Mhm. So crypto is interesting. Everything from bitcoins, blockchain, Solana, Ethereum. I'm no expert in these, but I've always wondered what the nuances of this industry are. And today is probably a good day to find out. I am a critic. I have never bought any of these ever. I don't know if I'll remain a critic after this, but I suspect I will. So, let's see how the conversation with Brian goes. I know he's going to take the for side. Somebody has to take the against side. It probably has to be me, even though I don't know too much about it. So, this should be fun.
How are you?
Good to meet you. Yeah. Come. All right. Yeah. Not too far away. Got a big crew here. Do you like coffee?
Maybe decaf or something if you have that or just water? Yeah. Do we have decaf coffee? If not, I'll just do water. Yeah.
Uh, mint tea sounds great. Yeah. Is that like your diet?
Well, I drink caffeine, but I try not to after noon, so it's easier to sleep, you know.
Yeah. Yeah. A lot of the people I met who were into crypto, like really into crypto, for the first time in a long time, they've become very disenfranchised in a way.
I've heard that argument before and I don't really see it. You know, I'm going to call that out.
No, I was actually in Ohio. And I just drove back last night.
Okay. You doing like a retreat there or something? That's an interesting city.
Yeah. There's this pledge. So, this was the 3-day offsite. Yeah. Thinking about how to do philanthropy effectively.
Mhm. That's great. Yeah. Something I need to learn more about.
Yeah. Do you believe in it?
Well, yeah. I mean, ultimately, all the money we're making can only go to taxes, philanthropy, or your kids, I guess. So, unless we figure out how to live forever, maybe that'll happen. Um, so yeah, I mean I think I've seen a lot of friends engage in philanthropy and it's just like startups. A lot of it doesn't work, but the best ones do incredible things.
Yeah. Yeah. And I've seen some people try doing philanthropy and I think it had unintended consequences actually. So it's humbling. You know, it's probably quite difficult to do it well.
Um Yeah. Have you done any philanthropy that Yeah. What's what are your main focuses? Uh that was quite interesting. The door opened on its own.
I What's wrong with it, you know? Yeah, we've done a bit of climate. Uh the last year I've been doing a bunch around entrepreneurship. So, a lot of people in India need seed capital to get started.
Uh this podcast is also like that in a way. Uh it's not for profit. There are no ads. There are no sponsors. Uh we don't monetize anything. The intent is very much to tell young people where the opportunity lies.
Mhm. Um that's what today is about in everything that you're involved in. For today, we're going to make Brian not a startup founder, but a college professor who can teach people where the opportunity lies in your industry to build.
Mhm. Yeah. It's great. I'm very passionate about how we can get more people to build companies in the world. I think entrepreneurship's a huge lever on how to improve the world and yeah I mean India has so much raw talent in that department as well. So but if like you asked earlier about giving if people live forever or for longer and they don't give. And if wage price inflation does not keep up with asset price inflation, like it does not even in America for the last 30, 40 years. What happens to income inequality? I've spoken a lot about this over the last week cuz I've been there listening to lectures around this. What do you think?
I mean, it's such a big question, right?
Yeah. I mean, I think one way to solve it is to make everybody a capitalist, right? So, you're not just working for labor. How do you make it so everybody even if you have relatively low income, you can put a little bit of money aside to own stocks or, you know, parts of other companies that can grow, right? So, there's something like 4 billion people in the world today who are unbrokered. They don't have any ability to buy equities. Um, and if you can democratize that, then everybody can have a piece of it, right? Like here in the US, there's an experiment that's being done right now. These Trump accounts, you probably saw that. So Brad Gerstner, I think, yeah, Brad Gerstner has been great on that along with others. And just getting every kid $1,000 of the S&P 500 at birth can make them have skin in the game, right? So I think that's, you know, who I heard pitched this many years ago, Mike Milken. Oh, yeah. He had this blueprint mapped out and I think Australia does it in some way.
Yeah. I mean you could actually do it with a sovereign wealth fund as well. Some countries do that very effectively and when you're born you get a share of it, right? And then it is just like in any company like the one you ran or run or the one I run. Our employees get equity and it's a beautiful alignment tool of you know we might not agree on everything but we all own a piece of the same thing. So we're trying to work toward that. And then I think there's another interesting question which is is income equality the goal right? I think we can all say income inequality makes people unhappy but we don't want perfect income equality that would destroy you know merit and progress and competition and all these things which are also good. So, one way I like to think of it is you know, it's like how do we just accelerate growth overall? Like I think a lot of people are looking at two different things. Like they're saying how much better or worse is my life personally versus a year or two ago and then they're also saying how much is my life better versus someone else. The second one is envy, right? The first one is really competition versus yourself and is your own life improving and I think we are also seeing an issue in society where people's own life is not getting better. Um I think if the rising tide lifted all boats you know let's say everybody even the bottom 10% like their life was getting better but there were some people getting way richer they would still be mostly okay with that. It's when their purchasing power or their wages are flat and then someone's getting much much wealthier. That's what creates the biggest social unrest. I think it's an interesting thing to think about.
If productivity were to go up and everybody's life gets better but the rich get 10 times richer than they are today. I don't know if I can extrapolate that far, but I would still presume people would be unhappy because the very notion of wealth is relative. We all have a lot more today than we had 100 years ago. Or 300 years ago. But people are not happier because of the relative change in individual wealth.
Yeah. Yeah. Are you familiar with the concept of the hedonic treadmill?
Yeah. So I think both are true. Yeah. If you know there's some things which today you know like even just having a great shower with like hot water or something you know I take it for granted but if I go camping for a week and I'm sleeping on the hard ground and I have to shower in cold water I come back like a hot shower is like the most amazing luxury you know in the whole world. So you forget that if you sort of become acclimatized to these things even if your own life is getting better. But then you're also you're right it's the other factor is the looking at other people and comparing and we that's part of human nature as well. So it's kind of an interesting question. Is it 50/50 you know my competing with myself versus others or is it 80/20? Everyone's wired a little differently and should we what should it be in society like should we try to encourage people you know try to improve yourself don't compare yourself to others. Should we try to teach that as a value? But maybe naturally people are skewed a certain way. So what is it for you?
I mean I always try to just compete with myself. Um you know it's human nature. I can't help but compare sometimes to other people but I sort of try to catch myself doing that and try to reframe it in my own mind. Right? Because I just want to be the best version of myself. I'm not if you know if there's a friend of mine who you know they made an investment and they got in series A and I put money in the series C and they did 100x and I only did 10x. I try to cultivate a mindset of you know being happy for them. Now someone could say, 'Well, that's great for you, Brian. You know, your cup runneth over. You know, you're living a life of post scarcity and there's a Maslow's hierarchy of needs and all this.' There's a lot of truth in that, right? Like if I was hungry or I was unsure where my next meal was going to come from, you know, I might beat someone up to like take their food, right? Or, you know, you become much more zero sum in your thinking. But beyond a certain base level of needs, I think it's healthy to try to cultivate a I'm trying to be the best version of myself, not versus other people.
Yeah. Income equality or inequality is an interesting question.
Mhm. I feel like it's not a problem in isolation. There will always I'm a proponent of capitalism like I know you are and I've heard you speak about it in a couple of places. Mhm. Uh I hear you when you say separate church from state and then separate state from economics as well. But I think the magnitude of income inequality is somehow becoming a problem. It's probably smart for the beneficiaries of capitalism to also feign altruism because that allows for them to remain capitalist for longer.
If you're saying feign altruism?
Yeah. Okay. Fake basically fake it. You're saying okay got it.
Right. Like when I remember the books of childhood like I can't remember where I read the story but in a kingdom if the net produce is 100 and the king has 10 and the rest of the city has 90 it's okay. But when the king has a vast majority of the resources, at some point the people come to his door with I don't know axes and try to take it away.
Yep. Guillotines in some cases. Yeah.
Is the world getting there?
I mean I think you can look at you know there is a measure for income inequality, right? The Gini coefficient. And I haven't looked at it recently, but the last time I looked, I think we're not at all-time highs or anything like that. There have been periods of high and you look at it's different by country as well. Um so it goes up and down. I think it's probably my guess is it's up a bit in the last 20 years, but we're not at all-time highs for the US for instance. Uh but yeah definitely it creates feelings of unfairness when that goes up and I think we're seeing that now with certain politicians getting elected, Mandy like these kinds of folks and of course AI is a big factor there too everyone's trying to think like is it going to take my job and you know so those fears are totally natural and then the question is you know what do we do about it right? Um you know some people would say we should slow we should press a button to pause all AI development and to that I would say well how are you going to get the countries of the world to collaborate on that right? Um if the US does it is China going to do it? There's literally there's people I've talked to who they're like no the US government should be meeting with the other you know India and China and all the superpowers and saying we should collectively agree to do it and I'm like well then how are you going to guarantee that they do it? There's going to be inspectors walking through the data centers, you know, but it's like you can't if you're training like a new AI model on a data center, you can turn it off when the inspector is there and 10 minutes later the thing is training a different piece of software, right? So, it's hard for me to imagine a realistic scenario where the world collaborates to pause AI. So, okay, I think that's off the table. Maybe agree, maybe don't. So we're in a world where we have to the only way through it is forward. Like we have to try to build it responsibly. Um you know we have to try to leverage it for good and instead of bad like it's just like any technology right fire or you can make up any example you want crypto is another good example right like bad people have tried to use crypto a lot of I think it has a lot of benefits to update the financial system we can talk about that. Uh so I think the only way out of it is through it and you have to just whoever in that moment is ready to step up and try to build something good in the world they can tell people about it and see if the world buys it or not. And people vote with their dollars, too. You know, nobody wants to buy an AI model that is dangerous, that's inside their company, or that's against their values, right? Like if they think a company is evil or something, they're not going to buy those products. So, the free market is actually somewhat of a governor here on some of this. And I think other people would say, well, the government should come in and do something, right? And then you have to kind of it raises the question of how competent do you think the government is on the frontier of technology. Um at least in the US sometimes I'm skeptical on that. You know the Indian government has actually done some things very impressive working with you know like UPI and these things are incredible. So in some ways we see competent government in some parts of the world.
Yeah. I have a different like I think the lens with which you are looking at AI and the one I use is slightly different cuz here you're wondering if the fruits of AI are getting concentrated in a handful of people and a bunch of companies. Uh in India it looks like are the fruits of AI getting concentrated in another country altogether? Which is a harder place to be because it's not about income inequality anymore. It's if we are any part of that value chain, what happens if you're not?
Mhm. Yeah. I think countries like India then go the other way and they're like, can we be part of the AI infrastructure value chain? Can we be part of the energy value chain? Can we be doing something uniquely over there to capture some of this value? So it becomes really hard and especially in a time when America has become as combative as it has with tariffs and trade overall it gets even more complicated.
Yeah, I mean India has so many great engineering schools. I imagine that there's major efforts underway to build out the top AI companies in various ways there. And um you know, one other thing that we're thinking a lot about is what's going to be the financial layer for AI, right? Because AI agents increasingly need to go get work done on your behalf and they're going to have to make payments. And so there's a whole emerging area of agentic commerce that we're building out and that's been exciting too.
Why does an asset that you deal with say anything on the blockchain win as a commodity of transaction for agentic AIs versus another?
Well, you know, I think AIs are going to use a variety of things, but the reason why I think stablecoins in particular and blockchain are well suited is that you know, like an AI agent is going to have a hard time signing up for a credit card at a bank and you have to show your ID, which you know, only human beings currently can get this government-issued piece of paper. Um but an AI agent can spin up a self-custodial crypto wallet with stablecoins and by the way there should you know there should be a rupee stablecoin and everything it can be fiat and country specific but the onboarding works without KYC right and know your customer rules which are present for most regulated financial service businesses and then they can the other thing is that the stablecoin rails have gotten very fast cheap and global right so for these small transaction amounts like you can send a payment anywhere in the world and under 1 second in 1 cent US so we're seeing a lot of agentic commerce send small transactions even a couple cents US to you know gather read this research paper or get through this paywall and or just call another API query that kind of thing that doesn't really work with credit card rails the small transaction amounts.
The need for KYC in a way is both a good thing and a bad thing, right?
Sure. Yep. There's it's Yeah, that's its own deep topic. I mean, especially when the agent does not need KYC, right?
Well, that's what we're, you know, that's the question mark, right? Is those KYC rules are in place for good reason. They're trying to stop illicit activity. Um a lot of firms have looked at this and researched you know what has been the cost and the benefit of it right and there is a pretty high cost for all financial services with that type of regulation. There's some estimates that only I think about 1% of all illicit activity is frozen or seized as a result of AML activities globally. Uh AML is anti-money laundering as you know. Um so look I mean we're a regulated financial service business as well. We do this in the US and every country where we operate and so we're happy to follow those rules as a regulated financial service business. Um but I think you know it creates such a high friction in the economy that it's like imagine you know like sending a WhatsApp message. It's free instant anywhere in the world. Um the number of WhatsApp messages per day I think is in like the hundreds of billions or something. And you know when text messages cost 30 cents there was only 1/100th of that amount. So it's kind of a question of you know for agents on the internet like how much friction do we want to introduce into the system and there's trade-offs around that for sure. So this every democracy around the world I think trying to figure out what the regulatory framework should be and that's something we've been working on in the US as well. Um getting hopefully this bill through Congress in the next couple months. Hopefully.
When I send a WhatsApp message to you, I am subsidized the cost of sending the message to you by WhatsApp for business or the data being repurposed for different things by Meta. What is the equivalent when I send you a stablecoin?
Well, you are paying a small transaction fee. So it might be about a tenth of a cent US. So that might directly cover the cost of the people running the sequencers and the nodes and those kind of things. Um you know the stablecoin issuers they actually are holding the like in this case the dollars but it could be rupees or anything. They're holding them in US government or government bonds I should say. Right? So that's the business model of these stablecoin issuers. So there's the stablecoin issuer who's holding it in government bonds. They pass along some of that economics to the customer but not all of it and they hold some for themselves and then the blockchain itself is taking like a small transaction fee typically. Yeah. Like on the base chain at least it's about a tenth of a cent US.
So Brian I'm not an expert in this world. I know very little. So whenever I ask you a question if I sound too much like an idiot excuse me.
No no I doubt that will happen but yes I'm happy to start it. Start wherever you want to start.
Yeah. So when I look at okay let's assume USDT or USDC is backed by short-term American treasury which yields about 3-4%. Now if I take USDC from Circle and Coinbase and Circle and Coinbase is earning 4% on it. when I in turn say pledge or utilize the USDC that I have and I monetize it further say I make another 3 or 4%. Treasury can only yield once. Where is the additional money coming from?
Right. Well, so in that case, Circle's the issuer, they're holding it in the short-term government treasuries. Um, actually, if you're when people are holding those USDC on Coinbase, majority of that is actually passed to them, the economics. So, maybe 90% of that. Um, isn't that what the Clarity Act is for? like I read parts of it but it seemed like you're not allowed to pass it on and after this act you can. Yeah. So this is being carefully has been carefully negotiated in the draft Clarity Act. Uh the banks kind of made this concern out there in the world that they didn't want any rewards to be paid on idle balances. So that made it into the latest draft of the Clarity Act. But as long as the customer is doing some sort of activity like a payment or trading then they would be eligible to get these rewards. So the customer can still at least in the current draft if it becomes law and it's currently allowed under the Genius Act which already became law customers would get you know they could get the majority of these benefits from the underlying dollars held in short-term US treasuries. Um so that's the current arrangement. And then you had asked about another 3 to 4%. I wasn't sure what that part was.
Like if I were to like lend my USDC, I can monetize it again.
That's correct. So customers can opt in and choose to lend USDC into say a DeFi protocol if they want. And yeah, and can earn some additional yield on that.
Right. Now, if I were to buy USDC directly No, forget that. Actually, if I were to buy American Treasury directly I have a certain amount of risk. Let's say there is crazy inflation, yields go up, I have a mark-to-market loss on the change in interest rates. Even if it's short-term paper, I'm not talking 10 years. I'm saying 6 month paper, one year paper, whenever there is a significant change in interest rate as it has happened historically, I would lose some money. Why would I for the same return as I would get if I bought USDC or USDT directly put an intermediary in between and add a layer of an additional layer of risk to own the same instrument that gives me the same yield.
The reason is you can use the stablecoin as a payment instrument or you can use it for trading and you can use it in DeFi. So in the traditional financial system, they have this separation. And they'll say, 'Okay, well here you can have your checking account, right? And that's for payments, but you don't earn anything on that. And then over here is your savings account or your money market fund, and that we'll pay you some yield for that, but you can't spend it. You can't use your money market fund to pay for coffee or something.' So in this new financial system, we're trying to update the financial system. We're saying why do we force the customer to move their money between these two buckets? Why can't you just have one pool of money where if I want to spend it, I can spend it and if I want to earn some yield, I can earn a fair rate. So that's kind of the goal with stablecoins.
In a way, the reason banks do that is they can use your money to lend and monetize the money they have. Right.
Exactly. Yeah. They basically want to have the deposits in your checking account where they don't have to pay you anything.
Mhm. So in my view, you know, historically they've intentionally created this friction so that they get a larger net interest margin spread is what it would be called in the banking world. But so where's the spread for you guys for Circle and Coinbase? If you're going to give out all the treasury yield while you take the underlying risk of a crazy spike in interest rate, where is the spread to me good for this equation?
Yeah. So we keep it's about 10% of the economics of the it depends how much you know money people have and people could negotiate different rates at different providers. Maybe the market will compress even more over time. I don't know. But currently today it's about 90% of the economics at least on Coinbase are given to the user. So we are keeping you know the 10%.
Is that enough? If you were to say America has as much debt does it have as it does and a lot of countries across the world are paring down their exposure to American treasury because 4% is not commensurate to that level of debt and in a certain way the American government has indicated that they would like to see their currency depreciate to be more competitive from an export and manufacturing lens. Is 10% of the economics on 4%. I'm guessing that's like 40 bps or 50 bps. Is that enough to cover the risk of an interest rate spike?
Yeah. Well, a couple points. One is we're not getting exposure on the interest rate spike. Um we don't have liability there. I mean, so if I think before you were kind of saying the interest rate you're earning on short-term US treasuries may not cover the inflation risk and things like that, the change in interest rate. Yeah. But that's not something that would affect us like in terms of our bottom line. So we're just whatever the interest you know the short-term bond rate is, we would pay 90% of that to the customer. Um and would you also pass on the mark-to-market of interest rate changes to the customer? the mark-to-market interest rate changes. What do you mean?
Like say the treasury moves from 4% to 5% or 4.5% to 5.5%.
Yeah, we would adjust it. Yeah.
Yeah. But I think the broader answer to your question is, you know, is that enough? Right.
And how do you cover calendar risk? Say you have different maturities of treasury. How do you cover the calendar spread of different treasuries losing different amount of money? You would just pass on all of that to the customer whenever it changes.
Yeah, I think there's you know, we're not a stablecoin issuer, but I think the ones like Circle and then they hold different maturities like some of it is probably some percentage of it is 24 hours, you know, overnight, some of it is one month, some of I think the max they can do under the Genius Act is 90 days or 93 days. So the, you know, in the worst case scenario, if everybody wanted to withdraw it all at once, there's a lot of liquidity for short-term US treasuries, but in the worst, even if that went away, the worst thing you would do is just everyone would get their money over 90 days. That's what the US Congress kind of landed on as a reasonable low-risk backing. And by the way, if you compare it, you know, banks do fractional reserves. So they've lent out most of the money and that's partly why they're so heavily regulated. They're doing fractional reserves. So a stablecoin issuer is 100% reserve. Um the only risk they're taking is at most a 93-day US Treasury, which most people would consider that to be, you know, the risk-free rate, so to speak, right? Yeah. But I think your broader question was sort of like is, you know, is that enough? And my comment on that is that I think the cost structure to run a great fintech company has just come down over many decades, right? Um the classic, you know, bank model where you have these giant buildings and skyscrapers and you have branches on every corner. Um and you have armies of tens of thousands of people doing compliance. You know, I like Coinbase, I think we're just a much more efficient company. We can pass on those benefits to the customer, right? So, we don't have branches. Uh we don't have skyscrapers in major cities around the world. We have some offices. Um you know, and we're able to use things like AI and automation to make a lot of these compliance processes just much more efficient and more accurate, higher quality. So, we're trying to just build the next generation of financial service business that can provide better financial services to people. Crypto is an important, you know, piece of that, but it comes from all kinds of things, you know, policy work and good customer service and everything. I mean, you know how hard it is to build a great financial services company, right? So, that's what we see is we think that crypto is a piece of that puzzle. We can help update the financial system, just make it faster, cheaper, more global, permissionless access for everyone.
Yeah. I tried for a little while a couple of years ago to figure out if there is a business to be built around repatriation of money back into India. Uh remittances are quite high. Yeah. Uh I think the amount of money that goes back to India is about 150 billion a year.
Yeah. I think I read it's the highest remittance market in the world, right?
Yeah. Yeah. The problem is there were no offramps back then in India for a stablecoin per se and the government very rightly so is disincentivized to provide an offramp for a stablecoin that is backed by the American dollar in a way by virtue of what happened when the US sanctioned Russia and the swift I mean you don't want I don't see where the incentive lies for the Indian government that runs a really tight fiscal policy by virtue of you know the oil shock and everything else that has happened in the recent past to allow for an ecosystem like that to foster because once you provide an offramp you don't know if people start transacting in it you can't really monitor USDC in that way. Yeah. So I don't know if that business opportunity is there. Have you guys considered Coinbase? I know you guys came into India at some point a few years ago and you're probably coming back.
Yeah. Well, yeah. So on the stablecoin point yeah I mean I think every country has the right to have sovereignty over their own money and you know I know India is very that's very top of mind for them. So every country in the world like these major countries of the world they're all creating digital versions of their own fiat currency right so that a lot of stablecoins today are dollar denominated but there's euro stablecoins and yen but none of them are working well I think that's you're right like the US has actually been forward-leaning on that and I would certainly advocate of India having a digital rupee that in a stablecoin format that has clear legislation backing it that that's what really caused it to take off in the US. Um, because without that, you're right, like people are going to be tempted to have dollar-backed stablecoins. Um, and I think India should be forward-looking on that just as they've been with UPI and all those things that they've kind of the envy of the world in terms of digitization in every other category. So, they might as well have a digital rupee. Um, and you're correct. You know, Coinbase actually we did try to launch back a few years ago and we had trouble accessing the UPI system, but we've got that fixed now. So we're actually planning to relaunch in India on Monday and I believe we're now the first international player in India that has a local license and access to the local payment rails and you know we registered with the FIU and so we've got a local entity local license and yeah I'm excited to have Coinbase live again in India.
Can I ask you like a far extrapolated question? Yeah, we have a need to get more dollars into the country in exchange for rupees. What kind of product or ecosystem under what you're building can help us foster that? Like I had this stupid idea at some point and I spoke about it somewhere that Indian households have a lot of gold. Yeah. Like insane amounts. This is all we've been buying from you know like if I can remember my grandparents and great-grandparents it might have been a gram of gold but people have been buying gold in all of our history. Yeah. I was thinking of a coin where there is a clearing house in say every town and every district. Uh people have say 10 20 30 different pieces of jewelry that they can't use at one point. They can only wear one thing at a point. So you take what you own, go to this clearing depository custody place. Place your jewelry when you're not using it. And in return for that, you get a coin backed by gold that you can monetize by lending, investing, pledging, and doing other things with it. Do you think something like that could work?
Yeah, I mean I think in the same way that rupees and dollars can be tokenized, you can also tokenize gold. You can tokenize stocks, you can tokenize treasuries, bonds. So anything can get tokenized and what generally happens is that you see a more liquid market for that underlying asset and better distribution globally and real-time settlement. Like it's pretty difficult to take a bar of gold and transport it across the world or to pay for a cup of coffee with it because you'd have to chip off a little flake and measure it or something.
But you don't have to transfer it. Say if I'm in India and I created a gold coin and Brian in LA wants to trade with me, I'll call up a vault here and settle the equivalent value of gold as the gold there without actually transferring the commodity.
Yeah, that's what I mean. Yeah, like when gold was backed by the dollar was backed by gold, actual physical gold did not move around. People just settled it.
Right, so I think that would absolutely happen, yeah. In that case, there actually are some people I think who've done that. They have tokenized gold reserves on chain.
And I would say by the way, Bitcoin is like a digital version of gold. You know, it's actually created, it's very much inspired by gold and the gold standard. And countries all over the world have that sort of affinity and cultural history with gold. And so the scarcity of it and the decentralized nature of gold, like there's no one country who controls it, right? The supply is finite, so that's what gives people a lot of trust around it. And then, you know, it's quite durable. You know, it doesn't go bad. Like maybe people might trade bags of rice or something but it could go bad. Like the gold doesn't go bad, right? So these are some of the properties of money, right? And Bitcoin is, I think it takes all the best properties of gold and it is even better on a couple of dimensions, like the portability, right? You can transfer Bitcoin instantly and the divisibility of it, you can very easily divide it down to eight decimal places. So in many ways, I think the creators of Bitcoin, you know, Satoshi Nakamoto, whoever that is, they were inspired by the gold standard and tried to make a new gold standard actually.
Can I lean on professor Brian from founder Brian for a while and go to first principles. What was Bitcoin? I read the white paper.
It kind of was a protest around the banking crisis of 2008, right, when it came out.
Well, that was mentioned. Yeah. In the first Bitcoin block, this chancellor on the brink of bailout was the quote that was kind of enshrined in the first Bitcoin block. So, that certainly spoke to the motivation of the people or person who created Bitcoin.
Is a very simplistic way to define Bitcoin when it began at least, a paper. It was trying to solve one core problem. How do people send money over the internet without needing a bank, government or company in the middle?
That's right. Yeah. Peer-to-peer cash was what was described in the abstract. And yeah, they were trying to eliminate intermediaries.
And why? Because the Fed was printing excessively and there was unlimited supply of dollars in the system and they were inflating or deflating the currency without you having a say over it.
Yeah. Well, so again I'm speculating having not spoken to Satoshi Nakamoto but just having read the paper and seeing some of the early internet forum discussions, I think yeah it was all of these things. So it was to try to be a hedge against inflation and saying that people deserve sound money that it holds its value and can't be eroded by inflation. I think they were trying to reduce the cost of transactions. These intermediaries sometimes take high fees or introduce delays. And then I think there was really like a freedom argument underpinning it which was that economic freedom is important for anybody to be able to live their life and start a business. And you know sometimes we talk about other freedom, you know, freedom of speech or to congregate. And if you can take away someone's economic rights, you can take away all their rights really because if you don't have enough money to have transportation or food or housing, you can't really express your other rights. And so economic freedom is this important thing that they were trying to guarantee with Bitcoin and said anybody in the world as long as they have an internet connection and a smartphone can have access to sound money and they can hold their wealth in a way that it can't be taken from them and hopefully begin to participate in the global economy in a more open way. So those were the principles that Bitcoin was founded on at least in my view and I think they're just as important today.
Can I ask you another first principles question?
Yeah. Can you explain blockchain? What is a blockchain?
Yeah. So, a blockchain is a distributed ledger. So, typically at an intermediary like a bank or something in the prior system, you'd have one company or person keeping an account of, you know, I'm going to debit one rupee from Brian's account and give it to Nikkhil. So, I minus one and plus one. Somebody has to record that as a single transaction to make sure that nobody double spent the money. Now, what a blockchain is, it's a computer science breakthrough which allows a distributed set of computers to keep a ledger and come to consensus about who has how much at any given time. And that was a computer science breakthrough that really hadn't been solved before. And so it allows these peer-to-peer transactions to happen now without any intermediaries. And this distributed set of computers, kind of like the internet, could now come to consensus about who owns what. And so sometimes people call Bitcoin and blockchain, they call it the internet of value, right? Because the internet was a breakthrough in terms of democratizing publishing of information and blockchains were democratized movement of value.
Another way to like when I'm trying to think of it because I don't understand it truly.
Is I use Google a lot like Google Drive.
Mhm. It's a Google Drive sheet, a Google Drive Excel sheet of a sort where everybody has access to that drive page and when a transaction happens, we can all see it at the same time.
Yeah. So, I'll get into a little bit of the computer science under it actually. Imagine many of your listeners are very technical. So, and I actually would encourage anybody to go read the Bitcoin white paper. It's a little bit hard to understand the first time, but I think it's worth trying to read. And it's one of the most important documents, you know, written in financial history. Right, so okay, so the way it works is if you have a set of these computers on the network, anybody can generate a transaction and broadcast it and they each kind of relay it to each other so they're kind of gossiping, all the computers, and saying all right what transactions have you seen and they're relaying that so everybody has seen everything. But that doesn't mean those transactions are confirmed yet. So to confirm a transaction, because somebody might have said I have one rupee, I'm going to give one to you Nikkhil and one to somebody else. So I might have submitted two transactions and tried to double spend, right? Okay. So now all the nodes are aware of all the different transactions and some of the nodes are miners, Bitcoin miners, right? In this case we're talking about Bitcoin, but there's other blockchains. And the miners, what they do is they package up a set of recent transactions and they eliminate any duplicates like somebody trying to double spend. And what they do is they do some work on the set of transactions. This is called mining and I can explain how it works but basically it's almost like searching for a rare number in mathematics that would make this block coherent. In this case it's using a hashing function and you're looking for a certain number of zeros at the beginning of the hashing function. But the simple way to think of it is to say any computer can package up the transactions and you have to do a lot of computational power to find one of these rare numbers. Now if you find one which is hard to find, you can broadcast that solution to the rest of the network and it's very cheap for every other node to say oh that's a real solution, I verified it. So it relies on this asymmetry of like difficult to find, easy to verify.
And if the first person to announce one of those, that becomes the next block in the chain. And each block has a pointer to the prior block. So that would be what creates the chain. And so you have this, that's what they call proof of work. It's like basically the longest chain is the official record of the ledger. And it has a lot of computational power embedded in it because it took a lot of work to make this long chain. Sometimes there's a fork in the chain and whichever one is the longest wins and the other one dies off. And so it relies on at least as long as 50% or more of the actors on the network are behaving in a good way, it works. And you know if you have a bad actor who tries to submit some invalid thing, they will get outpaced by the rest of the network. So that was the computer science breakthrough really.
And when you do this proof of work and put a block on the chain,
You get a reward which is...
Yeah. So if you discover one of those new blocks, that's how new Bitcoin are created. And so you would initially you would get 50 new Bitcoin by mining one of those blocks. Now it gets cut in half every four years or so. And so the amount of Bitcoin being released every 10 minutes is sort of decreasing asymptotically.
That's because there is a finite number, 21 million.
Yeah. I remember a time when people made a business out of just mining bitcoins. Does that still work?
Yeah, there's lots of Bitcoin miners around the world. I mean, it's a business. We don't do that business, but you know, you have to be very good at getting inexpensive energy to run the data center and then using custom hardware, like custom chips that are optimized for mining Bitcoin.
If I were to start a business around, because I go back to like people watching this want to start a business. If I were to start a business in mining today,
by virtue of increased energy cost recently, what kind of IRR might I make? Say hardware being equal.
Yeah. Well, it depends. A lot of the successful Bitcoin mines are adjacent to power plants where there's certain times of day where they may have just excess capacity that would not get monetized. So, you could almost think of the Bitcoin mine as like a floor on the price of electricity. So, if it ever dips low enough, then all of that energy can be banked in the Bitcoin that gets mined, if you will. So it actually allows sometimes, it's a real benefit to people who are trying to underwrite the creation of new power plants because they can say all right I know that there's a floor on the price of energy and it helps them with their modeling. I should mention though because sometimes people have concerns about how much energy Bitcoin uses and I know you're focused on climate you mentioned, right? And Ethereum and other blockchains use a new system called proof of stake which is actually 99.9% more energy efficient and I could describe that algorithm too if you want but it's...
Just before we move on to proof of stake and proof of history, if Bitcoin was initially built to transfer value from one person to another, it's not necessarily the most efficient at that if we call it digital gold today, right?
Yeah, that's a great point. Actually, I would say that you're right. The Bitcoin white paper describes it as peer-to-peer cash. And money has multiple purposes. One purpose of money would be store of value. Another one would be a medium of exchange, which is more like peer-to-peer cash. You're right. I think it's fair to say at this point that Bitcoin has succeeded as a store of value and I don't think it has become a medium of exchange. There's people who have tried to make that happen with the Lightning Network was an optimization layer on top of Bitcoin, but it never really took off. It turns out that when you have a deflationary asset like Bitcoin that people think it'll go up in value over time, I mean it's volatile. That's one issue for a medium of exchange, but the other one is people think it's going to be worth more in the future, so they don't really want to spend it right now. So, we've actually seen massive growth of stablecoins running on blockchains, fiat-backed stablecoins as the medium of exchange, and Bitcoin has remained the store of value as digital gold. So, the way I think of it is we're almost like creating this new financial system, and it's not a perfect match to the prior one, but it rhymes, right? Like in the prior system, we had gold. Here we have Bitcoin. In the prior system we had, I don't know, Visa and Swift and here we have stablecoin payments happening on chain. So yeah, and then lending is being recreated and insurance and capital formation with stocks. It's like everything is being recreated on chain.
I used to watch these debates. I don't remember how many years ago, but Michael Saylor, MicroStrategy, I think he put a lot of money in bitcoins and he would argue gold versus bitcoin overall market cap what will happen tomorrow. Do you agree with him for a public company to put, he somehow converted a public company into a fund which gives you exposure in a more tax-efficient way into the upside of bitcoins.
Right. Well, okay. So, he did something really brilliant, which is, you know, I think from a financial engineering point of view, it was brilliant, which is that a lot of different pools of capital in the world, they're able to buy public company stocks, but they were not able to buy Bitcoin. You might be aware that recently there've been Bitcoin ETFs as well, which have become very popular. I think they were like the fastest growing ETFs of the last few years. But Michael Saylor recognized that a lot of funds could just very easily buy a public company stock if they could not buy an ETF or Bitcoin directly. So, he happened to make a public company that was essentially 100% exposure to Bitcoin and that created a lot of demand for that. Then he's using leverage in creative ways and things that I'm not entirely familiar with. Yeah, I mean I think we just need to make it easier for people to get access to digital assets and there'll be various opportunities like that along the way.
Do you want to move on to proof of work or proof of stake?
Yeah, sure. If you want. Yeah. I'd love to like understand the math behind it in a manner like an idiot.
Okay. Okay. I'll do my best to explain the proof of stake algorithm and then I'm sure somebody on the internet will find a detail I got wrong. But that's okay.
Yeah. So okay. So I think when they were creating proof of stake they said okay proof of work, the Bitcoin system, it's very robust. It hasn't failed, right? And many people have tried to attack it in various ways. It never failed. So that's a great property but it does use lots of energy. Okay. So how might we create a system that's equally robust but doesn't use so much energy. So in this case the nodes start off the same way. They're all relaying the different transactions to each other, gossiping and sending everybody's proposals. And again, some of them decide they want to try to propose the next block. Okay, so in this case what they do is they package up the transactions that they believe are valid and no duplicates and everything and then when they propose the block they actually put up some money as well. This is the stake and it's almost like a bond or something like that in corporate finance. So you put up this money and you say I believe this is the next block and I'm willing to put some money behind it and if other people agree...
and it becomes the next block and by the way the other people can vote on it kind of with their own money.
Let's ask a stupid question here. Say I stake 35 ETH or whatever to stake while I confirm the particular transaction. What if the value of the transaction is equivalent to 50,000 ETH? The value of the transaction but the stake, you're saying the stake is a lower amount.
Is this, yeah yeah yeah exactly. Well so everybody, this again it relies on at least 50% of the participants of the network, hopefully much more, but at least 50% are good actors. They're not going to allow you to propose a block that double spends money or does something bad.
So do I have to stake relative to something each time I stake a certain amount of ETH to confirm a transaction?
I don't believe the stake is relative to the amount of money being moved. I think it's literally just how sure you are of that one, how much you want to put up. I have to go back and look at that as a detail actually. But basically what happens is so you put your own money behind it. Other people can vote with their money and say, okay, I believe that'll be the next block and I've checked it. I think it's legitimate. And basically the people who are right, they get their stake back plus interest and the people who are wrong lose their stake. So you forfeit it, right? So, it's almost like an investment that happens, a round of investment that happens every multiple times a second, you know, I believe. And people are voting with their money and they're saying, which one do I think is going to be the next one? And then if you're right, you get your money back with interest and if you're wrong, you lose it. And so that allowed the network to reach consensus without having to use so much computational power.
Okay, please continue. Proof of stake. Then why do people even, if proof of stake brought down the cost of transaction because energy was no longer required and people were staking by a magnitude of 99%. Why did that not really become a currency and people start trading on it? Also maybe you can tell us about smart contracts a little bit.
Yeah well the Ethereum network which uses proof of stake and there are others as well. I mean I think a lot of people are trading it. I think it's been quite successful. You know if there's some other part of your question I'm missing on that though just let me know. Are you asking, okay so I think yeah I think the proof of stake networks have been quite successful. And then you asked about smart contracts. So this is another thing that Ethereum really innovated on was they said okay we don't want just to be able to move money from A to B. What if we could have programmable money? Okay so what does that mean? It means that we could put some sort of, you know, in the traditional world you'd use a lawyer to write up a contract and you know maybe it would say okay I'm Brian I'm going to put a million rupees into Nikkhil's company and in exchange Nikkhil's going to give me some shares of his stock and some voting rights and you know we could have a lawyer write up that on a piece of paper and we could both sign it and I give you the money and I get the shares. In the Ethereum world, they said, what if we could put the law or the contract into software and on the blockchain itself? And so they actually have a programming language in the blockchain itself. And so we can make a smart contract where you know, you publish it on the blockchain. Anybody in the world can see it and you say, hey, I'm raising money for my company. And if I, Brian, send money into that smart contract, I get the shares back. And so I don't have to trust that lawyer who wrote it or some court in some country. Like anybody in the whole world can now participate in that smart contract. And there's been very fascinating examples that have happened where people who have never even met each other. You know they've never met and they'll post a smart contract and like 20,000 people around the world within 5 minutes will participate in that contract and they'll somehow collaborate and do something in the world together, you know, go buy art or whatever they're doing. And so that's a very fascinating thing. Now, smart contracts are very new and there's been lots of bugs in the software where sometimes it's very difficult, there's not a lot of people who have experience writing these. So sometimes people will write one of these and there'll be a flaw found and people get money stolen. So it's a very kind of new area I would say.
Can you give me a simple example that I could use it for? Like if I need a smart contract?
Yeah. Well the, I'd say like the most classic examples that people have done so far is that like they want to raise a venture fund and so they have LPs and then so they'll publish to the world and say here's what we plan to invest in and everybody can wire money and then we can collectively decide to go buy things. That would be an example. Another example would be, right now we're making an on-chain payment protocol. And in the world of payments, you need to think about how to handle things like refunds and you can authorize the card, but settle the funds later when the item ships, right? Or maybe you need to think about how to do subscription payments. So, these are all things we can actually write into a smart contract. And so those are examples of the kind of things. It's actually what would be called a Turing complete language in the smart contract meaning you can actually write any software. It's like a totally complete, just like C++ or JavaScript you can write anything in there. But usually people are trying to make a very specific thing. They're not trying to like make a whole computer in there. Yeah.
So what are these being used for now? Say Bitcoin has become a store of value. What is being built on top of proof of stake? Like what's the real world use case today?
Yeah. Well, another example would be borrowing and lending. So, you know, in many places in the world, it's kind of difficult for people to get access to credit. And in these, people call these like DeFi protocols, like decentralized finance. These are all using smart contracts. So in this world you can have a number of people who have money willing to lend and many who want to borrow and you can have an interest rate that gets generated. You know you'd mentioned earlier people on Coinbase can actually choose to lend their money out and earn these yields and things, that's using a DeFi protocol underneath. So some of these have reached maturity where, and it's by the way it's global, right? So anybody in the world can participate in this.
How does it work? Like again a stupid question but when I lend money to somebody, I charge a rate of interest based on the likelihood of him paying me back. So when I lend to somebody on proof of stake, a DeFi protocol, how do I know if I lend to Brian I should charge 10% versus I lend to him I should charge 15?
Yeah. So there's different pools in these DeFi. You can choose, you know, it's kind of like in the traditional financial world, you'd have like a credit rating, these agencies and things like that. So you can look at different pools and say, okay, this one, the underlying pool is only being lent on Bitcoin with a 50% loan to value or different characteristics like that. Other pools might have more risk tolerance and pay a higher yield.
So they have to pledge something in order to borrow.
Yeah, there would be collateral.
There's no unsecured lending per se.
Not that I'm aware of. There might be something I'm not aware of, but I think the ones that we're doing today are all collateralized.
And if we can move on to Solana and proof of history. Can you explain that as well?
Yeah. Well, Solana is another blockchain that was built for more like high throughput, speed and low cost. And they've been very successful as well. So, yeah, I'd say that, you know, there was for a while there there was actually like dozens of these chains that were coming out and it's really kind of consolidated down where now I'd say for store value, it's Bitcoin and for the utility layer or like let's say the medium of exchange with all the programmability, it's basically Ethereum and Solana. And even on Ethereum, the most popular layer 2 solution is called Base, which is something we incubated. So, a lot of the activity is actually, it's really like Base and Solana I think are the two competing to be the utility layer chains. So we don't need too many, we don't need like dozens of blockchains. We need like a couple that work really well and then there can be millions of different applications on top of those.
So stablecoins fit in where on this? They sit on which chain?
Well, there are stablecoins running on most chains at this point, but a lot of it's running on Base and Solana.
Yeah. And I'm sorry I'm asking you like questions about the fundamentals of this and not Coinbase per se, but I feel like for people who want to start, if I'm a young kid wanting to start a business in this, it helps to hear about the fundamentals of what they're building on top of.
Yeah, that's great. Yeah. I mean we can talk about anything you want. Anything in the world.
Yeah. What would you like to speak about?
Well, okay. How do we create more entrepreneurs in the world? Let's talk about that because you know, I think part of it starts with education, right? India has amazing universities. There's probably lots more that could be done there. You know, I think AI will help a lot with education, by the way. That's an important area. And then there's like the financial markets, right? How do you get your first seed check because, you know, for me that was a big deal. Like I had a job and I had an idea and I was kind of nights and weekends working on my idea, but I wasn't going to quit my job unless somebody gave me a seed check, you know, because I had to pay rent. I had to buy food and things. So in Silicon Valley, you know, I went to Y Combinator and they had a startup incubator there and Paul Graham was the first person, he gave me a 150k check and that allowed me, gave me the confidence maybe someone believes in me, that's what caused me to quit my job and go try to really work on it and then good mentorship and everything that came along with that. We've tried to do a little bit of this in India actually, the Base chain, we have this program called Base Grants and we've given like $10,000 grants to a bunch of different developers in India and a lot of them we actually fly them out to Silicon Valley and they do a session where they get mentorship and pitch and everything and then they go back to India and there's been I think maybe like 4,000 Base builders now in India which has been really great. But yeah like what do you think we could, what's the limiting factor? I know Elon likes to talk about the limiting factor. So what's the limiting factor on more entrepreneurs in India do you think?
Risk capital is one definitely. There isn't very much available. I tried to copy Y Combinator and start our own version in India.
It's called Foundry. We give about 20-25 kids half a million dollars each every like 6 months and they live in a house and try to build consumer companies together.
But barring risk capital, culturally in India, unlike the west, people have not yet learned to appreciate failure.
I think that needs to change. I don't know how somebody changes mindset enough where somebody who tried something and failed is cooler than somebody who never tried. That distinction has to happen, right?
Yeah. What happens culturally? Is it like it's looked down upon, it's a failure, it's a shame or something like that?
Yeah. See the thing is a lot of this comes in societies with abundance where it's okay to fail once because you can try again and again.
It's harder there. It's changing and things are moving in the right direction. I know the prime minister has launched this new fund for deep tech startups where a bunch of venture guys are getting money to then in turn put money into deep tech startups and I think he's doing a great job with it but the scale of India is massive, you know like America has 300 something million people, India has 1,500 million people.
To affect change even in culture at that scale is a significantly harder proposition.
Yeah. But things like this...
I mean the popularity of your podcast tells me something that people in India look up to entrepreneurs. I mean a lot of the best CEOs in Silicon Valley, you know, came from India and I think even in India there's actually a couple, like we invested in CoinSwitch and CoinDCX, amazing entrepreneurs, you know I think my sense is they're kind of like heroes, you know, to many people there, rightfully so. There's another thing I like about, I noticed about Indian culture which is that I feel like engineering is really celebrated as well. You know in the US like in our government it's often run by lawyers, you know, and there's actually, I can't remember the name of the film, it was an Indian film I saw but it was basically about three engineers and like they all...
Yeah, Three Idiots, like that was...
Right, I don't think that film would have been made in America because people don't celebrate engineers like that. I don't know, do you think that's true?
Yeah. See, for a long time because of what you said earlier, the Indian origin people who came here and did very well.
Like when I was growing up, the ultimate upside for me at some point of time, not today, but like 25 years ago, would have been clearing some kind of an exam, maybe going to IIT and then coming to the US for college and then joining Intel or IBM back in the day, right? Because getting paid in dollars back then felt like something which was unattainable back home in India.
I think that's changed to a certain extent. A lot of people have done well. A lot of first-gen people who started with nothing. People like us and many others like that got lucky in the boom cycle in India which has, you know, strangely lasted over 20-25 years now. We didn't really get hit in the subprime, we didn't get hit in the subprime meltdown. The regulators did a good job of keeping leverage at check and the Indian markets have I think compounded at about 11%, I might be wrong but over the last 20-25 years so a lot of people have done well. But we're working off a smaller base and the pace of doing well has to go up exponentially, which for which maybe a lot has to change.
Are you, what is your connection to India outside of this? Is there anything there?
No, I mean I've visited before and we're excited. You know, we have an office in Bangalore.
Yeah, I'm from there by the way.
Okay. Okay. Yeah. And yeah, I mean I've spent some time in Delhi speaking with the government and in Mumbai and everything and just found them to be very engaged on crypto topics. And you know actually by most reports India believe it or not is the number one crypto country in the world by a number of people who use it.
I read that but I don't know if I believe it.
Well there's more trading volume in the US.
Yeah. But yeah those are, I think Chainalysis published that report.
Maybe you're not seeing it day-to-day. I don't know but...
I don't see it. Like when I meet people, I mean for unfortunately this is true of the recent past. A lot of the people I met who were into crypto, like really into crypto but also really levered on crypto. And I think in the last correction for the first time in a long time they've become very disenfranchised in a way.
Yeah because I think it was sudden like I remember all these guys telling me you need to create a 100 bitcoin, a thousand, whatever number of bitcoin wallet when it was at about 110, 115,000 which is not a long time ago.
But the last correction seems to have hit people hard.
Yeah. Yeah. Yeah. Well, crypto is down the last few quarters. For sure. One thing we've been doing is just diversifying the set of asset classes that are in, you know, we're building the everything exchange. So, you can trade stocks and commodities and FX and everything, right? And you know, index funds. So, we see every asset class being tokenized and brought into on-chain to, you know, 24/7 and global liquidity and all this kind of thing, which is much more efficient. But the other thing I would say is crypto is not just about trading. I mean it started that way. In the first 10 years were mostly about trading, but now we're seeing stablecoins just grow like crazy and it's totally uncorrelated with, so even if the trading markets are down, stablecoins are growing like 3 or 4x per year. So I think that you know that'll balance things out and people need to pay for things all the time. Trading, in trading something's always going to be up, something's...
Yeah. When I think of stable coins, I'm still not able to wrap my head around like Satoshi's white paper started around protest against not being under government control in a way, not being subject to excessive printing by governments. Now it seems to have turned around 180° where you know after the Genius Act everything is backed by US treasuries and there is KYC at every point. Blockchain is not really transparent because everybody can see if I'm a central bank and I'm adding allocation to a particular thing on the blockchain it's visible to others. There's no anonymity per se. It seems to have become the opposite of what it began as. Don't you think?
I've heard that argument before and I don't really see it. It's true that you know it started off as like very fringe and kind of renegade and you know anarchists and everything and it is becoming more mainstream. So like now that we have regulatory clarity in some major markets like in Europe and America and in Singapore and places, we are seeing more institutional money flow in. We're seeing the Bitcoin ETFs. So, these in some ways it's becoming more credible. But if you're a central bank moving money in Bitcoin, people might be able to see the ledger is open, but you can't always see who the person is, right?
But with KYC, you can't don't you know which?
Well, law enforcement. So if you're using a centralized exchange that does KYC like Coinbase in India and in America and other countries, we work with law enforcement. If law enforcement sends us a subpoena, we're required to turn over that information. But the average person won't be able to see it like it is for a bank transfer. The average person can't see it.
But the protest was very much against law enforcement and...
Well, I don't think Bitcoin was ever against law enforcement. I think they were against high inflation eroding people's wealth and...
Caused by the government.
Yeah. Yeah. Well, yeah. Overprinting in some cases or intermediaries taking high fees and slowing down innovation or you know banks being bailed out, you know these kinds of things. So it's true the centralized exchanges which are sort of the link between the fiat world, the traditional financial world and the new financial world, they are largely regulated today and they're doing KYC and all these things. Once people have crypto, I think they can start to participate in the new economy and that's where they're using DeFi or doing payments on you know cross-border and saving money on remittance fees and things like that. It still takes a while to update the whole financial system. You know there's still people in America who pay their rent with paper checks and these kinds of things. In many ways like India's ahead with you know mobile payments and UPI. So our goal as a company is really to update the financial system, make it faster, cheaper, more global, more fair, just provide better financial services. But you're right it's like there's a lot of pieces to get moving in that direction.
