three months and it's just going to do

it for you or you you put in a little prom hey go email Vance I need to push this boom it's going to pull up Gmail for you and write the whole email and um when that when that world happens it it's very tough to know online who's a q there's no way to know who's a human and who's not a human and World coins trying to solve that problem there's a story I heard um I think it was a couple of Stanford research teachers who um it wasn't the AI model that chat GPT runs on um because it has the ability to go off and actually uh prompt different things in a computer system and so they're they're testing this new model kind of similar to what you're talking about where it has access of the computer

um and the researchers say uh here here is an account and I don't know if it was a bank account or if it was a brokerage account um but it was uh here's an account with ten thousand dollars go off and make as much money in the stock market as possible and that was what the The Prompt was the AI went off uh signed up for a brokerage account to get the brokerage account it had to go through some captchas wasn't able to get through the captchas so it went on to taskrabbit to hire somebody to get through the captions for them the task rapid person even said how do I know that you're not an AI how do I know that you're not an NPC and the the AI literally said I'm I'm like I have visual disabilities I can't do this myself I need help doing

it convinced the person on taskrabbit to go through the captions for them and started trading stocks but yeah that's the world that is node 100 Locked In in my mind that's the world we live in you are going to everyone's going to have an AI assistant and that AI assistant is going to run a whole team of other AI assistants so like my AI system I'll be like I want to go build a website and they will go reach out to the other AI assistants that go build the website for them that is a 100 fact the world we're going to live in and in that world we need like proof of humanity I do see the picture for this now they they really [ __ ] up the launch like the token total botch calling the or an orb is like so cool

but so dystopian like so many I would have if I've run into marketing there I would have done it completely differently putting the first things in like Nigeria and like I was like come on guys like you're like horrible horrible marketing and comms there but I do understand the problem that they're trying to solve the problem is absolutely gargantuan there's no question about it and absolutely necessary it's just a question question of the implementation and frankly timeline like when are we actually going to need this you know well you already need it you already need it it's like think about think about crypto I mean so you don't need what we're talking about with chat gbt and stuff like that but like think or gbt sixth and seven but think about crypto airdrops for token distributions um yeah you can do civil resistance with

it I get that civil resistance protection against bots like just a better alternative to to captchas um like it's there are some short-term applications you know what I think you know this might have come up on the podcast that you did with ciao but this feels really bearish for the web 2 business model right wasn't this part of partially why Elon limited the amount of like posts you could view because now there's just going to be exponentially more web traffic because of these AIS but and that puts an additional load on the servers it's cost but then advertisers aren't going to pay for AI traffic I mean that's brutal for their model one of the interesting takes that I heard about AI is that um

it effectively structurally increases the costs costs of basically every application that runs on it so like you know imagine your Twitter and you want to you know make your site AI capable we can debate what that means maybe it's you know having an AI write your post for you maybe it's having a chat GPT plugin in the app every time you write a query every time you ask it's something that costs a shitload of money and there is like there's a run on GPU right now in Silicon Valley like people are trying it's like you know selling drugs people are trying to find these I think it's the hn 100s from Nvidia and get them stood up but like it's gotten so expensive that like it's become prohibitive from a cost perspective to

build an AI app so that's one side of like the the balloon getting squeezed the other one is just like you kind of need to put up these guard rails because every AI application is just going to be constantly trying to scrape your site for more and more data your server is getting pinged your costs going up it's like it structurally decreases the margins of basically all these web 2 tech companies and so that's not that bullish you know instructions landed the plane there Vance you're actually right it is not that bullish AI is gonna do great for all the web 2 companies it's like is it really are we are they going to grow that much faster maybe the bot traffic will the the big one and oh god I think I'm a the pricing

I can't remember did anybody does anybody remember the initial cost that Microsoft came out on their earnings call for co-pilot it was like three times analyst estimates I think it was thirty dollars per user per month and it was supposed to be like ten dollars and I think that that is lending Credence to what Vance is saying it's like their cost structure which they need to maintain their margins on like they're not gonna be able to make money and I think there's going to be a demand at thirty dollars a month but you really do have to change the business model of consumer applications in web 2 from being a you know you're if you're not paying for it you are the product well that Advertising based business model is not going to work in an AI dominated world let's just play this out a little bit

more so like do certain business models not work in the age of AI so like like what would be the r poo of of uh you know a a user on Twitter that's being served ads like what do you think that would be 10 in the US in the US it's 12 to 14. right 12 to 14 and Twitter is eight dollars a month you know on the subscriber side like maybe this kind of makes the advertising model maybe the advertising model doesn't have enough juice in it to overcome the additional costs you know provided by Ai and AI powered data scraping an AI powered applications like it kind of throws a little bit of that

into just the air and like you look at Snapchat and that thing can't even turn a profit with the advertising volume and they have a chat GPT plug-in I'm sure people are going to start scraping their website for chat gbt data it's like it really does call it posed a lot of interesting questions as to like what do these business models look like long term and subscription may be the only way that you can like really control and scale your Revenue to the these new costs I mean think about it this way the gold standard and this is probably a year or two outdated but the gold standard is Facebook for North American users and it was 20 a user per year enough for AI you know if that's really okay you're gonna have to double that I have a question for you guys you know my

understanding of the the reason there was the Advertising based business model for a while is like you people in the early days of the internet were gonna like pay to go online that was just a complete non-starter do you think now if there was a switch to a subscription business model like generally across social media sites do you think the majority of people would pay majority no but it doesn't matter yeah so snap has three million I think paying users so like I'm a Snapchat Plus subscriber somehow just because uh I wanted to use it says a lot about you I think we need to hear more about that kid you know I'm trying to stay young but uh 3 million is not enough they've got like 600 million users 700 something like

that not that many da use though right like 250 million da it's like one percent penetration of their daily actives right and and a lot of these things were in trouble already like I was looking at the Snapchat earnings which just absolutely were the opposite of meta and just it just feels like a buy quarter thing where they just get smacked so they're a 18 billion dollar company they have emitted 9 billion in New Stock since launching in stock based compensation they've never turned a profit um and there's really no path for them to increase Revenue either they're not really growing as fast as they used to there's really no new business models and their costs are increasing because of AI and you know the revenue is

decreasing because of Apple squeezing them on the other side as a recipient I've said stock based compensation I think that everything is totally fine I'll I'll lay this economic driver on top of a social driver that I think is going to drive this to I think that if you talk to like gen Z and the the Youth of today I think you're from the youths um I think people are driving into uh there's a desire to like move back into like deeper more private spaces online and if you uh if you like you know how much time do you guys spend on telegram chats today versus how much time you're spending on telegram chats first like even two or three years ago like a lot of my day is inside these telegram chats um or or slack right or or I don't use

Discord but like you know a lot of time is spent in these like kind of more private channels um versus on social whereas like my whole life used to be on like Instagram and Facebook seven years ago and stuff so and I think like if you take AI if you think about what AI will do to social media the like impending signal to noise ratio there's gonna be like a crisis of signal to noise I think on these social platforms and I think it'll continue you to drive people into these more like private private spaces when's the last time you guys went on facebook.com a decade ago I shot mine down like eight years ago I think or six years ago I went on it like two months ago I there's like literally three times for

every single organic post there were two ads yeah and it's it's a really uncomfortable feeling like I'm just looking at my Twitter right now and I'm sure you guys have this as well but my replies are just like shitloads of Bot responses scams fishing you know Ukrainian Russian women it's like wait what the [ __ ] is going on here this just like makes me not want to spend time here or like figure out a telegram chat that's a little bit higher signal or a Discord I think next up uh you're gonna have Elon limit the number of tags you can put into a tweet unless you're uh blue check mark that's right how Clairvoyant he's been on this stuff like sure I I don't think the delivery was perfect but like

he kind of called all this happening he hasn't fixed any of it yet but it does feel like this is the direction of travel a lot I think maybe he just kind of came in and I don't know what his you know original impetus was for really buying Twitter but he is for all his faults like he's definitely good at just being like this is the problem and like forcing uncomfortable things forward it feels like so yeah I feel like you did kind of get that do you think imagine building Rockets with him that would be just another experience yeah I don't know if I'd want that on it like I I already I'd be like a pretty brutal couple years to be honest with you but yeah I guess they did build the Rockets So I'm I'm really happy that he

owns Twitter and that he's able to disseminate free speech and crypto and openness and I don't like the X brand but I feel like even in time that'll probably be optional this is kind of a funny aside uh X is what he's been trying to call his financial services platform since 1996. he started he started x.com for those that don't know uh in 1996 which then later merged with Peter thiel's confinity to create PayPal before it was sold to eBay and then as he was leaving part of his uh severance package was he renegotiated with eBay to buy back the x.com brand and he's literally been sitting on it since and let me I'll add to that he named his kid X and he called

it he called it space X and Tesla Model X Dude Love dude loves x is yeah I mean our office is kind of near the uh the Twitter building downtown I drove past on the day that the uh the Twitter was being taken down it really did feel like the visceral end of an era because Twitter was like kind of like one of the prototypical early tech companies that came out and they're asking Francisco like Twitter Twitter users were just like SF Tech Bros like tweeting with them for breakfast like there's also Twitter was Twitter's the first major company in San Francisco first major attack company in San Francisco because of Jack right and and then everybody followed

and there he was with a with a crane or whatever that was just wild I know elon's very good at getting people to talk about his stuff you know in one way or another it is like it's not overdone comparison but this is what Trump was good at too like you were just always talking about that guy and if you've ever tried to like put something out into the world you know how hard it is to just get people to care at all he has this sort of ability to just like he just knows how to shine a flashlight of attention on stuff even this x thing you know we're talking about okay so I went on to the Twitter spaces on Saturday night as he was literally like whoever's got a good idea we'll implement it

tomorrow well he he was on the Twitter spaces and he was playing Diablo in the background the whole time where he was like all right we're changing the logo he's like yeah I've been playing Diablo for the last two hours I'm probably gonna play for another 30 minutes and then go to bed like he literally must exactly I think he I think he really just like doesn't give a [ __ ] and he also just wants to do whatever is the most comical because he thinks it's entertaining and fun and I honestly think that that's probably like where the impetus to buy Twitter came from eventually it was like okay well we should actually probably do this but at first he's probably like wow wouldn't it be funny if I did that what did you

what's up let's bring it back to to crypto here a little bit and just talk about this sort of battle that's playing out on Capitol Hill so there have been a couple big uh very relevant bills for well actually even to set the context before that it does feel like there's a little bit of finally resistance moving in the direction of crypto in Washington this was after like an onslaught of different I mean what have we been talking about these enforcement actions for the past couple months against binance against coinbase there was a concern that all of these uh you know many of the the crypto assets out there are going to get labeled Securities and what it it sort of uh subjectively feels like especially after the xrp summary judgment that the

tide is beginning to move in the other direction and this has been a totally partisan issue like this has been typically you know the Republicans being relatively Pro crypto anti-scc and the Democrats being anti-crypto pro SCC and now you're starting to see some prominent Democrats come out and say Gary Gensler has gone too far to paraphrase so I mean isn't it crazy that the Republicans are now the progressives trying to get new laws and regulations passed and to the Democrats with the obstructionists wild yeah the uh so yeah we're members of the blockchain association they so you know we we kind of like uh worked with them and everybody else who's a

member to to work on Capitol Hill related issues um the the stuff that's going on right now and where things land are working their way through is just frankly like as all this happens in negotiation and it's people wanting to get one word changed or it's sentence added or or you know rejected and there's amendments to it it's like back to Civics 101 of like how a bill gets made but I I do think you know the sentiment is um that yes it's partisan there is now sort of some contingent across the aisle to get some stuff done um but most likely it looks like it's not going to go through in this Congress and the rebel case is great like that

gives us a feather in our cap it's the new standard for certain aspects of regulations relating to crypto not for everything as everybody wants to do often project but frankly there just wasn't enough time in between the Ripple case happening and these bills being drafted for them to take a huge effect in the in the creation and and you know what is getting put into the bills and so I think that's where there's actually some just like issues like this stuff is happening on a day by day night by Night basis in terms of amendments and negotiations and and so my hope is that you know probably this stuff gets far enough to where it already has so the fit bill which is the financial Innovation and technology for the 21st

century act it's the first time that crypto has ever been in a standalone Bill and not stuffed into some Omnibus whatever the inflation reduction act um and it's a standalone bill it has passed two committees in the house and is dinner go to a house vote on the floor in after the August recession or after the August recess and that is a huge huge moment for for us will it get through the Senate probably not but you know as the tide shifts in Washington in terms of who's in office and who is not there's more likelihood that this stuff will will come with more you know negotiations amendments and then it'll it'll have a new wind probably in a year or a year and a half

um so having it like there's a ton of stuff going on with all these different bills but what the the one that we think is is most exciting is the fit bill which is used to be known as the market structure bill um it passed the house Financial Services board or committee and the ad committee like it definitely has a lot of momentum the interesting one is the stablecoin bill um which as of today seems to be uh met with vitriol as uh as was described uh in committee Chambers um where the White House seems to come in and it seems to have come in and basically put their foot down and said no way um we we were actually thinking that it would be the opposite that the stablecoin bill pretty mundane pretty standard just basically provide

safeguards and assurances for centralized operators of stable coins uh you know reading the tea leaves or According to some rumors uh White House slash the treasury came in and said you gotta stop it so that's kind of where we are why do you think they did that cbdc I I think a lot of people uh were surprised at how many Democratic votes the market structure bill got and so there was probably like uh oh [ __ ] you know we should really put our foot down on this other thing even though Maxine Waters and McHenry look like they've agreed on something um it looks like this is just like the political pushback that comes with more votes going to the market structure Bill than previously thought but as Michael said this is like pretty

bullish for the entire space like this is going to be the legal framework that exists when a Bill gets pushed through and if there's a change in the Senate there's a change in you know the presidential uh you know who's President like these are all things that will happen pretty short order in in our opinion but like until that happens we've caught grayscale which looks pretty good Ripple which you know changed a lot of things for the industry and a general feeling that the courts have the backs of the people who are not you know doing things with Mal intent so I feels good honestly just I listened to a couple of the Snippets of um discussions and and conversation and

and points that were made yesterday in the house committee Chambers um Richie Torres out of the Bronx in New York has just been absolutely crushing it um Democrat um super knowledgeable about the space very Pro the space um and his perspective was was great which is you've got on one hand the SEC and everybody's saying that they have enough rules and regulations to go off and regulate this industry but at the same time you've got the largest what looks to be a crypto Ponzi scheme and fraud committed in the in in history of crypto you've got all these different regulations they're they're not winning all the the lawsuits that they're bringing uh against the industry

um and there's just outright confusion meanwhile you've got other jurisdictions particularly within Europe and Mika Mica which are providing safeguards and pass forward for how to regulate this industry um and so I I think that is going to be the sentiment there are six Democrats on the house Financial Services committee that voted for the fit Bill the market structure bill um and and yeah advances point I think people got you know people that want to see crypto go away got nervous when they saw that vote outcome so outside of just general sort of um you know concern I why stable so stable coins I feel like are so obviously beneficial for U.S interests I just I don't feel like

that's a huge leap to understand I mean you've got this other sort of financial system economy pseudo however you want to frame it and the dollar purely from Market forces right this is purely bottom up like needs want driven is being adopted there at a rapid pace and the US was just like no thank you we don't want to take this free option on one of the guys once you have this system one of the Democrats who walked out somebody asked him why'd you walk out and he was like I was told to walk out you know these people are thinking for themselves it's just uh it's a political game but I think it's being played in such a way that crypto eventually comes out on top I wouldn't really like read

too far into like the temporary hold up of the Sable coin bill it could even really get done after the recess you know that's kind of like the the scuttlebutt but like it's it's just it's you know these things go from like no absolutely not I heard some guy call this an unjust and cruel Bill Clintonville like what an unjust and troll Bill and then made an amendment attempt to the same person made an amendment attempt to have a 128 120 day exploratory period for new regulations it's like dude we're talking about it right now yeah I would I wouldn't I wouldn't place a lot of stock in the day-to-day stuff you know these are like the uh the

regular season games and uh I think the playoffs are probably later this year slash next year uh my guess is well as soon as December hits It's it is election season my guess is if it doesn't happen before then it'll probably get pushed to the next Congress which is actually a really good thing like I think that having to get pushed um probably will give us more time to circle the wagons you know get some more wins for the industry uh have a better understanding of where things stand it'll just be more evidence you know to advance his point which I totally agree with is like we're gonna be on the right side of regulatory history here it's just we need more evidence to get more people on our side we're moving the ball up the field to use a football analogy

but I think we're in a good I think we're in a good spot here I have a 2024 question for you guys if you are a one-issue voter and crypto is your issue who is the number one president right now is it DeSantis well do you know the answer only one presidential candidate has multiple nft collections along with his you know previous first lady I mean this is with the context of like who's actually got a shot no no I I think obviously RFK would be Pro crypto great I would vote for RFK in a heartbeat I just don't think that's

gonna happen there's not gonna be a chance to frankly uh Cornell West was president I don't think we're gonna have that happen yeah um I mean the the other interesting part is you know what whoever the Republican candidate is like it looks like Biden is still going to be the candidate unless you know something pretty serious happens on the on the Democratic side um but it will be really interesting whoever the Republican nominee ultimately ends up becoming who they build as their camp like who's the running mate who are the people that are in support who are vying for potential cabinet positions or or what have you like there there could be a Groundswell of interest from some of the candidates that we're talking about and thinking

about right now do you remember what 2020 felt like with the election you know everyone was very focused on the future everyone could see four years of what each candidate would look like like it feels good that we're gonna start thinking about the future again the Republican debates are I think in two weeks three weeks and I think once that happens that kind of kicks off you know people starting to think about the future man I could not feel more differently about that I am not excited for 18 months of just every single [ __ ] day just talking about the election I I feel like candidates like RFK have opened the Overton window for people to really think differently about what the future looks like and it's not just like Trump versus Biden it's like

who is this RFK guy like what like the vaccine do you feel like RFK is like this year's uh honestly no no no he's uh the guy who's very scared of uh he wanted Ubi you know what I'm talking about uh oh Yang no he's way more terrible yeah it was Andrea I have a weird I have a small issue that I would like to see dude I don't know Vance uh Jano put this in my head actually before I went over to Europe but the food over in Europe like I I had you know I had like a chocolate croissant every day like to start every morning I had chocolate croissants

yeah and whatnot Mike had like seven a day just seven light on my feet I felt light on my feet over there you look good thanks buddy you did too but you know in the U.S like if I have like you know an extra thing of bread with lunch I'm like we gotta fix this food over here so the the cool conspiracy theory that I read uh yesterday was that uh Trump and RFK are like secretly teaming up and then RFK is going to be the FDA ahead of the FDA already he already asked him to be

the the head of vaccines into in 20 listen in 2017 I think it was 2017 when right after Trump got elected he asked RFK if he wanted to take a a health role within his you know within his administration I think the candidates are very interesting I've been all over the map politically I've voted uh liberal for a long time Republican a little bit independent I volunteered for Ron Paul when I was young so like all the way from auditing Fort Knox to find out where the gold is to like Morris address positions I just think there's a lot of very interesting candidates in this in this election and like I'm hoping you know Yana to your point that it's not going to be this like

drag through the mud I guess with the court cases it's going to be but yeah it's time to think about the future again the other one that I've started to listen to a little bit more of do a little bit more research into is Vivek and he is I mean he's 37 years old get that like he is basically our age and for president 35. and um he's probably the highest IQ candidate that we would we would potentially see it's just you know that ability to have someone who's out of left field you know high IQ High horsepower and not being an establishment person I think is frankly

what it is the Overton window shift that RFK has provided like it actually gives trade-ins to some of these dark horse bats which is great like we're actually having a conversation about it now Cornell West is running green party no labels is gonna it's kind of like you know you can kind of Choose Your Own Adventure which is exciting in terms of at least for me the mainstream candidates don't really appeal to me I'll end up voting for one of them but like I will get to entertain different policies for a longer period of time which is cool exactly yeah it's like this every year though it's always like this oh it's not come on literally was Trump against Jeb Bush in 2016. yeah just Gianna's just not gonna

be able to talk about this outside of the office okay 18 months out you have 20 candidates uh every single time and then eventually gets narrowed down to like two on each side and they're both going to be pretty institutional and you're going to have DeSantis vs Trump and you're gonna have Biden Biden and then we're gonna spend a year DeSantis is answers his toast I don't I don't think he's gonna be a competitor he didn't make it but uh Newsome I would love if he got in but the DNC has already said that they will not be participating in any debates within DNC party members and against the RNC party member that is that's ridiculous wait no no Biden Trump debates nope

Mike can't even bring himself to speak words I've Just Seen vivec on arama Swami or whatever on Twitter I haven't even looked into him at all to be honest but I uh maybe it could be a smart dude he's got some he's got some not so great perspectives but he's just very smart all right yeah get out there [Music]