Special Edition New Years AMA 2020 - Part 2 of 3

1:21:50 to 2:43:58

what is your deepest secret well if i told you it would no longer be my deepest secret right why didn't you get a new contract because i need to do that with you guys we're actually going to propose to the community through a voting process uh cardano 2025 along with a whole governing structure and many many more entities than just the core three you started and you the community will decide whether we should do that or do something else because that's the only entity that can give a contract to go work cardano even if i had some third party saying here you go do all this work how would we get all the code we've written to be accepted it's a decentralized ecosystem so you need a government to do that so let's build a government that looks like how the internet was built and that's what we're working on right now why did jeff bezos build a multi-billion million dollar clock inside a mountain is he up to something yeah that clock is incredible i'm actually i studied horology i used to build clocks and watches and i still have a full horological set and i collect clocks and watches atmos is actually my favorite clock and i love restaurant constantine they build these beautiful skeleton uh watches and actually um jk draws my favorite uh automaton maker so apparently jeff bezos likes horology as well and because he's just so rich and he has nothing better to do he's decided for some reason to build giant clocks i don't know why but he built one you'll have to ask him brad garlinghouse would never do a q a yeah and he hired ben lowsky how about that and he paid himself 150 million dollars for the privilege of it um i don't have a lot of patience with respect for certain people especially people like brad uh there was just this fakeness about the management of xrp uh we're like we'll be a cryptocurrency because it's profitable but we're not we're a banker coin but we're not because we're cryptocurrency and we're equity financed it's a weird chimera of our space and i've never understood it i never saw the value in it and then every now and then you'd see something they created you're like oh okay you guys are actually a threat now codius smart contracts in 2015. holy moly that's interesting okay we got to be careful about that and they're like ah we're going to kill that can't allow d5 to form our space we can't allow xrp to be the platform for issuing assets we just can't do that you could have been ethereum guys you were there first you had the engineers you had the people i mean david schwartz is a really smart guy he was at the nsa before he was a proper computer scientist and he knows what he's doing he knows how to run engineers he's a good chief scientist cto you just just let it all go why i don't know why does anybody do anything you know face your community have the balls to go talk to them on a regular basis and let them in a very transparent open way ask you questions and answer them and let them know who you are that's how a ceo should be that's how they should act or maybe i'm just crazy i don't know exactly i talked to stefan thomas about that i called him up he was the cto at the time i said stefan you've got to tell me about this codius thing this is crazy this is great really excited about it because actually it would have been useful for cardano for our computation layer the stateful operators could run codius notes right and then they could run distributed smart contracts and you have a massive throughput so you get more stateful operators you get more throughput on your smart contract and then you just basically pick your trust pairings and you say okay it's a high assurance calculation so i should have seven of nine run it and agree with that answer yeah i don't really care too much in two or three and the cost scales based upon that smart idea and they could have done it and it would have been beautiful did they no crazy crazy crazy crazy will cardano work without internet access long-term goal of mine some i'd like to get done by 2025 offline off chain transactions so for those of you don't know the idea would be that you have trusted hardware in a device like a phone or something you can plug into a phone or a laptop or desktop computer like a phone because this is what you all have you plug the device in that device contains a private key now trusted hardware you can't just be like oh okay transfer private key have it move like for example yuba keys i did that yubikey lecture when you put your pgp key on your yubikey you can't take it out there's no mechanism to do that okay so it's just there so the idea of an offline off-chain transaction would be you create two protocols you create a transfer protocol that allows you to guarantee that you have moved a private key from one trusted hardware enclave to another trusted hardware enclave and how you do that is you encrypt that payload with the public key of the other enclave and you know that that's the other enclave and you transfer it usually it's a signed public key and raw there's all these things involved once it's transferred and you have a confirmation that the transfer has happened then the trusted hardware will execute a proof of security once that proof of secure erasure has been transmitted to the other device the other device will hold on to that private key that's now in custody otherwise it'll erase it now proof of secure ratio means that you've destroyed you have a proof of destruction of the private key on the original device okay all of this can be done offline over bluetooth or another transfer medium why is this important well if you can secure you get a proof of uniqueness that that private key is unique and a way of transferring it from one enclave to another enclave and a guarantee that it's unique after the transfer is done you have effectively created cash because it's completely offline it's completely anonymous and it's infinitely scalable because these are point-to-point transactions and on the blockchain you don't see them but i have access to that money on that trusted hardware enclave so you can now without internet just tapping phones to people and having them sit together for 30 seconds and maybe entering a password or something you can do that and you can't extract the key from the trusted hardware enclaves that's the idea so that's a protocol we'd love to build and create some hardware for and that was the purpose of the university of wyoming relationship was to explore that because that gets me cash in africa especially if those private keys correspond to stable points then those are denominations and they can be transferred and now you have cell phone based stable coin online offline money uh that's totally anonymous and private infinitely scalable and it's within reach within five years it's actually possible to do that hard connect if possible yep usb to both phones sync them through an app click click click click click you're done and most phones have trusted hardware enclaves samsung has knocks for example iphones have trusted hardware your phones will end up in the developing world within 24 to 36 months because you upgrade and what happens when you trade them in they get shipped out to africa is it safe for the bluetooth connection yes because the payloads are encrypted that are being transferred so you do not rely on the secrecy of the transfer medium is what happens if someone steals your phone that is the what happens if someone steals your wallet you lose all your cash so there's always that downside now you could create a recovery situation um where the money is locked and only you can recover it and you have to get the device back but that's a serious issue if your phone is lost you lose your money now you could create a hardware subnet and have these trusted hardware devices act as consensus nodes and have the ability to rotate credentials or give you something and that's stored in secure storage but you had so much complexity when you have a recovery mode that's the point of cash you create cash large amounts of it are problematic small amounts of it have high velocity and they transfer hands all the time so it makes sense to have digital cash and when it gets too large you exfiltrate it from that system and you store it in a more secure means like on a ledger or a trezor through you know some cloud solution what's the most favorite sports car you've owned i have a lamborghini huracan 2017 lp 610 spider love it expensive as hell to fix are those lamy pens very perceptive have a backup phone that actually does not work in this case why because the keys are unique it can only live on one device at a time just like your wallet and the cash in your wallet is unique you can't have a backup wallet with backup cash that's different cash my projects like starlink uh network preempt the need for offline transfers if they can't afford internet how could they afford this trusted hardware enclave i can make a trusted hardware enclave like those 10 gem cards would actually be sufficient you can make them for like 50 cents or a dollar okay so they're very cheap to make and they can be subsidized through third-party actors and that's for an external chip these capabilities are already built into many modern phones samsung galaxies apple phones google phones lg phones htc phones almost all modern phones have a trusted hardware enclave it's part of the arm standard called arm trust zone so those chips exist and that software exists and it even exists in the laptops and desktops of the world through intel sgx and amd's trusted hardware enclave so basically these things do exist they're already distributed to billions of devices and if you want to augment your devices the cost of doing so is in the dollars or cents it's not much larger starlink is a promising idea but ubiquitous internet is something we're probably not going to have for a while and even if we have it it will be intermittent for many places in the developing world for the next 20 to 30 years so pretty good to use a stop gap also this solution is complementary to internet access because this solution allows offline private uh infinitely scalable peer-to-peer transactions to occur so just because you have cash doesn't mean you don't need a bank account and just because you have a bank account doesn't mean you don't need cash they complement each other we don't have a cash equivalent in the cryptocurrency space at the moment what is your astrological sign i am a scorpio can't you just do it with your head yes if neural link actually comes out heard of a person who got chronovirus after a vaccine is this a concern or just a hype article you absolutely can get coronavirus after a vaccine when you hear things like 96 effective it means four percent of people who got the vaccine still got sick usually what ends up happening is that they get sick very soon after they've been inoculated or they were sick prior to being vaccinated they just developed symptoms later now even if that's not the case um the illnesses tend to be less significant uh for example 100 of the modern pfizer cases did not have serious illness in the vaccine groups even though they got infected it was a mild infection so the particular person who got uh the chronovirus after it was vaccinated was a nurse and got it eight days after being vaccinated you need to go through both shots to get full immunity and even after one shot you still have to wait a few weeks before immunity fully kicks in okay so yeah you're not invulnerable or immune but the good news is it's like getting an injection of monoclonal antibodies it probably is going to massively reduce the seriousness and duration of the disease what about ivermectin uh great drug they use it for parasites i give it to my horses to prevent problems there's a lot of evidence that iremectin works strange that we don't talk about it how do you avoid double spend on the peer-to-peer transaction uh basically you that's the proof of secure erasure so after you transfer the key uh basically the enclave will automatically destroy its copy of the private key and you can't do another transfer until that copy has been eradicated and then the other enclave will not accept the private key until it receives a proof of secure ratio otherwise it will actually destroy the key itself so if there's an interrupted transfer and enough time has passed that actually the safe thing to do is destroy the money as opposed to allow two keys to exist so you guarantee it through the proof of secure erasure the uniqueness property thoughts on the mrna vaccines in particular versus traditional great platform they had the moderate vaccine in two days after receiving the genetic sequence and mrna is the future a lot of stuff they have to do to clean it up um the polyethylene glycol that they're using as the adjuvant and for the bilipid layer stuff in the vaccine is um causing allergic reactions uh much higher than a normal vaccine would have anaphylaxis for example occurs about one in a million for a normal vaccine for midair and a pfizer one fifty thousand so it's twenty times more likely um so that's probably gonna have to change it's supposedly an inert substance but it's in mouthwashes and toothpastes and laxatives and other substances and some people have developed a intolerance to it kind of like gluten intolerance and when you inject it to someone that causes an issue so that's an example of being new you don't have an optimal supporting infrastructure around the mrna to make it viable um the ability to in software make a vaccine through a computer model is an extraordinary thing because you can keep up with the rate of evolution like for example you've heard of the uk strain which is far more infectious uh that some scientists believe and you've heard of the south africa strain that it's not it's the same level of infectiousness but it seems to be more lethal and there may not even be strains you know they're variants they haven't quite reached strain level yet uh you know let's say for the sake of the argument that the vaccines are less efficacious in their current form to these new variants uh you would through software be able to custom tailor mrna to basically correct that and you could do that in two days or three days and then you just adjust your supply chains so the vaccines that you have coming out will contain some of the old immune response against one of the variants and the new immune response against other variants you just simply could not do that with the normal vaccine supply it takes years to do all this now you can do it all in software so it's a miracle an absolute miracle the other thing i really like about the mrna vaccines is they do not interact with your dna and they they're very very direct it's basically an instruction that enters the cell and that instruction will then make something and that's something you make i mean responsibly elicited from that look at the astrozenica vaccine that was just approved in the uk or the johnson johnson vaccine which is likely to be approved in february those are viral recombinant viral vectors and so they're adenoviruses so these are monkey viruses that have been genetically engineers not to replicate and they carry actual dna in them and that dna enters your nucleus and area faces with your dna creates the rna similar rna to the rna that's in the flies or moderate vaccines and that rna will then make the proteins and you know those spikes and then your body will create an immune response and hallelujah i think the fact that you're introducing a genetically engineered virus and dna to interface with your dna a lot more can go wrong with that type of an approach than just saying we're going to put some fat and polyethylene glycol around and a size basically a cellular software instruction and give it to you to go do something the the probably the worst case scenario in that model if you're not allergic to the things that are inside that vaccine is that the instructions for some reason don't do what they're supposed to do and they just they make all useless protein or something okay a lot more can go wrong with your genetically engineering viruses and interfacing with your dna and these types of things at least on the surface now why do they do the viral recombinant vector well because uh the viruses are much more stable than the the construction that they've kind of built around the mrna which means that that durability is reflected with uh storage the pfizer vaccine the modernity vaccine both have to be stored at very low temperatures fires are like negative 95 and madeira has to be frozen it can be refrigerated for a while but it's not very durable if you're using a viral vector you just put it into a refrigerator like a normal fridge that people have and it has a longer shelf life uh and then there's some other things about perhaps ease of manufacturing and so forth uh so that's why astrazeneca went with that approach and they'll have much higher distribution and they don't need the cold chain now there already are huge amounts of people working on freeze drying the mrna vaccines and these types of things so they can be just refrigerated potentially even stored at room temperature long term so we will see huge improvements in the adjuncts huge improvements in the lipid layer designs huge improvements in getting the software better and actually giving you more things like maybe a universal flu vaccine and we'll see a lot of improvements in supply chain dynamics of these what is most exciting about the mrna vaccines is the concept of a micro vaccine manufacturer so basically what you could do is give every hospital a special device you can send software to it and it can tell it how to make a vaccine against a recently discovered pathogen let's say an aerosolized honda virus is out there 30 mortality rate if you know that what you're producing has a high degree of safety even if it's not particularly efficacious you can still make it give it to people with the hope that perhaps it does something you can literally make it at the hospital and inoculate the entire people there you can do that with mrna vaccines and there's already companies like kirvak for example that are looking at that very platform this is not the case with what johnson johnson's doing astrazeneca is doing dna viral vector is a much much much more involved process in terms of the complexity of the lab and these things that have to be done so i do believe mrna is the future it opens up a whole bunch of things cancer vaccines for example where you can make bespoke custom vaccines against certain cancers to create an immunological response against tumors and they have some great science on that might cure pancreatic cancer at some point and there's a reason why madarana is so excited about what they do but it of course will take some time to bring to market does it work on herpes herpes is a fascinating virus it hides in strange ways and even behind your brain uh strange strange ways in the in the body and they treated with a whole class of drugs like acyclovir and valacyclovir and and so forth and it turns out there's some things in common with herpes to hiv so the enormous amount of research we put into hiv has actually helped us in the treatment of herpes like hiv herpes doesn't go away it comes back again and again and again and again because the initial virus can be destroyed but it hides in the body and it can come back and so a herpes vaccine would be a bellwether for enormous advancements in virology and probably a good indication an hiv vaccine will be developed in a reasonable period of time the answer is right now no but hopefully there's some hope in the future thoughts on category theory and homotopy type theory homotopia theory um well homotopic type theory is the one i like category theory is just a field of study you know algebraias tend to like it i got a book on category theory over there uh quite useful in haskell land like modad's makes sense from a category theoretical viewpoint uh homotopic theory is another field of study where people get very excited about homotopy theories this concept of homotopic type theory where you're taking homotopia theory and combining with type theory in a way that gives you new foundations of mathematics and that's something we are quite interested in and something that could become one of the theoretical foundations of the hilbert project to replace q adidas so no particular thoughts about it but there are some good free courses on youtube if you're interested and i'd highly recommend you learn a little bit about category theory to if you're planning on learning haskell because it'll actually help you when you're thinking about monads an hrv vaccine would cause the ccr5 mutation yeah the delta ccr5 receptor and the cd at in the cd4-t lymphocyte um that was actually a very famous story where they found there was a correlation between a very particular mutation that happened to be related to bubonic plague and resistance to hiv and it turned out if you had that mutation you'd have a harder time contracting hiv so this was actually one of the first places that vaccine people who were trying to create vaccines for hiv were looking uh in the 90s and 2000s and they didn't have any success with it but it's a great historical artifact that if you have a gene line that survived bubonic plague black death in europe in the 14th century somehow that would give you some innate resistance to hiv hi charles do you still do a keto diet i don't do it enough i should and i'm going to start again next year very important to keep that going and i think that it is a contributor to a healthy lifestyle but you also need to work out and do a lot of other things are you a medical researcher or crypto ceo i'm confused i did study a lot of biology back in the day i almost became a doctor but i decided that being a mathematician was a better idea then i decided being an entrepreneur was a better idea than being a mathematician but i do have a long line of family members who are all doctors grandfather was a doctor brother is a doctor uncle's an infectious disease doctor father's a doctor a lot of medicine in the family i was the black sheep who didn't do the medicine thing i did do the emt thing that was fun uh but virology is a fascinating field and vaccinology is a fascinating field and genetics is fascinating especially given you can do things now before you study things and said oh well this is the way it is there's like a rule look up you'd say well how does this work look it up how does this work look it up is that old saying you know like uh the physicists they ask like what's two plus two you say take one point nine nine nine nine nine nine seven plus one point nine nine nine nine seven and approximately equals four you know you know a mathematician you see one point nine to infinity and plus 1.9 repeating to infinity uh you know that equals four you know because we have this beautiful delta epsilon and you ask a biologist you know what is two plus two says four so how do you know i looked the answer up so um you know medicine has always been a bit textbook-y in that respect but now you actually do things and think about things and there's really cool stuff happening bioinformatics and so forth and at some point i'll probably start a biotechnology company um the mushroom stuff that i'm doing is kind of a nice segue into that because at some point when you do agricultural technology you start doing genetic engineering and so we'll do some crispr things there and i'm really interested in biofluorescence it'll be super cool to actually create sterile biofluorescent plants for decorations so you sell people plants that grow into you know beautiful trees that glow in the dark like a mushroom does or uh you know those beautiful caves that have bio uh bioluminescent uh creatures and uh you can genetically engineer that well if you have those capacities you can start looking into alternative treatments like one area that i actually studied you many many many years ago when i was still interested in medicine i was very interested in fudge therapy so bacteriophages are little viruses that actually kill bacteria and they were very popular in certain soviet circles 1970s and 1960s in particular as an alternative antibiotic treatments but they fell out of popularity however they really actually find some cool use cases where they put them in gels and you'd rub down burns and things like that and it would prevent bacterial infections and now people are starting to actually look at them again more seriously because there's a lot of antibiotic resistant bacteria and they're a complementary treatment to antibiotics the problem is the intellectual property works in such a way it's very unlikely flash therapy would be profitable and that's why there's it's under research so if you're really rich and you can subsidize things you might be able with like a 30 to 50 million dollar per year budget to create an open source library of fashions that co-evolve the bacteria and you combine them and mass manufacture them and then you use them as either a topical or an injectable treatment to assist in the treatment of sepsis or myrrhs or numbers but mrsa and these types of things that are very problematic for people maybe it can help with the super gonorrhea that we're seeing floating around do you take lion's mane i grow lion's mane sir it's hard to store them yes but what if you can use all these tricky things we're doing with mrna vaccines and adenoviruses as a vector to introduce them think about that how about that huh i did a video on bacteriophage they don't create superbugs i didn't say they created superbugs i said they could be used to combat superbugs because they're a different vector and they co-evolve with the bacteria okay cardano hasn't made the new listings on coinbase for q1 of 2021 what's going on didn't you guys do the rosetta integration you guys are really obsessed with coinbase it's like part of your soul coinbase coinbase coinbase we did the rosetta integration we have zero control over what coinbase does i don't handle listings no one does it's an open ecosystem uh you know the coinbase will decide what coinbase decides what coinbase to do as i mentioned many times before they got a million things going on they got to figure out what to do with xrp uh they got the s1 issues with the sec and they're trying to do an ipo they had a recent scandal with the whole social justice stuff the new york times article they're busy people they got their own thing going on okay if they come to me we talk tech we say they say how do we integrate or how do we do that here's how you do that we don't talk business like here's how you do listening or think we don't control that it's their decision as an independent company of what to do when to do how to do it and yeah the reason why a lot of people ask about coinbase is they have this bizarre belief that somehow when we get listed if we get listed on an exchange like coinbase that the price will go to the moon and liquidity will be incredible and all these other things it's like guys it doesn't work that way you know used to long time ago they got listed on coinbase you'd see like a 50 appreciation the asset uh but there's so much liquidity already in cardano that if we were to be listed on coinbase i don't really think it would have a huge market impact now it's true that certain people who live in certain jurisdictions would suddenly get liquidity like i believe new york state for example and that's great and i'm very happy for them um but i have no control over any of that and you guys keep asking one coinbase even if they were going to list this they actually wouldn't tell me they just don't do that and so i don't know in fact what's going to happen if they list us is that i'm going to see a tweet or a message from somebody saying we've been listed i'll be like oh and i'll retweet it that's what's going to happen so i know as much as you guys know all i can do is make the tech great and stable and make sure that the integration points look good and so forth and independent companies like binance and bittrex and coinbase and bitstamp and kraken they all make decisions based on what makes sense for them the risk profiles their customer demographics the geographies they occupy uh what they want to do okay that's their choice as organizations and when they come to us it's usually that hey your wallet needs some improvement we're having a problem we have utxo fragmentation we have this we have that okay and when we come to them is say hey by the way we're gonna do this hard fork and that might be problematic uh you probably should upgrade your node and they say oh that's a good idea uh can you make sure that we do that well yeah we have this test net we'll work with you guys on that make sure you get through that that's our relationship with exchanges it's not hey let's get this listed and get these financial products built and so forth the people who do that stuff uh they do that stuff for small cap shady coins okay the bitcoins they don't have to pay listing fees they don't have to negotiate these things there's no boardroom deal with suits and ties where people figure that stuff out that doesn't happen okay it's more does this make sense for us and our customers and if it's a bitcoin with a billion dollars of trading volume they're like wow we could get millions of dollars in trading fees if we listed something like this that makes sense to an organization and they'll pursue that if it's too small it doesn't make sense it's a nuisance right so get off this coinbase obsession it's not going to have a massive impact on the ecosystem and somehow fundamentally change cardano it's not going to be like adbc you know before christ after death it's not going to be like before coinbase after coinbase bc ac it's not going to happen okay it's just an event like many many many many other events might be a good market event for the day who the hell knows uh and uh you know we all move on life moves on and there's still an enormous amount of real things that have to be done like improving use and utility improving smart contracts growing the ecosystem getting more adoption getting more real-life applications those are much much more meaningful so things like the success of project catalyst things like the successful launch and a timely launch of gogan these are significantly more meaningful than coinbase but yet that's the number one question i that uh that i get do you work well with alex chirping oh yeah alex is a very good friend and we still work on uh ergo and uh he actually still collaborates with us on scorex and we're trying to get scorex into the hyperledger group as a r d chain uh but he's a good kid and he's really smart one of the smartest people i've ever met is the securities exchange commission the enemy of crypto no the regulators are not the enemy of crypto guys let's be honest here our space created bit connect onecoin mount gox bitmex thousands and thousands and thousands of scams that have hurt people regulators are like vampires in a good way they come in when you invite them okay vampire stands at the door says can i come in you say yes what brings a regulator into an industry happy well-functioned intra industry that are just everything is going right and everybody's thinking like how many regulators are there for mathematics is there the mathematics exchange commission that sits down and says we really need to look into those topologists we all man those comedy tourists they're slippery slippery people all we are deeply concerned about statistics yeah there's there's some problems there man serious problems 64 of people know that no because it's like what scandals occur in the mathematical world occasionally we have an older fields medalist who claims he proved the riemann hypothesis and turns out his brain's baked and it's a garbage paper okay we're pretty good at self-regulating in that industry on the other hand why is the pharmaceutical industry regulated because they make stuff that you put into people's bodies and if they that up they break your penis they break your brain they break your eyes you go deaf okay there's more than one people have gone deaf from the first reaction to an antibiotic uh you know there are all kinds of bad things that can occur so you need to regulate it because there are perverse incentives against your health it's not just could harm occur it's also the incentive set if i make drugs my incentive is maximal distribution and maximal money okay that doesn't necessarily correlate to the safest product the sound is product most efficacious product the best case scenario is i could sell snake oil the worst case scenario is the snake oil can kill you what happened 19th century you had all these charlatans running around rockefeller's father david avery rockefeller he sold snake oil he went all around okay selling stuff that didn't work and it was loaded with latinum and cocaine and all kinds of horrible stuff uh so yeah regulate it why because you notice that the market's behaving badly and it's killing people so let's look at crypto you have the ico boom you have tons of scandals and scams you have rampant insider trading you have wash trading on exchanges you have exchanges failing and the principles of the exchange is stealing the money and fleeing abroad you have software flaws that were made on purpose to steal people's money you have massive misrepresentations you have impersonations you have people claiming they're using project capital for something but they're actually using to buy yachts and miami houses and prostitutes in rah-rah-rah that is a big neon sign at the front of your door vampire come in our industry did that we didn't self-regulate we didn't stop the agency failures we created a neon sign and welcomed a vampire and now they're here and we're gonna complain that they're doing stuff filing lawsuits getting involved like a bull in a china of course they are and their ability to act as proportional to the sophistication of the tools and the modernity of the laws the howie test is an artifact of the 1940s it cannot work in stem cell finance where an asset can be everything it can be a currency a commodity in a security all at the same time could be everything in nothing it's like some buddhist cone okay we've invited them in and now they're doing their best job to sort the whole thing through so people look at ripple for example they say oh how dare the sec do this they're destroying innovation and they say guys we are a consumer protection agency our job is to hold businessmen accountable when they do nasty things okay and why are they involved with ripple is it because deep down inside they absolutely want ripple to be a security probably not they're unhappy with ripple because the principles of the company sold 600 million dollars of xrp on to retail investors and paid themselves that guys when i got paid to build cardona we received about 2.4 billion ada it's about eight percent of the supply now the market value of that from the pre-sale with the i don't know six million dollars give or take and it was a huge risk because who knows you know 3 000 cryptocurrencies the vast majority are flops so we didn't know where it was going to go but we decided just to hold it so we created a vesting thing and said we're not even going to be completely invested until 2019. i remember when ada went to a dollar thirty and i was sitting on two point four billion dollars uh 2.4 billion ada which was worth almost three billion dollars and we didn't sell we sold none of it zero it was just sitting there and every day i was looking at that and say you know we're in a bubble these markets are not sustainable holy i'm a billionaire from this one thing in my company register there's no regulation or law that prevents me from doing something but i felt it was irresponsible to sell i self-regulated as a company now other people sold eos sold they sold four billion dollars of an asset and the fcc certainly went after them but only fined them 24 million dollars and let them keep the 4 billion dollars so i was so upset when that happened i was like okay but you know that's just the way it works and so xrp they sold 600 million actually so 1.3 billion dollars worth of the asset and you know the sec saw that and obviously they thought that that was enron-like behavior bad behavior it's why when i read the 71 pages i thought for sure they were trying to build a 10b5 case so it's strange that they're just going after a refund uh but you know it's clear why that vampire came into the house but you have to self-regulate you have to have principles you have to have ethics you have to accept that sometimes you can't do things that even though are in your best interest because you have a moral responsibility for everyone else and at that time it made no sense to do a mass divestment at the top of a bubble uh in an ecosystem we held and that holding lost 90 of its value is what it is i've lost more money on paper than most people will make in a lifetime in a hundred lifetimes and a thousand lifetimes you say oh well turn the page move on it is what it is that's life why the securities exchange commission exists is because not everybody would make that decision and sometimes they do it differently and if they do it differently in a way that harms a small-scale buyer investor or other person that's a moral hazard and if you allow that to happen unfettered then you have markets that basically are a wealth transfer mechanism from the poor to the rich that's why the sec was created 1933 what happened 1929 was the beginning of the great depression from the collapse of the markets why did that happen you had radically inaccurate information being broadcasted out you had boiler rooms you had tons of speculation that was very unhealthy you had people borrowing 10 times the amount of money that they made per year to trade stocks that turned out weren't even real they were based on fantasies and people with insider information were trading against that and they knew when the symphony was going to come to an end before anybody else they made huge profits on the backs of the poor and so when the poor voted they threw hubert hoover out of the office and they put in a guy who promised that he'd rebalance the scales for them that's where the sec came from and they've had an 80-plus year mandate where sometimes they succeed and sometimes they fail i'm deeply disturbed for example where chinese companies list on u.s exchanges and they're not subject to the same transparency requirements as microsoft and apple and these things that's a serious problem and when they do get involved they involve very ham-fisted way and it is what it is you have to deal with it who is ultimately negligent it's not the securities exchange commission it's the united states health and representatives it is a job of the congress in the senate to update regulations and to create new regulatory agencies as technology evolves where is the cryptocurrency legislation they've known about the industry for 10 years and because they can't agree on anything even a 600 check because they're just a bunch of sucking piece of who only care about themselves and their popularity and their reelection potential and they don't give a damn about america or a dam about our industry they've allowed regulation to stagnate and fincen and the cftc and the sec and all these other agencies are left to somehow find a way to better procrastinate 80-year-old regulation to a field that is like stem cell finance it's impossible and they're doing their best the sec has actually had a very light hand it's insulting when the ripple principles go they're destroying the whole industry guys there were i think over a thousand icos they've only had a few dozen enforcement actions most of which were clear and obvious frauds some were geopolitical like telegram for example and where and when they could come to an amicable solution more often than not they found a way to do that and had the decency to contact people and talk to them ripples acting like suddenly out of the blue something has just magically happened why you have a tolling agreement with the sec then where the did that come from brad you were talking to these guys for a while and obviously your negotiations broke down when you threatened to move the company to the uk there was a bellwether for that so it's a complex topic there's a lot of nuances here there's a lot of idiots in the space that just go well this is a security and this is a security and the sec is going to do this and the bitcoin is king and ra you know like max keiser and tone and these other guys is just they're just froffing for the mouse idiots and they don't really understand how this works the end of the day the regulation doesn't matter as an entrepreneur i cannot follow regulation completely and perfectly because i'm doing new things in 52 countries there's no way to be in full compliance with every single thing no company the history of humanity in the world has made every jurisdiction and dominion that they operate in 100 happy 100 of the time so what you do is you have a transcendent principle is what i'm doing ethical is what i'm doing moral is what i'm doing obviously good for the consumer and if you can't answer that with a yes then you're probably at some point gonna piss off a regulator if anything because you're creating a political incentive for the regulator to go after you facebook is not really violating laws as they're written but they're being sued by 48 states for antitrust they rocked the boat too much with libra with the censorship of free speech with the appearance of picking sides and elections you piss off half the country you could be teresa and you know what's gonna happen you're gonna be hit with a lawsuit by some government agency somewhere trump love him or hate him when he leaves office somewhere some state somehow they're gonna try to charge him with a crime because there's big political kudos to being the king slayer and putting a guy like that in jail maybe they work maybe they don't work it's politics politics is about appeasing people when injustice is coming like the pharma bro shrekle you know he met he's a villain in the press he raises the price of drugs too high it doesn't matter he actually commits a crime or not the appearance of his character creates a big red target on his back so you know what i just start from is it ethical is it moral and am i screwing people or not i always try to make sure that the answers are yes it's ethical it's moral and no no one's being screwed in the process and when i know something you know something we try to make things as transparent as we can now obviously we have a general counsel who's a domain expert in securities laws these things and we're a software company we build protocols we don't do trading and market making we don't do icos we stay out of those markets okay but at the end of the day because we build protocols we have to understand these things and we take a step back and we follow those basic principles and we try to stay within that framework and we try to be good actors as much as we can the problem is everybody's terrified because lawyers never give you definitive answers they say it depends for example in the sec filing they they said well the ceo of ripple got a memo from a law firm that xrp could be a security you're damn right in 2012 every law firm in the united states including analysis of bitcoin would write a more likely than not opinion even if they think it's not a security with a disclaimer that it could be of course they're going to say something like that because it's ambiguous you know it's like who's batman you know you can have a hypothesis you know unless you you're god and you know it's bruce wayne and you know everybody picked their favorite person you know so so of course they'd say something like that it's ambiguous what matters is what do you do about it how do you treat people do you have a privileged position over other people are you taking advantage of that privileged position over other people you know are you following best practices and if you can't find best practices are you trying to create best practices you know these basic principles and things with ethereum we had zero guidance we talked to a former commissioner of the sec uh we talked to a law firm prior cashman they wrote a letter more likely than not opinion for us and we thought about it and we said well let's try to build something they created a foundation we worked with a prominent law firm mme partners try to do as much as possible on the blockchain try to make sure that everybody participated the same way we did what we could do with zero guidance you know and reasonable people could look at that and say well they tried their best and it ended up working so okay no harm no foul where you get into a problem is when you play games with semantics you know you're screwing people but you're trying to be smart and outsmart people and build a structure where you win guaranteed and then that's at the expense of someone else okay so when you build in you always get a big payout no matter what even if the project fails that's a moral hazard and even if regulation hasn't evolved to a point to hold you accountable your soul is going to corrode at some point and people don't know your scumbag nobody wants to do business with you that's why donald trump has a terrible reputation uh in in terms of construction and contractors and these things why because he actually told people one of his business principles was if you don't have to pay and you think you can get away with screwing people do it so you have these plumbers and these electricians and these drywallers come in this building they'd work hundreds of hours constructing things and then they'd send the invoice and trump would drag his feet on it and force them to sue hoping that they would settle for less on the employees he was notorious for that notorious for defaults and bankruptcies in fact blacklisted from most banks for lending and that was his character as a businessman now he's not jail so he got away with it but i have zero respect for that business practice it's not ethical it's not moral and sure tells screwing poor people there's huge asymmetries of power there the reason these agencies exist the reasons why we make them vampires they need to be strong enough to overcome the strong personalities on the other side it is a very big problem the regulators in some cases are co-opted by private industry why because when you're a regulator you are paid government salary tell me how much a gs 13 makes certainly not as much as a junior associate at a law firm you leave government and if you were nice to the right people somehow you get a board job somehow you get a job at a senior law firm so now you get something and now you're making seven figures eight figures nine figures that's a hazard because knowing that if you're nice to certain industries that you shouldn't be nice to you should be neutral and fair to uh can result in a nine-figure job an eight-figure job when you leave office you might have a tendency to go down that road be corrupted by that they have not solved that problem ben lasky is now working for ripple he's on their board he destroyed the entire cryptocurrency industry in new york and his reward is first to be paid 600 an hour trying to get people a bit licensed and now to be a board member it's a disgusting thing so it is it's certainly problematic you know steve newton when he leaves the treasury secretary role he's going to go right back into the banking swamp and i guarantee he's going to be sitting as a ceo of something or an advisor of something with a eight-figure nine-figure payout every year and the people he took care of when he was the treasury secretary will be the ones cutting those checks that's why people have problems with regulators if they were good virtuous always directly aligned with the will of the consumer would view them as positive actors like firefighters but they're not so it's very nuanced and mixed and it's a very complex topic securities law is super complex you go to law school for you study it for a while there's so many nuances here we already did it's iog and put output global hi charles what is your relationship with youtubers such as bitboy and cryptocrow they call me up and they say would you like be on our show i say sure i show up they ask me questions i answer the questions then i say this was great thanks and i go to the next interview that's my relationship mr hoskinson why the bull's head symbol for the daedalus wallet that is not a bull's head that is a minotaur head the minotaur was a mythological creature that lived in the labyrinth daedalus was the creator of the labyrinth the labyrinth was built because no chains could bind the minotaur and so by basically building a giant maze and putting the minotaur in it he couldn't escape the maze uh and so daedalus is the name of the wallet that elicits the creator of the labyrinth and the minotaur is the most prominent creature within the labyrinth that's why the symbol is minotaur charles what are your thoughts on edward snowden a case study and who not to recruit as a spy so his parents were spies they were deeply connected with the us government they kind of gave him a leg up he tried to do the whole special forces thing to differentiate a little bit broke his legs and got kicked out of that for medical discharge and then because of those familial connections and you know it's a really bright guy i got recruited at nsa and cia so there's a paradox when you recruit a spy the paradox is you want super charismatic very affable people that can be everything to everyone they can connect to people build trust with people and build relationships with people because at the end of the day spies are recruitment machines you see all these movies where they're putting probes in and secret cameras and doing spy 90 of the job of an operative is recruitment so they're always looking for people trying to convince that person to betray their government and give information to the us government okay and they have a whole profile it's called mice stands for compromise by money so you bribe people uh by ideology so basically you're capitalist and they're communists but they want to be capitalists for example or maybe religious ideology for example in afghanistan we used the fact that we were a christian nation to really help the mahajidin come to our side because the soviets were atheists and they knew that you know while they didn't quite like our religion if the soviets got over they would eradicate the islamic faith and afghanistan at least that was the psyops perspective of it and we pointed to what happened in georgia for example was the destruction of the orthodoxy church there as an example and it really helped in recruitment so ideology compromise for example you find out ahmed is gay and if he's found out to be gay in his country they'll kill him so you can use his black male that's what epstein did right you know got kids to sleep with prominent people say oh it'd be real shame if the world found out you were a pedophile maybe you should help us an ego maybe there's a guy and he's a prominent person and he got fired or pushed down the chain or something has a lot with scientists they they get passed up for promotion or they get demoted but at one point they were running the nuclear weapons program or the biotech program or something they got a big chip on their shoulder and very angry about it so what a spy does is a spy takes advantage of those domains thinks about it and this is how do i recruit these people and convince them to give us information or do things for us up including into wet work means they murder people on your behalf okay like the recent nuclear scientist that was killed in uh iran killed by local assets all right and really cool rigged up drone gun thing okay so you want somebody who's really charismatic you can magnetically connect to people and very larger than life but then at the same time you want somebody who is totally okay with never telling anybody what they've done they could hack into uh the fsb headquarters and find out all the secret agents working for russia and every russian operation that that the greatest intelligence game in the history of the cia and the only person who can know about that are the people who have a need to know and they go home to their wife or their husband and just pretend like nothing happened how was your day it was a good day anything interesting yeah lunch was pretty good so the problem with snowden was that he was really good on the first part very charismatic guy and he has kind of the family heritage and so they kind of welcomed him in but snowden failed on the second part he wants people to know he's a great guy he has ego huge ego okay he must save the united states from the spy state he alone knows what the constitution says and what's best maybe you agree with it maybe you don't agree with it but in his head he's a hero and he must be a hero and stand for the american principles in the way this is a catastrophic recruitment failure for a spy because a spy they can't operate in that dimension even if they have personal misgivings they have to be willing to accept that as reality as it is i work for this organization they trust me to do the job that they've hired me to do and the wisdom of what we're doing you know that's going to have to be decided at policy levels above and if you disagree you resign and leave that's the culture that they try to inculcate and it's mostly successful so snowden is a recruitment failure from that respect and it actually so traumatized the agency and the us federal government that they launched a slew of psyops programs and psychological inquiries and they even did uh analytics programs like dr bader over in darpa he created something out of io called prodigal and basically the point of prodigal was to create a predictive ai agent using graph theory and ml and all this really cool stuff that would monitor people who operate in a clearance setting because there was a data rich settings they with your cat card know every time you go for the bathroom when you come in when you leave your social contacts and so forth and they look for discrepancies and then they try to retrodict those data sets to predict anomalies in fact prodigal got so sophisticated that they were able to predict that nadal hassan was going to kill a bunch of people uh through retrodicted data and the same for snowden defecting and so forth because these defectors who are ego driven they leave a awake a slime trail that retroactively makes a lot of sense the signs are there uh for example this recent bombing in uh nashville like guy built the rv bomb there were definite little fingerprints here and there that he was becoming radicalized and clearly was thinking about doing something there was even allegations in august of 2019 that he was building a bomb his girlfriend called him in and the police actually said the girlfriend was crazy and they tried to put her in a psych ward it was crazy i think that's the up of the century for nashville but you know he was talking about 5g conspiracy theories and the lizard people conspiracy and these that's mostly harmless for most people but then combine it that is like google searching ammonium nitrate and you know these other types of things and so the point of prodigal is to say it will be that aggregator to a point where it can proactively predictively depict these things the government doesn't build stuff like that because they're completely happy with the people that work for them they build stuff like that as a response to a trauma in the organization um counterintelligence having spies turn on you and become double agents is super traumatizing to the morale and culture of the organization it it damages them in so much of a way because each and every person in that organization feels the betrayal they're all looked upon with suspicion they're all looked upon with admonishment and it diminishes the job the other thing is that you know you can only tell about the existence of the capability but you can't talk about how the capability was actually used so okay we're alerted to prism was prism used in ways that were actually beneficial to the world maybe maybe not but you as the organization can't talk about that so you get the allegation in the attack but you can't defend and that further exacerbates the trauma of the organization and this is why there's in the intelligence circle such deep-seated hatred was noted even amongst people uh who agree that snowden's arguments are right not everybody's monolithic at the nsa or cia or dia or the other 16 intelligence agencies and says we absolutely have to archive every bit of data ever produced by every person have total information awareness and then use that to create profiles on each and every person and proactively predict who's the threat or not some people think it's antithetical to everything that america stands for but their love of the organization its mission its culture and the good things that they perceive the organization does outweighs their umbrage to that particular program or their belief that that program can somehow be responsibly run or moderated and thus they hate snowden now it's not the decision of the intelligence agencies to decide if snowden is a hero or a villain it's above their pay grade it's the decision of the american people in the political class responding to the will of the american people and frankly he probably should get a pardon at this point it's difficult to know though because there are things we don't know like his relationship with russia why did he go to russia and get asylum there versus another country why did he flee to hong kong of all places when he first left hawaii was there some sort of chinese government relationship who knows there's a lot of unanswered questions that are probably known by the fbi and the intelligence agencies that aren't known to us the general public and they can't necessarily tell us because that would reveal capabilities so that's problematic that said a lot of time has passed the damage has been done commution or pardon probably would make sense and i it's one of those things where we have to do things differently as a society it's already done differently in the clearance setting there's enormously more scrutiny put on people who hold security clearances and patterns of behavior there's a lot more caution and care with the handling of classified information than there was even just seven years ago as a direct result of edward snowden and it certainly has had a huge impact on the world as a whole and the intelligence world as a whole you know all this said spies are not good people they're not bad people but they're certainly not good people they lie for a living they kill people for a living they manipulate people for a living they do all kinds of horrible things a lot of this anti-vax propaganda for example is funded by russia why in china because they know if they can convince 30 to 40 percent of the u.s population to be vehemently anti-vaccine and not take the vaccine it will exacerbate the lockdowns in the united states and make them last another three to six months if not longer that will cause catastrophic economic damage to the united states so if you're the leader of china and you look at how do we hurt the us or diminish its geopolitical role if somebody comes to you and says give me 20 million dollars and i will run a psyops campaign with hackers and bots to convince people that bill gates is depopulating the world and these vaccines carry sterilization or quantum dots or whatever in them and if i can do that and get 40 of the u.s population to agree to it and they have vaccine hesitancy this will cause half a million more deaths and it will cause six more months of lockdown would you take that deal if you know that the economic losses in the us would be your gain of course now what kind of a up person is gleeful about that type of conduct and behavior murdering people and psyops campaigns that damage things that cause she carrying havoc and chaos not a normal person and so maybe they do it because they have a profound nationalistic view that what they're doing is great for the nation maybe they do it because they can divorce the challenge of the task from the morality of the task but once things clear when someone has entered the spy class they should never be trusted again in society you know outside of just executing the spy stuff they've crossed a moral threshold where the ends justify the means so they should rise no higher than the uh than the darkness that they've lived in unless they find some redemption at all of that because the ends do not justify the needs i've never believed that and i've never believed that it's a good idea to give people an unlimited license to do things in the darkness for the greater good that harms so many people especially when the people who decide the greater good are people who are not invested in the greater good of society they're only invested in their own greater good we've seen how our political class has failed us so snowden is a fascinating case it's a fascinating case of organizational psychology it's a fascinating case of reaction and so forth it's a fascinating case of recruitment failure where they clearly got the first part right but the second part wasn't there it's a fascinating case of a political problem uh you know how do you forgive and accept and allow society to grow but at the same time don't destroy or demoralize institutions you rely upon to do things it's a fascinating case of of the inner workings of organizations that we normally don't get to think about and see so uh lots lots of parts there and really complicated i think the first time i've ever talked about it in uh in detail but that's the point of these amas you guys get to hear my thoughts okay trump can't get the vaccine yet this is actually an example of the dishonest media uh there are some people in the media saying why is trump not getting vaccinated he's irresponsible you should get vaccinated first it's not really clear after you get it that there's much urgency to get vaccinated because your natural immunity probably lasts for quite some time there's certainly a lot of people who have contracted it a second time but relative to the totality of all people it's very uncommon and usually the second case is much more mild and data from wuhan's completely invalidates this asymptomatic super spreader the reason why trump can't get vaccinated is because he received the monoclonal uh antibody treatment and actually that prevents the vaccine from working so you have to wait for that to flush out and i think the regeneron ones take about 90 days so he's still inside that window and he can't get it until then i guarantee he's probably gonna get it because whatever his beliefs are he's a very self-centered guy of course the media won't talk about that yeah that's accurate i think that stone should receive some clemency or pardon uh and there has to be a kind of a come to jesus moment what they should do is negotiate they should make a deal that if snowden is willing to go to a neutral country he can sit down and have a come to jesus moment about exactly how he survived in russia putin is not a dude that just wakes up in the morning and says boy i can't wait to be a humanitarian i can't wait to help the world and do things for people no nothing is free in russia under that regime so the fact that he lives there and is able to have freedom of movement and the russian government so nice to him there may have been some reciprocity in that so there needs to be a real establishment of what was actually leaked we know it was leaked publicly but why were china and russia so affable and some understanding of the optics of partnering and uh it's known this whole argument this goes back to that ego component i cannot return the united states because i will not get a fair trial you know they hate me so much even though this giant celebrity if i return i will not get a fair trial the media will do nothing i'll be persecuted and martyred it's like shut the up go and have a neutral meeting sit down with guys from the justice department and the intelligence agencies and sort it all out figure it all out at the end of it if there's good faith there and honesty there then give the guy a pardon or make a deal where he takes a plea and you know it's time served or something like that and then he can go into the political class and be one of these guys that gets a job at harvard or mit and talks about privacy and data and it'll have this like you know superhuman appeal that people have all these ex-hackers have uh so i i think that's probably the best way of doing if i was president that's what i would do i'd have people reach out to him and say get the hell out of russia you have to come home come on now it's a disgrace to your family and these other people that you're living abroad the united states is not the evil monster you're making it out to be okay prison bad i get it but let's talk about this and let's be clear here prism is baby food compared to what china has constructed with social credit in the great firewall okay they have concentration camps in western china let's not pretend like the us is alone on the world stage in terms of surveillance and the execution of surveillance and you know what there's no situation like the kgb in historic russia or the statsi in east germany where there would be systematic oppression of opposing political viewpoints we see flirtation with that from time to time like obama's spying for example on the trump campaign certainly very distasteful worse than watergate in my view but that's not systematic okay it's not the case that every member of the libertarian party is being surveilled by the government and they're randomly taken and gulogged that happens in russia that happens in china these are these are things these are facts these occur okay so don't don't believe there's a moral equivalency there and the problem with snowden is that he is a figurehead for anti-american propaganda because what he does is he points out the sins of this country but he doesn't in any way equate it to the sins or proportionality of the sins of other countries so those other countries are more than happy to use them as a useful idiot to legitimize the things that they do or say we're big violators of human rights and so forth that must be addressed if he wants a pardon and a return to normal society he can no longer be used as a propaganda figurehead for how bad america is you know and there's just no reason to placate him in that way and stroke his ego in that way because he's already going to be rich he comes back he'll best selling books and interviews and 100 000 speaking fees you know we make the controversial celebrity so just because he was so controversial he's got this mysterious background the man will be a millionaire and live like a king if he was to return the united states these charges be dropped so he has a very strong incentive to play ball here and as for efficacy of his actions a lot has to be done and there's bipartisan agreement to keep these power structures in place and i think the things that were brought up during the church committee and these other things that reigned in the cia and the intelligence industry has has faded a bit and uh especially with the fisa courts and that has to be resolved unfortunately there's bipartisan agreement to keep doing that the best chance we had in the last 50 years of breaking that was the trump administration because the obama used these powers against trump so he had a very strong incentive to undo it problem is he was incompetent so he had no idea how to actually undo the things that him in fact the very things were used against them in the mueller investigation and so forth it's another example of how power requires finesse