I’ve long aspired to release topical content relevant to the current crypto news cycle. But I never found a great way to pull that off. There are lots of podcasts with crypto bros shilling their unedited opinions on price movements or the latest ICOs, and I just didn’t want to go that route (especially since I don’t personally enjoy this content).
While contemplating this delimma, Eric Meltzer’s Proof of Work Newsletter arrived in my mailbox. What I appreciate about Eric’s Newsletter is that it isn’t filled with news hackery or thought pieces from Medium; instead, Proof Of Work includes updates directly from the makers behind top crypto projects. Proof of Work includes primary source material coming directly from founders, rather than third-party analysts.
So I approached Eric about doing a Monthly Proof of Work Audio wrap up. He said yes, so here we are.
In this episode we discuss:
- Major themes and trends amoung crypto projects for the month of August
- Our 6 favorite features and releases “shipped” from various engineering teams in the space
- Which crypto team has won “The Ship Award” … which is the monthly award we give to the project that has shipped the most in a given month
- Why asian exchanges are absolutely dominant right now
- Which crypto businesses are making money, and . . .
- What new developments we expect to see in September
Here’s a little bit of background on Eric Metlzer:
Eric is a partner at INBlockchain, China’s oldest and largest institutional cryptoasset and blockchain fund. To give you a sense of INBlockchain’s size and scope, consider that they announced a $1.6 Billion dollar fund with 30% coming from the Hong-Jo local government. And prior to that they already had a couple billion under management. If you want to learn more about Eric, check out Flippening Episode #17.
Thanks To Our Sponsors
We’d like to take this opportunity to thank our two sponsors, Panda Analytics and the Nomics API.
This Episode Is Possible Due To The Generous Support of PandaAnalytics.com
If investing is not your full-time job, but you still want to get into crypto and blockchain, what cryptocurrencies should you consider when making an investment decision?
One popular solution is a portfolio of cryptoassets selected and rebalanced on a regular basis. Panda Analytics is a crypto index research and management company that has software tools which allow you to construct a passive index tailored to your risk level and help you execute the strategy, automating the tedious rebalancing work. Also, Panda created the world’s first Proof-of-Work index fund, a low-cost, complexity-free investment vehicle allowing you to diversify into crypto. If you want to learn more about their index fund and tools, please check the website at PandaAnalytics.com.
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Links Relevant To This Episode:
- Eric Meltzer
- Proof of Work
- Dharma Protocol
- Debt: The First 5000 Years by David Graeber
- Placeholder Ventures
- Crypto Kitties
- Scaling Bitcoin
Clay Collins: Welcome to Flippening, the first and original podcast for full-time, professional, and institutional crypto-investors. I’m your host, Clay Collins. Each week, we discuss the crypto currency economy, new investment strategies for maximizing returns, and stories from the front lines of financial disruption. Go to Flippening.com to join our newsletter for crypto currency investors and find out just why this podcast is call Flippening.
Announcer: Clay Collins is the CEO of Nomics. All opinions expressed by Clay and podcast guests are solely their own opinion [00:00:30] and do not reflect the opinion of Nomics or any other company. This podcast is for informational and entertainment purposes only and should not be relied upon as the basis for investment decisions.
Clay Collins: For the most part, the Flippening podcast is about how production value deep dives into topics that will be relevant for a long time. Our goal is to create reference material that explores the most important facets of institutional crypto asset investing. In the past, we’ve taken on large topics, with projects like our security token documentary or our recent [00:01:00] deep dive on programmable tokenized debt markets. We’ve also covered crypto index funds, publicly listed master node businesses, momentum/sentiment investing, quantitative crypto investing and much much more. We like exploring these huge topics and going deep.
But in addition to this reference content, I’ve always wanted to release topical content that was timely and relevant to the current crypto news cycle but I really never found a great way to pull that off. There are a lot of podcast with crypto bros shilling their [00:01:30] unedited opinions on price movements or the latest ICOs and I just didn’t want to go that route especially since I don’t personally enjoy this content. I was up one night contemplating how to provide topical content to my listeners when I received Eric Meltzer’s Proof of Work newsletter in my inbox. What I appreciate about Eric’s newsletter is that it isn’t filled with news hackery or thought pieces from medium. Instead, Proof of Work includes updates directly from the makers behind top crypto projects. It’s almost all primary source [00:02:00] material about projects themselves rather than third party analysis.
So, I approached Eric about doing a monthly Proof of Work audio wrap up. He said yes, and here we are. Essentially, what we’re going to do is discuss some of the most important updates provided in Eric’s Proof of Work newsletter and use this as the focal point for discussing what happened in the cryptosphere during a given month.
In this episode we discuss one, major themes and trends among crypto projects for the month of August. [00:02:30] Two, our six favorite features and releases shipped from various engineering teams in the space. Three, which crypto team has won the Ship Award, which is the monthly award we give to the project that has shipped the most in a given month. Four, why Asian exchanges are absolutely dominant right now. Five, which crypto businesses are making money and six, what new development we expect to see in September.
Here’s a little background on Eric. Eric is a partner at InBlockChain, China’s oldest and largest institutional crypto asset and blockchain fund. To [00:03:00] give you a sense of InBlockChain’s size and scope, consider that they recently announced a 1.6 billion dollar fund with 30% coming from the Hangzhou local government and prior to that they already had a couple billion under management. If you want to learn more about Eric, check out Flippening episode number 17. I am especially happy to tell you that this episode is made possible by the generous support of PandaAnalytics.com.
If investing is not your full time job, but you still want to get into crypto and blockchain, which crypto currency [00:03:30] should you consider when making an investment decision? One popular solution is a portfolio of crypto assets selected and rebalanced on a regular basis. PandaAnalytics is a crypto index research and management company that has software tools which allow you to construct a passive index tailored to your risk level and help you execute the strategy, automating the tedious rebalancing work. Also, Panda created the world’s first Proof of Work index fund, a low cost, complexity free investment vehicle allowing you to diversify [00:04:00] into crypto assets. So, why do some people invest in a portfolio of Proof of Work crypto assets?
Here’s why. The significant investment dedicated to mining equipment demonstrates a ubiquitous mental consensus and it has the advantage of relying on the mining community’s second opinion. If miners choose to deploy computational resources to support a network, it shows confidence in the network. If you want to learn more about PandaAnalytics’ website, index fund, and tools please check them out at PandaAnalytics.com. [00:04:30] Also, I’m going to go off script here and say that I’ve met the team behind this and I really like them and I endorse what they’re doing. I had the opportunity to review their work and it’s pretty cool. They have a free version of their product that you can check out. In fact, PandaAnalytics essentially has three tools.
The first tool is a DIY crypto index fund creator. Again, this one is free. Where you fill in a bunch of variables and they create a customized indexing [00:05:00] strategy for you that you execute, right? So you execute the trades recommended by this strategy. Their second product is basically the same as the do-it-yourself tool except they execute the trades for you via API access to an exchange of your choice. Their third product is a fully managed index fund. I like the folks that run this. I’ve met them and they have my endorsement. Also, from the bottom of my heart, thanks to [00:05:30] PandaAnalytics for stepping in and making this show possible and for making this type of content possible in general.
Okay. Let’s get this started. Without further ado, here is the inaugural edition of the Proof od Work End of Month Wrap Up for August.
Eric, what have you been up to in August?
Eric Meltzer: In August, I just got back from [00:06:00] Beijing. So, I spent the previous month, for almost the entire month out in Beijing dealing with some projects that were incubating there and catching up with my partners over there. And then, I was mostly in Boston for August. I went out to Hawaii for a friend’s wedding so I spent a couple days kind of relaxing in Hawaii, but you know, I brought my laptop so I could stay updated on the crypto scene. That’s pretty much it. I’ve been digging pretty deep into the handshake stuff as anyone that reads Proof of Work will have seen. And so we’re actually … [00:06:30] We’re incubating an exchange called Name Base that’s going to be sort of the first exchange for Handshake. And so, I’ve been working really closely with that team and really digging into the docs around Handshake and kind of thinking about how Handshake will change the crypto landscape. So, that’s kind of been most of my August.
It’s been nice. I’ve been able to really focus on one or two specific projects and go pretty deep.
Clay Collins: You mentioned something. You’re incubating Name Base. How does that work? So, InBlockChain, one of the funds you’re working with, is it actually … Is it your fund that’s incubating that?
Eric Meltzer: [00:07:00] So my fund under the InBlockChain umbrella … It’s call the Early Fund. We’re going to have some pretty exciting news about that next time we talk, but I can’t say anything yet. But yeah, so it’s our fund. We met this team way before they had anything. We were really blown away by the three founders. They’re just … They ship out at a ridiculous speed so they’re going to be joining Proof of Work as of next week. They’re really fast. They have a really great background in startups and so they kind of know how [00:07:30] to ship stuff that people actually want and they’re also like me. Just like obnoxiously excited about Handshake and so they’ve got a lot of really cool stuff that they’re building.
Clay Collins: I found your Twitter feed to be a better source of news on Handshake than like, the Handshake Twitter feed.
Eric Meltzer: Yeah, well, so the Handshake … So, I can give some background on it. The Handshake guys are being quiet until midnight launch basically because they just want to focus on getting the test net code up to speed and so they’re not really … I think they’re going to be a [00:08:00] lot more active in a couple weeks. But for now, it’s mostly just me being like, “Oh my God, this is so cool.” I mean, because to me, what’s exciting about Handshake is that pre-this, where mostly in the IP address age, where you have to memorize these complicated crypto addresses and you have all sits of issues that come up because of that where ICOs have gotten hacked and people have switched their addresses and since they’re not human readable it’s pretty hard to tell whether an address got switched or not.
And so now with Handshake [00:08:30] when you have this thing you can use for crypto addressing. I mean, so if you registered like Clay Collins on Handshake, then after a few fairly simple things get implemented, I’ll be able to send you Bitcoin to Clay Collins. I’ll be able to send you Eth to Clay Collins. And so, we think that’s really neat because it’s like you’ve now gone from this really complicated, intended for machines addressing system to a truly human readable system.
Clay Collins: It’s great to see these kind of human readable name spaces emerge. It takes a lot of work than I think most folks would realize, [00:09:00] but it’s an exciting development. So, you mentioned incubation. What does incubation entail in blockchain? Is it kind of a virtual incubation? Teams can work from wherever they want to? Is it more sort of general set up in state of mind than a Y combinator situation where there’s a fixed start and stop date and you go to a place and there’s a specific set of advisors? How does that work?
Eric Meltzer: For us like, it’s definitely not … There’s nothing formal. It’s basically just like, there’s a few teams where we’ll be really excited about what they’re building and they’ll be really, really early. [00:09:30] And for us, that’s kind of a sweet spot because there’s a lot we can do at that stage. We can provide a lot of product guidance. We can make all the necessary intros. We can make fundraising really easy. And so, that’s kind of how it works. And yeah, actually the Name Base team did work out of our office in the very beginning and they were like, sleeping at our office for the first …
Clay Collins: In Boston?
Eric Meltzer: Yeah. One of the co founders, [Teshan 00:09:52], is an MIT drop out and the CTO, Anthony is an MIT grad. So, they were both in Boston and then [00:10:00] they actually poached Teshan’s little sister from Squarespace, where she was like one of the rising star designers. So, she was in New York but she came down to Boston. So, it was really fun. We had like the whole team in the office. They were sleeping here. We would see them all the time.
Clay Collins: I bet your cats like that.
Eric Meltzer: Yeah, it was fun. Got the cats, got the start up team, you know, me and my associates. It was good. It was really fun. Very lively. But now, so they’re in San Francisco. They’re actually going to come back to Boston in a week for a kind of sprint, where they’re going to be working out of our office, [00:10:30] but that’s yeah … Like, essentially our model for incubation is it’s really hands off. We think the best teams don’t really want a like super hands-on incubator approach. In my opinion, almost from a psychology perspective, the best founders are pretty intensely independent and so, we provide a lot but at the same time we also just kind of let them do their thing.
Clay Collins: I think that’s a pretty solid approach. I think a lot of these incubators can just fill up your time with advisor meetings and preparing [00:11:00] for pitches and all the formal what-not, and I think that handholding is helpful if you’re very new, but if you just kind of know what you want to build, you just want folks to empower you and then get out of the way.
Eric Meltzer: Totally, yeah. The only other kind of incubator in the space that I think might be interesting is actually Binance is doing an incubation program now in San Francisco. And this will be like the first class of that, but I think that could end up being really cool, because by virtue of where they are in the industry, they know all the pitfalls, [00:11:30] and I think … I helped them look at their incubation program and they’re all being very cognitive of like not taking too much of founder time and really optimizing for being super helpful and super useful. So, I think that could be cool as well.
Clay Collins: There’s something I’ve seen kind of frequently out of incubation scenarios and also venture studios where the set up is that there’s a really famous sort of figurehead that becomes chairman of the board. They have an idea that they [00:12:00] want created and they find a really solid non-entrepreneurial operator to just kind of bring their idea to life and I think those situations lack sort of the foundering DNA and a lot of the oomph to get across the finish line and they can be a little bit sterile.
Eric Meltzer: Yeah I know. I totally agree.
Clay Collins: Have you seen that happen before? I don’t want to name names, but I’ve seen that and they just never seem to take off.
Eric Meltzer: Yeah. And they don’t. And also, like the other big problem that people don’t talk about is that a lot of those incubation programs want a ridiculous [00:12:30] amount of equity. I mean, they’re taking this huge chunk of the company and I guess some of the operators that they bring on board are okay with that, but you know, a really high quality, talented entrepreneur is going to tell you exactly where you can shove that. And so, we optimize for really great founders much more than we optimize for having a huge equity stake.
You know, we’re getting in really early so we do get a significant stake, but it’s not such that like the entrepreneur is left with too little and it doesn’t make future [00:13:00] fundraising difficult. I think that’s pretty important.
Clay Collins: I think it’s all about nailing the incentives. On this conversational thread that we’re on … And the only reason I’m indulging in this is because the feedback on the first episode that we did together was that people enjoyed this.
Eric Meltzer: Yeah, I mean this … I was telling people like, I don’t do a lot of podcasts just because I don’t have time for it and a lot of the ones that I’ve done in the past have been kind of boring, but I always really like getting a chance to chat with you. It’s really fun.
Clay Collins: I appreciate that.
Eric Meltzer: [00:13:30] Yeah. I look forward to it.
Clay Collins: Me too. Dude, you’re so damn thoughtful. Like, I don’t know. I’ve said this to you on multiple occasions so I won’t beat a dead horse here, but I just appreciate the thought that you give to these ideas. Kind of another thread on teams, which I’d love to hear your perspective on. So, I see a lot of teams in the crypto space that I think on the surface look really impressive. It’ll be like Stanford computer science, ex Coinbase, Google … And then [00:14:00] you’ll have a bunch of people that are sort of variations on that like Yale, ex … I don’t know some other hot company, Airbnb, but when you dig a little bit deeper, you’ll find out that like, the Coinbase thing was an internship. The Google thing was like nine months and it’s just like … These people have never shipped production code before in any serious way and then you find out that like three years later, they ship something [00:14:30] and they’re just trying to figure out how to create production software and run a business for the first time.
Is that a pitfall that people are falling into? How do you like vet teams beyond those sort of initial signals?
Eric Meltzer: Yeah, I mean think … So, okay, I’d say that’s one of the most valuable skills that an investor can have, is just like a sixth sense where you meet a team and you’re like, “Okay, these are people that ship code.” And they ship code for stuff that people want. And I think … I’m pretty cynical about this honestly. I think a lot of those … A lot of the teams [00:15:00] and a lot of the investors backing those teams, they’re also not confident in their ability to ship something really, really amazing. It’s just that they’re like, “Well, this team looks really good, and so there’s going to be someone else that wants to invest in this later just on the basis of the team.” And it’s just this musical chairs game that I find really, frankly repulsive. And I’m just … It’s disappointing and yeah, like you’ll see a lot of these teams that on paper look really fantastic, but they have no experience in the crypto space and so they make all the same mistakes that these people that have been around since 2013 or [00:15:30] you know, 2010, made five years ago.
They’re just not … They’re making products that don’t really make sense from a crypto perspective. I think like what works as a distributed network is very different than what works as a start up and so we’ll see all these pitches that just to us, seem ridiculous. You know, like centralized Airbnb. It’s like, well, you know, Airbnb is actually pretty great as a centralized company. There’s a lot of awesome things that come from that centralization and I think [00:16:00] it’s disappointing to us when we see those teams and I think we’ve gotten really good at differentiating between the real shippers and the people that just look good on paper.
Clay Collins: Indeed. Personal update from me. I’m here in the middle of the country, contemplating moving to San Francisco, who knows. But the weather’s been gorgeous. It’s like 72 degrees outside. I have twin toddlers and we’re about to enroll them in music classes. Every year, I try and go on a solo camping trip. [00:16:30] So, I’ll just go up to like the north shore of Lake Superior and get a campsite right on the water and spend a couple days just completely isolated by myself. I’m really pissed that the place that I go to every year now has cell phone access, so I’ve got to find a way to lock that up.
I found this thing called a kitchen safe. It’s a timer safe that doesn’t require a combination, but you just put like something in it, and then you set it for a certain amount of time and it locks you out of it. Now, it’s pretty fragile, so you could get a hammer and probably beat the [inaudible 00:17:00] [00:17:00] out of it and get to your phone in an emergency situation, but I’ve really been relying on that. It’s made for people who are diets. So, like, you could put your cookies in there or your like, cigarettes. But yeah, it’s fun.
I think on top of that, we’re about to announce some really cool partnerships at my company, but it’s similar to some of your Tweets, Eric. I just can’t talk about some of this stuff or I’ll get in legal trouble or the deal will fall through.
Eric Meltzer: We’re doing the Tran thing now. The announcement of an announcement.
Clay Collins: It’s so meta. [00:17:30] People totally fall for that though. Or the announcement that we’re contemplating doing something.
Eric Meltzer: Are you taking [inaudible 00:17:37] at 420?
Clay Collins: Funding secured. So, as an overview of what this is, for those that have stuck around this far. I wanted the Flippening podcast to have a monthly update. And I explored a number of options. I contemplated working with some other newsletters that provide a survey of thought pieces on this space. A lot of medium articles, a lot of podcasts [00:18:00] that are in and of themselves summaries of what’s been happening in the space and it seemed kind of like I’d be too far away from the primary source events and primary source content in the space if I did a roundup that was basically a round up of summaries.
And I really am a huge fan of Eric’s Proof of Work newsletter. It’s hands down my favorite newsletter and so I approached Eric about doing a monthly wrap up with Proof of Work as the basis. [00:18:30] With that established, I can tell you a little bit about, you know as an audience, what you can expect. We’re going to try this once. We’re going to see if you like it. We’re going to see if Eric can stand spending this much time speaking to me, and if all goes well, we’ll see if we can’t turn this into a monthly thing. Can you tell us a little bit about Proof of Work, the philosophy behind it, and what folks can expect to get if they subscribe to the newsletter?
Eric Meltzer: Proof of Work is a super simple newsletter. Basically [00:19:00] we just … We get updates from all of the best teams in the space every week and everyone will send us these two to three line updates of what they shipped that week and they’re really good about … You know, they’re not shilling their project. They’re not talking about a bunch of boring stuff. They’re just talking about like, “This is what we made this week.” And then when you put that all together, you get this really cool thing that’s almost like, you know … Someone described it as a weekly stand up meeting for the crypto space, which I like a lot. And so, you can just at a glance see what everyone’s working on. [00:19:30] And then you know, I tend to write a little bit in the beginning about what’s going on that week or what’s interesting in the space.
It’s been really fun. The genesis of this was just like, I used to contact all these projects privately and just chat with, “Hey, what are you guys up to? What’s getting built?” In order to stay on top of the space and then I realized that you know, everyone wants that. And so, it’s been really great. I think we’re going to continue to sort of scale it up. We have to be really picky about who we do let on, [00:20:00] on Proof of Work because right now the quality of the projects are so high and I really want to keep it that way. And so, we’re fairly careful on what projects we let on, but it’s going to keep growing. There’s definitely like … Every year there’s a bunch of new interesting projects and so I think it’s a good format that we can just stick to.
Clay Collins: Proof of Work kind of conforms to what I see in you in terms of your philosophy for consuming content in this space, which is your love of crypto projects [00:20:30] and makers in general. Like, we hung out a little bit at Consensus. You seemed to have hated Consensus but I can see you really liking an event like Scaling Bitcoin, right. Where it’s maker focused. It’s developer focused. It’s very close to the actual source code.
Eric Meltzer: Yeah. Scaling is one of my favorite conferences of the year. I really like Scaling Bitcoin’s great. There’s a couple other. There’s like a security focused conference, but I think really in general, the non technical conferences, [00:21:00] at least that I’ve gone to have ended up being a pretty big waste of time just because you get so much noise for like the tiny bit of signal.
Clay Collins: It’s like the calibrating for the right hoodie to suit ratio. Hopefully it’s at least like eight to one or something.
Eric Meltzer: Right.
Clay Collins: Okay, let’s start with chapter one, which si a review of major themes and trends among crypto currency projects and teams during the month of August 2018. Eric, how would you describe what you saw happen with regards to projects submitting updates to Proof of Work in August? [00:21:30] What were the major themes?
Eric Meltzer: The space is so diverse that it’s hard to say like, one major them. But I think there’s … You know, because of this down market where people’s attention has gone away from crypto trading and flipping ICOs and stuff to actually building, I think August has been a great month for a lot of projects. For me, the two big things sort of have been the mining landscape is getting really interesting and then also Handshake is on the scene and is building a whole [00:22:00] bunch of stuff. And then, the other thing that I think is kind of quiet but is really exciting is Zcash has been working on this Sapling update for a long time and for those people who haven’t bene following along with that, what Sapling does, is it makes these Zk-SNARK proofs a lot more lightweight and so potentially a cell phone will be able to send Z transactions and so I think that’s been something that they’ve really just been cranking on for ages. And in August, they now have it ready to activate so I think that’s been super exciting [00:22:30] for us.
Clay Collins: That’s really exciting. You know, I have to admit, so I don’t know a ton about Zcash. You know, at a high level I do. At first, I wrote it off because it seemed like almost nobody was using it to send private transactions. It seemed like the ratio of non private to private transactions was a liability. You know, I thought some of their partnerships were impressive and sort of Wall Street involvement was impressive, but I really don’t know that that can drive a project forward. [00:23:00] But then a lot of people who I really trust and respect started speaking very highly of Zcash. You know, folks like you, Nick Carter’s a huge fan. There’s a family office that I know of that has been involved from the very beginning and it seems like there’s probably more there than meets the eyes, initially. What do you see in Zcash?
Eric Meltzer: For me, it’s really simple. Like, Zcash has one of the strongest cryptography teams in the space and so if someone’s going to make a really usable [00:23:30] privacy coin, I think they’ve got a really good shot at it. I mean, luckily there are a couple other really great teams out there working on the same problem. And so, I think we’re going to see a lot of cool stuff in the privacy space. And I think among investors, privacy is one of the most crowded trades where everyone realizes that these privacy coins … At least one or two of them are going to do super well from a price perspective and from [inaudible 00:23:52] option perspective, just because privacy is such a need.
So, we think of it like, you know, there are definitely some use [00:24:00] cases where the public nature of the Bitcoin ledger is a huge asset. You know, if you’re going settlement between banks or of if you’re doing something where this auditable by anyone aspect of the blockchain is great, then that’s awesome. But there’s a lot stuff that that’s not the case for. I mean there’s any kind of purchases … You really don’t want there to be a permanent public ledger that anyone can go suck the data out of. And so, I think like the fact that privacy is a need is pretty obvious to everyone and then it just comes down to, “Okay, which team do you believe can actually [00:24:30] ship this?”
And for us, it’s like you know, the Zcash team is fantastic. Grin is really interesting. The Mobile Coin guys are working on something I think is really cool. So, yeah, that’s kind of like where we’re looking at it. And you know, Zcash, in my opinion has been … I don’t know if it’s bad at or just doesn’t care about promotion and so like, a lot of the cool stuff that they ship doesn’t really get as much attention as some coins that I think are actually way inferior to them on tech basis. I think kind of now, we’re approaching the [00:25:00] moment of truth for this, where once Sapling is activated and you can send Z transactions really easily from a phone, if we don’t start seeing the Z to T ratio going up a lot, then we know we’ve got a problem.
Clay Collins: When I think about some of these features that turn into coins. You know sort of we’ve got a privacy coin and we’ve got a high transaction throughput coin. It seems like there’s these competing forces of interoperability, on chain interoperability and atomic swaps versus sort of whatever the big coin is, [00:25:30] just looking at the source code. I know it’s not this easy, but you know adopting some of the same cryptography and features. I wonder which is going to win out, like on one hand, Bitcoin probably isn’t that far away from confidential transactions if they can actually get consensus on creating a force that makes that happen. But on the other hand, if you have team that’s been just focused on one thing, and atomic swaps are super easy to do, then why not just swap out for the coin you want to use [00:26:00] in a fairly seamless manner on a multi coin wallet and use that? I don’t know which one’s going to win out. What’s your perspective on those competing forces or do you think they are competing?
Eric Meltzer: So, I think privacy is one of the features that is sort of … It’s not very easy for something to just adopt. I think there’s always going to be some trade-offs. Like you said, there’s definitely uncertainty around whether there will be consensus that Bitcoin should ship a whole bunch of privacy features. And so, I feel like privacy is appealing from that perspective in that [00:26:30] like, we definitely will get pitches where I’m like, “This is not like a new coin. This is just a feature that Bitcoin is going to adopt eventually.” But I think privacy is probably one where there’s room for something that’s like focused on that.
And you know, which coin that ends up being is an interesting question. And then also like, the situation you described with easy swapabilty is pretty interesting because if someone just like constantly holds Bitcoin forever and then like occasionally swaps into a privacy coin [00:27:00] when they need it, that’s not good news for the value of the privacy coin and so I think the actual monetary policy of these privacy coins is fairly important where you want something that’s similar to Bitcoin that’s not going to be very inflationary that isn’t controlled by any central parties, so there’s not just some giant pre mine just sitting out there.
I think Zcash has done pretty well with that. Like, Zcash does have the Founders Award, but the founders regularly sell some Zcash so it’s not too centralizing there [00:27:30] and the majority of the Zcash is still in the miners’ hands and the miners sell very regularly, so I think from like a monetary perspective, monetary policy perspective, Zcash is looking interesting as an asset that you could actually hold. And the same thing is true of Monero and then Grin is an interesting case because Grin is talking about having a permanent inflation where I think the current number is like 2% every year. And so, I don’t know if they’ll stick with that. There’s a lot of controversy over whether that’s a good idea, [00:28:00] but that might effect sort of whether you really want to hold a lot of Grin long term.
Clay Collins: Okay. Instead of diving into all of that, which might be a fun topic for another episode, let’s wrap up chapter one and kick of chapter two which is a review of our favorite updates submitted by crypto teams to Proof of Work during August. I’ll kick this off by mentioning some updates submitted by the Dharma protocol.
I’m really a huge fan of Dharma in general. I think it’s a huge market. I think it’s an ambitious project [00:28:30] that Dharma’s building. I love that they haven’t issued a token yet. I think that’s really smart on the team’s part. So here’s how I think about Dharma which is a platform for creating debt markets. So, the US money supply, the M2 money supply is at about 17 trillion dollars. So M1 is like cash, coins, checking accounts. M2 includes like money market accounts and relatively accessible stores [00:29:00] of money. It’s at about 17 trillion. The stock market is at 30 trillion dollars. But the bond market is at 40 trillion dollars and the bond market doesn’t even include household and other forms of debt. So, debt is a really, really, really big deal. And I think it is essential and necessary that the crypto space with a store value, like Bitcoin and created smart contracts.
I really think that debt [00:29:30] is a monster, monster use case. And everyone quotes David Graeber’s Debt: The First 5000 Years, and talks about his assertion that debt actually came before money. I think that’s really an interesting point to make and I think it’s unwise to ignore the impact of debt markets on the space. So, I’m a huge fan of what Dharma is doing. They released a relayer kit which allows, I don’t want to say anyone, [00:30:00] but developers to create relayers on top of the Dharma Protocol. And so I think-
Clay Collins: Developers to create relayers on top of the Darma Protocol. I think anyone who’s followed the Zero X project can find an analogy there. So, a relayer for Darma works very similar to a decentralized exchange on top of Zero X right? You’ve got a maker and taker, or a buyer and seller. A bit and ask in a traditional exchange. On Darma you have a lender and a borrower. Right? And then there’s an interest amount and there’s a transaction [00:30:30] fee. I just think there’s so much that can happen here given the size of global debt markets, which are larger than global stock markets and larger than global money supplies.
I’m really excited about how easy they’ve made it launch a relayer on top of Darma. And I’m excited about some of the relayers that are on MainNet. We’ll see what happens there. That’s my first favorite update.
Eric Meltzer: So it’s funny. I have a really intense bias [00:31:00] towards really early stuff and go to market. You’re talking about the size of M2 and whether debt came before money. All I can think about when I look at stuff like this is like, “Okay, who’s going to be the first person to use this? Are there users that want this thing?” What are the really simple, tiny little toy use cases? I think Darma is definitely one of those projects where people definitely want this. The really simple thing is people want to be able to borrow assets they want to short. One of the biggest complaints that [00:31:30] cryptofund people make is, all the coins that you actually want to short are what’s known as difficult to borrow assets.
There’s not that many people that are lending them out. There’s not that much liquidity. And so, if you have something like Darma … What’s cool about these decentralized exchanges besides the fact that they eliminate counter party risk, is that they make it really easy to aggregate liquidity because they’re all sitting on top of the same permissionless platform. I think, if Darma just keeps doing what they’re doing, they’re going to be sitting on something very useful.
Clay Collins: I agree. I forgot what it’s called, [00:32:00] but it’s really short term debt, like almost like Payday Loan debt, but non-scammy. I can envision a scenario where an employer pays an employee through a smart contract, but that smart contract is also locked up with Darma. You can take a loan against future earnings in a fairly short-term way. I can see how this would be helpful for shift workers or other people. It’s fairly low-risk for the lender. [00:32:30] And fairly low interest rate for the borrower. I struggled a little bit with what the short term immediate use cases are, other than people borrowing money for speculation. But, I think there’s just so much demand to borrow money that I can’t help but think this is going to catch on in the long term. It might take a few years though.
Eric Meltzer: Yeah. Darma definitely is one of the projects on Proof of Work that they update every week. Every week they have something interesting and new that they’re doing. They’re shipping.
Clay Collins: We recently had Nadav on [00:33:00] the podcast. I think he’s one of the most brilliant people on the space. I think he’s a really sharp guy. I think they’re going to keep on shipping at a really amazing clip. Eric, what’s your first favorite update of the month?
Eric Meltzer: So I think my favorite … It wasn’t the formal Proof of Work update. They’re actually going to be starting next week on that. I would have to say HandShake’s launch was kind of the most exciting thing to me that happened. And so, what I like about that project is that they launch directly to a functional test net. And within [00:33:30] a week there were people building on that test net. There’s a Chrome extension out now so that if you install this Chrome extension you can actually resolve HandShake domains. You can … In Chrome you can type in a HandShake domain and it will share your website. So super excited about that.
I will say the funny backstory on that is that our fund invested in HandShake last year. When we invested they were like, “We’re ready to launch test net in a couple of weeks. This thing’s going to be live.” [00:34:00] I was like, “Cool, that’s awesome.” A month later I was like, “Oh yeah, let’s check in on HandShake and what’s going on there.” They were like, “We’re really close. Basically one more week.” So I’m like, “All right, cool.” And then this went on for weeks. I was super annoying to the HandShake team just like, “Guys, what’s going on?” I’m not in that big of a rush but I kind of want to know what’s taking so long.
At one point, one of the chief [inaudible 00:34:28] at HandShake was like, “Dude, I don’t [00:34:30] really know when we’re going to launch. But I found some people that might.” He sent me a link on Yelp to Fortune Tellers in the San Francisco area. I was like, “All right, cool.” They ended up … They were quiet for like a week and then suddenly it launched. Now that that’s out there, that’s been the most exciting thing to me recently. It’s one of the few protocols out there that I’ve see where there’s just massive dev interest from day one. There’s interest …
I have a lot of friends in the tech space, who, to this [00:35:00] day are really skeptical of cryptocurrencies. Some of them are like … Even BitCoin they don’t like. Some of them are like, “We get BitCoin but everything else is a scam.” A lot of those people … I sent them the HandShake docs and they were like, “Oh, this is like really cool.” There’s all this cool stuff we can build on it. I think that’s really exciting.
Clay Collins: I think one of the limitations or one of the bottlenecks to mainstream adoption is the ability for these cryptocurrencies which are native to the internet to extend [00:35:30] themselves into the worlds that we live in everyday. I think these kinds of internet native technologies that build on these foundational technologies that sort of started with the advent of BitCoin … I think it’s important. I think it’s … the development needs to be proximal to what already exists and have value. I think that’s what’s been lacking. I think it’s important to remember that …
Eric Meltzer: Totally. I mean, we’re so far from that. I think the reason that I’m so excited about HandShake is that it’s a reasonable step forward. We get all these pitches all the time from people making these really complicated docs that are going to be used in all these ways that are analogous to the ways that people are using apps today. I’m like, “The space is [00:37:00] just not there yet.” There’s all this infrastructure that just doesn’t exist yet. So it’s like, HandShake is taking us from the IP days to the days where there’s this thing called URLs. You can go to a URL and it will resolve something. This is something people have been trying to do for a long time.
The first altcoin, as far as I know, was NameCoin. NameCoin had a very similar mission to what HandShake is doing. But there was some pretty fundamental problems with how they approached it. Then you know there’s been a whole bunch of attempts since then to do [00:37:30] this sort of human-readable addressing in crypto. And so, this is … It’s a problem that everyone has known about for ages. It seems like these guys have a really solid solution to it. And so I think we’re going to see a lot of neat stuff.
Besides tech people that I showed this to, I showed it to a bunch of my internet culture friends. People I’ve known that have been writing interesting blogs for ten years or have been doing internet art. A lot of them were really excited too. They’re like … You can make all these weird things. You can do … You can have an emoji domain [00:38:00] on HandShake. You could just be like Eric.fire emoji or whatever. There’s a lot of fun and interesting stuff that I think is going to come out of this. I’m excited to have them on Proof of Work and I’m stoked that it exists.
Clay Collins: It’s very cool. So, let’s transition to our second picks. Mine is a combination of Agoric and Zeplin. I think they’re trying to solve similar problems which is that smart contracts [00:38:30] and the scripting languages around smart contracts are really a pain in the ass. I think hacks … Money lost due to hacks around smart contracts is approaching or may have even surpassed the dollar amount lost to people hacking exchanges. It’s probably getting close there. I don’t have hard figures in front of me. But, it’s a real problem. We’ve got situations like the Dow hack or the Parody hack [00:39:00] where the code was out in public. It was open source. Everyone could read it. And still there were exploits that were found.
Zeplin as well. They seem to be taking a different approach. It’s more about providing a battle-tested library of smart contracts that have been used in various situations and that can be modified. I think that’s a smart way to go as well, especially since their library is For Solidity which is the most popular smart contracting language. So, I like what both of those teams are doing. And I think it’s similar to HandShake [00:40:30] in a way, where it’s providing value that’s immediately usable to folks that are needivly operating in the space. And it’s just another piece of scaffolding that I believe we need to get to where we want to go. What’s your take?
Eric Meltzer: So, I love both of those projects. I’ve known the Zeplin guys for a long time. Demi is a good friend. Manu also was a special partner at our fund for awhile. And yeah, they’re just like … they got into the game. The auditing … They’re part of this really interesting scene in [00:41:00] Argentina. In Buenos Aires there was this house called House Voltaire. They all lived there. [inaudible 00:41:07] and a couple of other interesting projects. They kind of just created this community out of nothing. And became one of the premiere auditors in the space. And then, in the course of auditing, they ended up just making a bunch of their own standard smart contracts where they would just say, “Look, instead of re-inventing the wheel for the 50th time we can just use this contract that we’ve already made.” And then this idea of turning that into [00:41:30] a stake based operating system is a really cool one. I love those guys.
And then the Agoric guys, I met actually through Zuko. Zuko does almost no investment in this space. He’s like, “I don’t have time for it. I need to focus on Z-cash.” But he … When he ran into the Agoric team he was like, “Dude this is sauce.” He explained … One of the really cool things about how Agoric’s thing works is that they use this thing called an object capability model. It’s a different way of thinking about how you permission various objects [00:42:00] in a space. And it’s fairly complicated. People that are interested in security models definitely go look up object capability model and kind of understand how that works.
But I think it’s a pretty intuitive way of writing various secure smart contracts. Zuko was like, “Dude, you’ve got to talk to these guys.” And then I met some of their team at Z-Con at the first Z-cash conference and was really into what they were building. Ever since they’ve been on Proof of Work they’ve just been constantly shipping cool stuff. So, [00:42:30] definitely an awesome project.
Clay Collins: The team definitely seem like they’re a bunch of veterans. Folks that could hang with Zuko and or teach him a thing or two when it comes to cryptography.
Eric Meltzer: Totally. I think what a lot of people don’t realize is that there’s a lot of new blood to the space. But there’s also a lot of people like Zuko and like the Agoric people. Ian Grigg on EOS. There’s a couple people out there that have just been around forever. And they’ve just been super interested in this idea of permissionless digital [00:43:00] money. Since way back in the day. It’s cool to see these people actively working on this now that it’s become a really hot thing. And the technology has evolved to such a place where it’s actually possible to make it work.
Clay Collins: Indeed. And I think cryptography has been around for a long time. Especially public, private key, cryptography. I recently bought a domain from someone. There was this domain name we really wanted for business purposes. On the home page it was like, “Yeah, it cost one BitCoin.” And I was like, “Well, that’s [00:43:30] really interesting.” I contacted the guy and turns out he’s never owned BitCoin before but he wanted to. But he’s an old-school developer. And he’s like, “Hold on, I need to figure out how to create a paper wallet.” And then he just goes away. He reads the BitCoin whitepaper and he just generates his own key. He was like, “yeah, I get this. There’s nothing new here. I get it.” He’s like, “here it is. There’s a black explorer. I generated a key. It’s cool.”
Eric Meltzer: Yeah, yeah, yeah. It’s always awesome to see people get into BitCoin for the first time. I think selling [00:44:00] a thing that you made, or selling a domain for your first BitCoin is definitely an awesome way to get your hands on one.
Clay Collins: For sure. What’s pick number two?
Eric Meltzer: People are going to get so sick of me for this HandShake stuff, but I would have to say my pick number two for this is NameBase. NameBase is the first exchange on HandShake. They are also people that ship at a ridiculous speed. The next Proof of Work is going to feature their first formal update. But informally, [00:44:30] I’ve been talking about them a little bit in the preludes. Yeah, what they’re building is very simply just a gooey interface and a custodial wallet for people to buy and sell domains on HandShake. They’ve got about a million ideas for different ways to make HandShake more user friendly and more interesting for people.
I think the coolest thing that they’re talking about building is, if you think about it on HandShake … this takes people a while to wrap their heads around. Any name on HandShake is actually a top level domain equivalent to .com [00:45:00] or .org. What that means is that if you register Clay Collins you can just use Clay Collins as your domain. There’s no x.y format. It’s just Clay Collins. But, if you registered Collins, you could register… You could then have sub domain, Clay.Collins. And then you could also sell .Collins sub domains to anyone in the world that’s named Collins and wants one. Joe.Collins and Bob.Collins can come buy those domains from you.
What’s interesting about that is that’s not … It’s not natively supported on the blockchain. [00:45:30] On the blockchain it’s only the top level domain that’s being registered to the HandShake blockchain. The sub domains currently would be maintained the same way that a sub domain on .com is maintained. There’s some name servers and you have records for all of those sub domains. In the whitepaper there’s actually discussion about, could you create, for example, a plasma child chain that records sub domains? And so, one of the interesting things that name base can do early on is that it can allow people who have [00:46:00] these interesting top level domains to then sell and maintain sub domains on them.
I think in the beginning that will probably be a centralized kind of thing where it’s just NameBase is helping you do that. But I think, in the long term, there’s going to be a lot of really cool stuff around probably plasma chains for these sub domains. And why that’s important is … This is getting kind of deep into the technical weeds. But I know the listenership here is quite technical. Is that on HandShake there’s kind of two security models. There’s actually maybe three. The highest [00:46:30] security is you can run a HandShake full node and you can resolve domains through that full node. In that case you know you’re getting the correct domain.
A little bit weaker security model is you can run a light node that does these SPV look ups to the chain. And then, the third security mode is just kind of similar to normal DNS where you’re just pointing at a name server and you’re hoping that that name server is, itself, a full node. And so, for sub domains you only have that third option because they’re not on the blockchain at all. But at the point [00:47:00] where there are some child chains or side chains, whatever they want to do to record these sub domains, then the things that NameBase is currently managing can actually go on chain and they can be resolved at the same level of security as these HandShake top level domains.
I would have to say the NameBase guys is definitely one of my favorite teams in the space. Shipping super, super fast. They’re about to be done fundraising. They’re actually pretty funny. These guys were bitching to me nonstop that fundraising is so distracting and it’s slowing them down so much. I was like, “You guys are still [00:47:30] shipping about as fast as any other team in the space and you claim that you’re being slowed down by fundraising.” I’m kind of scared to see what it’s going to be like once they’re no longer distracted by that. But, they’re going to be doing Proof of Work updates. Everyone can follow along with that as of next week.
Clay Collins: Smart investment. I mean, the freaking digital land grab that is going to come from this. If people thought cryptokitties were the ultimate collectible. They have no idea what’s coming. [00:48:00] And then just sort of the bartering, the exchange. This shit, if it actually takes hold, and you have the ability to … Individuals have the ability to publish their own domains under which other domains can be published. This is just going to go nuts.
Eric Meltzer: That’s exactly how we feel. I mean, it’s interesting that you mentioned cryptokitties because … the HandShake people have never said this but this is how I feel. These HandShake domains are actually the first non fungible digital asset that has a real value use case. Cryptokitties [00:48:30] are cool, and there’s a lot of … I think eventually there will be valuable non fungible assets. I think they’re probably going to come from gaming first. I kind of don’t buy the digital collectible story outside of a gaming context. We’ll see. Maybe I’m wrong.
But I think with NameBase and with HandShake, the value of having these names is so obvious. What’s really cool about names is that they’re naturally scarce. And so, even BitCoin … BitCoin’s scarcity is artificial. We create BitCoin scarcity because we all agree that there’s only 21 million BitCoins. [00:49:00] I would say that I think it’s underappreciated how much harder that is in BitCoin than anywhere else. BitCoin has this intensely ideological culture around, “We are never modifying that.” The number of curmudgeons that don’t care about money at all that you would have to go through in order to change that is pretty high.
But I think with names there is this interesting aspect where the space of names if finite. And the space of names that anyone actually wants is even more finite. And so you have this natural scarcity around them. And [00:49:30] yeah, at the point where you have a marketplace where you can buy and sell them, and you can sell sub domains on them, I think it’s going to be extremely valuable.
Clay Collins: If you can get a significant cut of that entire ecosystem or the entire ecosystem’s exchange volume, that’s just huge. I was saying to a friend the other day that HandShake and these domains are the cryptocollectible we need, not the one we deserve. It’s going to be awesome.
Eric Meltzer: I guess two funny anecdotes. One is that the team that’s actually building [00:50:00] NameBase did not really realize how valuable it might be. They just thought it was really cool. We, in blockchain, used to run UNB which was one of the biggest Chinese crypto exchanges. We’re very familiar with how lucrative exchanges are. They were like, “yeah, this is so exciting. Maybe we’ll be able to make a little bit of money on this too.” I think it’s going to be pretty valuable. I don’t think you guys really get just how valuable it’s going to be. Now they’ve kind of wised up to that.
I think the other interesting thing is when I told crypto friends [00:50:30] about this and about HandShake they were all like, “Okay, so I have to get my name. I’ll pay anything.” I have a buddy, his name is Jimmy. He was just like, “Jimmy on HandShake is going to be mine. Whatever I have to pay, that’s my name.” I think there’s a lot of demand for these vanity handles. The other thing that I think is exciting is that I grew up on the internet. I think I first had an AOL account when I was like eight. [00:51:00] I really enjoyed … Back then there were all these really kind of ad hoc, really janky communities.
There were web rings and there were groups of blogs that would quote each other. There were almost these little tribes on the internet. I kind of see with HandShake that might come back. I think people are going to have all sorts of interesting content on HandShake. There’s something that I thought about last night which is like, it’s actually possible to know every single website on the HandShake internet if you monitor the block explorer so you can see when a new domain [00:51:30] is registered. You could crul … This is a free idea for anyone who wants to build this. I think it would be cool.
You could monitor the block explorer. You can see anytime an auction concludes. You know a new domain has been registered. Then you just have something that cruls all those domains every day. You see if there’s anything actually out there. If there is, then you can make a sight like Stumble Upon. I don’t know if you guys remember that, but Stumble Upon was this extremely addicting, extremely time wasting, really cool website where you would just click and it would give you a new, random website [00:52:00] from the internet. I think there was some social filtering. They tried to make sure that the websites were interesting. But you could totally make that for HandShake and you could just explore the early days of the HandShake internet. So I think it’s going to be really neat.
Clay Collins: Then you could create the Yahoo directory for HandShake manually for a few years here.
Eric Meltzer: Yeah, cause it’s going to be really small in the beginning. In the beginning it’s just going to be a bunch of nerds and weird internet people like us that have content up there. I really … I’m obsessed with the early days of communities [00:52:30] like that. I think that … one of my favorite sci-fi authors, this guy William Gibson …
Clay Collins: The king.
Eric Meltzer: Yeah, yeah, yeah. I didn’t know you were a fan. But yeah, he’s amazing. One thing he’s really bummed out about is that in this late capitalist environment that we live in, if you have an interesting sub culture, within months, it’s been commodified, and it’s a new trend. Kylie Jenner is wearing it. And it’s over. And so I think, the early days of HandShake are going to be really fun. It’s this quite, weird, unknown [00:53:00] corner of the internet where people can experiment. I’m super excited to see how that develops.
Clay Collins: Me too. Speaking of sci-fi, have you read Snow Crash: Cryptonomicon? Do you like Neil Stevenson?
Eric Meltzer: Yeah, I’m a big fan of both of those. I actually tweeted out a cryptocannon for people that are interested in sci-fi. Stevenson and Gibson are way up there. I think the other one that people don’t talk about as much is Bruce Sterling.
Clay Collins: Oh, I don’t know.
Eric Meltzer: Bruce Sterling is great. He actually co-wrote a book with Gibson called The Difference Engine that’s this Victorian era steampunk book about Charles Babbage [00:53:30] and the first computer. That’s a great one. But he’s done a bunch of interesting kind of cyber-punk short stories. Also really great.
Clay Collins: Transitioning to pick number three. I’m going to go with Compound. To be frank, I don’t think that their updates in Proof of Work are that interesting. It’s all early stage stuff like, “We fixed this bug. We created a validation engine. We published this documentation or updated our whitepaper.” Stuff like that. But I think the problem that they’re solving [00:54:00] is really interesting. I think the team is also pretty interesting as well. They’re essentially creating an open source money market for Atherium. I think it’s a super valuable use case. I think one of the biggest needs in the space is the opportunity to earn interest on our crypto wealth or just our crypto. Whether or not it’s wealth.
I think a money market is a really efficient way to do that. I like that you don’t have to maintain an order book or [00:54:30] constantly be actively in accumulation mode. This is more of a passive way to earn dividends on your crypto. So I’m really excited about it. I hope they pull it off. But we’ll see. What’s your take on Compound?
Eric Meltzer: Yeah. Compound is super cool. I actually didn’t get in their round. I wanted to invest but I committed way too late. And they were like, “Sorry, we’re full.” I was like, “ahh.” But I know the guys really well. They’re really cool. They’re working super hard. And I think you’re right. What they’ve made is pretty [00:55:00] much an obvious thing that people need. And I think they can execute on it.
Clay Collins: Yeah for sure. A trustless …
Eric Meltzer: One really interesting thing that I haven’t heard a lot of people talk about that I think I’m going to have someone at our firm write about is like, “In the near future, if you hold crypto, there’s going to be a lot of ways you can earn some interest on it.” If you have either you could lock it up in Makers, CEPs. You could lend it out on centralized exchanges for margin lending. You could put it in Compound. If it’s proof of stake you could stake it. I think it will be really interesting to see [00:55:30] how these various things compete. They all have different levels of risk. And then they all have different levels of reward.
I think once you have a lot of crypto in the hands of extremely rationale economic allocators, they’re going to put their money wherever the most value is created with the least risk. If you have something that depends on people staking, you better hope that that’s going to risk adjusted a good move or they’re not going to do it.
Clay Collins: Yeah, and hopefully there will be some sort of, I don’t know, a [00:56:00] meta allocator that sits on top of all these different options for deploying your crypto assets and getting a return. And it can move a slider from high risk to low risk.
Eric Meltzer: Yeah, yeah, yeah. Totally. That would be really interesting. There’s some interesting … In crypto there’s some zero risk ways to deploy. The collateral is locked up so you know you’re getting your money back. And then there’s much riskier stuff like staking in a system where you might get struck. Or lending out in a way that’s not collateralized. I think it will be really … It’s going to be fascinating.
Clay Collins: Every time we have [00:56:30] an Argentina or a Greece, or a Zimbabwe … Where did it happen most recently? Turkey … It’s like, money flows to crypto. I see adoption on the rise. What’s your third pick?
Eric Meltzer: Quick … I think that hasn’t even gotten close to getting started just ’cause in most of these countries that have a demand for crypto because they have an unstable or inflationary currency, the on ramps suck. Those on ramps are only getting better. I think we’ve only barely seen the [00:57:00] beginning of that narrative. But anyway, I think the other pick that I have is the D-Cred guys have been working on this thing. Pullitaya. It’s fairly simple. I’ll preface this with, I’m still really skeptical of on chain governance as a concept. But I think if any one is going to make it work it’s going to be D-Cred. They have this cool system that’s an on chain proposal system.
It actually stores all the data on chain. And you can propose, “We should build this thing for a D-Cred and I want [00:57:30] x amount of the block subsidy to get diverted to this so I can go build it.” Having that on chain is important. If it was just an off chain website or something, it’s not censorship resistant. If D-Cred came under serious attack, they could just take down the proposal system. They’ve been cranking on this for a long time. Like anything in crypto, that has the most brutal adversarial model ever, it’s much harder than it sounds.
It sounds like this would be easy right? You just have this big page with proposals. But there’s a million attack vectors and a million different [00:58:00] ways it could get censored. They’ve been working on this for a long time. But they’re very close to having it actually live. I’m super excited about that. I think it’s really cool. Again, even from a position of some skepticism around on chain governance, to me it’s one of the most exciting experiments being ran in the space. So I’ve been paying a lot of attention to that. I love what they’ve done with that.
Clay Collins: Yeah, so I’m a somewhat early D-Cred holder. It’s so funny … I saw a tweet the other day where someone was describing narratives around [00:58:30] bias or lack of skin in the game. The tweet essentially said, “If you say you don’t hold someone then people will claim that you’re searching about the token or fault because you don’t have skin in the game. But yet, if you hold a lot of it, then you’re just schilling your bags.” So, anyway. I think D-Cred is doing some interesting work. I’m also skeptical and I think that there’s some sound logic in some of the sort of rebuttals to on chain governance from Vitalic and others. But I also think [00:59:00] it’s something that shouldn’t be written off. And I think it’s a worth experiment that the world needs. I’m supportive of the ambition.
I think we’re going to get there eventually. But I still think there’s a lot of problems that remain to be solved. Namely, participation and getting people actually interested and voting. How do you have effective on chain governance in a scenario where people aren’t actively voting? We saw that scenario play out with EOS and sort of the stalling of the launch [00:59:30] there. If I understand that correctly.
Eric Meltzer: The other thing I would say about D-Cred and in general is people are like, “Oh, there’s all these problems with this potentially. It’s maybe not going to work.” And I’m like, “Well, good. If this was obviously great, there’s no investment opportunity.” The same thing I feel is true of the space. People are like, “We just don’t know if there’s anything here.” And it’s like, “Yeah, good. At the point where everyone is saying BitCoin is awesome, it’s over.” It porkbellies.
Clay Collins: it’s priced in.
Eric Meltzer: Yeah, there’s not any venture upside left. So I think [01:00:00] for me, it’s very fun and comfortable to be in these spaces.
Eric Meltzer: For me, it’s very flat out uncomfortable to be in these spaces where its like we’re not really sure if it’s going to work yet. You mitigate that by having a great team, like D-CRED, that is honest. They’re not over hyping what they’re building. You know, when I talk to them, they’re as skeptical as anyone, but they’re saying, we have this thing that we think is interesting and we’re going to build it out and see what happens.
Clay Collins: I think it’s easy to write D-CRED off when you see their space suit break dancers and they’re kind of NASA-esque jackets, but-
Eric Meltzer: Supposedly it was told [01:00:30] that I have one of those jackets in the mail and I did tell them that I’ll wear at my next talk if they send me one. I actually don’t have any credit D-CRED at the moment. It’s one of those projects that I’m excited about. I was excited about it early enough that I was like I should buy some of this but then I just never did. I’m waiting for this bear market to continue and I’ll probably pick up some D-CRED so I have some skin in the game and then people accuse me of shilling my packs.
Clay Collins: I think Chris Perninski and Joel Over at Place Holder Ventures are smart people and I think contribute [01:01:00] a lot to thinking in this space. The first and I believe the only prospectus they’ve written up around an investment they’ve made was on D-CRED. I think those guys aren’t fucking around in general and so, I think there’s something to pay attention to here for sure. I love their commitment to atomic swaps and the lightning network and you know, sort of as aggressively as possible pulling what they can from development work that’s happening around Bit Coin. I remain a fan and I think [01:01:30] we can expect to see good things happening.
That wraps up chapter two. Let’s move to chapter three. In chapter three, Eric is the editor and chief of Proof of Work, announces the winner of August Ship Award. The Ship Award is a fictitious award that comes with absolutely no prize, for the crypto project that has been most prolific in August and/or is otherwise deserving of the award according to Eric, who I’ve decided can grant this award at his sole discretion and without further explanation. Eric, who gets the Proof of Work Ship Award for August?
Eric Meltzer: [01:02:00] Yeah, I mean, so I’m definitely the editor in chief. I’m the grand puma here, there’s no other editors here at all. I’ve got no competition for that one. Yeah, I think would I have to give the Ship Award to Z Cash for sampling. It’s maybe a little bit premature because it hasn’t been activated yet but it’s ready to go and that’s just been something that it’s a really hard problem. It’s like cryptography research level difficult. I think, you know, assuming it does activate smoothly in October, it will be pretty game changing for the crypto landscape. [01:02:30] I would have to give the Ship Award for August to Z Cash for that one.
Clay Collins: Nice. Now, to chapter four.
Chapter four is a conversation with Eric about topics I’ve wanted to discuss with him. The only basis for the topics hers is that I’ve wanted to discuss them with Eric for a while and I think he’ll have some good perspective on the issues at hand. Okay, let’s get to the first discussion topic, which is about Asian exchange dominance. Eric, why do you think Asian exchanges have been so utterly dominant recently?
Eric Meltzer: [01:03:00] I think it’s complicated. I think the two main factors are the Asian exchanges were forced by adverse government forces to be pretty resilient and they’ve had a lot more pressure. I think you see in natural selection in organisms that when the environment is really hostile, you get some really interesting animals evolving. You know, all these Chinese exchanges evolved in this extremely [01:03:30] adverse environment, where you never know what the regulators are going to do.
I think in the US there’s this perspective that the regulators in China hate crypto. I don’t think that’s really the problem. It’s like the issue is just the regulation in China is much less predictable, and so it’s very hard to tell when you’re on the right side and when you’re not. These exchanges have had to deal with that from day one and as a result, they’re not tied to a Fiat gateway. They’re mostly crypto to crypto. There’s also just so much competition among them. There were hundreds and hundreds of exchanges [01:04:00] fighting for this market share, and so they’ve all had to get really, really good about what people call in Silicon Valley, growth hacking. You’ve seen them get really good at that.
The other thing I guess is just like China and the US are the two main crypto markets, but in the US, because we do have pretty clear regulation, there’s a lot of things that US exchanges just can’t touch. You see, Coin Base only lists a very small subset of crypto-assets. Bittrex lists a lot more but I think Bittrex [01:04:30] has the issue of you know, they didn’t have this like intense competition the way China does. The Bittrex guys are great, the team is very strong, but I would say from a user experience perspective, from a liquidity perspective, you know, Binance is pretty much eating their lunch.
Now, what becomes really interesting is like will some of these Asian exchanges successfully go global. I think, to me, the one that has the best shot at that, at least for now, is probably Binance. They’ve each kind of carved out these cool niches. You [01:05:00] know, Okay Exchange has this massive futures market and it’s the biggest cryptos future market in Asia for sure. A lot of the miners use that to hedge risk. I think they’re doing really well there. That’s a really profitable part of exchange. They’re going to kind of, I think, continue to dominate that.
And then, Wabi is focused, I think, on just owning the China market. I think they’re pretty good at that. Wabi is a very like natively Chinese company. They’ve localized for China, that’s their market.
[01:05:30] And then, Binance I think is kind of uniquely interesting just because they’re the only Asian exchange that really focused on going global. You know, if you look at CZ’s Twitter feed, it doesn’t look like a CEO. It looks like a national leader. He’s like hanging out with heads of state of these small countries and he’s hanging out in Malta, Uganda and Bermuda and all these places.
I think Binance has a chance of making this enormous global business. But like you said, Binance has only been [01:06:00] around for like a year. A little longer than that, but they’re still in some sense an underdog. They definitely have less on their balance sheet than the other Asian exchanges, because in crypto, because these assets are deflationary and because we’re not even close to full out option yet, the earlier you start, you get a big head start because you’re collecting fees when Bit Coin is really cheap. Binance from a balance sheet perspective is still far behind. I just think from an execution perspective, they’re really, really fast. [01:06:30] They’ve managed to hire extremely talented people. You know, they have a really great team doing investment, the labs team, and they’re technically very good.
I don’t think Asian exchange dominance is going anywhere. It kind of feels to me like the world is just going to belong to, you know, Binance on the one hand and then like the really regulated exchanges, like Coin Base on the other. Then you have this kind of yin and yang for the space.
Clay Collins: I think that’s a really kind of a stew point that Asian exchanges have [01:07:00] in a lot of ways existed in a pressure cooker from day one, both from a regulatory perspective but also from just a sheer competition perspective. I mean, I think maybe another factor contributing to the dominance is just like billions of people. (laughs) It’s just a numbers game as well.
Eric Meltzer: I forget which- One Silicon Valley VC wrote this article that was like Chinese start ups just work harder. He was talking about this culture that he observed in China, where like people would do tons of overtime and be [01:07:30] sleeping in the office and be working really hard. He got a lot of hate for that and people were like, you know, that’s all manner of hate was directed at him for this. I was sitting there thinking like, you know, it’s pretty true. These Chinese companies that we know work insanely hard. They’re extremely focused on shipping and they have, like you said, in this competitive pressure cooker.
I think that is an advantage and we see that in Chinese manufacturing too, where like I have a friend who has been working on some hardware projects. [01:08:00] He was trying to manufacture them in the US. The issue became like he would just have all these weird experiences where like a US supplier would say, well we’re going to have this for you in like 60 days. He’s like, okay, exactly 60 days? They’re like, yeah exactly 60 days, you know, plus or minus five days, we’re working on it. Then he talked to a Chinese supplier and they were like, we’ll have this for you in 42 days. He’s like okay. They’re like yeah, not 43, because we’re going to get someone on a plane and they’re going to carry these samples through customs to you because we found that’s faster.
[01:08:30] I think there really is like this culture of like extreme dedication to shipping. You know, the weakness in China is I think there are less like super creative new companies coming out. I think on the protocol level, most of what we’ve seen in China is not super exciting. On the infrastructure level, where it’s just down to like who ships faster, I think it’s pretty hard to compete with them.
Clay Collins: Just data for my exploration of the space because we work with a lot of exchanges, closer to being over 150 exchanges integrated with Nomics, but according to my research on this space, [01:09:00] this is kind of interesting. About 10 months ago, we needed to integrate with 11 exchanges to get 50% of exchange trade volume in the space. Now, it takes about 40 exchange integrations to get 50% of the trade volume in the space. Of those 40 exchanges, about 36% of those were started in 2017 or later. 11% of those 40 exchanges that account for 50% of the trade volume in the space, 11% were [01:09:30] started in 2018. All the newcomers are Asian exchanges. Almost all the top 10 are Asian exchanges so it’s super, super interesting space to watch.
Eric Meltzer: Totally. I think there’s like weird psychological problem in the crypto space. I think that’s like everyone always thinks they’re too late. It’s always like someone is like I bought Bit Coin at a hundred and it’s just too late. It’s already done 100x. If I had got there at a dollar and then two years later they’re sitting pretty happy. I think the same thing is true [01:10:00] in exchanges where people are like oh, there’s already all these big exchanges. It’s impossible to start an exchange now.
It’s like if you look at the numbers, Crypto adoption is still tiny. Most people in the US do not own any crypto assets, and so, you know, just from a pure numbers game, it’s very clear that we’re super early in this and that the market has not solidified at all. Yeah, we’re going to see a lot of consolidation around these big exchanges but there’s still tons of room for new entrants.
Clay Collins: I think there’s definitely a path to starting out with a vertical solution or, you know, an [01:10:30] industry specific solution and then boot strapping your way into including additional crypto assets. I mean, we’ve seen kind of the top down approach where, I believe Bittrex started out with Bit Coins, started adding a bunch of new tokens and then announced that they’re going to list security tokens. Coin Base has done the same. You can go the other way. You can start out like Name Base. Decide that you want to start including other assets that are maybe related, maybe other cryptos or I don’t know. There’s lots of paths to, you know, climbing up the ladder over time as [01:11:00] you accumulate more users and more expertise and more resources.
There’s still so much, so much opportunity and I think Binance is a great example of that.
Eric Meltzer: Yeah. Yeah, totally.
Clay Collins: Okay. Second question. What, other than exchanges and excluding token sales, which I’m not counting, who do you see making money in this space?
Eric Meltzer: Yeah, so I would say we’re definitely going to exclude token sales from this because that’s not making money, that’s basically like almost like if you’ve done a token sale, you now owe all these people that you sold [01:11:30] the token to an awesome product. You know, you got to deliver on that and I think a lot of these projects won’t be able to.
I think exchanges are making money, stuff adjacent to exchanges while it’s in OTC desks are also making a lot of money. I think we’re going to start seeing non-exchange products making money but I think, stuff like Darma is probably going to be the first layer where it’s like these slightly more complicated financial products, like lending, that we see working.
There’s a lot [01:12:00] of people trying to crack sort of the global orbitances thing. There’s a lot of reasons why crypto is not that great for that yet but I think we’ll see that starting to take off and starting to really work. And so, I’m interested in kind of anything in that financial infrastructure space.
Clay Collins: Essentially variations on the theme of value changing hands and some sort of intermediary, whether it’s a decentralized or not decentralized intermediary taking a cut. Yeah, I think that’s going to be the business model here for the next few years, at least.
Kind [01:12:30] of going back to, you know, Asian exchange dominance and growth hacking, just off the top of your head, what are the biggest moves exchanges make to grow? I’ve seen affiliate programs, they seem to work really well. Affiliate or referral programs and then just being as aggressive as possible about listing new tokens and essentially being like the one place, the real user base for liquidity that has a token that you might want to acquire and then that sort of grows the user base. Is there a third play that sort of comes to mind?
Eric Meltzer: [01:13:00] I think you got it. Those are the main things. The tricky part is always like how do you cold start? Right? How do you come out of nowhere and become interesting? I think we’ve seen a couple ways, some of them work better than others in the long term. I’ll talk about one that doesn’t seem to have worked too super well is there’s an exchange in China called F Coin and they have this interesting model where they actually rebate 105% or 120%, some [01:13:30] number more than 100%, of your trading fees, but they do it not in the token that you’re trading but in their own token, which is called FT.
What this very quickly created was this massive incentive to wash trade. That’s exactly what people did. We have a friend actually, who he took 2000 Bit Coin or 3000 Bit Coin and he just traded it back and forth on FT until it was completely gone, until all the Bit Coin had been spent on transaction fees. He was getting those transaction fees back in FT and he was getting more than the Bit Coin [01:14:00] he put in, and so as long as he could then sell that FT, he could just make like essentially risk free profit day in and day out.
He did this for like weeks and made millions of dollars just wash trading FT. The problem becomes like there’s no real value for this token. The second people don’t want to buy the token anymore, the whole thing collapses. I joked on Twitter about like FT is basically arbitrage on coin market cap advertising because you do all this wash trading and F Coin [01:14:30] shows up as the number one exchange in the world for a while and you got that for free. But, now they’re in this really tough spot where they’ve created all these tokens but they’ve got to make the tokens valuable somehow and the token value crashed big time. They’re running from model to model trying desperately to make it valuable.
I think that’s maybe an example of you pushed off, you’re able to get a cold start and people got really excited about this and made a lot of money but then like, now you’re in this really bad position you essentially have this debt overhang where you have to somehow make this token valuable.
I [01:15:00] think on the positive side, I think how Binance got started was pretty smart and so like, Binance, they did referrals like everyone else. Back in the day, Coin Base did Bit Coin based referrals, where if you referred someone you got some Bit Coin and it was a very small amount but because it was Bit Coin, now it’s like a lot. I think that worked pretty well for them, but what Binance did with B and B is like they created this token. The platform token has a very simple model where like they buy it back with their profits and then, also it used as a discount on the site. [01:15:30] So, people kind of had an obvious idea of why it would be valuable. They did a small ICO and sold some of this token and then, they created essentially this army of Binance missionaries that were big holders of B and B and so, had a huge incentive to make B and B appreciate. Those people refer tons and tons of friends and so, they were able to grow very quickly.
Also, they were the first people to list some tokens, like you said. I think B and B was like a really neat way to kind of cut people in. I think we’ll see more of that, right? Because even B and B, [01:16:00] it functions as a profit share to Binance but there’s no like actual what I refer to as share holder rights and so you’re just kind of trusting that they’re going to keep it good for their investors. I think the Binance people are quite trustworthy and I’m fine with that, but if they had to compete with something that had real guarantees, it would be interesting. I think for example, the decentralized exchange that had a smart contract with a platform token could potentially do that.
I think we’ll see a lot of interesting innovation there.
Clay Collins: I think B and B is [01:16:30] just a super interesting case study. It’s one of those things where like at first glance, I was like this isn’t going to work. They’re just issuing a token to raise money, but now I look at this and I love that B and B is like you get 50% off trading fees, so it actually has real value because Binance has liquidity. You know, CZ is reporting that the majority of Binance employees are taking payment in B and B. Their venture fund is taking returns and burning B and B. Like it’s just fucking incredible. They’re actually [01:17:00] making it valuable and the market cap is a billion dollars and that’s a fraction of what Binance is worth right now.
If you consider it to be a reasonable proxy for equity in the company, which they may never issue, like this is basically like non-voting common stock. It’s kind of a good deal. Don’t buy this based on my advice, but I’m very bullish on B and B.
Eric Meltzer: Yeah, B and B is really interesting. I can imagine that B and B is this really rough prototype of what this could like. I think Binance, you know, they’re very [01:17:30] into the decentralized exchanged stuff so I think they could take it in this direction or someone else will. But imagine a token like B and B but it’s on a decentralized exchanged, it’s issued by a smart contract and it gets a cut of transparent cash flows from the decentralized exchange. Then you have something really interesting because you’ve eliminated a big chunk of the counterpart of your risk. I think when people talk about security tokens, I like just get really bored and want to go to sleep.
That’s mostly because what they’re talking about is like tokenizing existing [01:18:00] securities. That’s cool and like there’s definitely going to be some neat stuff there. Bruce Fenton has some interesting stuff about this. I think that’s going to be a thing, it’s fine, but it’s definitely not crypto and it’s just like not that exciting to me.
If you think about it, these things are very similar securities. If you did have these securities that are backed by unchained cash flows, then you have something that’s pretty fascinating. It’s like deeply transparent and there’s much less counter party risk. I think that aspect of security token is really exciting to me.
Clay Collins: Absolutely. I think there’s an additional [01:18:30] interesting facet of B and B which is that they’ve haven’t measured this recently, but Binance has effective boot strapped their own quote currency. There’s a lot of different types of dominances that can be tracked in this space, exchange dominance, market cap dominance, but to me, like if you think of money as a means of exchange, a store value and a unit of account, I think of quote current dominance as measuring unit of account. [01:19:00] The fact that they have B and B pairs for like every single one of their coins and they’re the top exchange, instantly shoots them to at least the top five in terms of quote currency dominance. That’s really, really compelling and I think something that merits more analysis.
Eric Meltzer: Yeah, I totally agree. B and B is really- I like it a lot. It’s very cool.
Clay Collins: Well, that’s a wrap to chapter four. In chapter five, [01:19:30] we discuss expectations for September. Eric, what do you expect to see in September? You mentioned some stuff coming down the pipe from Z Cash. Obviously, there’s the Name Base and Handshake stuff. Is there anything else that you’re particularly looking forward to?
Eric Meltzer: Yeah, so supposedly Handshake is going to launch their main net in September. My experience with main net launch dates leads me to believe that that might delayed, but it’s possible. They’re definitely going to get a lot closer so there’s a lot of interesting stuff happening on test net. [01:20:00] There’s going to be a lot more realization that Handshake exists, just because they’ve been fairly quiet and I think they’re going to start being pretty loud. We’ll see a lot of interesting stuff getting built on that. You know, I think someone is talking about making a really interesting blogging tool where you can like with one click just create a blog that’s hosted on maybe Cya and then, is fronted by Handshake and so you have this completely decentralized static website.
I think we might see that in September. It might take till October [01:20:30] to get that out.
Again, Z Cash, Sapling doesn’t go live until October so there’s not going to be a ton on that but I think they’re going to be making sure that all the Sapling infrastructure is ready to go.
You know, Cosmos is doing a bunch of cool stuff. Cosmos still has this test net going and I think it will be interesting to kind of see where the Cosmos thing goes. There’s a lot of people building interesting stuff on Tendermint. You know, I can’t say which yet, but I’m really anti DAP and we don’t really invest in [01:21:00] DAPs very often, but there was someone building something that I think is pretty clever on Cosmos Tendermint. I think that might be ready in September. I’m excited to see that.
Other than that, it’s hard to make predictions. I’m actually surprised every time I read this. Every week I’m like whoa, they’re doing that? Awesome. It’s about all I can predict.
Clay Collins: I saw a tweet from you around sort of the topic of DAPs and you were mentioned a friend who was building something on top of EOS. I thought that was a really good [01:21:30] point. What you were claiming is that the app if it sort of runs its scale, would be really expensive on top of Ethereum but on EOS it does make sense. I was logging into my EOS account, or at least I was on a block chain explore kind of checking out my EOS account and for the very first time, I got a sense for what a real world computer might look like. It told me the percentage. It told me the amount of ram I had on this world computer, it told me the amount of computer power, you know, for the very [01:22:00] first time like this seemed real.
Wow, I actually have allocated resources in perpetuity as long as I’m taking these coins on EOS. It was an eye opening moment for me. It was really cool. I hope that a platform like EOS or the scalability solutions that are in place for Ethereum actually take hold, because I do think there will become a time for DAPs. I don’t think it’s close, but there’s something there eventually.
Eric Meltzer: That’s been always what I’ve been interested in with EOS and like, I’ve gotten a lot of flack for liking [01:22:30] it. I think there’s a lot of claims made by really, really crazy EOS bulls about it that I don’t buy, I do think that like for gambling apps, for gaming apps, it’s a good use case. Actually, so I had a super evil idea for something that would be fun to build on EOS or potentially that I think we can close out with.
I was thinking like- I imagine everyone is familiar with FOMO 3D, but if they’re not, the basic idea behind this game that [01:23:00] these guys made called FOMO 3D is its similar to this game that was running business schools for a while where a professor will say okay, I’m auctioning off $20 and if you bid on it, you have to pay whether you win or not. Everyone will start bidding until it gets to like $19 and then, at that point you’re in a weird scenario because if you’ve bid $19, you’re going to lose that $19 no matter what. But if you win the thing, then at least you get the $20 back. Everyone bids $ [01:23:30] 20 and then, the problem is now everyone has the incentive to bid $21 because even though you’re going to lose one dollar, at least you’re only losing one dollar, not $21.
This game has actually run up into the thousands in these business schools. It’s like a really interesting human psychology exploit. FOMO 3D works in a similar way. There’s a big pot of [inaudible 01:23:49] and there’s a count down timer and there’s some complicated mechanics but the simple part is the interesting part, which is every time you put a dollar or any amount of [inaudible 01:23:59] into the pot, [01:24:00] the counter resets and the price it costs to buy a key, which is like what resets the counter goes up.
This pot got really big, there was like $8 million of [inaudible 01:24:08] in the pot and the guy that actually ended up winning it, performed this really clever sort of exploit on the bots. There were a lot of bots that would like buy these keys and he figured out a way to sort of trick them into putting in the wrong gas price and then was able to actually win the pot. I was thinking there was a potentially really funny, again kind of evil version [01:24:30] of FOMO 3D.
Imagine you have two pots. You can imagine it like a scale. On one side of the pot it would say pro-choice cause like Planned Parenthood and then on the other side is a pro-life cause and people can put money into either pot and there’s a count down timer. The catch is when the timer expires, whichever pot has more, gets both pots.
What you imagine is like the more these two sides dislike each other, the more crazy they’re going to go in making sure that their pot [01:25:00] has the most money. I can think of a lot of like, there’s some fun ones. You could do UC Berkeley versus Stanford. My school, Peking University has a rivalry with the school across the street, Chingwa, you could do that. But you could also make it pretty adversarial.
Clay Collins: Presidential fundraising, a whole bunch of things.
Eric Meltzer: Yeah. Yeah. Right, like totally next presidential election. Trump versus whoever, you have these two pots. I kind of want someone to build this on EOS. If anyone is looking for a fun side project for EOS, you should go build this.
Clay Collins: Yeah, this [01:25:30] could definitely go evil if it starts becoming like funds allocated to assassinations but yeah, wow. That’s super like, that’s a great human psychology hack. I definitely would get into that. Eric, as always, you’ve been extremely generous with your time. Thanks for creating Proof of Work. Thanks for spending time with me today. Just thanks for everything you do to contribute to the space. I appreciate it.
Eric Meltzer: Yeah, thank you, Clay. This has been super fun and I’m stoked to come back next month.
Clay Collins: [01:26:00] That concludes August Proof of Work wrap up. If you’ve enjoyed this and would like us to do this again, please hit us up on Twitter and let us know. If you enjoyed this content, please be sure to subscribe to the Flippening on iTunes or where ever you listen to podcasts. Please also subscribe to Proof of Work at [01:26:30] proofofwork.news. That’s it for now, see you next week.
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