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Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation | Lex Fridman Podcast #307


small model | large model

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The following is a conversation with Brian Armstrong,
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cofounder and CEO of Coinbase,
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the largest cryptocurrency exchange platform
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with 98 million users in 100 countries,
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listing Bitcoin, Ethereum, Cardano,
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and over 100 popular cryptocurrencies.
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I recorded this conversation with Brian
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before this week's SEC probe
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into whether some of the crypto listings are securities
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and thus need to be regulated as such.
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As always, with conversations that involve cryptocurrency,
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I try to make it timeless
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so that the price soaring high or crashing down low
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doesn't distract from the fundamental technological,
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economic, social, and philosophical ideas
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underlying this new form of money, energy, and information.
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Our world runs on money, the exchange and store of value,
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and cryptocurrency seeks to build the next chapter
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of how money works and what it can do.
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Coinbase and Brian are trying to do this
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by working together with regulators and governments,
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which is a long and difficult road.
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Bureaucracies resist change, for better and for worse.
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The latest SEC probe is a good representation of this.
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It is a serious attempt to limit fraud,
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but one that also runs the risk of limiting innovation
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and limiting financial freedom of individuals.
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This is a complicated mess,
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and I applaud everyone involved
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for trying to work through it.
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I hope in the end, the interest of the individual wins.
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Decentralization, after all, is a hedge
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against the corrupting nature of centralized power.
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This is the Lex Friedman podcast.
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To support it, please check out our sponsors
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in the description.
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And now, dear friends, here's Brian Armstrong.
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Let's start with the fact that you're a programmer.
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What was the first program you've ever written?
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Or the first one that you remember?
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The first memory I have of programming
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was probably in middle school.
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And I remember it was recess,
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and they had this time period where you could read books,
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and the other kids were reading comic books and stuff.
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And for some reason, I had gotten into this idea
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that I wanted to get into computers,
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and I was playing with computers at home.
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And so I got this book, I think from the library,
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it was called How to Learn Java in 30 Days.
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So I was reading this book at the recess,
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and I didn't understand anything.
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And I remember I went home,
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and I tried to get this thing working.
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And if you've ever written a Java program,
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the first lines are public static void main string args
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or whatever.
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And it's so foreign, and it's so difficult to get started.
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And so I was kind of frustrated.
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I was like, I don't understand anything
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that's happening in this book.
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So the first thing I wrote was probably just
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a Hello World app in Java.
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But I felt like I was so confused
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about what was actually happening
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that I later learned a bit of PHP.
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And PHP was like more fun for me
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because it was like, oh, just print out what you want.
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It didn't have all this complexity around it.
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So then I got more into PHP,
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I started building like some simple websites,
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I think learned some HTML.
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So I think that was my introduction to programming,
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at least the very beginning part.
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Yeah, you know, Java has a lot of,
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out of all the Hello Worlds it could possibly write,
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Java is the one where I think it's the longest.
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Yeah.
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Which is quite interesting
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because Java is often at least for a long time
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was used as the primary programming language
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to teach people how to program,
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or at least about object oriented programming.
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I think most universities have now switched
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and high school switched to Python.
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I'm not sure if that's the case.
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Probably better.
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It's easier to learn.
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It lowers the, it makes it less scary.
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It was like less of a hurdle.
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And certainly none of them use PHP.
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I love PHP and I feel like it's a dirty secret.
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I have to keep private to myself.
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Like it's somebody I'm seeing on the side
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or something like that,
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because it's just not a respected programming language
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because I think there's so many ways
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you can write poor code with PHP,
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which is why it's not respected.
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Yeah, it's a scripting language more so,
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although of course Facebook built like a huge stack
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on top of an invaluable company,
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but I still love Ruby to this day.
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Ruby is probably my favorite language.
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Python's great too,
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but I just love the idea behind Ruby that it's like,
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let's make it easier for the human,
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harder for the computer,
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and make it a joy to be expressive and all these things.
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So I was never the best computer scientist,
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but I was a good hacker.
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I could rapidly prototype products
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and using languages like Ruby.
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Do a lot of computer science programs still use like Lisp
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and Scheme and things like that?
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No, they do for, that's like, that's if you're hardcore.
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If you're legit, you're gonna do
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some of the functional languages.
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I think there's a few others that popped up,
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but Lisp is a distant memory for a lot of people.
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That's like somebody has to like,
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you go to library, you dust off the book,
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but Scheme a little bit.
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I think if you're starting,
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I mean, there's courses about languages themselves,
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like programming languages.
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Lisp might be one of those,
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you know how there's languages that nobody uses anymore,
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like ancient languages?
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You might have to go to school in that same way
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for programming languages.
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Back in the day, we used to use parentheses.
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I of course still use Emacs as the editor
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for most things that I do.
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And Emacs is, a lot of the customization you can do
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is in Lisp and that's the language probably
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when I first really fell in love with programming is Lisp.
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Because for a long time throughout the earlier history
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of artificial intelligence,
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Lisp was the primary language,
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but it still had a life in the 90s and the aughts
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where some people would use it.
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It's such a beautiful functional language,
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but it just somehow didn't pick up.
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That said, I should say sort of push back,
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PHP, I feel like it's still true
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that most of the web runs on PHP.
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Most of the backend is still PHP.
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So if you look at, you know,
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it's like the stuff that people don't talk about.
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It's like what runs most systems in the world?
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What runs the most backend?
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What runs most front end?
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JavaScript, you know, HTML.
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The Stack Exchange surveys show JavaScript
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is the most popular language in the world, I think, right?
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Oh yeah, in terms of programmers and numbers of, I wonder.
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By survey of number of programmers on Stack Overflow.
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Oh yeah, but that's also the cutting edge, right?
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Those are the people that are just like excitedly
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writing code.
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I wonder if there's people that are just like
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maintaining gigantic code bases.
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Yeah, I feel like the amount of Java out there
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just running industrial systems has gotta be enormous.
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And then of course in the banking industry, finance,
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it's like even older stuff, Cobalt and whatnot, but.
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I've been actually looking for somebody to interview
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who represents Cobalt and Fortran.
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Like who's the figure still there that holds the flag?
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I did, you know, with Java, founder of Java,
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creator of Java, creator of Python, creator of C++,
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but nobody wants to hold the flag for Cobalt and Fortran,
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even though some of the most important systems in the world
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still run on those.
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Like power systems and infrastructure systems,
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which is fascinating, and ATMs and stuff like that.
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Like a lot of stuff that we rely on,
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it just works, and the reason we don't change it
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is because it works well.
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It was written in languages that people don't use anymore.
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Yeah, that'd be a cool series of interviews.
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Get the stuff that's like tech that was invented
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40, 50 years ago, but still is being used widely.
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I mean Emacs is an example of that.
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Let me ask the big question of
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what are cryptocurrency exchanges and what's Coinbase?
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How does it work?
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Before, I'll ask even bigger questions,
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but it's just a nice kind of palate cleansing question
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of what is Coinbase?
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Coinbase is a cryptocurrency exchange brokerage custodian.
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Basically, we're the primary financial account for people
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in the crypto economy, how they buy crypto,
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how they store it, how they use it increasingly
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in different ways.
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We can talk about that.
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So yeah, we want to be the way that a billion people
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hopefully access the open financial system globally.
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How does it work?
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What's cryptocurrency?
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There's Bitcoin, there's Ethereum.
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What does it mean to be an exchange?
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What does it mean to store?
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What does it mean to transact?
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How does it, what does Coinbase actually do?
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Okay, so basically in any given market,
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there's some people who want to buy,
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some people who want to sell,
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and you keep an order book of all those prices.
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And then if someone's willing to buy
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for more than the lowest price someone's willing to sell,
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then you get a trade to execute.
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That's kind of how an exchange works underneath.
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And a brokerage is kind of simpler than that even.
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You don't have to know,
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look at the whole order book and everything,
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but you just go in there and you say,
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I want to buy a hundred dollars of Bitcoin
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or whatever cryptocurrency.
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You get a quote, and if you like it, you can hit accept.
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And the core things that we do to make all that
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kind of just work, make it seamless,
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it sounds simple on the surface,
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is we have to do payment integrations
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in a variety of places around the world
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to make it easy for people to get fiat currency
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into this ecosystem.
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We have to do work on cybersecurity a lot.
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There's lots of hackers out there
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trying to break into our systems and steal crypto
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or to put stolen credit cards and bank accounts
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and things like that into these systems.
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We have to integrate with the blockchains themselves,
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which are periodically getting updated
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and having various airdrops and all kinds of things.
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So we're integrated with lots of different blockchains.
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And then we have to store the crypto
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that people buy securely as well.
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So crypto is kind of like storing,
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you store the private keys essentially.
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And we've invented a lot of cool technology
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about how to do that securely
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that helps me sleep at night
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as one of the largest crypto custodians out there.
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So those are some of the pieces that had to come together
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to get that early simple buy sell experience to work.
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And yeah, I mean, Coinbase actually has
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a lot of different products now.
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So we have like an institutional product.
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We have Coinbase Commerce,
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which is like merchant payments, like Stripe for crypto.
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We've got a self custodial wallet,
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which we can talk about.
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There's all kinds of cool applications
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people are building with web3
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and they can access it through that.
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We just launched an NFT product.
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I can go on down the list.
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So we're sort of like a portfolio of crypto products now.
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We're big enough where we can do multiple things.
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But yeah, the core thing we got started with
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and still the majority of our revenue today
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is people just wanna come in and buy and sell some crypto.
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And we help them do that and make it simple
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and easy to use.
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And I'll ask you about wallet, NFT is about,
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what is it called?
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The Stripe type?
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Coinbase Commerce.
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Coinbase Commerce.
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I'll ask you about all that.
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But order books in exchange,
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what's the difference between that and stocks, for example,
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which there's also order books.
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Yes, I mean, stocks trade through order books too.
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So do commodities.
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There's all similar type of situation.
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So when I wanna buy one Bitcoin and I see Coinbase,
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say the price of that Bitcoin is say $40,000
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and I press buy, what happens?
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Yeah, okay.
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So you've gotten a lot,
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when you press the button on your keyboard,
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like an electrical signal goes up the wire
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on your keyboard.
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No, we won't cut out the level.
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That's also important, the timing, right?
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Cause it's not price fixed.
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Yeah, that's true.
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It's giving you a quote, right?
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There's a whole concept of like slippage.
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And like by the time the quote is executed,
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if the price has moved too much, like we may reject it.
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And there's various things like that.
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But how do, I mean, what's the simple version I can give you?
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So we'll basically check the order book, give you a quote.
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It's good for some period of time
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or for some amount of slippage.
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And then what's happening is we're initiating a debit
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to your payment method, whether that's a credit card
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or a bank account, or you're storing dollars or euros
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or something on our platform,
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there's various payment methods.
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So we're basically debiting that.
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And then we're crediting you the crypto
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and we're taking a fee for it too.
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So that's fundamentally what's happening underneath.
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And then there's just some interesting slippage.
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How do you calculate how much slippage is allowed?
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Like how do you know these things?
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Cause order books are fascinating.
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The dynamics of that is pretty interesting.
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The little I know about it.
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Yeah, so there's a lot of people like traders
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who get super into this and like high frequency traders
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and arbitrage and all kinds of interesting topics.
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Flash Boys was like an interesting book
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on this whole thing.
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You want like access to information the fastest,
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sometimes even putting your thing in the data center
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right next to the thing.
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We don't allow that colo stuff
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cause we want it to be more democratized.
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But basically you give a,
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let's say we wanted to just keep it math simple.
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We want to charge a 1% fee.
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So if you're buying $100 of Bitcoin
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and we'll charge you $101,
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we've presented you the amount of Bitcoin
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you're going to get for the $100.
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Now let's say 10 seconds later you hit accept.
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We go to fill the order.
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So it's going to be some error bound
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around that 1% fee, right?
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And if we think we're actually losing money on the trade,
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I think we'll often reject it.
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So some part of the fee,
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the slippage is incorporated into that,
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averaged over a large number of people.
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Just, it's fascinating.
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Cause like even just like that little detail
link |
00:13:41.560
probably requires a lot of experimentation.
link |
00:13:44.240
Yeah.
link |
00:13:45.080
And it's kind of like a giant bug bounty out there
link |
00:13:46.960
because if you get it wrong,
link |
00:13:48.480
there's people who are going to arbitrage that.
link |
00:13:50.040
And we've had people sort of pen test our systems
link |
00:13:53.600
in a really creative ways where like,
link |
00:13:58.000
they'll just fire like programmatically with APIs,
link |
00:14:01.280
they'll fire off like a million different quotes
link |
00:14:03.560
and look for one of them that's out of bounds
link |
00:14:05.320
and then actually take that money right there.
link |
00:14:07.200
And we get people doing all kinds of crazy stuff.
link |
00:14:10.360
So how do you protect against that?
link |
00:14:12.320
How do you protect?
link |
00:14:13.400
So we'll talk about cybersecurity in interesting ways,
link |
00:14:15.880
but there's a lot of clever people
link |
00:14:18.240
trying to do clever things to earn,
link |
00:14:20.960
not even just to break into the system,
link |
00:14:22.640
but to earn an edge of some kind in the system.
link |
00:14:26.280
How do you stay one step ahead?
link |
00:14:28.840
There's no silver bullet,
link |
00:14:29.680
it's a bunch of lead bullets, right?
link |
00:14:30.840
So it's like, you know, one thing we do is
link |
00:14:34.680
we just have good test suites, right?
link |
00:14:36.200
So you're testing every piece of code that goes out,
link |
00:14:38.440
that's like just common good best practice,
link |
00:14:40.180
but it's particularly important in financial services.
link |
00:14:43.800
Another thing we do is we hire third party firms
link |
00:14:45.960
to try to audit this stuff and break in.
link |
00:14:48.040
Another one we do is we have a bug bounty program.
link |
00:14:51.280
So we basically pay white hat hackers to find this stuff
link |
00:14:55.480
before the black hats do.
link |
00:14:56.800
And we've paid out lots of good bug bounties.
link |
00:14:59.800
So, you know, try all the above.
link |
00:15:02.780
And occasionally you don't get it right
link |
00:15:03.840
and you lose some money and then you fix it
link |
00:15:05.440
and you keep going, so yeah.
link |
00:15:07.400
Let's talk about cybersecurity a little bit more.
link |
00:15:10.360
You mentioned using stolen bank accounts.
link |
00:15:13.200
So that's another one, that's another interesting one.
link |
00:15:15.200
How do you protect against that?
link |
00:15:17.480
Okay, so fraud prevention, yeah, is a big topic.
link |
00:15:20.720
So one of the, there's a lot of things people do,
link |
00:15:23.120
but one of the things they do
link |
00:15:25.200
is that you use machine learning, right?
link |
00:15:28.200
So you look at hundreds.
link |
00:15:29.800
To protect or to attack?
link |
00:15:30.920
To protect against it.
link |
00:15:32.400
So what you want to do is kind of build up
link |
00:15:35.620
a labeled data set of all the different people
link |
00:15:39.000
who have turned out to be fraudulent and good actors,
link |
00:15:42.720
and hopefully collect as much data as you can.
link |
00:15:44.240
And then, you know, you might feed hundreds
link |
00:15:45.800
or thousands of these factors
link |
00:15:47.720
into your machine learning model
link |
00:15:49.480
and it'll come back with a risk score.
link |
00:15:51.600
So, you know, an example of like the kinds of factors
link |
00:15:54.720
people create or put in there, you know,
link |
00:15:56.460
obviously I don't want to disclose too many of them
link |
00:15:57.880
because it's a cat and mouse game,
link |
00:15:59.740
but just kind of, I don't know,
link |
00:16:01.360
relatively well known stuff might be.
link |
00:16:03.300
You know, you have device fingerprints, right?
link |
00:16:06.900
So like, what kind of device are you on
link |
00:16:08.860
and what fonts do you have installed?
link |
00:16:10.380
A lot of people who are farming lots of these accounts,
link |
00:16:12.300
they're using emulators and like virtual machines and stuff.
link |
00:16:15.220
They're not like, you know,
link |
00:16:16.460
an average person on that device.
link |
00:16:19.160
And then you'll see sometimes like,
link |
00:16:21.160
one of my favorite metrics we track for this
link |
00:16:23.260
was called like improbable travel velocity.
link |
00:16:26.120
So we would, we're tracking people's IPS, right?
link |
00:16:28.480
And you might see someone who was one day in Austin, Texas
link |
00:16:33.340
and then like an hour later they were in London or something.
link |
00:16:36.140
It's like, well, that's very improbable.
link |
00:16:37.560
I mean, sometimes people are using VPNs.
link |
00:16:39.500
So you gotta be careful with that
link |
00:16:40.500
because like there's legitimate people who use VPNs too.
link |
00:16:42.780
But if it's not possible for them to have gotten on a plane
link |
00:16:46.700
and gotten there that quickly,
link |
00:16:47.620
then that's usually they're like spoofing a device or IP.
link |
00:16:50.260
Sometimes those are interesting factors.
link |
00:16:52.540
But yeah, if you feed enough of these in, you will,
link |
00:16:56.100
oh, another fun one is like, you know,
link |
00:16:59.460
real users will type their credit card
link |
00:17:01.580
like one number at a time.
link |
00:17:03.720
Scammers have a list of them
link |
00:17:05.280
and they'll just paste in a whole number.
link |
00:17:08.260
So you can look at like the number of milliseconds
link |
00:17:10.760
between keystrokes.
link |
00:17:11.900
Like there's all kinds of stuff people have come up with.
link |
00:17:13.700
And even for travel velocity,
link |
00:17:15.340
you could probably incorporate VPNs too
link |
00:17:17.740
because there's probably a travel velocity
link |
00:17:21.100
for VPN switching too that's human like.
link |
00:17:24.500
Like if you're using legitimately VPN for something else,
link |
00:17:27.340
that might be, there's like legitimate uses too.
link |
00:17:31.060
Actually, you know, I feel embarrassed
link |
00:17:32.660
that I don't know this, probably should.
link |
00:17:34.860
But the, I'm not a robot.
link |
00:17:37.640
Capture thing. Capture thing.
link |
00:17:39.300
Yeah.
link |
00:17:40.140
So that probably works in the same way.
link |
00:17:42.580
Like how do you move your mouse maybe
link |
00:17:46.020
or how the dynamics of the clicking.
link |
00:17:48.960
Totally.
link |
00:17:49.800
But how does that even work that well then?
link |
00:17:51.660
And why can't it be fake?
link |
00:17:52.960
I need to look into this.
link |
00:17:53.940
Cause it's such a trivial capture.
link |
00:17:56.860
It feels like it should be very crackable.
link |
00:17:58.740
And yet a lot of high security places use that.
link |
00:18:02.340
Yeah.
link |
00:18:03.180
It's really interesting.
link |
00:18:04.000
It's another cat and mouse game.
link |
00:18:04.940
So I think they've, yeah,
link |
00:18:05.960
but it's using a lot of similar signals
link |
00:18:07.460
like mouse movements, keystrokes.
link |
00:18:10.220
And then obviously all the stuff that comes over
link |
00:18:12.060
the wire with your browser.
link |
00:18:14.180
So like what operating system, what fonts,
link |
00:18:17.340
what headers are being sent over.
link |
00:18:18.940
And there's actually, there's an old website.
link |
00:18:21.940
I can't remember what it's called.
link |
00:18:22.780
It was kind of like Panoptik Click
link |
00:18:24.180
or Panopticon or something.
link |
00:18:25.500
But it basically was like a proof of concept site
link |
00:18:27.560
that they would just show you all the data
link |
00:18:30.180
that was kind of getting sent over with your request.
link |
00:18:33.080
And like say that there's only one person in the world
link |
00:18:36.140
who has this exact set of data.
link |
00:18:37.420
It's you.
link |
00:18:38.260
And so it's almost like a workaround,
link |
00:18:41.100
a clever workaround to track somebody,
link |
00:18:43.820
make identify a unique person,
link |
00:18:45.420
even if like there wasn't a cookie involved or something.
link |
00:18:48.320
Yeah, this is a fascinating world
link |
00:18:50.140
where you can't see anybody here in the dark
link |
00:18:52.740
and yet you have a lot of signal
link |
00:18:54.060
and you have to figure out who's a real person, who's not.
link |
00:18:56.260
Who's a robot, who's not.
link |
00:18:58.380
Let me step back.
link |
00:18:59.220
We're gonna jump around all over the place.
link |
00:19:00.660
Let me step back.
link |
00:19:01.500
That's why I like your interviews.
link |
00:19:02.320
You get into like technical topics.
link |
00:19:05.220
So just let's use Bitcoin as a measure of time.
link |
00:19:09.240
You started Coinbase when Bitcoin was $10.
link |
00:19:14.460
And you just mentioned an incredible system
link |
00:19:17.020
with security, with transactions.
link |
00:19:19.800
Everything is thought through.
link |
00:19:20.920
There's a lot going on.
link |
00:19:21.980
But what was version one back in those early days,
link |
00:19:25.060
the first prototype of Coinbase?
link |
00:19:26.740
What did that look like?
link |
00:19:28.300
Like what did it take to write it,
link |
00:19:31.060
to think through it and make it work enough
link |
00:19:35.420
to at least make you believe that it's gonna work?
link |
00:19:38.580
Well, I definitely didn't know if it was gonna work.
link |
00:19:40.060
I mean, it was kind of,
link |
00:19:41.380
I felt like I was just following my gut.
link |
00:19:44.100
So, I mean, I was working at Airbnb.
link |
00:19:47.020
I was a software engineer there, project manager.
link |
00:19:50.060
I was working on some fraud prevention stuff, for instance.
link |
00:19:52.660
And I read the Bitcoin white paper
link |
00:19:55.280
in kind of December of 2010.
link |
00:19:57.900
I started going to some Bitcoin meetups in the Bay Area,
link |
00:20:01.020
met lots of interesting people there,
link |
00:20:02.300
like crazy people, anarchists,
link |
00:20:04.740
really brilliant people, all the above.
link |
00:20:06.860
And so I started nights and weekends
link |
00:20:09.220
trying to put together a prototype.
link |
00:20:11.220
And my initial thought was,
link |
00:20:13.700
well, SMTP is a protocol that runs email.
link |
00:20:16.700
And Git is a protocol for version control
link |
00:20:21.140
that people made like Gmail and GitHub.
link |
00:20:23.380
Most people don't wanna run their own email server
link |
00:20:25.500
or even their own Git server.
link |
00:20:26.860
They just wanna like use a hosted thing
link |
00:20:28.920
that will do all the security and backups for them.
link |
00:20:31.700
So the thought in my head at that time
link |
00:20:33.020
was Bitcoin's this new protocol.
link |
00:20:34.620
There's probably gonna be somebody
link |
00:20:35.620
who makes a hosted service
link |
00:20:37.460
that does all the security and backups for you,
link |
00:20:39.300
makes Bitcoin as a protocol easy to use.
link |
00:20:42.100
So maybe I should make like a hosted Bitcoin wallet
link |
00:20:45.860
or something, that was my,
link |
00:20:47.180
it was gonna make Gmail for Bitcoin or something.
link |
00:20:50.020
And a bunch of people told me that was a bad idea.
link |
00:20:52.860
Like most of my smart friends who I told about it,
link |
00:20:55.060
they were like,
link |
00:20:56.920
well, first of all,
link |
00:20:57.980
I don't really get what you're doing at all.
link |
00:20:59.460
Like Bitcoin sounds like a scam
link |
00:21:01.100
or something you've gotten involved in.
link |
00:21:04.180
But then other people who understood what Bitcoin was
link |
00:21:06.020
told me they thought it was a dumb idea
link |
00:21:07.100
because they're like, dude, if you store all this Bitcoin,
link |
00:21:09.960
you're just gonna get hacked.
link |
00:21:10.820
Like nobody, you know, why would you do that?
link |
00:21:14.820
And so I kind of had this thought like, you know what?
link |
00:21:18.180
I'm not gonna go all in and like make a store
link |
00:21:21.140
everyone's Bitcoin, that would be too much right now.
link |
00:21:22.700
I have a job, I have a day job, you know?
link |
00:21:25.060
But let me just make a prototype
link |
00:21:26.580
and I'll tell people this is like a beta thing.
link |
00:21:28.300
Like don't put any real money in it
link |
00:21:29.580
and just see if there's interest.
link |
00:21:31.100
And if I feel like I'm onto something,
link |
00:21:32.280
maybe I'll go do this as a company.
link |
00:21:33.860
Cause I did, I really wanted to be an entrepreneur
link |
00:21:35.460
at that time.
link |
00:21:36.300
I was like, I was 29, I was almost turning 30.
link |
00:21:38.700
And I was, I always wanted to like start a company,
link |
00:21:40.520
but I was, you know, I wasn't yet.
link |
00:21:43.580
I was an employee at a company that was great.
link |
00:21:45.020
But so anyway, I had this prototype.
link |
00:21:47.740
I was hacking together nights and weekends.
link |
00:21:50.300
I actually wrote a whole Bitcoin node in Ruby,
link |
00:21:53.900
which turned out to be a, maybe a weird decision
link |
00:21:55.760
in hindsight, cause Ruby wasn't the most
link |
00:21:57.200
performant language.
link |
00:21:58.040
We've subsequently had to rebuild that many times.
link |
00:21:59.680
But yeah, I had this hosted Bitcoin wallet
link |
00:22:03.140
and the thing that I didn't have any users for it,
link |
00:22:05.980
by the way, I applied to Y Combinator
link |
00:22:08.020
cause I was like, maybe if somebody there writes me a check,
link |
00:22:10.700
this will like make it feel like a real company.
link |
00:22:12.340
And I was trying to find a co founder at that time
link |
00:22:14.660
unsuccessfully.
link |
00:22:16.100
So I was basically just wandering in the desert.
link |
00:22:18.220
I had a lot of self doubt about this cause I was like,
link |
00:22:21.580
I don't know, all my friends don't think this is kind of dumb
link |
00:22:24.220
and maybe Bitcoin is just gonna get shut down
link |
00:22:27.380
and like, this is all be some stupid thing.
link |
00:22:29.020
So there was definitely a feeling of just wandering
link |
00:22:31.820
lost in the desert, lots of self doubt.
link |
00:22:35.020
Paul Graham and the Y Combinator group
link |
00:22:37.180
kind of wrote me the first check
link |
00:22:38.580
after I went and interviewed and stuff.
link |
00:22:39.860
And they wrote me a check for like 150K.
link |
00:22:42.380
And that was the first time somebody
link |
00:22:43.980
who I really looked up to kind of said,
link |
00:22:46.020
this is worth pursuing.
link |
00:22:47.540
Like maybe you're onto something, maybe you're not,
link |
00:22:49.240
but like, let's at least try it.
link |
00:22:50.940
And so that was kind of what gave me the confidence
link |
00:22:53.740
to quit my job and try it.
link |
00:22:55.420
And I'll wrap the story here by saying that like we,
link |
00:22:59.820
I found the right co founder after Y Combinator.
link |
00:23:02.860
We still didn't have any customers.
link |
00:23:03.980
The thing that,
link |
00:23:05.220
I basically launched the hosted Bitcoin wallet.
link |
00:23:07.600
There were people signing up.
link |
00:23:09.100
I just posted on Reddit and places like that.
link |
00:23:11.300
And maybe like a hundred people would sign up
link |
00:23:13.300
and then nobody would come back.
link |
00:23:14.980
And so I was like, I just in Y Combinator,
link |
00:23:18.300
they often tell you like,
link |
00:23:20.300
talk to your customers and improve your product.
link |
00:23:21.860
Talk to your customers, improve your product.
link |
00:23:23.140
That's all you're supposed to be doing.
link |
00:23:24.220
Try to find product market fit.
link |
00:23:25.760
So I emailed like five of the users that had signed up
link |
00:23:28.820
and I was like, hey, I worked on this app.
link |
00:23:30.540
I saw you signed up.
link |
00:23:31.380
Can I get on the phone with you?
link |
00:23:32.200
I get on the phone with like five of these folks.
link |
00:23:34.420
And I was like, why didn't you come back?
link |
00:23:36.820
And the guy was like, well, the app was okay
link |
00:23:38.860
for a beta, but like, I don't have any Bitcoins.
link |
00:23:41.620
So I didn't really know what to do with it.
link |
00:23:43.380
And I remember this light bulb kind of went off in my head.
link |
00:23:45.000
I was like, well, if I put a buy Bitcoin button in there,
link |
00:23:48.900
would you have used it?
link |
00:23:49.740
And he was like, yeah, maybe.
link |
00:23:51.500
So then I had this, we went about the process.
link |
00:23:54.180
My co founder at that time,
link |
00:23:55.140
we like got basically had to get like a bank partnership,
link |
00:23:57.920
payment rails, you know, an exchange,
link |
00:23:59.300
basic exchange functionality,
link |
00:24:00.420
all that stuff I was mentioning earlier in place.
link |
00:24:03.620
And the minute we launched that feature
link |
00:24:05.340
where you could just click buy,
link |
00:24:06.260
put in your bank counter credit card,
link |
00:24:07.620
buy Bitcoin, it showed up in your account.
link |
00:24:09.580
From that day forward,
link |
00:24:10.400
like the number of users started to go up like this.
link |
00:24:12.620
And so we finally had found product market fit
link |
00:24:14.980
after two years of wandering in the desert.
link |
00:24:17.140
So you weren't even thinking about to buy the on ramps.
link |
00:24:20.460
You would think it would be just the wallet,
link |
00:24:22.060
a place to store Bitcoin that you've already gotten.
link |
00:24:26.340
Yeah. Okay.
link |
00:24:27.500
This is, I mean, cause that's such a pain to do,
link |
00:24:31.140
to have to work with others to convert dollars
link |
00:24:34.380
and fiat currency into Bitcoin.
link |
00:24:37.820
Yeah.
link |
00:24:38.660
So did you, I mean,
link |
00:24:39.700
were you overwhelmed by the immensity of the task here
link |
00:24:45.400
or were you just sort of not allowing yourself
link |
00:24:51.860
to think too deeply through this whole thing
link |
00:24:53.860
and just letting the optimism take over here?
link |
00:24:59.020
You know, I was really looking forward
link |
00:25:00.560
to like doing something crazy and like a big challenge.
link |
00:25:03.300
And I wanted to, I love kind of crisis moments like that
link |
00:25:09.580
where, you know, I'm very determined, right?
link |
00:25:12.300
And especially when I get like very set on something
link |
00:25:14.820
and I'm just like, you know what?
link |
00:25:15.700
I'm gonna figure out a way to make this fucking thing work,
link |
00:25:18.420
like no matter what.
link |
00:25:19.700
And so I reveled in that.
link |
00:25:23.160
I was sort of, I had read all these books about startups
link |
00:25:26.220
and like every startup has these like, you know,
link |
00:25:28.140
major setbacks and just like nothing works.
link |
00:25:30.340
And so that was a sign that you're doing something right.
link |
00:25:33.460
I had no idea if I was doing anything right at all,
link |
00:25:35.500
but I was like, I was kind of loving the experience of it
link |
00:25:38.260
in a weird way.
link |
00:25:39.100
It felt, it felt stressful at the time.
link |
00:25:41.000
Like, you know, nothing was working and,
link |
00:25:43.820
but I was just, I felt like I was on the right path somehow.
link |
00:25:47.220
And so I just kept going, I don't know.
link |
00:25:50.940
What was the darkest moment that you've gone to
link |
00:25:53.940
in your mind during that time?
link |
00:25:56.500
What was, what were some of the tougher moments?
link |
00:25:58.700
You said self doubt.
link |
00:26:00.460
Yeah.
link |
00:26:01.860
Have you, yeah, where'd you go?
link |
00:26:04.700
Where'd you go in your mind?
link |
00:26:06.020
Is there a moment where you're just like laying there?
link |
00:26:10.460
This is, this is hopeless.
link |
00:26:13.380
Well, there's a couple of moments I'm remembering.
link |
00:26:15.500
I mean, so for whatever reason,
link |
00:26:18.280
I had this like big chip on my shoulder at that time.
link |
00:26:20.780
And I was like,
link |
00:26:21.900
I really want to do something important in the world.
link |
00:26:23.900
Like, you know, I could have a good life
link |
00:26:26.260
and like work for some good companies
link |
00:26:27.860
and write some software.
link |
00:26:29.100
And I'm, for some reason, I never wanted that for myself.
link |
00:26:31.940
That probably would have been healthier, honestly,
link |
00:26:33.340
just to like, as an expected value outcome,
link |
00:26:35.860
that's probably a better thing in life.
link |
00:26:38.020
But I was like, I was like, man,
link |
00:26:40.260
I really want to do something important
link |
00:26:41.940
and have a bigger impact.
link |
00:26:43.140
And I was like, I was willing to sacrifice a lot for that.
link |
00:26:46.220
I was like sleep and not going out with friends and stuff.
link |
00:26:49.620
I remember one of the,
link |
00:26:50.660
just for like years working on this stuff,
link |
00:26:52.740
I remember one of the darker moments was,
link |
00:26:55.940
we probably had like maybe five employees at that time.
link |
00:27:00.160
And I remember like a bunch of bad things happened
link |
00:27:03.560
like all at once.
link |
00:27:04.440
And it was, so first of all,
link |
00:27:06.660
you have to remember at this time,
link |
00:27:08.860
we were all very sleep deprived,
link |
00:27:10.400
which kind of exacerbates everything.
link |
00:27:11.900
If you look at like the Exxon Valdez spill
link |
00:27:14.460
and all these like natural disasters,
link |
00:27:16.300
like sleep deprivation is often involved.
link |
00:27:18.520
So, because the reason why we were so sleep deprived
link |
00:27:20.960
is not just because we were working so much,
link |
00:27:22.080
but like the site would go offline in the middle of the night
link |
00:27:25.240
and we'd get, I'd get paged.
link |
00:27:26.280
I was like on pager duty.
link |
00:27:27.180
So I'd get woken up sometimes
link |
00:27:28.280
like two or three times a night,
link |
00:27:29.400
like have to try to fix something, go back to sleep.
link |
00:27:31.920
So in that environment, you can kind of get,
link |
00:27:35.000
you can get discouraged.
link |
00:27:37.040
So one bad thing that happened was,
link |
00:27:39.360
we had a bug on the website
link |
00:27:40.680
and there was thousands of people on Reddit and Twitter
link |
00:27:43.760
who were all like pissed at Coinbase
link |
00:27:46.640
because like the balances were showing wrong.
link |
00:27:48.320
And they were just like, fuck this company, it's over.
link |
00:27:51.580
Like, I hate these guys.
link |
00:27:52.520
And so that was, I'd never had this feeling
link |
00:27:55.320
of a thousand people mad at me at the same time.
link |
00:27:57.280
You know, I feel like I'm a pretty chill guy.
link |
00:27:58.840
Like most of the time people don't get mad at me.
link |
00:28:00.440
So that was one.
link |
00:28:02.080
Another one was that.
link |
00:28:03.400
Can we pause on that?
link |
00:28:04.240
That's so interesting.
link |
00:28:05.220
So you were saying like, here's a dream.
link |
00:28:07.100
I'm trying to create something.
link |
00:28:08.660
And now forever, the reputation of this dream is ruined.
link |
00:28:13.200
It will never, it's irrecoverable.
link |
00:28:15.000
It's over, that kind of feeling.
link |
00:28:17.220
Yeah, well, I didn't, you're right.
link |
00:28:18.640
I didn't know at that time.
link |
00:28:19.600
I was like, is this, is this the end?
link |
00:28:21.640
Like everybody, we're so, we're so tiny.
link |
00:28:24.200
Now everybody hates us.
link |
00:28:25.120
So is it over?
link |
00:28:26.320
Yeah.
link |
00:28:28.760
Nobody told me this before starting a company
link |
00:28:30.760
that like, you're a bunch of people will hate you for this,
link |
00:28:33.560
which is like a very counterintuitive thing.
link |
00:28:35.200
Cause you know, most companies I think are doing
link |
00:28:38.200
good things in the world, at least you're trying, right?
link |
00:28:39.760
And so even if someone's like trying,
link |
00:28:41.960
but they're not, they're failing,
link |
00:28:42.840
I'm generally rooting for them.
link |
00:28:43.920
At least you're trying, right?
link |
00:28:45.360
But that's not the case at all.
link |
00:28:47.080
And most founders I've known have gone through this too,
link |
00:28:50.160
where they're very surprised at the amount of hate
link |
00:28:53.320
that they get.
link |
00:28:54.160
And if it's, I think it's actually like a muscle
link |
00:28:55.920
you can build your tolerance to it.
link |
00:28:57.720
Like, because you know, you go talk to somebody who's like,
link |
00:29:01.440
for you, it feels terrible
link |
00:29:02.400
cause you're at the center of this storm and like,
link |
00:29:04.480
but if you go, then you go talk to like, you know,
link |
00:29:06.360
your family or some other person like, dude,
link |
00:29:08.120
I didn't even hear about that.
link |
00:29:08.960
Like my, they're just busy in their own life.
link |
00:29:11.300
And so they, they have no idea
link |
00:29:13.400
that you had all this negative press
link |
00:29:14.800
or like whatever it was.
link |
00:29:16.500
Can I put once again, put a link on that?
link |
00:29:19.000
Yeah.
link |
00:29:20.400
There's an interesting person I'd like to bring up
link |
00:29:23.520
just as an example, Bill Gates.
link |
00:29:26.480
Yeah.
link |
00:29:27.600
So he gets a very large amount of hate on the internet.
link |
00:29:31.560
Yeah.
link |
00:29:32.400
And there's something about him,
link |
00:29:34.240
this is me talking that you,
link |
00:29:35.440
that he seems out of touch about that hate.
link |
00:29:39.960
I believe at least in my understanding
link |
00:29:43.440
that with the resources he has,
link |
00:29:46.280
he's trying and is actually doing a lot of good.
link |
00:29:50.360
And yet there's a gigantic amount of hate,
link |
00:29:52.640
conspiracy theories and stuff like that.
link |
00:29:54.660
Right.
link |
00:29:55.500
And it feels like that's the case
link |
00:29:57.960
because he's somehow out of touch with people.
link |
00:30:02.080
So I wonder how you stay in touch
link |
00:30:04.360
with the voice of the people
link |
00:30:05.520
without being destroyed by the outrage.
link |
00:30:08.800
Is there any wisdom you have to that or?
link |
00:30:11.160
I don't know about wisdom, but I've thought about this too,
link |
00:30:14.440
because yeah, you wanna always be open to feedback,
link |
00:30:19.080
especially from people who have
link |
00:30:20.160
like your best interests at heart, right?
link |
00:30:22.380
And if you can become isolated from it
link |
00:30:25.440
and just like, you know, surrounded by yes people.
link |
00:30:28.320
And I mean, who knows, maybe like she and Putin
link |
00:30:32.480
and people like that are in situations I have no idea.
link |
00:30:36.660
But if you listen to too much of it
link |
00:30:39.080
and you just try to please everyone,
link |
00:30:40.260
you'll never get anything done.
link |
00:30:41.460
And I mean, most of the best leaders are people
link |
00:30:44.880
who they can act when they believe
link |
00:30:47.900
that they're doing something net positive
link |
00:30:49.740
for the world and humanity.
link |
00:30:51.520
And they actually don't really care
link |
00:30:52.720
if they piss off some portion of the people.
link |
00:30:55.600
Almost anything you're gonna do of significance
link |
00:30:58.160
in the world today is gonna piss off 5% of people,
link |
00:31:01.080
maybe 49% of people or whatever, maybe 60%, I don't know.
link |
00:31:04.840
So you never wanna become so surrounded
link |
00:31:07.700
by people who just work for you and will say yes.
link |
00:31:09.720
And then you think like, well, I'm a genius
link |
00:31:11.480
and I'm like, that's how you become a dictator or whatever.
link |
00:31:15.240
But you also can't care so much about what people think
link |
00:31:18.080
because then you'll never do anything
link |
00:31:19.320
that's truly authentic to yourself.
link |
00:31:21.560
One other thought on that, by the way,
link |
00:31:22.800
I think it's a really good question.
link |
00:31:25.120
So I've thought about this a lot.
link |
00:31:26.520
Like why, you know, people generally kind of hate on Zuck
link |
00:31:29.560
and they hate on Bill Gates and they hate on,
link |
00:31:33.400
they don't really hate on Elon.
link |
00:31:34.800
Well, actually Elon has a lot of haters too,
link |
00:31:36.040
but it's a different thing.
link |
00:31:37.360
This is measured, this is measured, I was looking
link |
00:31:40.160
at some surveys, so I think Zuck is the most,
link |
00:31:43.800
so loved and hated, right?
link |
00:31:46.520
Zuckerberg is the most, both loved and hated.
link |
00:31:50.720
He's the most hated.
link |
00:31:52.280
And then I think it's Bill Gates and Elon is down there.
link |
00:31:55.280
I think it's like 40% hate Zuck, people asked.
link |
00:31:59.880
And then Elon is in the double digits,
link |
00:32:02.600
but low double digits.
link |
00:32:04.200
And so it's interesting, you just look at this data,
link |
00:32:06.760
ask yourself why.
link |
00:32:08.080
Right, so I ask myself this sometimes too,
link |
00:32:10.400
because I don't claim to know any of these people well,
link |
00:32:13.080
but like I've met them briefly.
link |
00:32:15.080
And my impression is that they're actually all smart people
link |
00:32:17.720
trying to do good things in the world.
link |
00:32:18.760
So there's not too much difference there,
link |
00:32:21.120
despite public perception.
link |
00:32:23.280
So why is it that some are really hated and some aren't?
link |
00:32:25.440
I mean, it's a complicated question.
link |
00:32:28.080
Obviously Zuck in his Facebook got blamed
link |
00:32:31.240
for the whole election thing and all that didn't help.
link |
00:32:34.240
Social media has gotten a lot of pressure
link |
00:32:36.280
just from like, hey, why aren't you solving
link |
00:32:39.640
all of society's tough problems?
link |
00:32:40.800
It's like, well, they're just one company.
link |
00:32:42.640
But one thing I've noticed is that a lot of these people,
link |
00:32:47.520
they have like Asperger's, right, a little bit.
link |
00:32:49.800
And sometimes people with Asperger's
link |
00:32:53.360
don't really emote in the same way.
link |
00:32:54.760
And so I think it's almost a form of like
link |
00:33:00.840
bias against their cognitive type or something,
link |
00:33:05.840
which is like that person doesn't emote right.
link |
00:33:07.960
I don't trust their intentions.
link |
00:33:11.320
And the other thing I've thought about too
link |
00:33:14.440
is that sometimes I think some leaders,
link |
00:33:18.040
like maybe Zuck or Bill Gates,
link |
00:33:19.320
they can come across as like a little bit PR rehearsed.
link |
00:33:22.960
Like they're basically,
link |
00:33:24.920
they're giving the PR approved answers
link |
00:33:26.960
where Elon just says whatever he thinks like to a fault.
link |
00:33:29.720
So even if people hate what he says or like,
link |
00:33:31.320
at least I believe it's authentic.
link |
00:33:33.240
So I've always thought about that too for myself.
link |
00:33:34.960
I'm like, how do I,
link |
00:33:36.520
cause you can fuck it up on both sides, right?
link |
00:33:38.480
Like if you just come out and you're like saying
link |
00:33:39.960
whatever stream of consciousness,
link |
00:33:42.240
you'll often end up like pissing off people on your team
link |
00:33:44.680
or like saying tripping over some like regulation
link |
00:33:47.520
that you've, there's all kinds of things
link |
00:33:50.400
about running a public company,
link |
00:33:51.680
you can't say certain stuff.
link |
00:33:53.120
But if you're too PR approved and your answer is like,
link |
00:33:56.360
nobody trusts you what you're saying.
link |
00:33:58.280
And so anyway, this is something I think about a lot.
link |
00:34:00.480
I don't think I have the right answer,
link |
00:34:01.560
but I'm trying to find that balance.
link |
00:34:02.800
And more and more with the internet, there's a premium
link |
00:34:05.360
on authenticity, just like you're saying.
link |
00:34:07.600
People really, really appreciate that.
link |
00:34:09.080
So for leaders, it's a challenge to be,
link |
00:34:11.960
how do I make sure I'm authentic,
link |
00:34:15.640
but also don't say stupid shit.
link |
00:34:19.600
And so that's an interesting thing.
link |
00:34:21.000
I've noticed that just having interacted
link |
00:34:23.720
with a bunch of leaders that you have to be careful
link |
00:34:28.920
how much you surround yourself with PR folks.
link |
00:34:31.960
Because the best, I would say, let me just say a nice thing
link |
00:34:34.520
about marketing and PR folks,
link |
00:34:36.360
the best marketing folks are extremely good.
link |
00:34:40.720
So they understand exactly what great marketing is
link |
00:34:43.680
and great PR, it's authenticity.
link |
00:34:46.080
It's showing, revealing the beauty.
link |
00:34:48.300
As opposed to PR and marketing out of fear.
link |
00:34:51.500
Oh, don't say that, don't say this, don't that.
link |
00:34:54.440
Because then you start living in this kind of,
link |
00:34:57.140
that pushes you towards a bubble
link |
00:34:58.520
where you can't express the,
link |
00:35:00.280
your beautiful quirks and weirdness
link |
00:35:02.040
and all that kind of stuff.
link |
00:35:03.280
And also the cool, the beautiful things
link |
00:35:06.060
about what you're doing.
link |
00:35:07.120
I find like, especially with tech things,
link |
00:35:10.280
like even like Coinbase,
link |
00:35:12.120
the way to reveal the beauty of it
link |
00:35:15.080
is not only by showing all the things you could do with it,
link |
00:35:18.460
but showing that there's great engineering
link |
00:35:20.640
going on underneath.
link |
00:35:22.180
So letting the nerds shine too.
link |
00:35:23.760
It doesn't have to be like these kind of commercials
link |
00:35:28.540
where it's like a happy family using Coinbase
link |
00:35:33.500
to send a transaction about flowers for mom
link |
00:35:36.680
or something like that.
link |
00:35:37.680
Like it could be also like gritty stuff and real stuff.
link |
00:35:41.600
So that's a general just observation I made.
link |
00:35:45.280
But you said you were talking about dark moments
link |
00:35:46.960
and that there's people on the internet
link |
00:35:49.040
that were pissed off that the site was down.
link |
00:35:51.200
And you said there might be something else.
link |
00:35:54.080
Yeah, so sleep deprived,
link |
00:35:55.860
like a bunch of people on the internet were pissed at me.
link |
00:35:57.800
The balances were fucked up.
link |
00:35:59.440
Like people were tweeting the company's over,
link |
00:36:01.200
just give the money back, whatever.
link |
00:36:03.600
And then, oh yeah, somebody posted.
link |
00:36:07.800
So we had all this, we didn't,
link |
00:36:09.520
we started to get all these customer support inquiries
link |
00:36:11.300
and like, we only had like a few people at the company.
link |
00:36:14.200
And so we were backed up maybe like 20,000 support requests.
link |
00:36:18.000
So people couldn't get ahold of us.
link |
00:36:19.760
So somebody posted my cell phone number on Reddit
link |
00:36:22.800
and they were like, they were like,
link |
00:36:24.220
if you need to get ahold of the CEO, whatever,
link |
00:36:25.800
cause everyone's upset about where their money is.
link |
00:36:28.240
So I remember we're in the office,
link |
00:36:30.000
it's like late at night.
link |
00:36:31.460
We've been working like 12 hours, we're all sleep deprived.
link |
00:36:33.560
I'm trying to hack and like get this bug fixed.
link |
00:36:36.640
And we all need like food at the office.
link |
00:36:38.680
And so my phone has been blowing up all day
link |
00:36:41.040
cause someone posted my phone number on the internet.
link |
00:36:43.040
And there's like a guy,
link |
00:36:45.360
there was a guy like trying to deliver food
link |
00:36:46.960
and I needed to answer my phone
link |
00:36:48.480
to like get the food from downstairs.
link |
00:36:50.440
So I was like, shit, I gotta just see who, if that's him.
link |
00:36:53.000
So I started answering the call and it's like,
link |
00:36:55.960
is this Brian?
link |
00:36:56.780
I'm like, nope, wrong number, click.
link |
00:36:58.480
And I pick up the next call.
link |
00:37:00.920
It's like every, when I finished the call,
link |
00:37:02.640
another call is like coming in.
link |
00:37:03.480
So I was like, I'm a reporter from Japan,
link |
00:37:06.400
like asking about a security, nope, wrong number, click.
link |
00:37:09.040
And then I like, finally I get the delivery guy downstairs,
link |
00:37:11.120
bring the food up.
link |
00:37:11.960
We were all like surviving to like fix this bug.
link |
00:37:17.080
I remember there was just basically a point that night
link |
00:37:18.980
where I was like, fuck, I need to just,
link |
00:37:20.660
I basically just curled up on like a ball on the floor.
link |
00:37:24.440
And I just like cried for a little bit.
link |
00:37:28.440
I think I let myself just kind of wallow in self pity,
link |
00:37:31.040
kind of took a nap for about five minutes.
link |
00:37:32.760
And I was like, let's fucking solve this.
link |
00:37:35.160
And I like, you know, stop being like a little whatever
link |
00:37:38.320
and like got back up.
link |
00:37:39.800
Sleep deprivation combined with just the stress
link |
00:37:42.200
and the pressure of the site going down
link |
00:37:44.720
and everybody wants the site to be up.
link |
00:37:47.080
Just the pressure from people
link |
00:37:48.640
and the number of users is growing and growing and growing.
link |
00:37:51.360
So that pressure is just mentally, mentally tough.
link |
00:37:54.600
What was your source of strength during that time?
link |
00:37:58.320
Like what, like somebody that patted you on the back
link |
00:38:02.100
and said, we got this.
link |
00:38:04.160
Yeah, well, it definitely helped to have a co founder.
link |
00:38:06.800
So, you know, there's like that old saying about
link |
00:38:10.000
it's better to be in a great relationship than to be single,
link |
00:38:12.280
but it's better to be single than in a bad relationship.
link |
00:38:14.000
So co founders actually blow up a lot of companies too.
link |
00:38:17.320
But when you find the right co founder,
link |
00:38:18.680
which I was lucky to find with, with Fred or some,
link |
00:38:21.560
that was very important.
link |
00:38:22.520
There was definitely moments where, you know,
link |
00:38:24.920
I was like kind of, you know, at the width end or whatever.
link |
00:38:28.840
And he was like, it's like, dude, let's rally.
link |
00:38:31.600
Like, and he basically carried the team, you know,
link |
00:38:33.440
a couple of times, like in really key moments.
link |
00:38:35.440
What advice would you give to startup founders
link |
00:38:39.060
about this particular stage about surviving it
link |
00:38:43.480
to the five and through the five employees stage
link |
00:38:46.760
where you were?
link |
00:38:47.600
Yeah, well, if your pre product market fit,
link |
00:38:50.040
the best advice that I have from that period
link |
00:38:52.760
is action produces information.
link |
00:38:55.800
So just like keep doing stuff, you know,
link |
00:38:58.800
I remember like Paul Graham, Paul Graham had this great
link |
00:39:04.920
line like that.
link |
00:39:05.740
I think that's his line.
link |
00:39:06.580
And he was like, startups are like sharks.
link |
00:39:08.560
If they stop swimming, they die.
link |
00:39:10.520
You know, so even if you're like, not sure what to do,
link |
00:39:12.320
like just do anything because when you do it,
link |
00:39:14.440
it'll like, it'll produce some information.
link |
00:39:16.160
Like people liked it.
link |
00:39:17.000
They didn't, this was very true for me.
link |
00:39:18.640
There was times where I just did something
link |
00:39:22.640
instead of debating it endlessly and like, just try it.
link |
00:39:24.720
You know, like, all right.
link |
00:39:25.560
So we shipped it.
link |
00:39:26.380
And like, there was a couple of times where like
link |
00:39:27.980
the minute I shipped it and I was like, I knew,
link |
00:39:30.640
I know we built this wrong,
link |
00:39:32.880
but now I have an idea of what to do next.
link |
00:39:34.400
And it wasn't, I only would have had the idea
link |
00:39:36.520
if we'd actually gone through the exercise
link |
00:39:37.960
of going to build it.
link |
00:39:38.920
It's like my other favorite analogy for this is that
link |
00:39:42.660
you're like at the base of a mountain that's shrouded
link |
00:39:44.560
in fog and you're looking up at the mountain
link |
00:39:47.120
and you're trying to think like, okay,
link |
00:39:48.180
how do I get up there?
link |
00:39:49.020
But you can only see like three or four steps ahead
link |
00:39:51.000
cause the fog is so thick.
link |
00:39:52.600
So you have to just take steps into the unknown.
link |
00:39:55.920
And when you take three steps,
link |
00:39:57.680
another three steps will be revealed ahead of you.
link |
00:39:59.960
And sometimes you'll end up on some local maximum.
link |
00:40:01.940
You'll have to retrace your steps or whatever,
link |
00:40:03.580
but, or come up to a cliff, you know,
link |
00:40:06.040
but most people in life don't take the steps into the fog,
link |
00:40:11.480
into the unknown because it's scary.
link |
00:40:14.200
Or they're like, I don't know, what if I fail?
link |
00:40:15.860
Or like, I don't know how that's going to work
link |
00:40:17.640
or I might run out of money
link |
00:40:18.480
or I won't be able to get a job after,
link |
00:40:19.800
or I don't know, whatever reason.
link |
00:40:21.720
But that is like one of the things that separates,
link |
00:40:24.520
I think entrepreneurial people with that kind of inclination
link |
00:40:27.180
is that they have sort of a comfort with this risk tolerance
link |
00:40:31.720
but it's actually not really risky if you think about it.
link |
00:40:33.880
It's not like, you know, at least in most places,
link |
00:40:38.200
like, you know, if you go to a startup and it fails,
link |
00:40:40.800
like you're going to, you're even more valuable
link |
00:40:42.640
to your next employer, right?
link |
00:40:44.180
Or you can go raise a seed round, pay yourself a salary,
link |
00:40:47.260
try it for like two years or three years.
link |
00:40:49.080
If it doesn't work, go get another job.
link |
00:40:50.520
It's not like you're,
link |
00:40:51.520
you weren't paying yourself a salary during that time.
link |
00:40:53.320
So I think, I think people overestimate the risk
link |
00:40:55.700
of doing a startup and they just never,
link |
00:40:57.480
they never start because it seems crazy
link |
00:41:00.960
and all your friends think it's silly.
link |
00:41:02.140
Like that's sort of the default nature
link |
00:41:03.600
of every big startup idea.
link |
00:41:05.600
It's just basic fear.
link |
00:41:06.840
It's the same kind of fear that if you see a,
link |
00:41:08.920
if you're a guy, see a cute girl at a bar,
link |
00:41:11.680
it's the fear associated with coming up to her,
link |
00:41:14.480
you like her, asking her.
link |
00:41:15.840
It's like, what's the actual risk exactly?
link |
00:41:18.160
Right.
link |
00:41:19.320
She'll say, no thanks, I'm not interested.
link |
00:41:20.800
No thanks.
link |
00:41:21.640
I guess the risk is like,
link |
00:41:23.380
that's going to be mentally difficult
link |
00:41:26.040
to deal with rejection.
link |
00:41:27.680
So just like it's mentally difficult to deal with failure.
link |
00:41:31.040
If you had a bunch of ideas and you were excited about them
link |
00:41:33.800
and you implement them and you realize they're not good,
link |
00:41:37.160
that could be difficult to keep pushing through that.
link |
00:41:40.360
But I suppose that's life.
link |
00:41:41.880
You're supposed to, you know,
link |
00:41:44.200
perseverance through the failures and then the risk is low.
link |
00:41:48.080
So that's, and then the whole time through the fog
link |
00:41:50.120
up the mountain, you're looking for product market fit.
link |
00:41:52.360
Yeah, that's right.
link |
00:41:53.360
So you know, you have it when the usage of your product
link |
00:41:55.620
keeps growing without any marketing dollars
link |
00:41:57.400
or anything like that.
link |
00:41:58.240
It's just like more people keep coming back
link |
00:41:59.680
every week or month.
link |
00:42:01.180
So you're kind of keep,
link |
00:42:02.020
you're basically watching your stats.
link |
00:42:04.400
Nothing is working.
link |
00:42:05.840
You see these little wiggles of false hope in your metrics
link |
00:42:09.360
and you basically just keep talking to customers,
link |
00:42:11.380
fixing the, improving the product,
link |
00:42:12.680
talk to customers, improve the product,
link |
00:42:13.880
talk to customers, improve product, you know,
link |
00:42:16.280
and try not to run out of money.
link |
00:42:17.120
So be really scrappy.
link |
00:42:19.280
And then if you're lucky, you hit some kind of threshold
link |
00:42:22.320
where like, okay, the thing is good enough now,
link |
00:42:24.060
or we hit on some use case and then it'll organically
link |
00:42:26.760
start to grow a bit.
link |
00:42:28.340
And then you have a whole different set of problems
link |
00:42:30.740
once you hit product market fit,
link |
00:42:31.680
which is how do we scale this thing?
link |
00:42:34.220
How do we hire people?
link |
00:42:35.720
How do we, you know, hire an executive team
link |
00:42:39.120
or raise more money?
link |
00:42:39.960
And like, so the problems totally change, but yeah.
link |
00:42:42.760
Well, you were there through the whole thing.
link |
00:42:45.080
So that's the other question that's fascinating.
link |
00:42:48.120
Again, back to the girl at the bar,
link |
00:42:50.960
how do you hire people?
link |
00:42:52.240
It's like, how do you find good friends?
link |
00:42:55.360
How do you find good relationships?
link |
00:42:57.800
And in this specific case, how do you hire good people?
link |
00:43:01.100
Engineers, executive, all of it.
link |
00:43:04.940
One thing is I've done a lot of reps on hiring
link |
00:43:06.720
at this point.
link |
00:43:07.560
So Coinbase has about 5,000 people,
link |
00:43:12.040
probably the first 500 people or something,
link |
00:43:14.440
maybe in that range.
link |
00:43:16.020
You know, I interviewed every single one of those,
link |
00:43:18.200
but you have to remember there's probably like,
link |
00:43:20.780
I don't know, on average, maybe 10 people
link |
00:43:22.520
that we went in the process for every one we hired
link |
00:43:25.040
or something.
link |
00:43:25.860
So it was like, by the time that we had 500 employees,
link |
00:43:29.360
I had done like 5,000 interviews or something.
link |
00:43:31.280
I was like very burned out on interviews.
link |
00:43:32.880
I had been doing, some days I did like seven interviews
link |
00:43:36.400
in a day or maybe, you know, you've been doing
link |
00:43:39.320
lots of interviews, maybe you wouldn't get burned out,
link |
00:43:40.720
but different kind of interviews.
link |
00:43:42.480
Very different, very different, very different,
link |
00:43:45.000
because you're, so first of all,
link |
00:43:49.200
most of your interviews lead to rejection.
link |
00:43:51.440
Yeah.
link |
00:43:52.560
Which is also exhausting.
link |
00:43:54.760
Yeah, and there's a whole part of the interview
link |
00:43:57.440
which is about candidate experience, right?
link |
00:43:59.160
Sometimes you know it's not the right person,
link |
00:44:00.880
but you wanna make sure they have a good experience.
link |
00:44:02.440
Yes.
link |
00:44:03.280
Like, if you're just exhausted
link |
00:44:04.120
and you're on your sixth interview
link |
00:44:05.080
and you're like, well, thanks for coming in
link |
00:44:06.840
and you wrap and you just, and then like,
link |
00:44:08.600
you're gonna create a detractor.
link |
00:44:09.840
Someone who's out there like, fuck that company
link |
00:44:11.400
or Brian was rude to me or whatever.
link |
00:44:12.680
So I had to, honestly, I had to work on that a little bit
link |
00:44:15.080
in the early days because I was doing so many interviews.
link |
00:44:16.680
Like I needed to make sure that when people came in,
link |
00:44:20.040
I was like, you know, made them feel comfortable,
link |
00:44:23.560
asked them a couple of like warmup questions,
link |
00:44:25.280
just like, oh, how was it getting in the office?
link |
00:44:27.040
Like, did you find it okay?
link |
00:44:27.960
And like, what have you been up to this week?
link |
00:44:29.220
And not just like, you know, like a factory assembly line
link |
00:44:32.760
like boom, boom, boom, like, yeah.
link |
00:44:34.880
But also there's a moment,
link |
00:44:35.840
cause I've interviewed a bunch of people
link |
00:44:37.040
for like teams and stuff.
link |
00:44:38.680
There's also a moment when you, early on,
link |
00:44:40.600
know it's not gonna be a good fit
link |
00:44:42.720
and you still have to land that plane
link |
00:44:45.000
and all that kind of stuff.
link |
00:44:46.840
And that could get really, really, really exhausting.
link |
00:44:49.340
So yeah, anyway, sorry.
link |
00:44:50.360
So.
link |
00:44:51.520
Yeah, so basically we tried all,
link |
00:44:53.280
we've tried so many things over the years
link |
00:44:54.400
to make interviews more efficient
link |
00:44:55.640
cause it's a huge time sink for the team.
link |
00:44:58.860
So, you know, we basically,
link |
00:45:00.720
we'll usually get them down to like 25 minutes.
link |
00:45:03.320
I've seen, if you're trying to hire like a big team,
link |
00:45:05.880
let's say, you know,
link |
00:45:08.480
of people who are like contractors or something,
link |
00:45:10.140
not necessarily full time employees.
link |
00:45:11.280
I've seen people actually do 10 minute interviews.
link |
00:45:14.280
You can even interview like a thousand people
link |
00:45:16.400
almost like in a week or something.
link |
00:45:17.760
I'm not sure if that quite works out,
link |
00:45:18.920
but let me a little less than that.
link |
00:45:20.860
But you can basically get six and six done in an hour.
link |
00:45:23.680
If you're just, I need to get a team of 30 contractors
link |
00:45:25.880
for whatever purpose.
link |
00:45:26.720
But if you're talking about full time employees,
link |
00:45:28.480
I usually do like 25 minute.
link |
00:45:30.760
You know, you're oftentimes like,
link |
00:45:32.880
one thing we've done is we'll put like a Google form online
link |
00:45:37.320
and it's like, put some basic hurdles in there.
link |
00:45:39.560
Like, you know, ask them to put in an answer,
link |
00:45:43.160
which you can check in a spreadsheet
link |
00:45:44.260
if it was correct or not.
link |
00:45:45.200
And like, there was some funny examples
link |
00:45:46.760
in the early days of Coinbase
link |
00:45:47.600
where we'd put in like brain teasers and stuff,
link |
00:45:49.280
but we don't do that anymore.
link |
00:45:50.480
We do like normal interviews, we do references.
link |
00:45:52.640
The kinds of things I ask in interviews,
link |
00:45:56.140
you know, it's usually like,
link |
00:45:57.840
I like to think about what do we need this person
link |
00:46:00.380
to accomplish in this role, right?
link |
00:46:03.000
And get really specific about that.
link |
00:46:05.300
It's like usually something pretty hard.
link |
00:46:07.200
And then I'll ask them a question.
link |
00:46:08.540
It's like, tell me about a time you did X
link |
00:46:11.360
and, or tell me about the hardest,
link |
00:46:14.580
the hardest kind of problem you've had to solve in Y
link |
00:46:17.400
and what did you do specifically to overcome it, right?
link |
00:46:20.360
So I'm asking to see if they can actually do the stuff
link |
00:46:22.400
we need to get done.
link |
00:46:23.240
But then I'm also kind of asking like culture questions
link |
00:46:25.860
if I'm interviewing for that.
link |
00:46:27.440
And so I'm trying to see like,
link |
00:46:29.400
are they concise communicators?
link |
00:46:30.840
Can they just give me a clear answer and stop talking?
link |
00:46:34.440
Some people like ramble on for like five, 10 minutes
link |
00:46:37.200
if you ask the first question.
link |
00:46:38.720
Some people are, you know, they're interrupters
link |
00:46:41.220
like church of interruption.
link |
00:46:42.160
So like they won't stop talking until you interrupt them,
link |
00:46:44.840
which for me, I'm always patient and I wait.
link |
00:46:46.780
So that's weird.
link |
00:46:49.380
I'm looking to see for humility too.
link |
00:46:50.900
Like, you know, I'll tell us people,
link |
00:46:53.360
I'll tell you about a time something went really wrong.
link |
00:46:55.420
Like you had conflict with someone on a team
link |
00:46:57.080
or what I'm kind of looking for is,
link |
00:47:00.200
were they part of the solution
link |
00:47:01.320
or are they still holding onto like blame and criticism
link |
00:47:03.780
about that and be like,
link |
00:47:04.620
well, I told them they shouldn't do that way,
link |
00:47:06.360
but they didn't listen to me.
link |
00:47:07.360
And you know, these are all like bad signs.
link |
00:47:09.440
So I'm looking for, yeah, can they get the job done?
link |
00:47:11.960
Will they work together on a team?
link |
00:47:13.600
Can they communicate effectively?
link |
00:47:15.800
Do they fit into our cultural values and you know,
link |
00:47:18.280
those kinds of things.
link |
00:47:19.120
Yeah, I mean, there's a,
link |
00:47:20.220
cause I've even for help with this podcast here,
link |
00:47:24.420
but also at MIT and so on, I've done a bunch of hiring
link |
00:47:27.420
and I was always looking for, you said, brain teasers,
link |
00:47:30.360
all kinds of simple questions that can,
link |
00:47:33.080
they can reveal a lot of information
link |
00:47:35.600
and it's always been challenging.
link |
00:47:36.860
I used to, I still ask this question,
link |
00:47:39.060
but do you think it's better to work hard or work smart?
link |
00:47:45.580
And you know, I had this idea that I've,
link |
00:47:50.320
that I think I've matured about,
link |
00:47:54.900
which is I kind of believe that people who say work smart
link |
00:47:59.060
on that question don't actually work smart.
link |
00:48:03.300
So the right textbook answer is it's better to work smart.
link |
00:48:07.880
But the reality is it's people that haven't actually
link |
00:48:12.140
ever done anything that say work smart.
link |
00:48:14.980
They're like, they haven't really struggled
link |
00:48:17.860
because my general belief at the time
link |
00:48:20.640
was in order to discover what it means to work smart,
link |
00:48:25.780
to be efficient, to, you have to work your ass off.
link |
00:48:29.060
So you have to really fail a lot
link |
00:48:30.940
and failure feels like hard work.
link |
00:48:33.460
And so I was always suspicious of people
link |
00:48:36.380
that would say work smart.
link |
00:48:37.860
I would want to interrogate that question.
link |
00:48:41.380
But then I also, you know, have learned that there is people
link |
00:48:45.540
that are just exceptionally, exceptionally efficient.
link |
00:48:51.340
They really do know what it means to work smart,
link |
00:48:53.860
even at a young age.
link |
00:48:55.700
And so like, you can't just disqualify based on that.
link |
00:48:58.500
You have to dig in deeper.
link |
00:49:00.340
But some of the most interesting people I've ever worked
link |
00:49:02.780
with would say work hard unapologetically.
link |
00:49:05.020
And they're usually the ones that know how to be efficient,
link |
00:49:08.580
which is, it's just an interesting thing like that.
link |
00:49:11.220
And I've always searched for questions of that nature
link |
00:49:13.940
to see can I get a person to reveal something profound
link |
00:49:21.220
about them in as brief of a question as possible?
link |
00:49:26.940
And I, you know, and then of course,
link |
00:49:28.540
there's basic attention to detail and brain teasers
link |
00:49:31.500
and stuff like that, depending on the role,
link |
00:49:33.380
programming and so on to see can they solve a tricky puzzle
link |
00:49:38.060
and do so, like one that doesn't require a lot of effort,
link |
00:49:40.960
but requires a certain nonlinear way of thinking.
link |
00:49:46.300
Is there some, I mean, maybe you don't want to reveal,
link |
00:49:49.800
but is there some questions that you sometimes
link |
00:49:52.740
find yourself leaning on?
link |
00:49:55.020
You said like, how did you solve a hard problem
link |
00:49:58.140
in your past and have them talk through it?
link |
00:50:01.380
That's one.
link |
00:50:02.220
You know, we started with brain teasers periodically
link |
00:50:04.780
at Coinbase and we got away from that relatively quickly.
link |
00:50:07.700
And I think one, it's a tough one
link |
00:50:10.860
because I actually think it does show how somebody
link |
00:50:15.180
kind of performs under pressure,
link |
00:50:16.420
but it's, I don't think it's a super reliable indicator
link |
00:50:18.680
because there's some people who are really good
link |
00:50:22.420
in the typical work situation,
link |
00:50:25.180
but that's not a typical work situation
link |
00:50:26.460
where somebody puts you on the spot,
link |
00:50:27.620
like in a live interview and sometimes people get nervous
link |
00:50:29.920
and they can't think clearly
link |
00:50:31.020
and like they don't have their computer in front of them
link |
00:50:32.700
or whatever they normally use.
link |
00:50:35.700
So yeah, I'm a little skeptical now
link |
00:50:39.220
of the brain teaser thing.
link |
00:50:42.340
There is a whole, yeah, there is a whole question about,
link |
00:50:46.380
like a lot of universities are getting rid of,
link |
00:50:48.100
you know, entrance exams.
link |
00:50:48.980
So if you're hiring right out of universities,
link |
00:50:52.680
sometimes it's becoming a less reliable indicator
link |
00:50:54.700
of like, are they in that university?
link |
00:50:56.560
And I've heard some companies, we haven't done this yet,
link |
00:50:58.500
but I've heard some companies are actually creating
link |
00:50:59.780
their own like for college grads,
link |
00:51:01.660
like their own basically exams, like standardized testing
link |
00:51:06.700
almost to get people in the door
link |
00:51:08.140
because the degree almost like doesn't mean
link |
00:51:10.380
what it used to, which is the whole topic, but.
link |
00:51:12.820
Yeah, that's fascinating because it's fascinating both
link |
00:51:17.140
for that, because it's not just about you trying
link |
00:51:19.380
to hire a great team, it's also to help them find
link |
00:51:22.300
the right place to work at.
link |
00:51:23.420
Yeah.
link |
00:51:24.260
It's like a two way street.
link |
00:51:28.140
All right, so once you found the product market fit,
link |
00:51:32.180
how did Coinbase become what it is today?
link |
00:51:38.180
Ooh.
link |
00:51:39.020
So let me ask an engineering question actually.
link |
00:51:42.180
Sort of from the Ruby wallet days,
link |
00:51:47.540
what are some of the interesting challenges there?
link |
00:51:50.420
Or are they not engineering?
link |
00:51:52.340
Just the things that had to be solved, what were they?
link |
00:51:56.540
Engineering, regulation,
link |
00:51:59.100
financial hiring, lawyers, what was it?
link |
00:52:07.700
So post product market fit, yeah, a lot of it's scaling
link |
00:52:10.580
and you got to build out an actual company.
link |
00:52:12.420
So I remember I was still writing a lot of code there
link |
00:52:15.500
for a while and we were hiring in,
link |
00:52:17.220
we had like maybe 25 people or something.
link |
00:52:19.420
I remember one of our investors came by one day
link |
00:52:21.060
and he was like, Brian, how much of your time
link |
00:52:22.860
are you spending writing code?
link |
00:52:24.340
And I was like, maybe 50% or something.
link |
00:52:27.260
And he was like, how much time are you spending hiring people?
link |
00:52:29.660
I was like, probably 20%.
link |
00:52:31.980
And he was like, I think you need to flip those numbers.
link |
00:52:35.220
Like this company is not going to scale.
link |
00:52:36.740
You're the CEO, you don't need to be writing code every day.
link |
00:52:39.420
You're going to have to transition that stuff.
link |
00:52:40.820
Like even if people can't,
link |
00:52:41.940
all that stuff's locked in your head.
link |
00:52:43.180
So maybe they're not going to do it as well as you
link |
00:52:44.740
for the first six months or something.
link |
00:52:46.580
But like, if you don't start to transition it,
link |
00:52:48.380
you're never going to build a real company.
link |
00:52:49.740
It's just going to be, you're going to be the bottleneck.
link |
00:52:52.620
So, you know, like a lot of founders that took me a while
link |
00:52:55.860
to like really internalize that lesson.
link |
00:52:57.260
I'd always heard people say that and, you know,
link |
00:52:59.780
but I still was holding on too much to decision making.
link |
00:53:02.900
And I probably still am, by the way,
link |
00:53:04.100
like even to this day at Coinbase,
link |
00:53:05.380
where we continually have to push down decision making
link |
00:53:08.580
in the org, like even with 5,000 people,
link |
00:53:10.700
like who are the owners of each of these things?
link |
00:53:12.260
And so the temptation is people to push it up
link |
00:53:14.180
and you become a bottleneck.
link |
00:53:15.060
And anyway, so yeah, you basically need to make sure
link |
00:53:19.020
you have enough money where you don't die
link |
00:53:21.180
if there's some kind of a downturn
link |
00:53:23.220
or hit break even profitability.
link |
00:53:24.980
We were in a position where we were periodically profitable
link |
00:53:27.700
during up periods, but then crypto would go down
link |
00:53:29.300
and we were unprofitable.
link |
00:53:30.620
And so we had to kind of manage our own psychology
link |
00:53:33.300
and the balance sheet to make sure we didn't like die
link |
00:53:35.940
in the downturn, which a lot of crypto companies did.
link |
00:53:38.980
We had to basically professionalize a whole bunch
link |
00:53:41.060
of services that had been just very quickly thrown together
link |
00:53:44.020
by like 20 year olds, right?
link |
00:53:46.060
Whether that was cybersecurity, it's like, okay,
link |
00:53:47.900
how do you get like a really senior experienced
link |
00:53:50.380
cybersecurity person, but not someone who's so senior
link |
00:53:52.420
that they can't get their hands dirty
link |
00:53:53.500
and they can come into a company with 25, 50 people.
link |
00:53:56.380
How do you get a finance person to come in and do that?
link |
00:53:58.140
Our finances were a mess.
link |
00:54:00.060
Like we didn't even really know how much money we had
link |
00:54:01.900
at certain times and stuff.
link |
00:54:03.020
I mean, this was, it's embarrassing to say,
link |
00:54:04.900
but it was true.
link |
00:54:05.740
Like I remember there was a point where we had raised,
link |
00:54:09.700
I think like our series C or something like that.
link |
00:54:12.060
And I think we had our bank accounts.
link |
00:54:14.940
I just put like $25 million, like in a different bank
link |
00:54:17.100
account that none of this stuff was touched
link |
00:54:19.020
to the actual operations of business.
link |
00:54:20.140
Cause I was like, our operations were so messy
link |
00:54:23.620
and we needed to hire a new finance person.
link |
00:54:25.380
And I was like, I'd heard horror stories
link |
00:54:28.340
of actually startups where they thought
link |
00:54:29.540
they had X amount of money.
link |
00:54:31.420
And then it turned out they had way less.
link |
00:54:33.080
And then the whole thing was insolvent in like three weeks.
link |
00:54:35.180
So you wanted to have some padding to at least like,
link |
00:54:37.260
all right, I can at least count on this to save us
link |
00:54:39.800
if we go to like super negative.
link |
00:54:41.460
Right, I mean, it was like a cheap hack,
link |
00:54:43.580
but that was like the only I could come up with.
link |
00:54:46.060
And until we could hire like a real CFO and finance team
link |
00:54:49.660
who like, okay, now we got our arms around
link |
00:54:52.000
how much cash we have.
link |
00:54:52.840
It sounds silly, but we had such high volume
link |
00:54:55.620
of money coming in and out.
link |
00:54:56.620
Anyway.
link |
00:54:57.460
What was the ordering of hiring by the way?
link |
00:54:59.840
Like how many engineers was it early on?
link |
00:55:03.420
You said CFO was not, you didn't even have a CFO for a bit.
link |
00:55:06.980
Like what was the landscape of hiring
link |
00:55:10.860
as you building up this company?
link |
00:55:13.380
Was it engineering focused?
link |
00:55:15.260
Well, let's see.
link |
00:55:16.100
I mean, so the first person we hired was just like,
link |
00:55:18.540
we need to solve customer support.
link |
00:55:20.040
So we brought someone to do that
link |
00:55:20.980
because we were all staying up till midnight every night
link |
00:55:22.500
trying to do customer support.
link |
00:55:23.840
And then we got more engineers.
link |
00:55:26.420
And then I think maybe the sixth hire
link |
00:55:27.980
or something like that was a recruiter.
link |
00:55:29.540
Cause that turned out to be, you need to build,
link |
00:55:31.980
hire the person who can hire more people.
link |
00:55:34.340
That turned out to be a great force multiplier.
link |
00:55:37.180
And then you're going down the list.
link |
00:55:39.780
Eventually you want to hire some more senior people.
link |
00:55:43.640
We needed legal and compliance.
link |
00:55:45.220
We needed that really badly.
link |
00:55:46.460
Cause we, it was all kinds of questions about
link |
00:55:48.540
what the legality of it was.
link |
00:55:50.400
Was it hard to find legal people that work with crypto,
link |
00:55:52.740
like serious adults?
link |
00:55:54.940
Cause it's such a cutting edge new world.
link |
00:55:57.540
Yeah, I mean, there was nobody who had like more than,
link |
00:56:01.100
nobody had three years of experience with it
link |
00:56:02.380
cause it had only been around a few years.
link |
00:56:04.180
So yeah, we were finding people from adjacent fields.
link |
00:56:07.180
There's a certain personality type of people
link |
00:56:08.860
who are willing to join early companies
link |
00:56:10.420
because they have no structure.
link |
00:56:12.500
You can't really commit to them about
link |
00:56:14.100
you're going to have this team or this boss or whatever.
link |
00:56:16.620
Like everything's in chaos and flux.
link |
00:56:18.920
So it takes, yeah, hiring is one of the hardest things
link |
00:56:22.340
in the early stage for sure.
link |
00:56:23.220
You got to find people crazy enough
link |
00:56:24.620
to join you on this journey.
link |
00:56:26.240
So one of the interesting things about Coinbase
link |
00:56:28.180
and you've written, we've talked, we'll talk about it a bit.
link |
00:56:31.340
You're very focused on the mission.
link |
00:56:33.540
Yeah.
link |
00:56:34.380
You're very kind of, I think that simplifies things
link |
00:56:37.980
that makes hiring easier,
link |
00:56:40.700
that makes working at Coinbase easier,
link |
00:56:42.820
that makes, I mean, it's similar.
link |
00:56:44.980
So Elon has the same thing.
link |
00:56:46.780
It's pretty clear.
link |
00:56:47.740
It's pretty clear what we're here to do.
link |
00:56:50.460
So I suppose what's the mission of Coinbase?
link |
00:56:55.540
Well, it's to increase economic freedom in the world.
link |
00:56:57.860
And what is economic freedom?
link |
00:56:59.940
Yeah, so economic freedom is this term kind of like GDP
link |
00:57:02.660
that economists use.
link |
00:57:04.060
And it's basically a measure of different countries
link |
00:57:05.820
around the world.
link |
00:57:06.660
It looks at things like,
link |
00:57:07.660
are there property rights enforced?
link |
00:57:09.700
Is there free trade?
link |
00:57:10.780
Is the currency stable?
link |
00:57:12.520
Can you start companies that you wanna start?
link |
00:57:14.100
And can you join the ones you wanna join?
link |
00:57:15.340
And is there corruption and bribery prevalent
link |
00:57:18.620
or is it relatively free of that?
link |
00:57:20.700
And so there's several different organizations
link |
00:57:24.280
that basically score countries by economic freedom.
link |
00:57:27.220
And the really cool thing about economic freedom
link |
00:57:28.840
is that basically it positively correlates
link |
00:57:31.740
with things that we all want in society,
link |
00:57:33.340
like not only higher growth of the economy,
link |
00:57:36.620
but also things like higher self reported happiness
link |
00:57:39.340
of citizens, better treatment of the environment,
link |
00:57:41.780
better income for the poorest 10% of people.
link |
00:57:44.360
And it negatively correlates with things
link |
00:57:45.860
we don't want in society,
link |
00:57:46.780
like corruption and bribery and war,
link |
00:57:48.980
even in things like that.
link |
00:57:50.500
And so it's this pretty crazy provocative idea,
link |
00:57:53.980
which is that if you give people good property rights
link |
00:57:58.580
and rule of law and allow them to trade,
link |
00:58:01.160
it basically encourages them to do more good stuff
link |
00:58:03.380
and the whole society benefits.
link |
00:58:05.240
Like one of the things, you may have noticed this
link |
00:58:08.320
growing up in various places you did,
link |
00:58:09.660
or I spent a year living in Buenos Aires, Argentina
link |
00:58:12.220
that went through hyperinflation.
link |
00:58:13.340
And there's a certain like pessimism
link |
00:58:15.820
that can creep into countries
link |
00:58:18.520
when they don't have economic freedom,
link |
00:58:21.040
which it's basically like everyone has this bit of this vibe,
link |
00:58:24.020
which is like, don't stick your head up,
link |
00:58:26.620
don't try too hard because it could all be gone tomorrow.
link |
00:58:28.960
Like the things that really are valuable in life
link |
00:58:30.900
are just family and friends
link |
00:58:32.540
and the past was better than the future will be.
link |
00:58:35.440
And so you don't really, people don't try as many,
link |
00:58:37.580
they don't try hard because you're not really sure
link |
00:58:40.240
you can actually keep the upside of your labor
link |
00:58:42.080
if you try hard, so you just don't try as hard.
link |
00:58:44.840
Whereas in America, historically,
link |
00:58:47.700
or high economic freedom countries,
link |
00:58:51.060
people basically like they just try more stuff
link |
00:58:53.720
because they're like, if I do good for other people,
link |
00:58:55.520
I'll get to keep part of it for myself
link |
00:58:56.800
and I can improve my lot in life
link |
00:58:58.100
and for my children and my community, whatever.
link |
00:59:00.560
So I realized when I read the Bitcoin white paper
link |
00:59:03.700
a long time ago, that at least I had a hunch.
link |
00:59:06.700
At the time I was like,
link |
00:59:07.760
this might be a really powerful piece of technology
link |
00:59:09.920
that can inject good financial infrastructure
link |
00:59:13.640
into all these countries around the world that don't have it.
link |
00:59:15.940
Basically good economic freedom principles
link |
00:59:18.020
in like property rights and things like that
link |
00:59:20.700
into these countries all over the world,
link |
00:59:22.180
which just as long as you had a smartphone
link |
00:59:23.620
and now crypto got invented,
link |
00:59:25.140
everybody could have economic freedom.
link |
00:59:27.260
And it's crypto is kind of really well suited
link |
00:59:28.960
for economic freedom,
link |
00:59:29.800
because if you want property rights,
link |
00:59:31.840
it's based like crypto is,
link |
00:59:32.940
if you can remember a 12 word phrase
link |
00:59:34.620
or have an app on your phone,
link |
00:59:37.020
you can store as much wealth as you want.
link |
00:59:38.620
And it can't be taken away from you.
link |
00:59:39.780
You can even, there's like refugees who need to flee
link |
00:59:42.980
and they wanna take their wealth with them
link |
00:59:44.660
and they can't do it often
link |
00:59:46.240
in the traditional financial system.
link |
00:59:47.500
And so crypto lets them do that, right?
link |
00:59:49.760
Crypto is inherently global.
link |
00:59:51.060
So it allows free trade and cross border payments.
link |
00:59:54.840
It makes it easy to accept payments from people globally.
link |
00:59:57.860
It provides a stable currency to everyone,
link |
01:00:00.060
not only with Bitcoin,
link |
01:00:00.940
which is kind of like this new reserve currency,
link |
01:00:03.080
but also with stable coins, right?
link |
01:00:05.900
Which are new inventions there.
link |
01:00:08.220
So yeah, I basically feel like crypto
link |
01:00:10.860
is this secret hiding in plain sight
link |
01:00:13.120
that can create economic freedom
link |
01:00:14.780
for people all over the world
link |
01:00:15.780
and a more fair and free and global economy.
link |
01:00:18.980
Well, so the limit,
link |
01:00:21.060
and by the way, I didn't know about Argentina.
link |
01:00:22.860
Why'd you end up in Argentina?
link |
01:00:25.160
Okay, so I was basically,
link |
01:00:28.020
I was living in Houston, Texas after college
link |
01:00:30.180
where I went to school.
link |
01:00:31.500
And I had never studied abroad.
link |
01:00:34.240
I kind of like, I don't know,
link |
01:00:36.220
I felt like I needed some adventure or something in my life.
link |
01:00:38.140
And I was like, I was running this other startup
link |
01:00:40.220
that I was trying at the time, a tutoring company,
link |
01:00:41.900
and I could work from anywhere.
link |
01:00:43.740
So my plan was, you know what,
link |
01:00:44.940
I'm just gonna go do like a month
link |
01:00:47.260
in every city around South America,
link |
01:00:49.120
just like almost like to force myself
link |
01:00:51.260
out of my comfort zone
link |
01:00:52.180
because I had never traveled by myself
link |
01:00:54.640
to a foreign country or whatever,
link |
01:00:55.720
and where I didn't really speak the language.
link |
01:00:57.340
And anyway, I landed in Buenos Aires
link |
01:01:00.420
thinking I'd go all around South America
link |
01:01:01.780
where I had never been there.
link |
01:01:03.240
But I basically, once I was set up in Buenos Aires
link |
01:01:06.600
with an apartment and a cell phone and stuff,
link |
01:01:08.160
then I was like, I don't wanna do that all again next month.
link |
01:01:10.300
So I just stayed there for most of the time
link |
01:01:11.620
and took some day trips.
link |
01:01:12.460
But yeah, it was kind of a formative experience
link |
01:01:15.060
in that regard.
link |
01:01:15.900
You got a chance sort of unexpectedly
link |
01:01:18.580
to experience the social effects of hyperinflation,
link |
01:01:21.460
which is interesting.
link |
01:01:22.500
But I also, I've never been,
link |
01:01:24.380
I really, really wanna go as a person who likes tangos,
link |
01:01:26.860
a person who likes the Argentinian national team
link |
01:01:29.980
and soccer and steak.
link |
01:01:34.340
All right, and all the other things
link |
01:01:36.620
that Argentina is known for.
link |
01:01:38.240
Okay, so economic freedom.
link |
01:01:41.380
One of the limits on economic freedom
link |
01:01:43.620
comes from government and government regulations
link |
01:01:46.300
and all those kinds of things throughout the world.
link |
01:01:49.360
So how does cryptocurrency help resist that?
link |
01:01:52.340
So can you sort of elaborate a little bit further?
link |
01:01:55.560
What are the things that limit economic freedom
link |
01:01:57.900
and how does crypto help ease that?
link |
01:02:03.340
Today the world, like the traditional financial system
link |
01:02:05.420
is basically every country of the world for the most part
link |
01:02:08.060
has their own currency.
link |
01:02:10.220
And so there's a group of people or institutions
link |
01:02:13.280
in each of those countries that's controlling
link |
01:02:15.360
that economic policy or that money supply.
link |
01:02:18.560
And it can be manipulated, right?
link |
01:02:22.380
So it's not like many of these currencies
link |
01:02:25.100
are not linked to gold standard.
link |
01:02:26.820
The U.S. kind of famously came off that in 1970s,
link |
01:02:29.260
for instance, but if you read Ray Dalio and all this stuff
link |
01:02:32.020
like he talks about, there's thousands of fiat currencies
link |
01:02:34.500
that have been in existence over time.
link |
01:02:36.700
And basically all of them eventually get disconnected
link |
01:02:39.660
from backing of like hard commodities
link |
01:02:43.700
and then they get overinflated and printed.
link |
01:02:46.460
And so in times of stress, with Nixon,
link |
01:02:50.980
I guess it was like in the U.S. it was the Vietnam War
link |
01:02:53.780
or something like that.
link |
01:02:54.900
It kind of drove government spending.
link |
01:02:56.340
And so under times of stress, they say,
link |
01:02:57.980
hey, it's a temporary measure.
link |
01:02:59.100
We need to break the peg.
link |
01:03:00.820
Temporary was like famous words that he used
link |
01:03:02.980
and they go print.
link |
01:03:07.500
And so the bad thing about that, of course,
link |
01:03:09.300
is that it sort of erodes people's like wealth
link |
01:03:11.980
if they can only hold their assets in cash,
link |
01:03:13.580
which basically like poor people tend to do that.
link |
01:03:16.820
If you're wealthy, you can hold stocks
link |
01:03:19.220
or like real estate and things like that.
link |
01:03:20.740
But it's really a tax on the poorest people
link |
01:03:22.700
in society, inflation.
link |
01:03:24.760
So anyway, crypto in a way is a little bit
link |
01:03:28.060
of like a return to the gold standard
link |
01:03:30.260
in this digital era, right?
link |
01:03:31.620
Bitcoin, there's guaranteed scarcity of it.
link |
01:03:33.820
It's deflationary.
link |
01:03:34.940
There's never gonna be more than 21 million Bitcoin.
link |
01:03:37.420
And so that's a really important principle.
link |
01:03:42.300
I also think not just Bitcoin,
link |
01:03:44.300
but like cryptocurrency generally,
link |
01:03:46.980
it's really important in terms of this,
link |
01:03:48.980
you asked about regulation, right?
link |
01:03:50.740
So think about like, if you wanted to make a global borrowing
link |
01:03:55.060
and lending marketplace or a global exchange,
link |
01:03:59.140
you would have to go to all 200 countries in the world,
link |
01:04:01.800
sometimes like maybe 50 states in the US
link |
01:04:03.780
and get lending licenses or an operating exchange
link |
01:04:07.860
or whatever.
link |
01:04:09.020
And that's just an incredible amount of work.
link |
01:04:12.900
And you can't even do business in many of these countries
link |
01:04:14.900
because like you have to bribe somebody
link |
01:04:17.300
or it's corrupt or whatever.
link |
01:04:18.860
And so, but with DeFi, with decentralized finance,
link |
01:04:22.300
people have published like Uniswap
link |
01:04:24.860
as a decentralized exchange.
link |
01:04:26.300
Everybody in the world, no matter what country you're in,
link |
01:04:28.040
what jurisdiction can interface
link |
01:04:30.460
with that decentralized exchange
link |
01:04:32.420
and there's no central company operating it.
link |
01:04:35.480
It's a smart contract on the Ethereum blockchain,
link |
01:04:38.620
which is globally decentralized.
link |
01:04:40.160
So there's no throat to choke.
link |
01:04:41.260
There's no one person or a company you can go to
link |
01:04:43.700
to like, hey, shut this thing down.
link |
01:04:45.500
Even if everybody who's working on Uniswap today stopped,
link |
01:04:48.900
the Uniswap smart contract would continue to operate
link |
01:04:52.180
on the Ethereum blockchain.
link |
01:04:54.460
Similarly for like a borrowing and lending marketplace,
link |
01:04:56.660
like somebody in India wants to borrow
link |
01:05:00.860
from somebody in the US or whatever,
link |
01:05:02.380
there's very difficult to do that
link |
01:05:04.260
in the traditional financial world,
link |
01:05:06.220
but in a smart contract that's decentralized,
link |
01:05:08.880
you can enable anybody to access it.
link |
01:05:10.660
So it's really kind of this great democratizing force
link |
01:05:14.260
that is creating a new financial system
link |
01:05:16.300
that is more fair and more free.
link |
01:05:19.380
Yeah, and in some ways it's a clever way
link |
01:05:24.700
that's enabling people to do that in a novel way.
link |
01:05:28.380
So is Uniswap in some sense a competitive Coinbase?
link |
01:05:32.220
In which way is it and which way is it not?
link |
01:05:34.700
So because for people who don't know,
link |
01:05:38.300
Coinbase is centralized.
link |
01:05:40.660
So let me ask, doesn't that go against the spirit of crypto
link |
01:05:45.920
since crypto is decentralized?
link |
01:05:49.100
What are the pros and cons of being centralized
link |
01:05:51.940
as an exchange?
link |
01:05:53.960
So I don't think Coinbase is fully centralized.
link |
01:05:55.980
We have many different products.
link |
01:05:57.340
And the way that I think about it is that our exchange
link |
01:06:01.100
or our brokerage is a centralized,
link |
01:06:03.740
regulated financial service business.
link |
01:06:06.100
And it's actually important for the crypto ecosystem
link |
01:06:08.140
to have that because you wanna allow a lot of the fiat money
link |
01:06:11.500
in the world to flow into the crypto economy.
link |
01:06:13.380
So we're very proud of that.
link |
01:06:15.940
And I think we've helped a lot of that money flow in.
link |
01:06:18.620
Now, once people have money in crypto,
link |
01:06:20.620
they can choose to hold it in a variety of ways.
link |
01:06:22.280
And they can choose to hold it in a self custodial wallet,
link |
01:06:24.660
which is more decentralized.
link |
01:06:26.240
They can choose to use decentralized exchanges,
link |
01:06:29.580
which we love and Uniswap is not really,
link |
01:06:32.780
I don't think of them as like a direct competitor to us.
link |
01:06:34.920
We basically have integrated Uniswap
link |
01:06:37.460
into a number of our products.
link |
01:06:38.340
We love DeFi, decentralized exchanges, the whole thing.
link |
01:06:41.460
So Coinbase wallet, which is a self custodial wallet,
link |
01:06:46.320
is more decentralized and it allows people
link |
01:06:48.820
to hold their own crypto.
link |
01:06:51.500
They don't have to trust us.
link |
01:06:52.500
Can you explain what a self custodial wallet is?
link |
01:06:55.860
What is a wallet and what is a self custodial wallet?
link |
01:06:58.900
Yeah, so it's confusing.
link |
01:07:00.540
So a custodial wallet means you're trusting Coinbase
link |
01:07:04.260
to store your crypto, the private keys themselves.
link |
01:07:08.420
And for some people and institutions and everything,
link |
01:07:11.420
just meeting them where they are today,
link |
01:07:12.940
that's nice because it's simpler.
link |
01:07:17.120
They're not afraid of losing their crypto
link |
01:07:18.720
if they make some accidental mistake.
link |
01:07:20.660
Or so custodial crypto products are important
link |
01:07:25.140
to help get a bunch of people into the ecosystem.
link |
01:07:27.480
But I'm very supportive of self custodial wallets.
link |
01:07:30.580
And I think in some ways they are the future
link |
01:07:32.500
because more and more people are gonna want
link |
01:07:34.380
to store their own crypto,
link |
01:07:35.340
not trust a third party institution to do it.
link |
01:07:37.320
And in some ways that is much more authentic
link |
01:07:38.940
to the ethos of crypto.
link |
01:07:40.140
So Coinbase will help you convert the fiat into crypto.
link |
01:07:43.700
And frankly, that's a more centralized thing.
link |
01:07:46.020
But once you have crypto,
link |
01:07:46.940
you can then go to the self custodial world,
link |
01:07:49.080
store it yourself.
link |
01:07:50.100
And to get into the technical details just for a second,
link |
01:07:53.500
it's basically saying you're gonna store the keys
link |
01:07:56.500
on your own device.
link |
01:07:57.900
And so even if Coinbase gets some court order to seize it,
link |
01:08:02.860
we actually can't.
link |
01:08:03.900
From an architecture point of view, we can't do it.
link |
01:08:06.580
Or if Coinbase gets hacked or something,
link |
01:08:08.520
we can't lose your funds.
link |
01:08:09.960
Now the thing is you have to take the responsibility
link |
01:08:12.300
because we're not taking it.
link |
01:08:13.140
So the individual person could get hacked.
link |
01:08:15.920
And there's a whole bunch of really cool research happening
link |
01:08:18.960
to make self custodial wallets more resilient
link |
01:08:21.900
to accidental loss, hacks, and just user error.
link |
01:08:28.060
I don't know how much you've looked at various cryptography
link |
01:08:30.140
things, but basically, you can have multiple signatures
link |
01:08:35.780
from different keys on different devices
link |
01:08:37.420
where you need two of the three or three of the five.
link |
01:08:39.740
There's a whole technology called multi party computation
link |
01:08:43.220
or threshold signing signatures, which is really cool.
link |
01:08:46.460
But those are the things you would run locally?
link |
01:08:49.700
These are all security measures, cryptography measures
link |
01:08:52.460
to protect you without a centralized component?
link |
01:08:56.580
Right.
link |
01:08:57.100
So a simple example would be, let's
link |
01:08:59.180
say you had a two of three key signature.
link |
01:09:02.300
And one key might be stored at Coinbase,
link |
01:09:04.820
but that's not a quorum.
link |
01:09:06.220
So we couldn't unilaterally move your funds.
link |
01:09:08.100
But another key is on your device, on your phone,
link |
01:09:10.100
let's say.
link |
01:09:10.740
Oh, cool.
link |
01:09:12.100
So in a normal situation, you have a key on your phone.
link |
01:09:14.920
We have one.
link |
01:09:17.420
And so two out of three, it can all
link |
01:09:20.060
get signed very quickly for day to day use.
link |
01:09:21.900
But let's say you lose your phone or something.
link |
01:09:23.900
Now, there has to be a third key.
link |
01:09:25.420
And that's where you could store it in a backup somewhere,
link |
01:09:29.580
like in Google Drive or iCloud.
link |
01:09:31.820
You could trust a third party that's
link |
01:09:34.140
not Coinbase to also have that one key.
link |
01:09:36.260
And they can't do anything unilaterally with that one key.
link |
01:09:39.180
So that's a simple example.
link |
01:09:40.700
You can get way more complicated.
link |
01:09:42.260
Yeah, that's an awesome idea.
link |
01:09:43.380
So if your funds get seized, Coinbase can't do anything.
link |
01:09:49.820
But you better not lose your phone, maybe, in that case.
link |
01:09:52.260
Yeah, yeah.
link |
01:09:54.420
But it provides a, there is, so even if you lose your phone,
link |
01:09:56.660
then there is a recovery mechanism.
link |
01:09:57.820
Because you can get the one key from Coinbase,
link |
01:09:59.140
the one from your backup provider,
link |
01:10:01.500
and recover a new one back on your phone.
link |
01:10:03.860
I know, yeah.
link |
01:10:04.620
But what if Coinbase is no longer,
link |
01:10:06.820
but because of government, because of, say,
link |
01:10:09.420
it's in North Korea, government says you're no longer,
link |
01:10:12.620
like Coinbase is shut down in that country
link |
01:10:14.780
or something like that.
link |
01:10:15.820
Then you can get it, even if you have access to those two.
link |
01:10:19.460
So again, perhaps a silly question,
link |
01:10:23.140
but isn't a self custodial wallet a competitor
link |
01:10:26.780
as a notion to Coinbase?
link |
01:10:29.860
No, I mean, so we offer a self custodial wallet.
link |
01:10:33.420
We've built one, and it's like one.
link |
01:10:34.820
But doesn't it bleed the, like I guess
link |
01:10:37.060
I'm asking a sort of a financial question,
link |
01:10:39.580
is like how does Coinbase make money on transactions?
link |
01:10:43.940
So does this not, it does not decrease the number,
link |
01:10:47.140
or does not significantly negatively affect transactions?
link |
01:10:50.700
Or are you more focused on growing the number of the pie
link |
01:10:53.980
of the number of people that are using cryptocurrency?
link |
01:10:56.700
Yeah, like a traditional financial service firm
link |
01:10:58.580
would probably say, well, we should be storing,
link |
01:11:01.740
let's keep more of the custody with us,
link |
01:11:03.740
because that's how we prove to the world
link |
01:11:05.780
that we're valuable or whatever.
link |
01:11:07.540
I don't really believe that.
link |
01:11:08.660
Like I think that actually we kind of want to encourage
link |
01:11:10.980
our users to move to self custody over time
link |
01:11:13.020
for those who are ready and willing.
link |
01:11:15.020
And that technology needs to mature.
link |
01:11:16.660
I'm not trying to like force anybody to do it
link |
01:11:18.260
who doesn't want to do it.
link |
01:11:19.100
But to me, that's like the future
link |
01:11:21.300
of how we get billions of people using crypto.
link |
01:11:23.860
But doesn't that mean they can go somewhere else easier?
link |
01:11:27.420
Yeah, that's sort of the point is like,
link |
01:11:29.660
we're all using the same protocol.
link |
01:11:31.020
So there's low switching costs,
link |
01:11:32.340
which keeps all the companies accountable, right?
link |
01:11:34.500
Like if you want to access the visa network,
link |
01:11:38.500
there's only one company in the world
link |
01:11:39.620
you can go through to do that, like visa.
link |
01:11:41.740
But if you want to access the Bitcoin network,
link |
01:11:43.500
there's dozens or hundreds of companies out there
link |
01:11:45.780
who can do that.
link |
01:11:46.620
So it's arguably, you could argue it's worse for us
link |
01:11:50.620
as a company, but I think it's better for,
link |
01:11:53.140
it's what makes Bitcoin interesting
link |
01:11:54.540
and cryptocurrency interesting is that nobody controls it.
link |
01:11:58.020
There is low switching costs for customers.
link |
01:11:59.940
It's better for customers.
link |
01:12:01.180
And that means that all the companies in the space
link |
01:12:03.260
are going to be held to a high standard
link |
01:12:04.500
because the minute you lose someone's trust,
link |
01:12:06.060
they're just going to move their Bitcoin to some other service
link |
01:12:08.500
and that's good for the world.
link |
01:12:10.220
Do you think of Coinbase as,
link |
01:12:12.500
so there's these ideas of layer one,
link |
01:12:14.300
layer two, layer three technologies.
link |
01:12:17.060
Do you think of Coinbase as layer one,
link |
01:12:20.020
layer two, layer three?
link |
01:12:21.700
Now that said, there's so many products
link |
01:12:27.180
that are under the Coinbase umbrella
link |
01:12:28.740
that it's hard to answer that question,
link |
01:12:30.100
but what do you think?
link |
01:12:31.940
Do you acknowledge the existence of layer three?
link |
01:12:34.340
So, you know, usually when people are using those terms,
link |
01:12:38.860
layer one, layer two, so they're referring to like,
link |
01:12:40.580
layer one would be the blockchain,
link |
01:12:42.940
layer one blockchain itself,
link |
01:12:43.820
like a Bitcoin or Ethereum or something,
link |
01:12:45.780
not like a centralized service like Coinbase
link |
01:12:48.140
or even our decentralized self custodial wallet.
link |
01:12:51.740
So yeah, I wouldn't consider us to be like a layer one.
link |
01:12:56.460
These are the decentralized protocols
link |
01:12:58.540
that we're integrating, but Coinbase itself is not those.
link |
01:13:01.740
Yes, but layer two is the thing that was basically
link |
01:13:05.180
doing transactions without the settlement on the blockchain.
link |
01:13:09.180
And so you get to have some of the benefits
link |
01:13:11.180
of faster transactions without the security
link |
01:13:15.220
associated with the blockchain.
link |
01:13:16.420
And layer three is, I suppose,
link |
01:13:20.300
sort of apps built on top of that.
link |
01:13:23.060
So, you know, at least I think talking to Michael Saylor,
link |
01:13:26.860
he considers Coinbase a layer three technology.
link |
01:13:29.940
Interesting, okay.
link |
01:13:31.180
I'm not really particularly familiar
link |
01:13:34.460
with this kind of distinction of layer three and two.
link |
01:13:37.460
I don't see them as fundamentally different.
link |
01:13:40.340
But some of the, okay, I mean, one way of asking that,
link |
01:13:44.700
is there some layer two like of magic happening
link |
01:13:48.180
in order to make transactions associated
link |
01:13:50.220
with the blockchain happen instant, so that they're quick?
link |
01:13:55.460
So that.
link |
01:13:56.300
On Coinbase?
link |
01:13:57.140
On Coinbase, yeah.
link |
01:13:58.860
Is there some magic going on?
link |
01:14:00.140
Because you're, okay, we should say,
link |
01:14:01.820
how many cryptocurrencies are currently on Coinbase?
link |
01:14:04.980
So it's more than two.
link |
01:14:06.420
Yeah.
link |
01:14:07.580
It's a lot more than two.
link |
01:14:08.500
Yeah.
link |
01:14:09.340
So you have to understand,
link |
01:14:10.500
they have to incorporate all these technologies.
link |
01:14:12.580
Yeah.
link |
01:14:13.900
So how do you make that magic
link |
01:14:16.140
of sort of universal transactions happen
link |
01:14:18.820
across all of these different cryptocurrencies?
link |
01:14:23.260
There's our centralized products
link |
01:14:24.580
and decentralized products, right?
link |
01:14:25.860
The centralized products, we are storing that crypto for you.
link |
01:14:31.100
And so if you're moving from one of your accounts
link |
01:14:33.460
to another account, like an ETH1 account to ETH2 account,
link |
01:14:36.100
or from my ETH Coinbase centralized account
link |
01:14:39.860
to your ETH centralized.
link |
01:14:40.700
So we can do that transaction off chain to make it faster.
link |
01:14:43.580
And it saves the customer fees
link |
01:14:45.420
and it just confirms instantly.
link |
01:14:47.020
But it's not truly using the decentralized blockchain,
link |
01:14:49.180
right?
link |
01:14:50.020
So you can also send any Bitcoin address
link |
01:14:52.260
or Ethereum address, for instance.
link |
01:14:53.940
And that is putting the transaction on chain.
link |
01:14:56.420
Now our decentralized products like Coinbase wallet,
link |
01:14:59.300
the self custodial wallet,
link |
01:15:01.020
every transaction is happening on chain with that.
link |
01:15:03.580
And so basically it just shows a little bit
link |
01:15:05.700
of the evolution of Coinbase and the blockchains themselves.
link |
01:15:07.980
Like in the early days, these networks were not scalable.
link |
01:15:13.220
And so there were no L2 solutions, for instance.
link |
01:15:16.820
And so we had to do sort of these hacks,
link |
01:15:18.540
like moving the crypto off chain,
link |
01:15:20.140
if you were moving between your own accounts
link |
01:15:21.540
and stuff like that.
link |
01:15:22.460
Otherwise the minor fees would have just eaten us alive
link |
01:15:24.580
as a company, right?
link |
01:15:25.780
Yeah.
link |
01:15:26.620
But now the blockchains are starting to scale.
link |
01:15:29.020
There's a whole bunch of more work
link |
01:15:29.940
that needs to be done on that.
link |
01:15:30.780
And we're getting L2 solutions.
link |
01:15:32.260
So I think more and more of the transactions
link |
01:15:33.820
are going on chain, whether it's L2, L1.
link |
01:15:36.620
And ideally we shouldn't be doing that many transactions
link |
01:15:43.820
off chain, just internal Coinbase ledger or something.
link |
01:15:47.060
That's not really in the spirit of crypto.
link |
01:15:48.740
So when you say on chain, that includes layer two technology
link |
01:15:54.900
that the blockchain proposes.
link |
01:15:56.740
Yeah.
link |
01:15:59.580
I guess I was asking how much fun magic is happening
link |
01:16:02.500
off chain within Coinbase.
link |
01:16:04.380
And you're saying in the early days you had to,
link |
01:16:07.300
but you're trying to do less and less.
link |
01:16:09.620
So look, there's a bunch of high frequency traders
link |
01:16:11.620
that use the centralized products
link |
01:16:13.180
and even just regular retail people,
link |
01:16:15.620
they don't want to pay the gas fees and stuff.
link |
01:16:17.660
And they're trying to, it actually,
link |
01:16:19.340
we back at the envelope, calculated this out at one point
link |
01:16:24.180
and just like, it would be completely infeasible
link |
01:16:26.780
for like high frequency traders
link |
01:16:28.140
to put everything on chain at this point.
link |
01:16:29.780
That's basically what DEXs are doing.
link |
01:16:31.460
And so both are important.
link |
01:16:33.660
I think more and more is going to move decentralized
link |
01:16:35.700
over time, which is great.
link |
01:16:36.900
And we're, and we're basically.
link |
01:16:38.340
DEXs are decentralized exchanges by the way.
link |
01:16:40.340
Yeah.
link |
01:16:42.820
So anyway, we want to encourage more and more of it
link |
01:16:45.460
to move decentralized over time,
link |
01:16:46.860
but I don't, the centralized things aren't going away
link |
01:16:48.780
for like a long time.
link |
01:16:50.220
It's a decade from now,
link |
01:16:51.340
there's going to be some big institution
link |
01:16:54.340
or pension fund or central bank.
link |
01:16:56.660
That's like, all right, we got to hold crypto.
link |
01:16:58.940
Let's set up the account in a centralized way.
link |
01:17:00.740
So that's, that's fine.
link |
01:17:02.020
Both, both are important.
link |
01:17:03.220
Do you know the number
link |
01:17:04.460
of cryptocurrencies currently on Coinbase?
link |
01:17:07.300
Do you know that number?
link |
01:17:08.180
It's over a hundred, but it depends.
link |
01:17:10.660
It depends what jurisdiction you're in.
link |
01:17:12.260
And, you know, are you in institution versus retail?
link |
01:17:16.260
There's like, there's so many different categories now.
link |
01:17:19.020
But over a hundred.
link |
01:17:20.180
Yeah.
link |
01:17:21.660
So what does it take to become, to, to, to become an asset,
link |
01:17:25.860
to become a cryptocurrency on Coinbase,
link |
01:17:28.260
to add your technology to Coinbase?
link |
01:17:33.340
Okay. Well, so we're trying to get away from this idea
link |
01:17:36.500
of being listed on Coinbase as being seen as like
link |
01:17:39.300
an endorsement or something,
link |
01:17:40.500
because I actually think it's very important
link |
01:17:42.740
that we are not considered judge and jury about, you know,
link |
01:17:47.780
like imagine it was the early days of the internet
link |
01:17:49.460
and you were like, what's a good webpage
link |
01:17:50.700
and what's a bad webpage.
link |
01:17:51.540
Like you would have been totally wrong
link |
01:17:52.740
or anytime big tech companies try to make these review,
link |
01:17:57.140
review boards of like, you know,
link |
01:17:58.860
Apple famously gets in trouble for this a lot
link |
01:18:00.500
with their app store review process.
link |
01:18:02.060
Right.
link |
01:18:02.900
And so something that you think like a committee of people
link |
01:18:06.180
somewhere thinks looks silly may turn out
link |
01:18:08.060
to be the next big thing.
link |
01:18:08.940
Right. And so it's very difficult.
link |
01:18:10.660
So what do we do?
link |
01:18:11.500
We basically have a test of legality, right?
link |
01:18:15.020
We check, you know, do we believe this is a security?
link |
01:18:19.780
If so, it can't be listed on Coinbase
link |
01:18:21.620
and there's a very rigorous process we go through for that.
link |
01:18:25.060
Just currently the way the laws are in the US,
link |
01:18:26.620
you can't do that.
link |
01:18:27.900
And we've been, we acquired a broker duo license
link |
01:18:30.180
from the SEC.
link |
01:18:31.020
We're trying to work with them to get that operational
link |
01:18:32.820
and hopefully someday we can trade real crypto securities.
link |
01:18:35.260
But today that's not possible in the US at least.
link |
01:18:38.860
Then we look at sort of the cybersecurity
link |
01:18:40.900
of the crypto asset.
link |
01:18:42.500
Does it, do we see that there's some flaw
link |
01:18:44.260
in the smart contract or, you know,
link |
01:18:47.060
a way that somebody could manipulate it
link |
01:18:49.340
without the customer's permission?
link |
01:18:52.500
We look at some compliance pieces to it as well,
link |
01:18:54.700
like the actors behind it and like, you know,
link |
01:18:57.540
there any kind of criminal history, anything like that.
link |
01:19:00.100
But if we believe it meets our listing standards,
link |
01:19:02.980
basically this test of legality and everything
link |
01:19:06.260
for customer protection, then we want to list it
link |
01:19:09.460
because we want the market to at that point decide.
link |
01:19:11.620
And it's kind of like Amazon or something like that
link |
01:19:16.100
where, you know, a product might have three stars
link |
01:19:18.860
or it might have five stars,
link |
01:19:19.900
but if it starts to get one star consistently,
link |
01:19:22.420
like it's probably a fraudulent or it's defective
link |
01:19:24.620
or something like maybe Amazon will remove it.
link |
01:19:26.660
But otherwise you want to let the market decide
link |
01:19:29.060
what these things are.
link |
01:19:31.340
So that's generally how we do it.
link |
01:19:32.900
And by the way, more and more of these assets,
link |
01:19:36.180
I think especially like low market cap assets
link |
01:19:38.380
are going to be traded on DEXs through Coinbase.
link |
01:19:40.500
It's not that we,
link |
01:19:42.820
we don't need to list every asset on a centralized exchange.
link |
01:19:45.220
I think DEXs are really good for the long tail.
link |
01:19:47.780
And then it becomes an even,
link |
01:19:49.620
it's even more clear to people,
link |
01:19:50.860
like this is not some endorsement by a Coinbase of like,
link |
01:19:53.980
this asset's good and this one's bad.
link |
01:19:55.380
Like, you know, my belief is there's going to be millions
link |
01:19:57.900
of these assets over time.
link |
01:19:59.020
And so I hope it doesn't like make news
link |
01:20:02.380
every time we add one in the future, basically.
link |
01:20:03.780
Yeah, I wonder how you get there
link |
01:20:05.980
because I, even I look to Coinbase for, for example,
link |
01:20:10.580
you know, people, as you can imagine,
link |
01:20:13.020
sort of tag me on Twitter or something like that
link |
01:20:15.340
and all that, like you should interview our sort of this,
link |
01:20:20.580
the founder of this particular coin, right?
link |
01:20:23.140
Yeah.
link |
01:20:23.980
And I, it's so hard for me to know what's,
link |
01:20:27.340
first of all, what's interesting technology?
link |
01:20:30.540
What's, who's a scammer or not?
link |
01:20:34.780
Who's actually legitimately representing
link |
01:20:37.340
an ambitious new thing versus a scam?
link |
01:20:43.340
And I, you know, there's very few sources
link |
01:20:46.180
of like a verification signal.
link |
01:20:50.540
And unfortunately Coinbase in part
link |
01:20:52.780
has become a little bit of that too.
link |
01:20:55.580
And you're trying to get away from that
link |
01:20:57.500
because you're trying to get as many,
link |
01:20:58.740
sort of let the people decide.
link |
01:21:00.740
So you're thinking of like Amazon star type system
link |
01:21:03.940
where the people could rate.
link |
01:21:05.660
Yeah, so I think we'll actually probably add
link |
01:21:07.380
like user ratings and reviews.
link |
01:21:09.060
So, and we'll be very cautious about like, you know,
link |
01:21:12.660
these are real people.
link |
01:21:15.340
There's a bunch of stuff we have to do for that already.
link |
01:21:17.340
So I think wisdom of the crowds is good
link |
01:21:19.820
in terms of getting feedback on items,
link |
01:21:21.940
but we also, we're gonna do our own review,
link |
01:21:24.180
which I mentioned earlier, right?
link |
01:21:25.180
Which is like, okay, it meets this minimum bar
link |
01:21:27.620
to be listed on our site.
link |
01:21:28.700
Yeah.
link |
01:21:30.500
I think, yeah, both are important.
link |
01:21:32.180
How do you know if a coin is a scam or not?
link |
01:21:36.580
Well, you can see a few things.
link |
01:21:39.100
So, you know, I hate to use the word scam
link |
01:21:41.140
because a lot of these are judgment calls.
link |
01:21:42.580
You gotta, I kind of, a court may or a jury
link |
01:21:45.140
may land either way,
link |
01:21:45.980
but things that would be red flags to look at would be,
link |
01:21:50.060
you know, is a bunch of the asset owned by an insider
link |
01:21:53.620
or insiders with short vesting periods.
link |
01:21:56.820
You know, does the background of the founders,
link |
01:22:02.940
like they may have criminal records
link |
01:22:04.820
or if they've perpetrated other frauds in the past, right?
link |
01:22:08.260
There's a difference between something
link |
01:22:10.460
which is just a me too product.
link |
01:22:13.900
It's like, it doesn't have anything interesting about it
link |
01:22:16.100
and something that's an actual fraud or outright scam.
link |
01:22:18.220
And you have to, a lot of this data,
link |
01:22:21.300
what's cool about it is that it's now available on chain.
link |
01:22:23.540
You can look at like the tokenomics behind it
link |
01:22:25.500
and see who owns it.
link |
01:22:26.340
And are they selling it, you know, in like inappropriately
link |
01:22:32.740
or are they pumping it on like YouTube and Twitter
link |
01:22:35.900
and making promises about,
link |
01:22:38.140
hey, the value of this thing may be a higher in the future.
link |
01:22:40.260
And like, all those are just big, big no, no's
link |
01:22:42.220
that we would, you know, we just don't wanna go there.
link |
01:22:45.860
So our whole thing is like,
link |
01:22:48.220
we want to enable innovation in this space,
link |
01:22:50.900
but not allow anybody to curtail the advancement
link |
01:22:54.620
of this industry by like doing some kind of fraudulent thing
link |
01:22:57.380
or get rich quick thing.
link |
01:22:58.420
So.
link |
01:22:59.260
It's a tricky industry
link |
01:23:00.100
because I'm trying to figure out who to, you know,
link |
01:23:03.780
what's interesting to understand, to research.
link |
01:23:07.820
And it's hard to know.
link |
01:23:09.860
Let me ask you about a tricky one
link |
01:23:11.780
to add to a centralized exchange,
link |
01:23:13.460
which is privacy preserving cryptocurrency.
link |
01:23:16.300
So like Monero.
link |
01:23:17.420
Yeah.
link |
01:23:18.260
Is that technically difficult or is that why,
link |
01:23:21.700
why is like Monero, for example, forget that specific one,
link |
01:23:24.580
but like privacy preserving cryptocurrency blockchains,
link |
01:23:29.860
why is that, is that ever possible to add?
link |
01:23:33.340
So that's a great question.
link |
01:23:35.100
So the answer is maybe.
link |
01:23:36.220
So here's the reason why.
link |
01:23:40.300
So because we're a regulated financial service business,
link |
01:23:43.700
we have various licenses to do that.
link |
01:23:46.300
We are regulated by various regulators.
link |
01:23:48.500
Part of those licenses requires us to have a quote,
link |
01:23:51.060
reasonable program to monitor for suspicious activity,
link |
01:23:57.260
you know, an AML program, anti money laundering, right?
link |
01:23:59.660
And so if it, if a coin is a hundred percent anonymous
link |
01:24:03.860
and we can't really do blockchain analytics
link |
01:24:05.540
to track source of funds
link |
01:24:07.820
and where these things might be going,
link |
01:24:09.700
it makes it harder to have a reasonable program around that
link |
01:24:15.100
that's defensible.
link |
01:24:16.020
Now there are privacy preserving coins like Zcash,
link |
01:24:19.420
which have something called a view key.
link |
01:24:21.220
And a view key is basically another key
link |
01:24:23.300
which allows you to deanonymize the transactions
link |
01:24:26.060
in specific situations where you want that.
link |
01:24:28.100
So for instance, you know, we do support Zcash.
link |
01:24:30.820
And one of the ways we got comfortable with that
link |
01:24:32.420
is that when you're buying it on Coinbase,
link |
01:24:36.140
you know, you can basically have a view key.
link |
01:24:38.380
The transactions are not anonymous while you're buying it.
link |
01:24:41.100
And we can see where it goes afterwards
link |
01:24:42.660
and do our whole standard program.
link |
01:24:45.420
Now, if it gets a few hops away down the road,
link |
01:24:48.020
I mean, people could eventually turn on
link |
01:24:50.100
privacy preserving aspects.
link |
01:24:51.820
So, you know, these are tough judgment calls,
link |
01:24:53.860
but at least in terms of our interaction
link |
01:24:55.780
with the customer and everything,
link |
01:24:56.940
we feel comfortable at that.
link |
01:24:58.580
I think there's a broader point here,
link |
01:25:00.380
which is that I actually think privacy coins
link |
01:25:03.260
are a good thing for the world and they should be allowed.
link |
01:25:05.780
And more like, you know, despite,
link |
01:25:08.500
we've made this judgment call to operate
link |
01:25:10.380
in a regulated and safe and compliant way,
link |
01:25:11.900
but just taking my Coinbase hat off for a minute,
link |
01:25:15.220
I think the world would be a better place
link |
01:25:17.620
if there were more privacy coins,
link |
01:25:19.100
because it's kind of like the internet
link |
01:25:20.780
when it first came online, like there was no HTTPS,
link |
01:25:24.300
everything was HTTP and there was, you know,
link |
01:25:26.620
so people were afraid to put their credit cards
link |
01:25:28.140
on the internet and your messages could be intercepted
link |
01:25:31.580
and all this stuff.
link |
01:25:32.420
And now the whole internet has basically moved to HTTPS
link |
01:25:34.540
with a little lock icon in your browser, which is better.
link |
01:25:37.380
Like, and financial information
link |
01:25:39.260
is like the most important information to keep private,
link |
01:25:41.500
right?
link |
01:25:42.620
So there's times where like,
link |
01:25:44.420
let's say you're running a charity or something
link |
01:25:46.060
and you want to have total auditability,
link |
01:25:47.940
transparency for the whole world,
link |
01:25:49.700
who donated and where did the money go?
link |
01:25:51.300
That's great, you want it to be public.
link |
01:25:53.220
But if it's like your personal money or something like that,
link |
01:25:56.100
you don't want to be broadcasting that to the whole world.
link |
01:25:58.100
And in some ways that's what blockchains are doing,
link |
01:26:00.620
you know, pseudonymously,
link |
01:26:01.900
because like, but it is a public ledger.
link |
01:26:03.740
And so if you can know who owns each address,
link |
01:26:05.780
you can basically deanonymize it.
link |
01:26:07.780
I, you know, I think basically people should fight
link |
01:26:11.500
for privacy and freedoms of all kinds,
link |
01:26:13.980
but privacy of money is a good thing.
link |
01:26:16.020
So I would like to see more of that in the future.
link |
01:26:17.540
You chosen with Coinbase to have a seat at the table
link |
01:26:23.700
with the regulators.
link |
01:26:25.140
So what kind of conversations are there at that table?
link |
01:26:31.380
What are the regulations like?
link |
01:26:33.500
What is the level of understanding with regulators?
link |
01:26:36.860
What are they worried about?
link |
01:26:38.140
What are they thinking about?
link |
01:26:39.260
What are the positive and what are the negative regulations
link |
01:26:42.900
that you're facing?
link |
01:26:44.580
That you're educating, struggling with, pushing back on,
link |
01:26:48.060
supporting, all that kind of stuff.
link |
01:26:49.780
Yeah.
link |
01:26:51.220
Oh man, there's so many.
link |
01:26:52.140
Cause we're, I mean, we're live in like, you know,
link |
01:26:55.540
maybe a hundred countries or more at this point.
link |
01:26:56.980
So the conversations are all over the map.
link |
01:26:59.900
I'm trying to think what broad strokes I could paint for you.
link |
01:27:02.020
So I'd say one trend that's positive is that basically
link |
01:27:06.380
regulators around the world are more and more,
link |
01:27:09.140
over the last five years, I would say,
link |
01:27:11.460
it's more and more common to find a regulator today asking,
link |
01:27:15.780
how can we preserve the innovation potential
link |
01:27:17.740
of this technology while keeping the bad actors out
link |
01:27:21.140
than it was five years ago, where they were saying,
link |
01:27:23.500
this is all bad activity.
link |
01:27:24.500
How do we prevent it?
link |
01:27:25.700
And so maybe this is.
link |
01:27:28.500
When you say more and more, what fraction?
link |
01:27:34.340
I'll give you like a US specific example,
link |
01:27:36.500
although we operate in many countries.
link |
01:27:38.180
So when I go to DC now, I would say, you know,
link |
01:27:42.580
50, 60% of the people who I meet with are basically,
link |
01:27:46.620
you know, they're in the camp of crypto,
link |
01:27:49.020
has a lot of potential.
link |
01:27:50.260
We should regulate it to make sure the bad people
link |
01:27:52.300
don't do something bad with it.
link |
01:27:53.540
But this is here to stay and it has a lot of upside.
link |
01:27:56.220
We should basically create the awful regulation
link |
01:27:59.340
and celebrate it and actually encourage this innovation
link |
01:28:01.980
to happen in the US.
link |
01:28:03.180
That's a huge change from just three years ago
link |
01:28:06.580
where it was probably 30% of people saying that.
link |
01:28:08.380
Now it's like 60, it's like almost double.
link |
01:28:10.420
It's getting harder to find like true crypto skeptics
link |
01:28:13.340
in DC.
link |
01:28:15.860
I'd say that, you know, maybe only like 20 or 30% of people
link |
01:28:19.580
are like willing to say something negative.
link |
01:28:21.900
Like they actually think it's net negative.
link |
01:28:23.580
It's like, it's really hard to defend that position
link |
01:28:25.660
at this point, because almost like one in five Americans
link |
01:28:28.660
have used or tried crypto at this point.
link |
01:28:30.100
So you're kind of condemning 20% of your fellow citizens
link |
01:28:32.940
if you say that at this point, you know,
link |
01:28:36.020
especially with NFTs and all these things,
link |
01:28:37.260
like a huge segment of people who don't even care
link |
01:28:39.180
about investing or whatever came into the space.
link |
01:28:41.580
So, and then basically that's that same conversation
link |
01:28:45.420
is happening, but, you know, delayed by a few years
link |
01:28:49.460
in like India and Europe and in some Asian countries.
link |
01:28:53.140
And some countries have really embraced crypto
link |
01:28:56.260
and they're like trying to really,
link |
01:28:59.660
they're ahead of where the US is
link |
01:29:00.940
because they're trying to actually attract
link |
01:29:03.340
the best startups and entrepreneurs like, you know, like Dubai
link |
01:29:06.260
and UK and Australia and all are kind of pushing
link |
01:29:08.060
good regulation, El Salvador actually, I guess,
link |
01:29:11.500
adopted it as like Bitcoin as a legal tender.
link |
01:29:13.540
There was another country, Central African Republic,
link |
01:29:15.580
I think that is supposedly did that as well.
link |
01:29:18.220
But, you know, there's countries like China
link |
01:29:20.540
that are more autocratic that are saying,
link |
01:29:22.140
hey, this is a threat to our power
link |
01:29:24.580
and like, we're gonna try to really curtail it.
link |
01:29:26.420
So what kind of regulations are there that you feel the most
link |
01:29:30.700
that are limiting or that are empowering?
link |
01:29:33.260
Like, is there specific examples?
link |
01:29:35.300
Yeah, okay.
link |
01:29:36.140
So, I mean, basically I think the securities laws
link |
01:29:39.300
in the US need to be clarified about what,
link |
01:29:44.420
crypto is many different things.
link |
01:29:45.620
That's what people don't realize.
link |
01:29:46.620
So like some crypto, like Bitcoin, Ethereum
link |
01:29:49.700
and many others are probably more like commodities.
link |
01:29:53.180
They're not controlled by any one person, you know,
link |
01:29:55.300
like anyway, there's people who wanna raise money
link |
01:29:58.180
for a company that's sounds more like a security
link |
01:30:00.320
that should be regulated by the SEC.
link |
01:30:02.420
Commodities are regulated by the CFTC.
link |
01:30:04.540
Then there's some cryptocurrencies
link |
01:30:06.420
which are more like currencies,
link |
01:30:08.300
like stable coins and central bank digital currencies.
link |
01:30:10.800
And those are probably, you know,
link |
01:30:12.900
should be regulated by the treasury or someone like that.
link |
01:30:15.180
And then there's a whole another category
link |
01:30:16.620
of cryptocurrencies, which are none of those things.
link |
01:30:18.380
They're NFTs like artwork or they're metaverse items
link |
01:30:21.760
or decentralized identity and voting.
link |
01:30:23.620
And so I think that there's a very unhelpful point of view
link |
01:30:28.620
out there by some folks, which is,
link |
01:30:31.180
hey, this is all, most of this is like bad activity.
link |
01:30:34.420
We need to shut it down.
link |
01:30:35.860
So we're just gonna pursue enforcement actions
link |
01:30:38.020
or something like that.
link |
01:30:39.100
Most people in DC don't feel that way anymore.
link |
01:30:41.140
And I think the people of the US don't feel that way anymore
link |
01:30:43.780
because a lot of them are using this stuff.
link |
01:30:45.100
And their general view is,
link |
01:30:47.260
there's a lot of upside potential here.
link |
01:30:48.820
We can all agree, let's get rid of the fraud and the scams.
link |
01:30:51.100
We all wanna get rid of that.
link |
01:30:52.380
So let's create a relatively simple test, which says,
link |
01:30:56.900
if it's like nobody controls more than 20% of it
link |
01:31:02.860
or some threshold, it probably is more like a commodity.
link |
01:31:05.540
If someone's raising money for,
link |
01:31:07.540
they're selling this thing for a business,
link |
01:31:09.980
then it's probably a security.
link |
01:31:11.100
And then if it's more like a medium of exchange,
link |
01:31:14.340
it's a currency.
link |
01:31:15.180
And if it's none of those things,
link |
01:31:16.060
maybe it's artwork or whatever,
link |
01:31:18.260
a legal test like that would help clarify who,
link |
01:31:21.460
which regulator is regulating what.
link |
01:31:23.540
And then we also wanna have probably like a sandbox
link |
01:31:26.980
for innovation where if you're a startup
link |
01:31:29.100
and you're doing less than, I don't know, some number,
link |
01:31:33.260
less than some amount of payment volume
link |
01:31:34.980
or customer funds you're storing,
link |
01:31:36.380
it's like just let those things get off the ground
link |
01:31:38.700
without a soul crushing amount of legal bills
link |
01:31:42.100
and uncertainty.
link |
01:31:42.940
So if the US can get there, that would be great.
link |
01:31:46.020
I think a bunch of other countries now are rushing
link |
01:31:47.980
around the world to sort of create that regulation
link |
01:31:50.300
that does attract innovation.
link |
01:31:52.540
And so in the international bodies like IMF and G20
link |
01:31:57.100
and stuff, they're starting to look at proposed regulation.
link |
01:32:00.140
I hope that Coinbase and a bunch of other crypto companies
link |
01:32:02.140
can help in that conversation too.
link |
01:32:03.300
We have a whole policy effort.
link |
01:32:04.900
I think actually crypto policy efforts
link |
01:32:07.100
are like probably one of the biggest things
link |
01:32:08.380
in DC right now.
link |
01:32:09.220
So it moves slow at the speed of government,
link |
01:32:13.420
but yeah, and in the meantime,
link |
01:32:16.660
we're just trying to help more and more people use crypto
link |
01:32:18.500
because ultimately that's what, in the democracies,
link |
01:32:20.940
that's what they care about.
link |
01:32:22.100
Like they'll do what the people of the country want.
link |
01:32:24.780
So you want governments to start understanding
link |
01:32:27.060
differences between, in the crypto space,
link |
01:32:29.460
commodities, securities, currencies, NFTs.
link |
01:32:32.460
I still don't understand.
link |
01:32:34.020
What are they supposed to make sense of NFTs?
link |
01:32:37.060
What is NFTs exactly from a perspective of a regulator?
link |
01:32:41.100
Yeah, so.
link |
01:32:42.980
Is it the other categories?
link |
01:32:44.820
Yeah, most NFTs you could think of as like artwork,
link |
01:32:47.140
although it's, who knows where it's gonna go.
link |
01:32:49.020
It could be.
link |
01:32:49.860
You mentioned Metaverse, right?
link |
01:32:50.700
You mentioned some kind of unique identity of a thing.
link |
01:32:54.860
Yeah, like there's people selling virtual land in NFTs.
link |
01:32:59.860
I actually, I bought this NFT that's like,
link |
01:33:02.740
it's like citizenship in this like city, Dow in Wyoming.
link |
01:33:05.940
Like I've never been there,
link |
01:33:06.780
but it's almost like a badge or an attestation
link |
01:33:11.540
like to get access to this location.
link |
01:33:14.660
There's like people doing like tickets to events.
link |
01:33:17.380
Like, you know, they're called a POAPs.
link |
01:33:19.660
Like proof of attendance and things like that.
link |
01:33:23.620
So it'll be very interesting to see where NFTs go over time.
link |
01:33:27.820
It could get, and that's the danger.
link |
01:33:29.940
You don't wanna try to like define the regulation
link |
01:33:31.740
if you don't even know where this thing's gonna go, so.
link |
01:33:33.380
And so your efforts in the policy arm is education?
link |
01:33:37.540
Yeah, education, advocacy.
link |
01:33:39.900
We're just trying to be like a helpful educational resource
link |
01:33:42.100
essentially, and then if they give us feedback
link |
01:33:43.860
and they're like, hey, don't do this or don't, or do this,
link |
01:33:46.740
like we're more than happy to do anything that's requested.
link |
01:33:50.540
We generally go get licenses
link |
01:33:52.460
and we've just tried to do the right thing
link |
01:33:53.820
in the absence of clarity,
link |
01:33:54.940
because if it's not clear what the law says,
link |
01:33:59.180
then you should just basically do good things
link |
01:34:01.180
that you think may be required in the future
link |
01:34:02.780
to show good faith effort towards the right thing.
link |
01:34:05.100
And that's part of like innovating in a regulated field,
link |
01:34:08.700
which is, you know, a whole topic in itself.
link |
01:34:11.060
So if you are at the table,
link |
01:34:13.820
let me, this is less the case in the United States,
link |
01:34:17.300
but can government agencies seize a person's cryptocurrency
link |
01:34:20.820
by forcing Coinbase to hand it over?
link |
01:34:24.860
So when you're centralized,
link |
01:34:26.380
they have a phone number to call.
link |
01:34:28.220
Okay, so this is a complicated topic.
link |
01:34:31.980
Like if you really wanna be sure that,
link |
01:34:34.820
this is why people wanna store their own crypto, right?
link |
01:34:36.700
Like with self custodial wallets,
link |
01:34:37.980
like with Coinbase wallet embracing decentralization,
link |
01:34:40.420
they wanna avoid that.
link |
01:34:42.180
Now in the US, there is rule of law, right?
link |
01:34:44.820
So we have reasonable protections in place around
link |
01:34:48.220
like search and seizure and things like that.
link |
01:34:51.660
You know, Coinbase does,
link |
01:34:52.700
we publish transparency reports on this.
link |
01:34:54.460
We get subpoenas, court orders, things like that
link |
01:34:56.980
from various countries around the world.
link |
01:35:00.340
And there are situations where we have been ordered
link |
01:35:04.740
to freeze accounts, things like that.
link |
01:35:08.340
You know, we have to follow the law,
link |
01:35:09.420
is another way to put it.
link |
01:35:11.020
We're a regulated financial service business and so.
link |
01:35:13.580
If the money is used as part of breaking the law,
link |
01:35:16.980
that's what that, in a particular jurisdiction,
link |
01:35:20.860
in a particular.
link |
01:35:22.500
Right, and then the other thing,
link |
01:35:23.940
sometimes we will actually get court orders
link |
01:35:25.820
or subpoenas that are overly broad.
link |
01:35:27.220
We've seen, so they need to follow due process, right?
link |
01:35:30.940
And so we've seen some in the past that were like,
link |
01:35:34.420
well, we need you to freeze this huge number of accounts.
link |
01:35:36.580
And it's like, well, we'll actually have gone to court
link |
01:35:39.180
and like pushed back on some of these and said like,
link |
01:35:40.820
what is your probable cause?
link |
01:35:42.940
And has the threshold been met?
link |
01:35:44.460
And like, we've won some of those cases
link |
01:35:45.940
on behalf of our customers.
link |
01:35:46.940
So yeah, it's actually really,
link |
01:35:50.100
it's kind of unfortunate and frustrating.
link |
01:35:51.380
As a large business, you spend a lot of resources
link |
01:35:54.820
basically interacting with inbound requests
link |
01:35:59.500
by all kinds of lawyers and people and requesting things.
link |
01:36:03.700
And some of them are silly and ridiculous
link |
01:36:06.020
and you have to push back and say no.
link |
01:36:07.420
And so it's kind of a tax on every company at a certain size
link |
01:36:11.780
which ultimately gets passed on to the customer
link |
01:36:14.340
in higher fees.
link |
01:36:15.180
So you have to employ armies of lawyers
link |
01:36:17.540
to deal with this stuff.
link |
01:36:18.440
Can you educate me on something?
link |
01:36:19.820
How much innovation is there in the legal space?
link |
01:36:23.820
So for lawyers working with Coinbase
link |
01:36:26.340
because it's such a new cutting edge thing.
link |
01:36:30.780
So you're, there's a lot of gray area
link |
01:36:33.580
you're supposed to be operating under.
link |
01:36:36.520
Like how hard is it being a lawyer at Coinbase?
link |
01:36:41.100
Like how much precedence is there?
link |
01:36:43.380
I guess is what I'm asking.
link |
01:36:44.500
I mean, just like you said, three years.
link |
01:36:47.920
It's kind of a new space.
link |
01:36:49.580
Yeah, well, it's probably very hard
link |
01:36:51.700
to be a lawyer at Coinbase and very fun
link |
01:36:53.340
because whenever you're in a new field that's growing fast,
link |
01:36:57.200
there isn't a lot of case law and just precedent set.
link |
01:37:02.460
So that's also an opportunity for you
link |
01:37:04.460
to go create that stuff.
link |
01:37:05.420
And that's what a lot of legal careers are made out of
link |
01:37:07.620
is like take a complex situation
link |
01:37:09.700
where you have to balance difficult things.
link |
01:37:11.300
Like how do we prevent bad activity
link |
01:37:13.100
but still enable an innovation?
link |
01:37:14.140
That's a hard question.
link |
01:37:15.900
And there's, you can go draft legislation
link |
01:37:18.460
and circulate it to policymakers
link |
01:37:19.740
or come up with these policies
link |
01:37:21.820
and how do you operate a business in an environment
link |
01:37:25.340
where the law is just unclear, right?
link |
01:37:27.780
It's like try to do the right thing,
link |
01:37:31.220
but like strike the right balance.
link |
01:37:33.820
So yeah, a lot of our lawyers have to come up with that.
link |
01:37:36.260
Very creative stuff.
link |
01:37:37.820
You mentioned one of the things you're focused on
link |
01:37:39.580
is expanding the number of people,
link |
01:37:41.060
maybe a billion people on Coinbase or using cryptocurrency.
link |
01:37:46.340
Where are we at now?
link |
01:37:47.260
How do we get to a billion?
link |
01:37:49.020
As of Q4 last year,
link |
01:37:50.720
we had 89 million verified accounts on Coinbase,
link |
01:37:53.660
but in any given quarter, only maybe like 10
link |
01:37:59.220
or a little more million of those are like really active.
link |
01:38:02.100
So, and then if you look at globally,
link |
01:38:04.940
I think some of the estimates I've seen
link |
01:38:06.220
is maybe there's like 200 million people
link |
01:38:08.500
or something like that who have ever used or tried crypto.
link |
01:38:11.560
So we're a long, you know, we're ways from a billion,
link |
01:38:15.620
but it's not like that far off.
link |
01:38:18.540
How do you get there?
link |
01:38:19.940
How do you get to a billion?
link |
01:38:21.380
So a few things.
link |
01:38:22.420
One is the blockchains have got to become
link |
01:38:23.820
way more scalable.
link |
01:38:26.100
It's kind of like we're all running dial up modems
link |
01:38:28.020
and we need broadband.
link |
01:38:29.020
And so it's just like too expensive, too slow
link |
01:38:32.180
to do all these transactions.
link |
01:38:33.220
And I think if we just get L2s working and scalability,
link |
01:38:37.980
you know, we'll see another order of magnitude
link |
01:38:39.940
kind of come out just from that.
link |
01:38:42.860
I think the second one would be more clear regulation.
link |
01:38:44.900
That would help a lot.
link |
01:38:46.860
I do talk to, you know, pension funds
link |
01:38:49.540
and you know, various asset managers,
link |
01:38:52.780
sovereign wealth funds and stuff.
link |
01:38:53.820
And a lot of them tell me,
link |
01:38:55.740
we've got 1% of our portfolio in crypto today,
link |
01:38:58.780
but we really would rather have like 20% in there.
link |
01:39:02.180
But what we're waiting for is more clear regulation
link |
01:39:06.580
coming out and saying that clear test that I was saying,
link |
01:39:08.860
these assets are commodities regulated by SCPC,
link |
01:39:11.020
these are by SCC, these are by treasury, whatever.
link |
01:39:13.720
So that would be a big unlock.
link |
01:39:15.500
Do transactions.
link |
01:39:16.580
So one of the things that you mentioned, payments, sorry.
link |
01:39:20.940
Yeah.
link |
01:39:21.780
Well, does that unlock a lot of users?
link |
01:39:25.180
Yeah, it does.
link |
01:39:26.100
I mean, remittance is like a huge thing.
link |
01:39:28.260
People sending money home to their families
link |
01:39:30.100
in other countries where the fees are super high.
link |
01:39:32.960
So yeah, if we get blockchains to be more scalable
link |
01:39:35.700
and there's more global adoption,
link |
01:39:37.020
like I think we'll see remittance quarters
link |
01:39:40.240
move over to crypto a lot.
link |
01:39:42.300
There's also just,
link |
01:39:43.620
the other thing that's driving a lot of crypto adoption
link |
01:39:45.360
is basically the creation of more and more third party apps.
link |
01:39:49.300
So, or dApps they're sometimes called decentralized dApps.
link |
01:39:52.180
So a lot of startups now, you know,
link |
01:39:55.340
how like you used to use in the early 2000s,
link |
01:39:57.420
they called them.com startups,
link |
01:39:58.540
but now you don't need to say.com
link |
01:39:59.980
cause everybody's using the internet.
link |
01:40:01.500
And so now there's like hundreds or thousands
link |
01:40:04.380
of these crypto startups,
link |
01:40:06.100
but I think in the future,
link |
01:40:06.940
you won't need to call them crypto startups
link |
01:40:08.180
cause they'll just be called startups
link |
01:40:09.260
cause everyone's using the internet and crypto and whatever.
link |
01:40:11.900
So anyway, the use cases,
link |
01:40:14.900
the utility of crypto is getting better and better
link |
01:40:17.060
with like all these third party apps
link |
01:40:19.060
getting funded and created.
link |
01:40:20.180
And do you think there's going to be a killer
link |
01:40:22.660
or a set of killer dApps,
link |
01:40:24.940
like a thing where nobody can live without?
link |
01:40:27.700
Are we still waiting for that?
link |
01:40:29.280
There's going to be a bunch of them.
link |
01:40:30.220
It's just like, it's like the internet,
link |
01:40:31.500
like what were the killer web companies, you know,
link |
01:40:33.940
like Uber and Wikipedia and Airbnb and Google.
link |
01:40:37.020
And like, so there's going to be some big winners,
link |
01:40:40.420
but there'll be thousands of,
link |
01:40:42.620
this is basically the new,
link |
01:40:45.020
it's like what happened with the.com startups
link |
01:40:46.740
in the early 2000s.
link |
01:40:47.580
It's like a lot of the best entrepreneurs
link |
01:40:49.140
are building crypto startups now.
link |
01:40:50.800
So tons of venture money flowing into the space.
link |
01:40:54.100
A lot of smart young people, so.
link |
01:40:55.620
Do you think Bitcoin or some other cryptocurrency
link |
01:40:57.620
will become the reserve currency of the world at some point?
link |
01:41:01.700
Cause this is kind of a controversial idea,
link |
01:41:03.740
but I actually think yes.
link |
01:41:06.520
I do think Bitcoin could end up becoming
link |
01:41:08.620
a reserve currency of the world.
link |
01:41:10.820
So I've been reading Ray Dalio recently
link |
01:41:14.320
with his new book, like The Changing World Order.
link |
01:41:16.660
And I thought it was a really well researched book.
link |
01:41:19.900
He talks in there, he looks back at history, right?
link |
01:41:21.780
He looks at like empires and going back
link |
01:41:25.340
to various Chinese empires, the Dutch and Ottomans
link |
01:41:27.780
and everybody, and how did they rise?
link |
01:41:29.880
And they were able to have the reserve currency
link |
01:41:31.700
as they rose and what produced that?
link |
01:41:34.300
Like it came from good education and innovation
link |
01:41:36.700
and better trade and anyway.
link |
01:41:39.260
So the US by some measures is kind of looks like it's,
link |
01:41:44.860
maybe it's had a really good run
link |
01:41:46.640
and it's coming down a little bit
link |
01:41:47.940
and China is kind of coming up.
link |
01:41:49.940
Who knows how that'll play out, by the way,
link |
01:41:51.260
like the world is very complicated.
link |
01:41:52.500
It could, that could switch.
link |
01:41:55.480
But I guess if the US dollar is gonna be seeing
link |
01:41:59.260
more inflation in the future,
link |
01:42:01.960
the Chinese Yuan is not like necessarily better, right?
link |
01:42:05.900
I mean, they have a ton of debt as well.
link |
01:42:08.500
And it's not like you could really,
link |
01:42:13.220
that the Yuan could be inflated as well, right?
link |
01:42:15.500
It probably will be.
link |
01:42:17.020
And so I do think that there's this group of people today
link |
01:42:19.960
which probably most traditional, I don't know,
link |
01:42:24.460
like the people who run big banks
link |
01:42:27.340
and like governments and stuff that they're not,
link |
01:42:28.820
this is not really on their radar today.
link |
01:42:29.980
But I think there's basically a group of younger people
link |
01:42:32.720
in that kind of 25, 35 year old range who are tech savvy.
link |
01:42:37.520
They're starting to think of crypto as like
link |
01:42:39.420
the primary thing in their financial life.
link |
01:42:42.100
It's like, I basically hold my wealth in crypto
link |
01:42:44.880
and I use dollars or euros or whatever.
link |
01:42:47.900
If I happen to need something,
link |
01:42:49.400
I convert it to that at the last minute.
link |
01:42:50.620
It's like, if I'm traveling,
link |
01:42:52.340
I might convert some local currency in the moment,
link |
01:42:54.060
but that's not where I hold most of my wealth.
link |
01:42:57.080
So this segment of the population is not like massive yet
link |
01:43:01.560
from a GDP point of view,
link |
01:43:02.580
but I think it's a leading indicator
link |
01:43:05.560
of where things could be going.
link |
01:43:06.680
And this is actually good for the world.
link |
01:43:07.900
It's kind of like, especially if China does continue
link |
01:43:10.860
to rise and it has a more authoritarian view,
link |
01:43:13.580
it'll be kind of this very centralized East
link |
01:43:16.880
versus a decentralized West where people are in the West,
link |
01:43:21.180
in the free world, really kind of embracing crypto
link |
01:43:24.380
and a more open, fair, free global financial system,
link |
01:43:27.740
which I think will be enormously beneficial for humanity.
link |
01:43:31.020
And I do think basically Bitcoin is the reserve currency,
link |
01:43:33.900
the gold standard of the crypto economy.
link |
01:43:37.700
So that's pretty crazy.
link |
01:43:39.260
Yeah, the gold standard.
link |
01:43:40.340
I mean, it's also like with Ray Dalio,
link |
01:43:43.620
I feel like China will drive a lot of this,
link |
01:43:47.820
either in response or directly.
link |
01:43:49.940
I mean, I think the ruble,
link |
01:43:52.340
I'm not paying as close attention to the financial systems,
link |
01:43:55.400
but I think they're trying to tie it to gold once again.
link |
01:43:59.980
So that's an interesting,
link |
01:44:01.660
maybe it'll be one of the more authoritarian regime
link |
01:44:04.620
that will switch to Bitcoin standard first.
link |
01:44:07.900
And then it's the West that will,
link |
01:44:11.360
out of that pressure will catch up
link |
01:44:14.960
versus the other way around.
link |
01:44:17.500
It's fascinating to think of what is the forcing function,
link |
01:44:23.120
what kind of perturbation is required to switch,
link |
01:44:26.280
to change anything, honestly, about the financial system.
link |
01:44:28.600
But it could be, as you're saying,
link |
01:44:32.700
just waiting for the people that are young now
link |
01:44:34.960
that are embracing crypto
link |
01:44:36.660
to enter the positions of power, essentially.
link |
01:44:41.020
But I hope that's not the case,
link |
01:44:42.360
because if for any innovation we have to wait,
link |
01:44:47.400
sorry to say, for the older folk to pass away,
link |
01:44:51.860
that's not an efficient way to make change.
link |
01:44:54.700
Yeah, that's a super interesting topic
link |
01:44:57.480
of how people's minds become less plastic as they age.
link |
01:45:02.960
I guess it's a feature.
link |
01:45:05.000
It's called wisdom,
link |
01:45:06.520
but then we also need the wild ones to explore,
link |
01:45:09.120
exploration versus exploitation.
link |
01:45:12.200
You wrote a blog post that's really interesting
link |
01:45:14.480
in September 2020 titled
link |
01:45:16.680
Coinbase is a Mission Focused Company,
link |
01:45:18.960
like what we're talking about.
link |
01:45:20.640
So one interesting thing you said in that blog post
link |
01:45:23.520
is that we're not going to be distracted
link |
01:45:27.540
by activism within the company
link |
01:45:31.000
that's not related to the mission of the company.
link |
01:45:35.160
Now, that's a rare thing for a company to state,
link |
01:45:38.600
for a company CEO to state, especially in this climate.
link |
01:45:44.560
Can you, first of all,
link |
01:45:46.200
describe in a little more detail what you meant?
link |
01:45:50.320
Did you receive blowback for this?
link |
01:45:52.400
I definitely received some blowback,
link |
01:45:53.620
but yeah, I'll describe what I meant.
link |
01:45:55.020
And if you want to talk about how it came to that too,
link |
01:45:57.700
we can talk about that.
link |
01:45:58.540
But what I meant is that there's a lot of companies right now,
link |
01:46:04.040
including tech companies, but not exclusively,
link |
01:46:06.660
where I think like great companies,
link |
01:46:11.440
they have an important mission.
link |
01:46:12.680
They're trying to do something really good for the world.
link |
01:46:15.080
And unfortunately, they're getting a little distracted
link |
01:46:17.640
from that at times because of employee activism
link |
01:46:20.840
that is causing the company to basically jump
link |
01:46:25.320
into whatever the current thing is
link |
01:46:26.960
and try to help is like the positive interpretation.
link |
01:46:30.760
The negative interpretation would be to virtue signal.
link |
01:46:33.480
And my view is that this is actually kind of destructive to,
link |
01:46:38.680
this is largely an American company phenomenon, by the way.
link |
01:46:41.200
I do worry that this is making America less competitive,
link |
01:46:45.640
even though I think of myself
link |
01:46:46.480
as kind of internationally minded,
link |
01:46:47.820
but I am a US citizen, had my whole life here.
link |
01:46:50.060
So when we put out this statement,
link |
01:46:54.000
we had employees that were not in the US
link |
01:46:56.020
who were confused by it.
link |
01:46:57.200
They were like, why did Brian need to say that?
link |
01:46:59.520
It was just saying you're going to focus on work at work.
link |
01:47:02.480
That's what we were doing already.
link |
01:47:04.480
And there was certain pockets of the US, certain cities,
link |
01:47:08.640
in particular where we had employees
link |
01:47:10.320
that a very peculiar cultural phenomenon had evolved
link |
01:47:15.500
where I think people really wanted the company
link |
01:47:19.080
they worked at to be almost acting
link |
01:47:24.120
like the government or something
link |
01:47:25.240
and like trying to solve the hardest societal issues
link |
01:47:28.160
and at least have an opinion on it,
link |
01:47:30.380
if not contribute to the solution
link |
01:47:32.100
on almost everything.
link |
01:47:35.500
And for me, it was a very uncomfortable situation
link |
01:47:39.800
for me as a CEO.
link |
01:47:40.640
I'd never quite been in this situation
link |
01:47:42.000
where most of the time when employees in the past
link |
01:47:45.040
were kind of asking me questions,
link |
01:47:47.440
they would be asking about like,
link |
01:47:49.560
how do we make this product better?
link |
01:47:50.800
Like, what do we do with this competitor?
link |
01:47:52.320
What about this regulator?
link |
01:47:54.720
And it got to a place around that time
link |
01:47:56.680
where most of the questions we were receiving
link |
01:47:59.380
were I think even about things not related to the company
link |
01:48:02.080
they were about broader societal issues.
link |
01:48:03.260
Like Brian, what's your stance on XYZ controversial thing?
link |
01:48:06.680
And it was, I often like didn't have an opinion
link |
01:48:10.560
on these really hard questions, right?
link |
01:48:12.120
And I didn't really,
link |
01:48:13.640
I felt like it was distracting the company.
link |
01:48:15.800
People internally were getting into fights a lot too,
link |
01:48:17.780
like disagreeing with each other.
link |
01:48:19.640
There was a thing where like the social slack internally
link |
01:48:22.520
was turning into a social media almost
link |
01:48:24.160
with people putting in flame wars.
link |
01:48:26.360
So, and this culminated by the way
link |
01:48:28.000
with a walkout that happened in the company.
link |
01:48:31.300
We had received like some demands from employee groups
link |
01:48:34.640
about various things.
link |
01:48:35.520
And there was like basically an antagonistic thing
link |
01:48:37.680
with management and employee.
link |
01:48:38.720
And I was like, we're all on the same team here.
link |
01:48:41.960
If you wanna be antagonistic,
link |
01:48:43.240
let's do it with somebody else outside the company,
link |
01:48:46.480
that we're trying to improve the world in that dimension.
link |
01:48:48.480
So yeah, eventually I was like, okay,
link |
01:48:51.080
the company is not aligned on this.
link |
01:48:53.760
I just don't feel, I don't like the job as CEO, frankly.
link |
01:48:56.580
Like if the job is to come in here every day
link |
01:48:58.840
and like have to squirm in front of like the most difficult
link |
01:49:02.040
societal questions, I don't think I wanna do that job.
link |
01:49:05.400
So like either they're gonna have to go
link |
01:49:06.720
or I'm gonna have to go.
link |
01:49:08.120
And I founded this company
link |
01:49:09.400
and I really believe in the mission.
link |
01:49:10.340
So they're gonna have to go.
link |
01:49:11.400
And what I realized was that,
link |
01:49:14.140
so I basically, I made an exit package available
link |
01:49:16.920
to anybody who wasn't on board with this direction.
link |
01:49:19.320
5% of employees took it.
link |
01:49:21.180
I got the company realigned towards this mission.
link |
01:49:23.900
We're all here to do work.
link |
01:49:25.140
By the way, people can, they can go do anything
link |
01:49:27.460
like political or social activism outside of work.
link |
01:49:29.760
It's totally fine.
link |
01:49:30.600
Like we all, everybody has stuff like that
link |
01:49:33.360
in their personal life.
link |
01:49:34.260
But while at work, we can also disagree at work,
link |
01:49:36.360
by the way, on the work.
link |
01:49:37.600
You know, this is not like a no disagreement culture.
link |
01:49:39.820
Like we should, let's try to get the truth.
link |
01:49:42.320
But don't bring stuff into work
link |
01:49:44.060
that's just gonna create division.
link |
01:49:46.280
Make the workplace a refuge from division
link |
01:49:48.440
about all these crazy things.
link |
01:49:49.460
And like, we're all aligned here to work on the mission.
link |
01:49:51.720
Let's do that.
link |
01:49:52.640
Yeah, that was really, really, really refreshing to hear.
link |
01:49:57.240
So this is me speaking, but there's a sense
link |
01:50:00.340
when companies take on these issues publicly
link |
01:50:03.480
from a CEO position or anywhere else,
link |
01:50:06.120
that it does seem to optimize for virtue signaling
link |
01:50:10.920
versus solving a particular problem.
link |
01:50:13.480
Because to solve a particular problem,
link |
01:50:15.620
you really have to really put in a huge,
link |
01:50:18.800
you have to hire a huge number of,
link |
01:50:20.500
you basically have to create a company with a company
link |
01:50:22.940
to take on a particular thing.
link |
01:50:25.400
But if you allow yourself to internally care
link |
01:50:29.440
about a particular issue,
link |
01:50:30.620
you're basically pacifying some number of employee,
link |
01:50:34.240
like making sure Slack doesn't get out of hand.
link |
01:50:37.000
And then you're doing this kind of, from my perspective,
link |
01:50:40.180
especially on issues that care about fake virtue signaling,
link |
01:50:43.780
basically trying to understand
link |
01:50:45.560
what will make me look the best,
link |
01:50:47.240
what would make the company look the best
link |
01:50:48.720
in this particular aspect.
link |
01:50:50.320
And it just seems very shallow.
link |
01:50:52.120
And it's optimizing for the wrong thing,
link |
01:50:54.300
not for the solving of the problems,
link |
01:50:56.880
but for the making yourself look like the good guy
link |
01:51:01.920
and trying to then leverage that to say,
link |
01:51:04.940
I'm the good guy in all situations.
link |
01:51:07.520
And it just, it's the wrong thing.
link |
01:51:09.760
And perhaps from your perspective as a CEO, as a leader,
link |
01:51:13.880
it's also creating division,
link |
01:51:16.560
unnecessary division within people.
link |
01:51:19.300
Like they get, yeah, there's something about us
link |
01:51:21.280
who gets extremely argumentative about certain topics.
link |
01:51:25.840
They really bring out the emotion.
link |
01:51:28.440
And I think that probably, as you were saying,
link |
01:51:30.880
that emotion is even probably okay,
link |
01:51:33.960
maybe productive when that emotion has to do
link |
01:51:36.060
with the mission of the company.
link |
01:51:37.680
Like you really care about those disagreements
link |
01:51:40.440
versus like something that has nothing to do
link |
01:51:43.920
with increasing economic freedom using crypto.
link |
01:51:51.340
Yeah, it's fascinating.
link |
01:51:52.720
But it was so refreshing because it's rare.
link |
01:51:55.440
Why do you think that's a rare?
link |
01:51:57.320
So the city you're mentioning,
link |
01:51:59.840
I mean, there's a bunch of cities,
link |
01:52:01.960
but San Francisco is one such city when that culture.
link |
01:52:07.420
And it's sad because San Francisco is also,
link |
01:52:12.360
the Bay Area is also the hub historically
link |
01:52:16.680
of some of the greatest innovation in human history.
link |
01:52:20.600
So there's that tension.
link |
01:52:22.040
How did that culture emerge there?
link |
01:52:24.360
Where like the innovation was done by people
link |
01:52:27.320
that are very mission driven.
link |
01:52:29.000
You get a bunch of smart people together
link |
01:52:30.800
to solve a difficult problem.
link |
01:52:32.640
They get maybe sometimes too much blinders on,
link |
01:52:35.680
but they try to balance that.
link |
01:52:37.560
Because it requires that focus to solve an actual problem.
link |
01:52:41.400
And yet that's also the place where this culture emerged.
link |
01:52:44.680
It's a fascinating human dynamic.
link |
01:52:47.280
I don't know.
link |
01:52:48.120
Somebody will one day tell the history of Silicon Valley,
link |
01:52:52.400
not just the innovation,
link |
01:52:54.240
but the social dynamics that occurred there.
link |
01:52:56.160
Anyway, why do you think that's so rare?
link |
01:52:59.600
Well, because people don't wanna get attacked.
link |
01:53:01.680
It's like super, you don't wanna get canceled, right?
link |
01:53:04.100
It's super uncomfortable.
link |
01:53:07.640
Nobody wants to be called a racist
link |
01:53:08.960
or whatever people wanna say on Twitter.
link |
01:53:13.320
Did you get attacked?
link |
01:53:14.520
Yeah, yeah, I definitely got attacked.
link |
01:53:16.000
I mean, and I knew it would be controversial.
link |
01:53:17.960
The only reason I did it, frankly,
link |
01:53:19.600
was that I was kind of at my wit's end.
link |
01:53:22.560
I was like, well, like I said earlier,
link |
01:53:24.760
like the job, the CEO job sucks.
link |
01:53:26.440
Like either I don't wanna do it or they have to go
link |
01:53:29.440
and I'm gonna make the company into something that I want.
link |
01:53:31.300
And I'd spent eight or 90 years of my life at that point
link |
01:53:36.480
kind of building this thing.
link |
01:53:37.320
I was like, well, I could go start another company,
link |
01:53:39.200
but it takes a long time to get momentum with these things.
link |
01:53:41.240
And Coinbase is a very rare thing that happened in the world.
link |
01:53:44.440
I feel very passionate about it.
link |
01:53:46.240
So yeah, I'm not gonna go.
link |
01:53:48.800
Like I need to make this the company that I wanna work at.
link |
01:53:51.040
And what was really interesting was that
link |
01:53:53.960
there was such a huge outpouring of support.
link |
01:53:56.800
So I knew that it would be controversial
link |
01:53:58.240
and I would get attacked.
link |
01:53:59.080
And predictably, there was some journalists
link |
01:54:03.000
and New York Times and all these people
link |
01:54:04.520
who kind of like went and started writing hit pieces
link |
01:54:06.840
on the company shortly thereafter.
link |
01:54:09.440
And they basically just call people who've left the company
link |
01:54:12.120
and can get quotes on whatever they want
link |
01:54:14.680
and then they'll write a story.
link |
01:54:16.320
So mainstream media, I lost a lot of trust
link |
01:54:18.600
in mainstream media, frankly, after that.
link |
01:54:20.000
And of course, it's kind of become obvious since then
link |
01:54:22.720
that most mainstream media is like hyper politicized
link |
01:54:25.960
at this point.
link |
01:54:26.800
It's basically either super left or super right.
link |
01:54:28.560
And it's not really that focused on truth.
link |
01:54:33.040
So that's kind of unfortunate
link |
01:54:35.600
because I think journalism is actually like really important
link |
01:54:37.480
in society.
link |
01:54:38.320
So that whole thing got eroded in the US.
link |
01:54:40.800
Luckily, there's sort of new media, people like you
link |
01:54:43.400
and a whole bunch of people.
link |
01:54:44.720
Did that blog post help that statement,
link |
01:54:47.680
the 95 people that remained,
link |
01:54:50.600
is this still something you struggle with?
link |
01:54:52.560
Because it's also a culture of the broader tech space.
link |
01:54:56.660
Okay, so that was an interesting thing, which was that,
link |
01:54:58.880
so the 95% of people stayed.
link |
01:55:00.720
I got a huge outpouring of support from people who said,
link |
01:55:05.080
thank God you finally spoke up and said something
link |
01:55:07.280
because frankly, it was making it not a very fun place
link |
01:55:10.920
to work either.
link |
01:55:12.320
And I realized that there is, I think there was,
link |
01:55:16.280
I think Nassim Taleb has this blog post
link |
01:55:19.040
about the tyranny of the 1% or something like that.
link |
01:55:22.400
But there's basically a relatively small group,
link |
01:55:24.040
one in 5% or something like that,
link |
01:55:25.560
that is really upset about something.
link |
01:55:28.400
It's not the majority of the company, it's like 5%.
link |
01:55:30.880
There's another 15% or something that are sympathetic
link |
01:55:33.540
to the cause.
link |
01:55:34.440
They're actually somewhat suggestible.
link |
01:55:35.980
They will go along with whatever,
link |
01:55:37.560
because it sounds reasonable.
link |
01:55:38.720
These are like real issues they're talking about.
link |
01:55:40.400
It's not to say that it's not real.
link |
01:55:42.660
And they'll kind of get swept up in it.
link |
01:55:44.940
But there's an 80% of the company that basically
link |
01:55:48.520
doesn't agree or just wants to get their work done
link |
01:55:50.400
without all this drama or distraction.
link |
01:55:52.920
And they're afraid to speak up because if they speak up,
link |
01:55:56.640
they're afraid of being, again, called a racist,
link |
01:55:58.800
like fired, ostracized amongst their peers.
link |
01:56:01.960
And so it did require it to get to a bad enough place
link |
01:56:06.640
for me to finally say, you know what?
link |
01:56:07.800
I just, I feel like I have to do this.
link |
01:56:10.120
Live through the short term attacks of the press,
link |
01:56:12.600
which ultimately was very freeing for me
link |
01:56:14.340
because now I don't really care.
link |
01:56:16.360
And now I can actually just build the company
link |
01:56:18.120
that I want to build without caring about that.
link |
01:56:21.560
And then what was cool was a lot of really great people
link |
01:56:24.200
reached out to the Coinbase too after that.
link |
01:56:25.980
And were like, I'm an early engineer at Google or wherever.
link |
01:56:29.740
And this culture has gotten kind of messed up
link |
01:56:33.040
and I want to work at a company
link |
01:56:34.260
that's willing to stand for that.
link |
01:56:35.280
And so we've gotten a lot of good people come over.
link |
01:56:37.420
Basically what I realized, and by the way,
link |
01:56:38.960
our diversity numbers and all that stuff,
link |
01:56:40.560
people told me when I was drafting this poster,
link |
01:56:43.160
don't post this, people, underrepresented groups
link |
01:56:46.280
will never want to work at this company again.
link |
01:56:47.880
And I was like, I don't think that's true.
link |
01:56:49.960
I talked to our ERG groups and they're not telling me
link |
01:56:53.460
they care about this stuff that much.
link |
01:56:54.880
They're telling me they just want to be respected at work
link |
01:56:57.200
and do good work and contribute.
link |
01:56:58.880
So my gut was telling me that that advice was wrong.
link |
01:57:01.640
And I can tell you a year after doing it,
link |
01:57:05.040
our diversity numbers are basically either the same
link |
01:57:07.200
or better in every category.
link |
01:57:08.880
So that turned out to be false.
link |
01:57:12.340
Look, I hate to be polarizing on either dimension here.
link |
01:57:17.440
I just want to get good work done
link |
01:57:18.560
and build good stuff with technology.
link |
01:57:20.000
So I think companies should just have reasonable policies.
link |
01:57:25.840
You want to get rid of bias in hiring.
link |
01:57:27.320
You want to attract great people from all
link |
01:57:29.640
different backgrounds.
link |
01:57:31.520
We have pledge 1%.
link |
01:57:32.840
We put 1% of the company equity into a foundation.
link |
01:57:35.080
I hope we're able to do good stuff with that.
link |
01:57:36.800
Let's give back in some way.
link |
01:57:39.080
But the main message I guess for me is the core mission,
link |
01:57:46.280
the core work that we're doing on economic freedom
link |
01:57:48.200
and just all of our products,
link |
01:57:49.940
that is the main value that we're contributing in the world.
link |
01:57:52.440
Let's just do that more.
link |
01:57:53.480
And hopefully we can get from 89 million verified users
link |
01:57:56.520
to a billion or whatever.
link |
01:57:58.100
And then I just think that's how we'll have
link |
01:58:01.200
the biggest impact.
link |
01:58:02.240
It's tempting though.
link |
01:58:03.400
It's so interesting how companies get tempted to help.
link |
01:58:07.600
And you step in and it's almost like a drug
link |
01:58:10.160
and then you can't, you forget.
link |
01:58:11.880
I mean, like all of us in life just have to be companies.
link |
01:58:14.740
You get distracted and maintaining focus.
link |
01:58:18.720
You're absolutely right.
link |
01:58:19.760
The way for Coinbase to add value to the world
link |
01:58:22.060
is to maximize the mission that it's on,
link |
01:58:25.160
not other stuff.
link |
01:58:27.320
And when you get wealthier and more successful,
link |
01:58:29.880
it becomes more and more tempting
link |
01:58:31.920
to just help out in some other shallow ways.
link |
01:58:35.160
It's fascinating.
link |
01:58:36.000
And you just kind of brought that to light.
link |
01:58:37.520
So it was very refreshing.
link |
01:58:38.700
And it shouldn't be controversial
link |
01:58:40.240
to sort of focus on just getting stuff done.
link |
01:58:43.960
Well, let me ask you,
link |
01:58:44.780
I mean, do you think that this,
link |
01:58:46.200
it's all these things tie together.
link |
01:58:47.620
There's like a general trend of like more censorship.
link |
01:58:50.540
There's like more cancel culture.
link |
01:58:52.980
There's some of these like freedom values
link |
01:58:57.320
are kind of, even like freezing people's accounts,
link |
01:59:00.700
like the trucker thing that happened.
link |
01:59:02.500
And this seems like there's a general trend
link |
01:59:05.080
of more authoritarian policies there.
link |
01:59:10.820
But do you feel like the tide is turning on that?
link |
01:59:13.940
Like there's counter examples to it we've seen recently.
link |
01:59:17.100
I think it's the last gasp of old way of doing things.
link |
01:59:20.920
And so there's desperation and so on.
link |
01:59:22.940
Because to be fair, it's kind of the internet,
link |
01:59:27.100
which is where's the source of a lot of this,
link |
01:59:29.660
where people have a voice,
link |
01:59:31.180
is making the power centers of the world really nervous.
link |
01:59:34.300
And so that's where that's coming from, I think.
link |
01:59:36.580
And the internet is tricky.
link |
01:59:38.780
It's weird.
link |
01:59:39.980
It's full of bots.
link |
01:59:41.660
It's full of like misinformation of all kinds,
link |
01:59:45.820
full of large groups with conspiracy theories and so on.
link |
01:59:49.860
And I mean misinformation broadly.
link |
01:59:51.580
People are misusing the word misinformation.
link |
01:59:53.780
They're just, governments are just labeling
link |
01:59:56.200
random things with misinformation just to censor them.
link |
01:59:59.900
But I just think it's just like a new world
link |
02:00:03.540
where the internet is really finally taking hold,
link |
02:00:06.100
where there's billions of devices
link |
02:00:07.600
and everybody has a voice.
link |
02:00:09.260
It's almost, basically governments and powerful people
link |
02:00:15.900
are slightly losing hold of power.
link |
02:00:18.420
And they're starting to freak out a little bit.
link |
02:00:20.540
That's it.
link |
02:00:21.420
And once you have young people that are coming up now,
link |
02:00:25.620
gain power, I think we'll rebalance everything.
link |
02:00:28.660
And then there's, like you said,
link |
02:00:30.420
promising signs that it's obvious
link |
02:00:34.820
that the majority of people want freedom.
link |
02:00:38.180
And that means a lot of things.
link |
02:00:39.420
That means economic freedom.
link |
02:00:40.620
That means freedom to have a voice,
link |
02:00:44.380
freedom to move around,
link |
02:00:45.620
freedom to act in the way they,
link |
02:00:47.940
without reasonable sort of limitations
link |
02:00:53.220
by people that don't have their best interests.
link |
02:00:55.020
And I gain more hope from just regular people
link |
02:00:59.700
that are fighting and like demanding
link |
02:01:05.820
being able to have freedom of speech,
link |
02:01:08.620
or more specifically sort of resisting
link |
02:01:12.260
crude overreach of government in the acts of censorship,
link |
02:01:16.460
at least in the United States.
link |
02:01:19.780
And hopefully that percolates out to the rest of the world
link |
02:01:22.640
that's struggling on a much more basic level
link |
02:01:25.340
where people are being put in prison for the words they say,
link |
02:01:27.780
not just banned from Twitter.
link |
02:01:30.060
Right, it could be worse.
link |
02:01:31.500
What are some lessons from your failures and your successes
link |
02:01:37.660
about what it takes to run a company?
link |
02:01:40.080
I think one of the things that I learned about leadership
link |
02:01:43.740
is that I never really thought of myself
link |
02:01:47.260
as a very natural leader, to be honest.
link |
02:01:48.860
I don't think I was a natural leader.
link |
02:01:51.580
But so I always envisioned good leaders
link |
02:01:54.060
as like these military generals,
link |
02:01:55.500
like they seem so confident and they're just like bark orders,
link |
02:01:58.980
charge that hill and do this.
link |
02:02:00.360
And I was actually like more introverted
link |
02:02:03.260
and kind of, I wasn't really confident
link |
02:02:06.720
in the way I communicated.
link |
02:02:09.300
And so what I realized is that
link |
02:02:11.940
there's lots of different kinds of leaders.
link |
02:02:13.140
You can be any kind of CEO you want, right?
link |
02:02:15.020
I was kind of more of like a product, technical focus CEO.
link |
02:02:18.180
And I preferred to sort of hear everyone's opinion.
link |
02:02:21.720
And it wasn't just gonna like render a decision in the room
link |
02:02:23.780
in some like kind of heated moment
link |
02:02:25.100
and like piss off half the people.
link |
02:02:26.260
I would do like, all right, I'm gonna go think about it
link |
02:02:28.380
and I'll send you my decision later today
link |
02:02:30.660
or tomorrow or whatever.
link |
02:02:32.140
And so I found ways to kind of make it work for me
link |
02:02:35.040
where I could basically, I always tried to avoid like,
link |
02:02:40.420
when people getting like super emotional about something
link |
02:02:42.580
and like, I think they're thinking,
link |
02:02:44.540
their judgment goes down, right?
link |
02:02:46.460
And just like never make a decision when you're angry, right?
link |
02:02:48.460
And so I would always sort of try to get a sense of,
link |
02:02:50.960
are these people like trying to be right
link |
02:02:52.260
or are they trying to seek the truth?
link |
02:02:54.640
And you can do these little tricks like,
link |
02:02:57.260
okay, you argue that person's position
link |
02:02:59.380
and you argue the other one
link |
02:03:00.380
and like see if you can genuinely represent it.
link |
02:03:02.840
Now I know you're listening and these kinds of things.
link |
02:03:06.300
But I guess, sorry,
link |
02:03:07.140
getting back to your question about leadership,
link |
02:03:08.540
I think I basically just kept doing things
link |
02:03:12.160
that were a little outside my comfort zone.
link |
02:03:15.140
And then my comfort zone kept getting bigger and bigger.
link |
02:03:17.780
You know?
link |
02:03:18.600
And so I think that's how you build confidence
link |
02:03:22.060
is you do the thing that's scary
link |
02:03:24.940
and it's like a little outside.
link |
02:03:26.820
And like when I first started Coinbase,
link |
02:03:29.100
I had never managed anybody.
link |
02:03:30.220
I would have been scared to death
link |
02:03:32.060
to have put out like a very controversial opinion like that
link |
02:03:34.660
and sort of, all right, 5% of people will go,
link |
02:03:38.340
we didn't know what percent it was gonna be by the way.
link |
02:03:39.540
It could have been 1%, it could have been 50%.
link |
02:03:41.340
Like, but we went into it scary
link |
02:03:44.100
because it was a scary thing.
link |
02:03:45.220
I was like, I don't know, I think this is right.
link |
02:03:47.540
I'm just gonna do it.
link |
02:03:49.420
So if you do enough scary things,
link |
02:03:50.940
like you'll build the confidence.
link |
02:03:52.820
And I feel like I'm still on that journey.
link |
02:03:54.540
Every year or two at Coinbase,
link |
02:03:57.060
there's some big thing that comes out as like,
link |
02:03:58.700
oh my God, like I didn't sleep well for a week
link |
02:04:00.620
and like, this is the next level, right?
link |
02:04:03.580
But that's how you learn and grow.
link |
02:04:05.580
So you're still going up that mountain
link |
02:04:07.500
through the fog one step at a time.
link |
02:04:09.340
Yeah.
link |
02:04:10.580
Can I just quickly ask you about a couple of other efforts
link |
02:04:13.980
that are super interesting that you're involved with?
link |
02:04:15.860
So first of all, a little bit more old school,
link |
02:04:18.900
fascinating effort of research hub.
link |
02:04:22.340
So what's that about the GitHub for open science?
link |
02:04:26.980
Yeah, okay, so basically I've had a chance
link |
02:04:28.740
to try to help a couple other companies
link |
02:04:30.100
get off the ground too,
link |
02:04:30.940
cause I wanna see various efforts out there succeed.
link |
02:04:34.620
And one of them I've always thought about
link |
02:04:37.180
like why is scientific research
link |
02:04:39.820
not more like open source software
link |
02:04:41.260
or why couldn't it be much faster, right?
link |
02:04:42.700
And there's, you've probably have seen this
link |
02:04:44.780
like in an academic setting, right?
link |
02:04:46.020
But there's all kinds of things that feel very antiquated
link |
02:04:48.980
to me about scientific research,
link |
02:04:50.500
everything from the funding process and grants
link |
02:04:53.700
to how peer review works, to how you submit to journals,
link |
02:04:57.620
all the costs associated with journals,
link |
02:05:00.020
you know, that the people,
link |
02:05:01.220
you'd think like you'd get paid for this or something
link |
02:05:02.940
and it would then be available to all the taxpayers for free
link |
02:05:05.140
but no, they're like, they're all pay walled
link |
02:05:06.700
and there's like these big companies
link |
02:05:08.100
that have sort of, in my view,
link |
02:05:09.820
kind of held back innovation here.
link |
02:05:12.020
So, and the preprint servers like bioarchive
link |
02:05:14.940
and archive.org have really helped this
link |
02:05:16.580
but those websites are,
link |
02:05:17.700
they look like they're kind of from like 15 years ago
link |
02:05:19.820
or something.
link |
02:05:20.660
Yeah, it's like Craigslist or something.
link |
02:05:21.700
Yeah, so anyway, one of the things I,
link |
02:05:24.780
once Coinbase went public last year,
link |
02:05:26.300
I had a little bit of liquidity and I was like,
link |
02:05:27.580
all right, let me fund a small team
link |
02:05:28.900
and let's see if we can,
link |
02:05:30.540
if they can like go off and make something better here.
link |
02:05:32.700
So we have a prototype out there,
link |
02:05:35.140
it's at researchhub.com, people can check it out.
link |
02:05:37.380
And it's basically, you know,
link |
02:05:39.700
the first version is kind of like Reddit for science.
link |
02:05:41.540
There's like various hubs, which are like journals,
link |
02:05:44.500
but you know, you can publish papers there,
link |
02:05:46.460
you can use an electronic lab notebook
link |
02:05:48.260
to sort of have a modern day paper,
link |
02:05:49.740
which is not just a PDF that's static,
link |
02:05:51.540
but it's a living document.
link |
02:05:53.580
Ideally in the future, you know,
link |
02:05:54.460
you can get comments and feedback from people in there,
link |
02:05:56.580
you can update it over time.
link |
02:05:57.980
We want people to be able to share the code
link |
02:06:00.180
and the data sets associated with their paper,
link |
02:06:02.100
research paper is not just a PDF.
link |
02:06:05.020
And in the future, we want to make it even where like,
link |
02:06:07.020
you know, people can get funding for science
link |
02:06:09.860
through that site and even license out innovations
link |
02:06:13.660
that they've made.
link |
02:06:14.500
Because the other thing I've noticed in life
link |
02:06:16.380
is that there's kind of like,
link |
02:06:17.940
there's a bunch of people working on science
link |
02:06:19.220
and there's a bunch of people building companies
link |
02:06:21.100
and they very rarely intersect,
link |
02:06:23.340
but when they do, you get the best things
link |
02:06:25.180
like SpaceX and Genentech and even Google
link |
02:06:28.020
and like even Coinbase was based on a research paper,
link |
02:06:31.020
the Bitcoin white paper.
link |
02:06:32.460
And so most business people are like creating companies
link |
02:06:35.300
that don't have any scientific innovation,
link |
02:06:36.780
they're just like marketing based on, you know, whatever.
link |
02:06:40.220
And then a lot of scientists are making things
link |
02:06:42.740
which never actually benefit humanity
link |
02:06:44.740
because they're not commercialized and turned into products.
link |
02:06:47.540
And so if we can somehow create a translation layer
link |
02:06:50.660
between those two groups and help them,
link |
02:06:53.300
you know, helps align the market forces,
link |
02:06:56.260
align scientific research to market forces
link |
02:06:58.100
so that they're more incentivized.
link |
02:06:59.140
Like if you discover CRISPR or something like that,
link |
02:07:01.740
like you should be a billionaire, you know,
link |
02:07:03.220
and like all the downstream implications of that,
link |
02:07:05.500
not going through some antiquated tech transfer office
link |
02:07:07.820
or whatever.
link |
02:07:08.660
And if you're an entrepreneur,
link |
02:07:11.140
you should be looking to commercialize
link |
02:07:12.540
the latest scientific innovations.
link |
02:07:14.740
And so that's kind of like the longterm vision
link |
02:07:17.020
for that site.
link |
02:07:18.660
I think it's just an early step today,
link |
02:07:20.180
but we've got like a really passionate community on there
link |
02:07:22.540
that are jumping into like, you know,
link |
02:07:24.780
computer science or longevity or various bio hubs
link |
02:07:29.700
or whatever and like beginning to source
link |
02:07:31.780
the best innovations, but also discuss them, improve them
link |
02:07:34.620
and publish through the site.
link |
02:07:36.220
So I have a question about incentives,
link |
02:07:38.220
but first let me say for people listening
link |
02:07:39.980
who are outside of academia might not be familiar
link |
02:07:42.660
with an absurd situation.
link |
02:07:44.260
So there's journals, like you mentioned,
link |
02:07:47.220
and scientists publishing those journals
link |
02:07:51.620
and the journals provide very little value
link |
02:07:56.300
except matching you with reviewers that are unpaid.
link |
02:08:00.620
And so in the digital world,
link |
02:08:05.540
they're providing basically almost no value
link |
02:08:07.460
except hosting your paper.
link |
02:08:10.300
And they put up a paywall and charge people to access that.
link |
02:08:15.580
And that charge is not like even Netflix fees,
link |
02:08:18.500
you're talking about a lot of money.
link |
02:08:20.860
So they're basically blocking your research
link |
02:08:24.060
that should be wide open from the world
link |
02:08:27.060
and creating a paywall.
link |
02:08:28.220
It's a fascinating like scam that's actually holding back.
link |
02:08:32.860
I don't, it's a shitty scam
link |
02:08:34.620
because you're not making that much money.
link |
02:08:37.300
I feel like a definition of a scam,
link |
02:08:38.780
you should at least be making money.
link |
02:08:40.780
So like significant amount of money,
link |
02:08:42.140
you're basically making shady money
link |
02:08:44.380
and holding back all of human knowledge, okay.
link |
02:08:46.860
So that put aside and people get a little confused
link |
02:08:49.220
because the journals aren't the ones paying the scientists.
link |
02:08:53.420
People think like the journals are somehow
link |
02:08:55.820
funding the scientists, therefore they have the right
link |
02:08:59.980
to put up a paywall.
link |
02:09:01.140
No, no, no, the funding is coming from elsewhere.
link |
02:09:03.500
Journals are the middleman that nobody asks for,
link |
02:09:07.060
especially in the digital world.
link |
02:09:08.220
Anyway, that said, there is a interesting kind of incentives
link |
02:09:13.500
for scientists, which is prestige and so on.
link |
02:09:16.100
So there's a thing with journals,
link |
02:09:20.060
if there's a prestigious journal
link |
02:09:22.300
and you pass the review process, you get into that journal
link |
02:09:26.660
or a prestigious conference in computer science,
link |
02:09:29.780
then that's seen as a good thing in your resume.
link |
02:09:33.420
And, oh, not just your resume, within your community,
link |
02:09:36.100
that's a respected thing.
link |
02:09:37.380
Is there some way to achieve that same kind of incentive
link |
02:09:40.700
in the open setting of research hub?
link |
02:09:44.740
So like where I could say, I got X, Y and Z,
link |
02:09:49.480
like, look, I'm impressive
link |
02:09:50.820
because this happened on research hub.
link |
02:09:52.680
I think you're right.
link |
02:09:53.520
Like the whole academia, like progress track
link |
02:09:56.920
is about like where you got published
link |
02:09:58.900
and how many citations.
link |
02:09:59.840
And it's kind of like a false economy of reputation
link |
02:10:04.240
because like, there's not real money backing it.
link |
02:10:06.900
And so I think we've thought about this a little bit.
link |
02:10:10.220
And I think the research hub team has an opportunity
link |
02:10:12.180
to do something here that basically says like,
link |
02:10:14.860
okay, I had the top paper for 2022
link |
02:10:18.060
in biology on in here.
link |
02:10:21.580
And you basically publish a list,
link |
02:10:23.220
a leaderboards of these like top for the month,
link |
02:10:26.180
the year in all these different categories.
link |
02:10:29.180
Then actually, we should probably give out grants
link |
02:10:31.820
and awards in addition to that,
link |
02:10:34.500
fund those people almost like fellows
link |
02:10:36.340
or even give out like, you know how like the Nobel prize,
link |
02:10:40.100
there should be like a research hub prize or something
link |
02:10:42.080
and like ship people,
link |
02:10:43.940
maybe even ship like a print version of a journal
link |
02:10:47.740
that is the top papers in each category
link |
02:10:50.260
in each month or whatever.
link |
02:10:51.260
And then like people want to put that in their wall
link |
02:10:53.060
and in the lab.
link |
02:10:53.900
And like, so I do think we need to sort of change,
link |
02:10:57.580
I don't know, like the traditional folks in academia
link |
02:10:59.980
or science would probably think this is like crazy idea.
link |
02:11:02.540
But I think we need to change the culture
link |
02:11:04.580
to not celebrate getting published in paywall journals,
link |
02:11:09.360
almost like friends don't let friends publish
link |
02:11:11.420
in like paywall journals.
link |
02:11:14.140
Like, cause that's, it's just not helping humanity.
link |
02:11:16.500
So like, you know, it should be more prestigious
link |
02:11:19.060
to publish in an open science way and get the top spot.
link |
02:11:23.940
That should be celebrated above being published
link |
02:11:25.740
in whatever, I don't even want to name one of them,
link |
02:11:27.540
you know?
link |
02:11:28.380
Well, there's currently,
link |
02:11:30.100
the culture has already shifted
link |
02:11:31.300
to where almost everybody publishes on archive
link |
02:11:33.660
and by archive and so on.
link |
02:11:34.900
Yeah.
link |
02:11:36.100
But, so that the culture is there on that scene,
link |
02:11:39.740
friends don't let friends not publish open,
link |
02:11:42.400
but then the prestige thing is missing,
link |
02:11:44.700
which is like anyone can publish an archive.
link |
02:11:48.020
So how do you know it's actually a strong paper?
link |
02:11:50.040
Now, funny enough, even with the crappy systems we have now,
link |
02:11:55.000
word of mouth is powerful.
link |
02:11:56.580
Like you have a, like citation system is pretty powerful.
link |
02:12:00.280
So like you say, okay, this is a strong paper.
link |
02:12:02.700
We don't need reviewers, our human eyes are the reviewers,
link |
02:12:06.180
like the community is the reviewers.
link |
02:12:08.540
So it's already, like that part is there,
link |
02:12:11.060
but it would be nice to have like, you know,
link |
02:12:15.980
nature level, like this is respect,
link |
02:12:18.460
this is a respectful accomplishment.
link |
02:12:21.060
Yeah.
link |
02:12:21.900
And something like a leaderboard,
link |
02:12:23.780
but a stable kind of system.
link |
02:12:25.980
Yeah.
link |
02:12:26.820
And I should mention too,
link |
02:12:27.660
so there's a crypto angle to this too,
link |
02:12:29.100
which is, so research hub has a coin associated
link |
02:12:31.540
with research coin.
link |
02:12:32.580
And it's basically, if people, you know,
link |
02:12:34.400
upvote your paper or like support it,
link |
02:12:37.100
you'll accumulate more research coin,
link |
02:12:38.980
which is basically like rep or like a reward token.
link |
02:12:42.180
And so that is a way to, I guess,
link |
02:12:45.340
measure the community's collective view of that paper,
link |
02:12:49.500
a form of peer review.
link |
02:12:51.180
And it can even be weighted by like the reputation
link |
02:12:53.140
of the people voting on it and that sort of thing over time.
link |
02:12:57.100
Yeah, I think the last thing I'll just say is that,
link |
02:12:59.500
so I think from a rep, like a prestige point of view,
link |
02:13:03.660
it won't start off that way.
link |
02:13:05.100
It'll probably start off like being a little more quirky,
link |
02:13:07.440
like, you know, like remember when YouTube first started,
link |
02:13:10.100
it was like people posting weird cat videos and stuff.
link |
02:13:13.260
And, but now like, you know,
link |
02:13:14.400
if you have a million subscribers on YouTube,
link |
02:13:16.020
that's probably better than getting like a TV show on NBC
link |
02:13:18.460
or whoever the traditional gatekeeper was.
link |
02:13:21.000
So my hope, it might take 10 years, 20 years, whatever,
link |
02:13:23.460
but I'm hoping that this can sort of be the new
link |
02:13:27.140
prestigious way that young people publish in science
link |
02:13:30.060
and it'll come to be viewed as more prestigious.
link |
02:13:32.460
The journals, the traditional journals
link |
02:13:34.100
will be viewed as old fashioned.
link |
02:13:36.020
Well, it's definitely a system that could do a lot better.
link |
02:13:41.440
And there's a lot of incredible, brilliant people
link |
02:13:43.380
doing science, they deserve better, the better platforms.
link |
02:13:47.500
So another thing you're taking on and helping out with
link |
02:13:50.260
is this new limit, which is looking at longevity.
link |
02:13:53.820
What's the idea there?
link |
02:13:55.660
Yeah, okay, so as you can see, I'm excited about science.
link |
02:13:58.080
Like I think, you know, science is sort of the,
link |
02:14:01.140
basically if you get scientific innovation,
link |
02:14:03.300
then you get better products and you get better
link |
02:14:06.340
economic growth and then you get all kinds of like surplus
link |
02:14:09.700
in society that can go to arts and philosophy
link |
02:14:12.500
and like all kinds of stuff.
link |
02:14:13.340
But with new limits, so yeah, I kind of got,
link |
02:14:17.660
I started hosting some dinners with scientists last year
link |
02:14:21.080
and I was learning about all kinds of the latest stuff
link |
02:14:23.620
happening in bio and there's a lot of really cool stuff
link |
02:14:26.340
happening with like CAR T cells and CRISPR
link |
02:14:28.340
and all these things.
link |
02:14:29.180
And anyway, one of the topics I started to learn more about
link |
02:14:32.740
was something called cell reprogramming.
link |
02:14:35.140
And, you know, people maybe have heard of this
link |
02:14:38.700
induced pluripotent stem cells where you could take
link |
02:14:40.700
like a skin cell and turn it back into a stem cell.
link |
02:14:43.260
And Shinya Yamanaka won the Nobel prize for this work
link |
02:14:46.900
that was done in 2006.
link |
02:14:49.020
And, you know, it's kind of a crazy thing.
link |
02:14:51.780
You can turn one cell into another type of cell.
link |
02:14:54.300
Well, people recently have been experimenting
link |
02:14:58.020
with different types of transcription factors
link |
02:15:01.280
that would either not,
link |
02:15:02.900
you don't want the cell to go all the way back
link |
02:15:04.140
to being a stem cell.
link |
02:15:05.600
You can end up getting like cancerous cells
link |
02:15:07.320
and things like that.
link |
02:15:08.160
But you want it basically the cell to revert
link |
02:15:10.520
a little bit earlier in its, you know,
link |
02:15:13.380
it would call it the Waddington landscape,
link |
02:15:15.020
but it's basically like go, become act,
link |
02:15:17.660
start to act like a bit of a younger cell,
link |
02:15:19.700
but not to de differentiate and become more like a stem cell.
link |
02:15:23.020
And so I decided this might be an interesting area
link |
02:15:25.760
to go fund.
link |
02:15:27.020
I think that that team has come together.
link |
02:15:28.780
There's like some really talented people
link |
02:15:30.900
who've come together to help get that off the ground.
link |
02:15:32.540
And they're basically building a platform
link |
02:15:36.080
that can test a lot of different transcription factors
link |
02:15:38.820
on different cell types and hopefully find ways
link |
02:15:41.420
to rejuvenate different types of cells and tissues
link |
02:15:44.380
to extend human health span.
link |
02:15:45.520
I mean, the moonshot goal here, you know,
link |
02:15:47.760
the get to Mars is that there could be some therapy here
link |
02:15:51.700
that in, I don't know, 10 or 20 years that you take
link |
02:15:54.260
and from a whole body point of view
link |
02:15:56.580
is sort of rejuvenating tissue,
link |
02:15:58.340
not just one type of tissue like your immune system,
link |
02:16:00.740
but eventually your whole body, maybe even your brain
link |
02:16:02.560
so that, you know, we don't have that issue
link |
02:16:04.900
where people who are older have trouble learning
link |
02:16:06.540
or they're more ossified in their thinking.
link |
02:16:10.100
To me, this is just, I always think about, you know,
link |
02:16:13.700
it's actually a little inspired by Elon, right?
link |
02:16:15.540
Is like, what are some of the biggest things in the world
link |
02:16:18.060
like that are probably high technology risk,
link |
02:16:20.520
but if they did work,
link |
02:16:21.540
maybe they're kind of low chance of working,
link |
02:16:23.560
but if they did work would have enormous impact.
link |
02:16:26.040
I like the idea of trying hard tech problems,
link |
02:16:28.380
especially for people like founders like me
link |
02:16:30.880
who've made some money in software,
link |
02:16:32.460
which I think we're in kind of like a golden age of software
link |
02:16:34.700
so there's like fortunes to be made,
link |
02:16:36.540
but if you do make some money in that,
link |
02:16:38.680
my hope is people will like do atoms, not bits, you know,
link |
02:16:42.700
and try some of the harder things like in biotech
link |
02:16:45.020
or, you know, I guess he's doing cars and rockets and stuff,
link |
02:16:48.460
but anyway, I think we should try hard tech
link |
02:16:52.500
or, you know, physical science problems as well
link |
02:16:54.640
and see if that can advance for team human.
link |
02:16:58.140
Yeah, so he's also doing bio with Neuralink
link |
02:17:02.740
and I feel like bio is tough because it's messy.
link |
02:17:07.340
We don't understand it as well.
link |
02:17:08.380
We don't understand it.
link |
02:17:09.460
The risk is higher in terms of, not the risk is higher,
link |
02:17:14.240
but like you have to deal with the actual sort of,
link |
02:17:18.260
to get to human, to get to stuff
link |
02:17:21.500
where it could be therapies for actual human bodies
link |
02:17:24.680
is tricky because you have to prove that it's safe,
link |
02:17:29.620
it's effective, all those kinds of things with FDA.
link |
02:17:33.560
I mean, it's just, it's tricky.
link |
02:17:34.880
It's very difficult.
link |
02:17:36.160
It's a long journey.
link |
02:17:38.520
I mean.
link |
02:17:39.360
If I can give a quick plug.
link |
02:17:41.700
So yeah, I'm on the board at New Limit.
link |
02:17:43.420
We're hiring talented scientists
link |
02:17:45.160
that are interested in the cellular programming space.
link |
02:17:47.040
They don't necessarily have to be coming
link |
02:17:48.840
from like an aging background or anything like that.
link |
02:17:50.720
There's sort of a small group of people doing even.
link |
02:17:53.120
So this is a new thing?
link |
02:17:54.240
This is a, is New Limit relatively new?
link |
02:17:56.400
Yeah, it's very new.
link |
02:17:57.640
There's a small team today, just a handful of people.
link |
02:18:00.700
And so we're hiring more there.
link |
02:18:03.660
If people are excited about that space, reach out.
link |
02:18:05.600
And same thing for Research Hub.
link |
02:18:07.920
There's a small team there that's really awesome.
link |
02:18:10.100
That's doing more like software engineering,
link |
02:18:12.400
design, product, that kind of stuff.
link |
02:18:15.040
What advice would you give?
link |
02:18:16.760
If you put on your old, wise, sage hat,
link |
02:18:21.240
what advice would you give to young people today?
link |
02:18:24.000
High school, maybe undergrad and college about life.
link |
02:18:29.560
So like career, having a career they can be proud of,
link |
02:18:34.200
or maybe a life they can be proud of.
link |
02:18:37.720
So people can do whatever they want to be happy, right?
link |
02:18:40.440
So there's not one way to do it.
link |
02:18:42.360
I do think that some people,
link |
02:18:44.840
a particular type of people out there,
link |
02:18:46.440
a lot of people actually,
link |
02:18:47.280
they want to have an impact on the world.
link |
02:18:48.480
That's how they get a sense of fulfillment, right?
link |
02:18:50.960
So I mean, you need to have like health, physical health.
link |
02:18:53.680
You need to have good relationships,
link |
02:18:55.040
like there's lots of things.
link |
02:18:56.440
But most people want to do something important.
link |
02:18:58.440
They want to have fulfilling work,
link |
02:18:59.720
a way that they can feel like they're contributing.
link |
02:19:02.800
I think a lot of people, young people today are thinking
link |
02:19:05.240
like I should be an activist or something like that.
link |
02:19:09.560
And there's people in the world who have power
link |
02:19:11.480
and a lot of people who don't, I don't have power.
link |
02:19:13.840
And so the way to change the world is to speak truth
link |
02:19:18.120
to power or like criticize power
link |
02:19:20.440
and try to pressure them to change.
link |
02:19:25.400
To me, I don't think that's the right way
link |
02:19:27.040
to actually have an impact on the world
link |
02:19:28.880
because everybody has probably,
link |
02:19:33.720
I think people have more power than they realize.
link |
02:19:36.840
And by the way, it's easy to be a critic.
link |
02:19:39.520
It's hard to actually change these things and fix it.
link |
02:19:42.200
And so you'll get a lot of accolades
link |
02:19:44.680
from friends and things like that
link |
02:19:46.080
if you kind of go around criticizing, it's easy to do.
link |
02:19:48.600
Like everything is broken and could be better,
link |
02:19:51.520
including stuff I'm working on.
link |
02:19:53.360
I find like so frustrating.
link |
02:19:56.040
There's a million things I want to be better about
link |
02:19:57.640
like what we're doing in Coinbase.
link |
02:20:01.200
So be the person in the arena,
link |
02:20:04.120
like that Theodore Roosevelt quote,
link |
02:20:05.520
I think he said it right.
link |
02:20:06.960
Like go chew glass and stare into the abyss.
link |
02:20:10.160
Like if you really want to have an impact,
link |
02:20:11.840
either join a company that has a mission
link |
02:20:14.560
that is trying to fix the thing you're passionate about
link |
02:20:16.200
or start that company if it doesn't exist
link |
02:20:18.960
or start a charity if it's not suitable
link |
02:20:21.640
to be a company or whatever it is,
link |
02:20:23.080
but go try to be a part of the solution.
link |
02:20:25.680
Don't just criticize or be a part of the problem.
link |
02:20:30.320
My hope is that more people can realize
link |
02:20:37.520
that they actually can have a meaningful impact that way.
link |
02:20:39.880
And I think that to me,
link |
02:20:41.720
technology is actually one of the most important ways
link |
02:20:44.360
to improve the world.
link |
02:20:45.480
Like if you look at climate change,
link |
02:20:49.200
like a lot of the best ideas like carbon sequestration,
link |
02:20:51.960
all these things, it's a technology thing, right?
link |
02:20:53.640
If you want to try to fix education,
link |
02:20:55.960
it's like look at like Khan Academy
link |
02:20:57.400
and all this stuff going online, right?
link |
02:20:59.080
If you want to fix, you know, whatever transportation
link |
02:21:02.760
and like the financial system and global freedom
link |
02:21:06.280
and like equality of all these things,
link |
02:21:07.840
like there's typically the way to get something changed
link |
02:21:11.240
in the world today is with technology.
link |
02:21:13.280
And so I do think people, it's very bizarre to me
link |
02:21:15.880
that there's this kind of like anti tech thing going on.
link |
02:21:19.200
Look, nothing is perfect.
link |
02:21:20.520
Like if you create something new
link |
02:21:21.640
and like tens of millions of people use it
link |
02:21:23.520
or billions of people use it,
link |
02:21:24.400
it's like there's going to be some bad people
link |
02:21:26.440
who use it too, okay?
link |
02:21:27.360
And there's, you know, society is complicated,
link |
02:21:29.520
but like I think most of these things have been net positive
link |
02:21:33.040
because most people in the world are good
link |
02:21:34.640
is at least my view.
link |
02:21:36.200
So yes, we can mitigate like the 1% of bad people
link |
02:21:39.120
trying to abuse something,
link |
02:21:41.000
but 99% of people in the world are good.
link |
02:21:42.640
And the way you can improve the world is with technology,
link |
02:21:45.040
joining companies, starting companies
link |
02:21:46.480
that are working on the right stuff.
link |
02:21:48.260
So I hope more young people do that.
link |
02:21:50.920
And just, if you're not sure what to do,
link |
02:21:53.560
like just get started with anything.
link |
02:21:54.880
That's how you learn.
link |
02:21:55.780
And basically have the optimism
link |
02:21:57.800
that you have the power to do the change.
link |
02:22:00.240
So it's easy to distract yourself by being the critic.
link |
02:22:06.240
That's almost like acknowledging to yourself
link |
02:22:08.200
that that's all you can be,
link |
02:22:09.600
but basically everybody has the power to be the fixer.
link |
02:22:16.160
I like, chew glass and look into the abyss.
link |
02:22:21.600
That's much more fun than it sounds.
link |
02:22:25.760
What do you think is the meaning of this whole thing?
link |
02:22:27.400
Why are we here?
link |
02:22:29.040
Life.
link |
02:22:29.960
Yep, what's the meaning of life?
link |
02:22:31.760
What's this existence we got?
link |
02:22:34.120
You're trying to increase the amount of economic freedom
link |
02:22:36.380
on this planet or trying to alleviate
link |
02:22:38.240
some of the suffering.
link |
02:22:39.500
Yeah.
link |
02:22:40.340
But why?
link |
02:22:41.840
I don't really think there is any point to life.
link |
02:22:46.000
You know, somebody once told me,
link |
02:22:50.600
you know, if you go into these like,
link |
02:22:51.680
kind of really big existential questions,
link |
02:22:54.600
it can get a little scary
link |
02:22:55.680
because like you stare off the cliff
link |
02:22:58.160
and there's like, there's nothing there.
link |
02:22:59.360
You know, this one person told me one time they were like,
link |
02:23:03.920
you know, Brian, you should probably snorkel, don't scuba.
link |
02:23:08.180
I guess, and I think they were trying to say like,
link |
02:23:11.380
I, some of my friends have done this, right?
link |
02:23:13.080
They'll go to like, you know, epic meditation retreats
link |
02:23:16.940
and like, they'll kind of come back
link |
02:23:19.360
with all this existential dread of like,
link |
02:23:21.580
what's the meaning of it all.
link |
02:23:22.420
And then like, as far as I can tell,
link |
02:23:24.120
we are just some organic molecules in the ocean
link |
02:23:27.740
started like dividing and replicating
link |
02:23:30.000
and the selfish gene and all this stuff,
link |
02:23:32.500
like basically ended up here.
link |
02:23:34.600
And our only, it's some kind of like really naive algorithm
link |
02:23:38.080
that's just kind of trying to get us
link |
02:23:39.760
to survive and replicate.
link |
02:23:40.960
And we have DNA just like every other animal.
link |
02:23:43.600
And so we happened to develop
link |
02:23:45.240
these like really cool neocortexes.
link |
02:23:46.920
And so now we're sort of self aware
link |
02:23:48.600
and we have all these big questions
link |
02:23:51.000
and maybe we'll create another, you know,
link |
02:23:54.080
as computers get better,
link |
02:23:55.000
we'll create the simulation inside our thing.
link |
02:23:57.080
And I think it's cool.
link |
02:23:58.780
Like we should basically,
link |
02:23:59.800
I just want to keep watching the movie, you know, unfold.
link |
02:24:02.680
That's part of why I want to work on,
link |
02:24:04.640
like New Limit is really cool.
link |
02:24:05.920
Cause it's helped, if people can live longer,
link |
02:24:07.720
whether that's uploading their brain to the cloud
link |
02:24:10.680
or, you know, basically through we get biology to work
link |
02:24:14.300
or the strong AI to work or whatever.
link |
02:24:17.140
One of those two hopefully works out.
link |
02:24:18.760
And then we get to keep watching the movie
link |
02:24:20.680
and see how it all unfolds.
link |
02:24:22.160
I think that's fun.
link |
02:24:23.360
And so I don't know if that's like an answer,
link |
02:24:25.640
but I guess I don't think there's any real purpose.
link |
02:24:27.640
So just try to have fun.
link |
02:24:28.640
Well, the cool thing is that we get to write the movie
link |
02:24:32.760
as we watch it.
link |
02:24:34.480
Yeah, that's exactly right.
link |
02:24:36.640
I mean, that's like the Steve Jobs quote and all that,
link |
02:24:38.680
where he's like, everything around you was invented
link |
02:24:40.400
by somebody who just was like,
link |
02:24:42.400
this was a crazy idea they thought up.
link |
02:24:43.560
So once you realize you can kind of do anything you want,
link |
02:24:51.000
then that's what you start to go,
link |
02:24:53.040
you start to go try crazier stuff.
link |
02:24:55.120
I mean, this is another one of those areas where,
link |
02:24:57.720
not to get too out there,
link |
02:24:58.560
but like, you know, when you're,
link |
02:25:00.280
I think you can build your comfort zone
link |
02:25:02.060
around like people being upset with you.
link |
02:25:03.980
You can also build your range
link |
02:25:06.940
of what you think is possible, right?
link |
02:25:08.180
Like when I was in my 20s,
link |
02:25:10.480
I was like reading all these books
link |
02:25:12.160
about like self improvement and goal,
link |
02:25:13.880
how to write down your goals and stuff.
link |
02:25:15.080
And my goals were like,
link |
02:25:17.960
someday I wanna make $100,000 a year or something like,
link |
02:25:21.920
and that was, and you know,
link |
02:25:25.420
and it seemed like a little outlandish or what,
link |
02:25:28.080
I wrote down these goals,
link |
02:25:28.980
like I wanna own rental property or something anyway.
link |
02:25:31.680
And then I slowly started to get some of these things done
link |
02:25:35.120
over a couple of years.
link |
02:25:35.960
And so I started to think a little bigger.
link |
02:25:38.460
I remember one time I wrote down this goal where I was like,
link |
02:25:41.060
what's the craziest thing I could think of?
link |
02:25:42.920
And I was like, what if I, I wanna write,
link |
02:25:44.680
I wanna start a billion dollar tech company.
link |
02:25:47.320
That's crazy.
link |
02:25:48.240
And I had never started like a million dollar tech company
link |
02:25:50.960
or any tech company really.
link |
02:25:52.200
So what business did I have writing that goal down?
link |
02:25:54.960
I remember I wrote that on a piece of paper like,
link |
02:25:58.440
like probably every day for a year or something almost,
link |
02:26:00.980
right?
link |
02:26:01.820
I don't know if it was every day,
link |
02:26:02.640
but like I wrote it down a lot.
link |
02:26:03.680
And so little things started to happen.
link |
02:26:06.680
I was like, all right,
link |
02:26:07.560
well, maybe I should move back to the Bay area
link |
02:26:09.280
from Buenos Aires.
link |
02:26:10.120
Maybe I should try to apply to Y Combinator or whatever.
link |
02:26:13.080
Like, and I started thinking about these ideas.
link |
02:26:15.280
And so whatever it gets you fired up,
link |
02:26:16.960
it doesn't have to be like some company goal
link |
02:26:18.760
or startup thing.
link |
02:26:19.600
It could be anything, right?
link |
02:26:21.620
Maybe you wanna publish a book
link |
02:26:22.600
or like do something creatively or whatever.
link |
02:26:25.120
Anyway, I think like within seven years, no,
link |
02:26:32.160
it's probably more like 10 years
link |
02:26:33.280
of me writing that goal down.
link |
02:26:36.160
Coinbase had a valuation over a billion dollars.
link |
02:26:38.800
So it was out of my realm of what was even possible.
link |
02:26:42.880
And then within 10 years,
link |
02:26:44.640
you can accomplish more in 10 years than you think,
link |
02:26:46.680
less in a year than you think.
link |
02:26:48.480
So now I'm like, okay, what's the next goal?
link |
02:26:51.680
What's the, okay, maybe I wanna get a billion people
link |
02:26:55.640
accessing the open financial system
link |
02:26:57.580
through our products every day.
link |
02:27:00.040
That would be cool for humanity.
link |
02:27:01.680
And that's a pretty crazy goal.
link |
02:27:03.480
Like there's only 8 billion people or something, right?
link |
02:27:05.080
So there's one out of eight.
link |
02:27:07.940
Or maybe I can radically,
link |
02:27:09.760
like if I make some like the right investments or whatever,
link |
02:27:12.780
I can like help radically extend human health span
link |
02:27:16.580
or whatever, right?
link |
02:27:18.840
So try crazier stuff.
link |
02:27:21.240
I don't know, even if it doesn't work,
link |
02:27:22.520
like hopefully you'll advance the state of affairs,
link |
02:27:27.560
like something interesting will happen.
link |
02:27:29.120
And so most people today,
link |
02:27:31.160
they look at people trying this stuff and they're like,
link |
02:27:33.500
oh my God, they're so, they're a genius or whatever.
link |
02:27:35.800
And it's like, or they're an idiot.
link |
02:27:37.040
Like one of the two, neither one are true.
link |
02:27:39.600
It's just like anybody can start
link |
02:27:42.020
by thinking about what they want and then like go for it.
link |
02:27:45.200
And then once you get that,
link |
02:27:46.400
like go for something a little bigger
link |
02:27:47.480
and like you just have fun with it.
link |
02:27:48.920
And the universe is a way of smiling and helping you out
link |
02:27:53.560
if you just write it down and you dream big.
link |
02:27:57.440
There's something about just karma,
link |
02:27:59.800
about the energy you put into this world.
link |
02:28:03.000
Other people will help you out, doors will open.
link |
02:28:05.240
You'll notice that the doors opened
link |
02:28:07.460
and you actually have a shot at making it happen.
link |
02:28:10.600
It's a funny world.
link |
02:28:12.240
Yeah, I mean, I don't really subscribe
link |
02:28:14.360
to all like the woo woo interpretations of this,
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02:28:16.040
but my very rational brain interpretation of it
link |
02:28:18.360
is that if you just wake up every day
link |
02:28:20.200
and write down like what you want to get done
link |
02:28:22.160
and towards your longer goals, your larger goals,
link |
02:28:24.400
it's just on your mind that day.
link |
02:28:26.580
So you start to notice opportunities
link |
02:28:28.040
and you think about it more.
link |
02:28:29.380
So Brian, thank you for dreaming big.
link |
02:28:32.080
Thank you for doing what you're doing,
link |
02:28:33.440
doing incredible engineering at scale,
link |
02:28:37.140
trying to help people from all over the world
link |
02:28:39.600
and actually helping me personally get more into crypto
link |
02:28:43.360
just cause it's so easy.
link |
02:28:46.400
So thank you so much.
link |
02:28:48.080
And thank you so much
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02:28:49.600
for giving your extremely valuable time today
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02:28:51.920
to this awesome conversation.
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02:28:53.320
Thanks for your awesome podcast.
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02:28:55.080
I love it and I listen to it often.
link |
02:28:57.560
Thanks for listening to this conversation
link |
02:28:59.000
with Brian Armstrong.
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02:29:00.520
To support this podcast,
link |
02:29:01.720
please check out our sponsors in the description.
link |
02:29:04.320
And now let me leave you with some words
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02:29:06.200
from Benjamin Franklin.
link |
02:29:08.300
An investment in knowledge pays the best interest.
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02:29:13.000
Thank you for listening and hope to see you next time.