Crypto Megan Podcast | Charles Hoskinson: The $10 Trillion Bitcoin DeFi Revolution

It's a multi-trillion dollar opportunity. Bitcoin at this juncture, especially with the bull market coming, has almost unlimited liquidity. So it's the ecosystem that really needs this. What we do is we look at it like a stack. Bitcoin has a brain. So it actually can talk to other systems. If you want to live in a world where every transaction is always secured by Bitcoin, there's a path to do that. If you want to live in a world where it's a little faster and cheaper, you have still very good security, but it's not completely secured by Bitcoin. There's a way to do that as well. But you don't pick that. You let them decide.

Thank you for having me on, Megan. This is a lovely setup. We have Trump Tower in the background and I think 100,000 people at the conference.

The one you missed?

Yeah, that sounds great. It was standing room only.

It was a very exciting time. So for this is like the not the beginning, but it's been the midpoint of a very long conversation about how does Bitcoin achieve programmability? And it's been like the holy grail for a lot of us in the cryptocurrency space. You kind of grew up with Bitcoin because back in the day, we all tried our hand at somehow making it better. So they're like a lot of the Ethereum people. We started with projects like color coins and master coin. I was on the bit share side, but the basic idea was could you create overly protocols or companion protocols where you would have some degree of programmability so you can issue assets. You can have smart contracts, but nobody quite had the courage on the Bitcoin side for a very long time to try to actually pull some ability into Bitcoin for programmability until the Taproot revolution went live right around 2021. And then it took a little while for people to figure out a development model for it. And then we started seeing this concept of bit VMS, you know, Bitcoin virtual machines. And the first generation was kind of a toy. But now we're in Bit VM 2, Bit VMX. And now we're starting to get to a point where Bitcoin has a brain. So it actually can talk to other systems, you can actually program enough to have interoperability.

Massive.

Well, one part philosophical. Once you have achieved the original goals of the project, then what you don't want to do is start going off in mission creep direction. So if your goals create digital gold and a decentralized store of value, the minute you add programmability, you exponentially increase the complexity and difficulty of the system. And then suddenly everything's up for grabs, like changing the consensus algorithm or the block time or the governance structure. And there was no clear way without a founder around or some centralized organizing authority to be able to manage that because it's so complicated. And there's so much movement with it. Second, there were security and technological reasons. So when you look at the security side of these things, the last time they actually tried to change Bitcoin script to make it more expressive, it led to an inflation bug that for a period of time created billions of fake Bitcoin. So it was very bad time, I believe, around 2010. So they tried it once before and it scared the hell out of everybody. And, you know, a corollary to that is the big block debate in 2015, where there was a conversation of "Should we start changing the protocol to accommodate more use and utility, or should we keep most of these things to live outside of the ecosystem, the layer two space or the side chain space?" And the small blockers one. So it stayed in the in the side chain side of the space. And the third thing is, it's a bit philosophical, a cultural, I'd say, you know, the Bitcoin maximalism has always been very resistant to DeFi in general. And it took them a little while to start getting comfortable with it. And I think a lot of that it was just they didn't see a way to do that with values and safety. I often like to say there are three rules in Bitcoin, you can never violate them if you want to be successful in the Bitcoin space. So rule number one is there is only Bitcoin. So in other words, that you have to use the security of the Bitcoin network. And you can't really talk about other systems, you just talk about Bitcoin. Rule number two, you pay transaction fees in Bitcoin, you can't have another token and rule number three, you get your yield back or your returns back in Bitcoin. So unless and until you're able to present that experience, you're kind of dead in the water, philosophically, culturally and technologically. And it's only been recently where Bitcoin DeFi has evolved to that point where we now can actually entertain those three rules.

Yeah, it's a multi trillion dollar opportunity. Actually, it's four times larger than the market cap of Solana and Ethereum combined. So it just gives people a sense of how gargantuan it will be. And Bitcoin at this juncture, especially with the bull market coming has almost unlimited liquidity. So it's it's the ecosystem that really needs this. And what we do is we look at it like a stack. And so the first layer of the stack is the infrastructure. So that's how does Bitcoin go about talking to other systems? And what trade off profile are you prepared to accept for that to happen? So the settlement time, how long does it take to go in and out of the system? Is it minutes? Is it hours? Is it days? The security? So are you solely relying on the security of the Bitcoin network and proof of work? Or is it some form of hybrid model where you're using other networks or some exotic thing like exotic crypto, like multi party computation or trusted hardware. And the cost? And so every one of these transactions, are they a dollar or they ten dollars or they $100 of value? Because it's not really practical if every time you want to do this, it's $5,000 a transaction. So what's happened is that we have seen a dramatic improvement in all three of those categories. We've seen a reduction in the latency. We've seen an improvement in the security model. And we've seen actually a mass reduction in the transaction fees. And we're getting to that point where the trade off profile is reaching a point where consumers are going to come in. Second layer of the stack is the user interface. And so the wallets have to be ridiculously simple. And you always have to remember those three rules. There is only Bitcoin. You pay fees in Bitcoin and you get yield in Bitcoin. So what we did is we tried to pull an apple with the iPod with the wheel. We said, you know what, we're going to do that toggle. So a little toggle switch. You have your Bitcoin and you have a switch and you push the switch and it says DeFi mode. And there you go. Your Bitcoin DeFi mode. And no mention of another network, no mention of other things. And we found a way so that all your transactions, you can pay your fees in Bitcoin and all your returns you can get back in Bitcoin. And then the third part is, well, what can you do with it? Where does the yield come from? Can you lend it? Can you stake it? Can you buy things with it? Can you trade it on DEXs? So you need a DeFi ecosystem for this. That's multi chain. And all three of these will grow in parallel. So the event that we had was really an event about bringing an ecosystem of partners together and they live in all different parts of the stack. So some of the people that came up from Argentina, like Fairgate, for example, and others like Bitcoin OS and the Sundial team, these people were really worried about the infrastructure side. And how do we make that better, faster, cheaper than the wallet side? We had the Lace Wallet demo, the toggle switch, and kind of show that as an archetype that can then be ported to other larger wallets like Bitcoin.com or blockchain.com, which have 110 million users. And then when you look at the ecosystem side, a lot of Cardano dApps were present. But then we also talked about the development experience. You know, what we like is that all those magical languages that we came up with and development experience, we came up for Cardano, which is a UTXO system, which is the closest you can get to Bitcoin. Can we use those tools on Bitcoin itself? So is there a path where a Cardano programming language can be used to write Bitcoin script? Is there a path where Cardano off-chain hosts like Maestro or Blockfoss can also be used to build a dApp that's on Bitcoin? And so we showcased that as well, and we kind of demoed a lot of the different things. So it's the middle part of the conversation. It's not concluded, but certainly a lot of great progress has been made. And some of the things have already been running on Bitcoin mainnet. So we had demonstrated transaction between Bitcoin mainnet and Cardano mainnet where an ordinal was able to move back and forth, which is a huge leap forward. It really proves not only the concept, but it proves it at scale.

Well, what we did is we just took a lot of the really, really good ideas that came from the Bitcoin space and we just extended and improved them. And so, for example, the UTXO model, we created extended UTXO. So we had a full programmability to it, but it has the same accounting model that Bitcoin has under the hood. So if you're a Bitcoin developer, you'll instantly get how Cardano manages it. Just has all the things you always wish that Bitcoin had.

And then when you look at consensus, we modeled our consensus after proof of work, but we found a proof of stake variant with it. And so the first step is that we wrote a paper back in 2015 called GKL 15. It's one of the most cited papers in the cryptocurrency space where we prove Bitcoin is secure. And then that gave us a security model to prove that Cardano was secure through our proof of stake model. But it has a very similar notion of probabilistic finality that proof of work has. So again, if you're a Bitcoin developer, it's not surprising what you'd see. The same for color coins. That was the asset issuing standard for Bitcoin, but it was an overlay protocol. We brought that into the native protocol itself. So if you're familiar with the color coins concept, Cardano native assets would be very familiar with you. So it's just kind of like we just kept doing the innovation and we didn't allow it to stop or have to wait five years or 10 years or 15 years for it to work its way into the ledger. We're able to do it much faster. And we also have a very strong commitment to decentralization. You know, we measured it through the Edinburgh Decentralization Index, but Cardano is among the most decentralized cryptocurrencies in the world and many of the eight different areas from governance to development to, to consensus. So if you like a decentralized ecosystem with no central point of failure, then, you know, Cardano is for you. And so there's a great overlap between these two ecosystems. And it is the deflationary asset. Just like Bitcoin is a deflationary asset. So it's very similar to-- slightly different emissions schedule. But, you know, inflation is monotonically decreasing. So once Bitcoin starts seeing all that, they say, OK, the principles align, the technology aligns. And it does in many ways feel like a spiritual successor or continuation of what they're looking for. But what's nice is that Bitcoin and Cardano kind of make each other better. Bitcoin is a very secure out of layer. It's a giant value store, a lot of liquidity. Cardano is an amazing computation layer. And so when you pull these two pieces together and you have a little toggle to be able to go back and forth, we can allow a seamless experience. The other thing is Cardano has a built in feature called Babel fees. And what this allows you to do is pay transaction fees in different currencies. So you don't have to pay your fee in ADA. You can pay it in Bitcoin. And it allows you to get back to those three rules. I say, hey, you got to pay in Bitcoin and get Bitcoin back.

Yeah, you never talk about another altcoin. So there's only one guy. It's Satoshi.

Yeah. Well, the holders are different. So when you look at it, the US government's going to hold two hundred and twelve thousand Bitcoin instead of selling it. So with the crypto reserve, you know, the US government's one of the largest Bitcoin holders in the world. And it's the same when you look at BlackRock or Grayscale or you look at MicroStrategy. So when you have institutions who want to maximize return and yield for their buyers and their investors, you really change the paradigm a little bit from the old school maximalism. The other thing is putting the user into the driver's seat of the tradeoff profile is a very powerful thing. If you want to live in a world where every transaction is always secured by Bitcoin, there's a path to do that. If you want to live in a world where it's a little faster and cheaper, and you have still very good security, but it's not completely secured by Bitcoin, there's a way to do that as well. But you don't pick that for the user. You let them decide. And that's really the cool part about that layer, too. If you design that UX layer the right way, then it's just basically not only a toggle, but an advanced setting. And you either pick the default setting or you can pick your own customization of it. And once you start looking at it that way, then maximalists fall into a configuration setting as opposed to a philosophy. They just basically pick the most draconian and expensive way. But then other people will say, "Actually, I like the other way. I think that's a better way of going about it." But the other paradigm is that it's a silly thing to say that gold is only valuable if it sticks around the gold mine. The Bitcoin network is a gold mine. It's the most expensive and successful gold mine, I think, of all time. And it produces gold, which is Bitcoin. And Bitcoin is scarce and it's valuable and it's expensive to make. Well, you can move gold around. And so Bitcoin can go on vacation. It can go to Coinbase. It can go to Binance. It can go to other networks as wrapped assets. And you can do things with that. And then after you're done with your vacation, you click the toggle and you go back home.

Exactly right. And tourism is great. When you look under the hood, if you pay fees and Bitcoin under the hood, there's ADA being transacted there. But the user doesn't see it or feel it. So just like when a tourist goes to France and they have their credit card and they pay in dollars, they don't feel that they're paying in euros. They see the dollars. And there's just some magic infrastructure that just works under the hood. And in this case, it's fully decentralized. And that's how it should be. And then you start looking, OK, well, if you want to do these things, you can either do it on a regulated financial exchange that's centralized and it runs nine to five Monday through Friday. Or you can do it on a decentralized network that runs 24 hours a day, seven days a week with no custodial risk. Which one would you prefer? You know, if you're a maximalist, you're like, well, you kind of created this whole Bitcoin thing to get away from the former. So maybe the latter is pretty appealing. Let me let me have my gold go on vacation.

Well, it's more of an iterative approach. And so it already works on mainnet. It's just how do you make it better, faster, cheaper? And how do we continue to be relentless about the user experience? So on our side, layer two, so the, the wallet layer of it, we already have Bitcoin support and integration for the lace wallet, which is desktop right now and it's coming mobile soon. And that toggle switch will come the second half of the year. And that's the beginning of the conversation. There's a lot of infrastructure improvements that have to be made to get it into an appropriate latency and cost window. And that's what we're working on with Fairgate, the BitVMX platform. And I think that that iterative improvement will be very fast now that there's probably more than a dozen people working full time on that. And the big thing is, well, we'd like it to have something you can do when you click that toggle switch. So you have to build an ecosystem. So we've already become workshops. We've already been building coalitions and talking to a lot of not only Cardano DeFi, but other ecosystems as well and saying, you know, how do we bring these people together and figure out great ways to get yield? Because, you know, here's the thing. If you're a Bitcoiner, let's say you got in very early like Bitcoin at ten dollars or something like that. Well, you probably don't want to sell your Bitcoin at one hundred twenty thousand dollars and have a gargantuan capital gains effect. So if your hypothesis is that Bitcoin is just going to continue to get more valuable. Well, right now, your investment strategy is to buy and hold. Well, what if you could lend it or, you know, do something else with it?

Yeah. And then if you can do that, then the nice thing is that you don't have a tax event from that, but you can get a yield from it and it'll continue to appreciate value. And that's what people do all the time in traditional finance. So we think the lending markets are going to be massive for Bitcoin because of the supply dynamics that that they have. So that ecosystem side is mostly partner driven. And we have some really cool products on the real finance, the RealFi side. So real world assets that we want to bring in. And we have a lot of really cool products through partners that we think can come in. And then on the Bitcoin, actually, one thing that's been my white whale for a long time, Dan Larimer and I actually created the first algorithmic stable coin in the cryptocurrency space. Wow. It was called BitShares and it was called Bit USD was the particular instrument. So I've been wanting to do an algorithmic stable coin properly for a really long time. And we have a wonderful experiment we conducted called Jed. I'd love to do a Bitcoin backed algorithmic stable coin.

Yeah. And that's sound money. It's almost like the Bretton Woods agreement where, you know, you have gold back money and you have Bitcoin backed money and--

And then you can bring that onto the Lightning Network. And so you can create it somewhere else and then bring it to Lightning. And then and then you can use it for a payment system of an actual real money. So that's the kind of stuff that gets me very excited because I-- asset backed stable coins that are centralized. It's kind of like mommy and daddy got divorced and it was a bad divorce. And because, you know, it was crypto broke up from the legacy banking system. We wanted nothing to do with legacy banks. But you still have to apparently give the banks to kids on the weekend. And it's not a pleasant experience. And so you have these banks coming back into crypto and they're trying to apply that normal banking stuff, the KYC and the AML and the ability to freeze and seize assets. And now it's even worse because they can track everything. So when you use circle, every single thing you buy is tracked and somebody knows about it and they can see it. And at any time they can take your money. That's a really bad situation. That's that's not what we signed up for in the cryptocurrency space. But yet, 71 percent of all transactions settling on Ethereum, it's 120 million per month, are under that circumstance. That's a bad situation to be in. So I'd much rather have an algorithmic stable coin that has principles built inside of it, hopefully one that's a little bit more private, and all the custody is handled on the blockchain side. And there's no financial intermediary that's responsible for that. I think only Bitcoin is at the scale where such a thing could be constructed and transacted with the equivalent volume of Tether or Circle.

Yeah.

Yeah, there has to be a reconciliation where you go from DeFi and TradFi to just Fi. And it's very much the same when the Internet came out and started killing all the papers. You know, a lot of papers resisted it. But the ones that embraced it, they survived and thrived and they became new media. And the same thing has to happen here. I would just hope that we don't abandon the principles upon which the industry was founded. And so that's one of the reasons I created Cardano is I wanted to have a safe harbor for all these things. In some cases, it's made us a little bit of an island. But we try as hard as we can not to be an island, maybe be like a peninsula, although Florida is pretty weird. So we'll figure it out.

Repeal bit license. That's a nonstarter. I mean, I'll never forget that Super Nintendo lost. He calls all of us and says, 'What should we do with regulation?' And we spent hours and hours talking to him. And then the minute that we talked and throws it all in the trash can creates bit license and makes it nearly impossible to run a cryptocurrency business in New York. So, you know, I appreciate the mayor going out of his way and bringing people together, but they're not serious unless they get serious, and get serious means you have to fire the bad actors and repeal the bad legislation. So I didn't take the Trump administration seriously until they actually got rid of Gary Gensler, and they did. And they part in Ross Albrecht and they appointed a crypto czar and they told Tim Scott and all these other guys, 'We're passing crypto legislation.' And they say, 'When do you want to do it Mr. President?' He said, 'I want to do it by August', you know, and they're serious. And so now that there's urgency, it's very clear that there's good goodwill here with the government to actually make meaningful change. New York has a long reputation and history of pandering and they say a lot of stuff. And I don't take any of it seriously until they actually demonstrate that they're good actors and there's good faith there. So if there's actually an attempt in earnest to repeal bit license, then I'll say, OK, these guys are actually open for business. But also, I don't think a lot of people relish the idea of a 14 percent tax rate and all the other issues that people have when they domicile in New York.

Right. And I think that terrifies the hell out of New York because they've gotten away for a long time being this financial capital and then taking advantage of that and being quite egregious on many, many, many things.

I used to live in New York. I was in Jamaica, Queens. And so it's not personal. It's just I hold cities accountable for the things they do, both good and bad. And it's very clear when a city or community really wants to change and bring people in. Like when Dubai said and Abu Dhabi said, we want cryptocurrency businesses. This was not a vacuous thing. They went ahead and they opened arms and had Vara and the ADGM and they invited all of us to go and talk about regulation. And I commented on it. You know what they did? They implemented it the way it was commented. It was the same for the state of Wyoming when we said, hey, we're going to do crypto laws. They passed more than 30 pro crypto laws in the state of Wyoming, everything from brand new full reserve banks to asset classification to change of money service business laws to bring people in. And they went from one of the least friendly crypto states to the most friendly crypto state in the entire United States. And so we rewarded them by relocating our entire headquarters into Wyoming and Kraken moved there, and a lot of other people moved there and it created hundreds of jobs for the state. So you got to you got to look at both ways and be fair.

Yeah. I mean, you have to have a philosophical core. I got started because of Ron Paul, you know, I was very angry about the Iraq War. I was very angry about the direction of the United States. And I felt like we were all being lied to. Then Ron Paul comes out of nowhere and he said, stop being angry about it and do something about it. And he had a very simple campaign. He said, 'There are three things I care about. I want a humble foreign policy, trade with everybody and don't blow people up. I want sound money. So your money should be worth something. And I want to follow the Constitution. Just choose liberty.' And we had an equal amount of Democrats as we did Republicans. There was a lot of young people that were very fatigued with the political system. And I kept that to heart and I internalized that. And so I said, you know what? If I ever do a business or I ever do a protocol, everything I do has to in some way incentivize that. So if people trade with each other, they tend not to kill each other. So if you have protocols and start unifying people, then what ends up happening is that wars go away. And we're starting to see that with Israel trading with people in the Middle East until the recent events. The Abraham Accords were actually creating a political reality that I never thought I'd see in my life. I was in Dubai and I saw Sheikh Mohammed walk by at the World Governance Forum and he walked by an Israeli flag in Dubai. I mean, this is a country Israelis couldn't even go to 10 years ago. And Abraham, of course, really opened that up. And of course, there's been some regressions now, but it shows that when you start trading and you start creating economic ties, people stop having an incentive for conflict. And then when you talk about choose liberty, you can't trust people. People always let you down. No matter how virtuous or honorable a person is, we have weak moments for flawed people. Only God is perfect. People are never going to be. So what you do with blockchain is it creates a social artificial physics. You know, engineering works because laws of physics are immutable. Gravity applies the same way to a North Korean engineer as it does a South Korean, as it does a Russian, as it does an American. So because of that, we're able to build rockets and planes and all these amazing things and have knowledge transfer. Typically, social systems don't work that way. You have regressions in progress and systems are very different from culture to culture. But with blockchain, you can get the benefits of a rigorous laws of physics. But then you get all the benefits of a dynamic, flexible, growing social system. So when I say, for example, this is the way your privacy works or this is the way your vote works or this is the way your money works, I know that no one for political conveniences is going to come in and screw me on that. It is what it is. Satoshi can't come in and change Bitcoin. I can't come in and change Cardano. Cardano is the way it is. And if it is going to change, it's a process to do that. It's a long and slow and deliberate one and consent based. And I feel well represented with these types of things. So that is philosophically compatible. And then with respect to sound money, I think my own dad, my dad's a doctor. He worked his very hard his whole life before he retired and he saved up all this money. And now what he saved is worth half as much as when he retired because of inflation. It's theft on a global scale. The modern ponzzonomics of the fiat monetary system. And they say, well, that's the good for society because increases the velocity of money, this Keynesian garbage. And it's really at the end of the hood saying this gives politicians excuse not to raise taxes and to spend as much as they want. So instead of doing the right thing and having a balanced budget, what they do is they rob us silently and in a politically convenient way with inflation. So not having sound money means that all things being equal, you get poorer every year. And lo and behold, we all wonder why things are getting so bad. You know, when I was a kid, remember The Simpsons? It came out in 1988. And this is a story, as as all the fantastical things Homer has ever done. The most unrealistic is an uneducated blue collar worker can have a stay at home wife and three kids and still have two cars in a three bedroom, two bath home. They messed that one up. Yeah, I know, right? In 1988, that was the standard. Nobody batted an eye. Now, when you look at it, you're like, that's fantasy, that can never happen. Why? Because inflation, it destroyed the money. So we created the cryptocurrency space to do these things, to solve these problems. And I'm a zealot and absolutely uncompromising. And I will never work on something if I feel that the direction it's going is to regress back to the old system. There's just no point. You know, we're here just to go make some banker 15 percent more money so we can shave off two, three percent for ourselves and buy a beautiful home in Malibu? That's not a revolution. A revolution is to enrich the masses and bring up people and push power to the edges.

Yeah, it's been a bit confusing. You know, what the media wants to do is every single thing about Trump is always negative. You know, I talked all the time. I have friends in the New York Times and other places and we're very cordial and we have good relationship. But the Trump word ever comes up. I know automatically it's a negative story. You know, there's just no if ands and buts about it. It's always negative all the time. Ninety eight percent negative coverage. And it's gone from such derangement where not only is it negative, it's like, 'He's turbo Hitler!' You know, 'Even Hitler wasn't this bad!' You know, it's just so bad. And and so that derangement prevents an honest dialogue from happening. Trump is running the government like a startup, which means 70 percent of the time it's working OK. And 30 percent of the time it's just fucking crazy and it's not working so well. So, you know, you'll get like really cool and interesting things like pardoning, pardoning Ross Alberich or, you know, good crypto momentum. But then you get some weird stuff like the signal gate and other things like that. And you're like, OK, we kind of get it. So the crypto czar is no different. You know, when we talked to the transition team before we took office, they said, 'Hey, you know, there's going to be a czar, but we're not exactly sure. You know, things are chaotic. So wait until it gets elected. And then after that, you know, there's higher priorities like Secretary of State, Secretary of Defense, Treasury.' It's like, yeah, kind of sense. Yeah, it's like kind of have to run the country. Right? But crypto will come in December, January. So we were kind of waiting to have that conversation to see what they wanted to do and how they wanted to do it. And they went in a strange direction where they picked a czar and they merged it with A.I. And I think that was an Elon Musk decision back when he had as much influence as he did. And then said, 'Well, what do you want to do with this?' They said, 'Well, there's going to be like an adviser group.' That's why they pick Bo Hines. And originally, it's supposed to be like the chairman or executive director of a group of advisers that come in. So for a while we were trying to engage and figure that out. And then they decided to get rid of the adviser group and just have, you know, working groups. So eventually said, you know, what we're going to do is we're just going to go talk to Trump. And so ironically, a mutual friend of ours, it was Cordell. So Snoop Dogg's son said, 'Hey, you know, why don't you go down to Mar-a-Lago? There's this dinner. You can go talk to him then.' So we we did. And as he went down to-- To Trump, you went down to Mar-a-Lago to talk to Trump. We did. Well, I'll tell you-- Per advice from Snoop Dogg's son. I know-- Just to break this down. This is a crazy world. Right? So as we're flying down, they call us up and they're like, 'Yeah, that dinner, it's off. It's off.' And I'm like, OK, the dinner is off. 'No, you've just been disinvited.' And I was like, excuse me? So so then we were just sitting in Mar-a-Lago trying to figure this out. And then the next day after the dinner, they announced the Aida Reserve. And then we were thinking, oh, OK, maybe that had something to do with it. So then there was this White House meeting on Friday. And and then, you know, we were originally going to go. But then they said, 'No, you're not going.' And we're like, OK. And then I ended up moderating a panel with Don Jr. and Eric. And it's like all over the place. And that's OK. You know, the thing is that, like, people take this seriously, they take offense. They say, oh, this is an indication that nobody knows what they're doing. No, it's just an indication that they're running like a startup. There's many tribes and factions and people are doing all kinds of crazy things. And at the end of the day, we will get good crypto legislation. It won't be perfect, but we will get good legislation by August. The, the House and Senate, they're doing a phenomenal job. You know, Tim Scott's leadership has been just magnificent with this. Remember, he has to go every day and talk to Elizabeth Warren. Whoa, yeah, that's not an easy job. He's getting it done, because he's he's, he runs it like a boss. He's a great guy. And it's the same when you look at French Hill in the, in the House. And and he's the the counterpart there. And there's a lot of discipline in how to be reasonable and measured in the legislative process, because the crypto people, they're coming in. They're saying, like, we want yield bearing stablecoins and a reserve with all this stuff. And we want this thing and this thing and this thing. And then politics in Washington, they're like, OK, dude, dude, dude, we're lucky if we can agree like on what dog to get. You know, it's like it's like, do you like a Labrador? No, hell no. I like German Shepherds. You're a monster. You know, so. So the reality of expectations versus the reality of what the House and Senate can deliver in a legislative package and how not to create something that becomes quite problematic, I think they have been very measured with that. So what the White House has been very good at doing has been interfacing with the cryptocurrency space and bringing a lot of voices in. And some are contradictory and dissonant. And because we're a very competitive space, some people are very aggressive about things. But that hasn't flooded into the legislative process and contaminated. And it's quite the opposite. They've been very disciplined. So as I say, it's like a startup and we'll get the best of both worlds. We'll get the agility and speed that you need. But then we'll also get the prudence required to be able to not disrupt or damage the market, because it's important that we don't regress. We're not talking about a billion dollar asset. We're talking about a three trillion dollar ecosystem on a road to become ten trillion dollars by 2030. So you don't want to take something that's the scale of gold, globally speaking, a 5000 year old asset traded, and go and destroy that because people wanted to move too quickly. And the other thing is, there's a desire to make this bipartisan. And it's been challenging. Some things were self-inflicted. Other things were just unnecessary partisan politics that shouldn't happen. But it is what it is. And, but at the end of the day, the Democrats do realize that one of the contributing factors to them losing the election in 2024 was bad crypto policy. You know, when they got together with their little pity party in December and they said, 'God, why did we lose it?' They said, well, we should have gone on Joe Rogan and maybe we shouldn't have pissed off-- Yeah, what a missed opportunity there. Maybe we should have taken Robert Kennedy's phone call and not pissed off Elon Musk. But then most importantly, like, maybe we shouldn't have alienated 55 million Americans who are mostly young and mostly liberal and convinced them if they vote for Democrats, that it's going to destroy their financial returns, which is what Gary Gensler did. So a lot of the more moderate and younger Democrats like the Roakhanas of the world, they said, holy shit, we need to change course and policy. So I think they realize the political calculus and they understand that they have to find a path to be bipartisan. And it's just one of those muscles that it's almost like you've been in a coma for a while, you haven't used your legs and, you know, at some point you'll learn how to walk again. And Washington's starting to learn and they're like-- It's a monumental task. I know, we got to learn how to be like bipartisan again. We don't know how to do that. How do we do that? We're so polarized right now. This is one of those issues where I eventually feel that they'll converge to it. And like a startup, it won't be pretty, but it'll, it'll get done and it'll get done in record time for this thing. Because you're not talking about a small thing. You're talking about a transformation of policy over a gold class asset that is going to literally rewire the entire dynamics of the banking system, how every security is traded, how property is traded and ultimately probably eat every economic, political and social system. That's not small. That's gargantuan. And it's not even easy to figure out which regulators should regulate it, much less the SEC or the CFTC or something like that. So the fact that they're able to have a legitimate conversation about stable coins and market structure and these things, it's quite impressive and it's a quite good leadership.

Yeah. And we had a lot of really interesting things like the Digital Millennium Copyright Act and SOPA and PIPA that came later. And then there's an NSF AUP that that enabled e-commerce and then in the early 90s. So there were a lot of really smart things that happened. And actually some of the things that really helped the Internet were the lawsuits with Bernstein, where they basically make cryptography free because cryptography for a long time was classified as weapons system under the Wollstoneur agreement. Section five, category two. So it's a munition, according to the International Arms Treaty. So you have to actually have ITAR registration in these things. And Bernstein said, 'Fuck you guys.' And he took it up the Supreme Court, he won. And then it opened up crypto because you couldn't you can't have the Internet without cryptography because you can't have e-commerce without cryptography. And there was actually a proposal where every single Web certificate had to have a backdoor in it that went to the DOJ so

they could decrypt any communication stream, which was as dystopian as you could imagine. But we won those fights in the 90s. And that's why it's important to fight. There's a lot of bad policy being suggested right now. And people have to develop a backbone and say, we just won't tolerate it. We have to live in a free society. And crypto is equally important. And I don't think that people are going to back down. What's nice about this industry is not only is it big, it created a lot of billionaires who now can fight on principle. And they demonstrated that in 2024, enormous amount of money flowed into Republican coffers for being pro crypto. And now those are the fruits of the labors. And if people realize that this can move the needle three, four percent in an election that's close, that means you'll never win an election again if you take the wrong side of history, which is a very powerful statement.

That's a very powerful statement. So I encourage young people to say as frustrating as the process can be, we've won these battles before in the 90s and we can win them again. And ultimately, I think we can leverage these victories to undo a lot of the really bad policy moving forward. And in the process, we build our government. You know, the biggest problem in America right now is division and the division is caused by a lack of objective reality and faith in our institutions. You know, if you go to people, the difference between a Democrat and Republican is not trust, it's lack of trust in which institutions. And so you talk to Republicans, it's usually the deep state and they say, 'Oh, well, you know, we don't trust the CIA and the FBI and we don't trust this thing and this thing. But we like the military, you know?' You go to talk to Democrats, they distrust a different group of people. But everybody's very distrustful, right?

And even it depends on who's elected. So, you know, if Biden is president, then the NIH and CDC are beyond reproach and they're bastions of credibility and an authoritarian authority about medical things. But now that Robert Kennedy is running the show and the Republicans are in charge when they issue a statement about Covid or vaccines, it's all fake science and it's not real. It's like all those scientists just disappeared and the whole institutions have been captured and destroyed. So it's it's it you can't run a government and you can't run a society where your entire notion of truth is based upon whether the person you like is president or not. You just can't because we have to move forward. We have to make laws. We have to enforce things. So what blockchain does is it starts taking a lot of these things out of human control and it moves them into more algorithmic governance. They say, well, you might not like the president, but you'll agree that he was legitimately elected. And because the voting system was blockchain based, or you might not like the banking system, but you'll agree that you're not going to be preyed upon by the banking system.

Yeah, it's an objective reality. And and the example I like to give to people is how powerful trust is in society and its absence, how damaging it can be. Is imagine you're a rancher and you say, you know, I have a lot of cattle and I want to buy my next door neighbor part of his land so I can graze on it. So if you trust your neighbor, grew up with your neighbor, you could drink whiskey with them every Saturday. You go over and say, you know, Arnold, I'd like to buy a few hundred acres over here and here's what I want to buy it for. Oh, absolutely. You shake on it. And then what you do is you start papering the deal and let's say a month later, you discover there's some issue. So then you go over to his house again and say, hey, we have this issue here. How are we going to solve it? You talk about it, you shake hands and the real estate transaction closes and you're done. You get the land. It's a decent price. Everybody's happy. You're drinking together. Now, say you hate each other. You have no relationship at all. Your lawyer contacts. Their lawyer says, I want to buy this land. You're immediately under an adversarial negotiation. That month comes up and you can't reach a conclusion. Then suddenly litigation breaks out and you have two, three year bloody lawsuit over something. And then at the end of the day, maybe you win and you get the land. Now, the net outcome is the same. You know, you get the land. The difference between the two is the legal fees, the pain, the heartache. So the delta between these two things is the relationship. It's the trust. So if you run a society on zero trust or low trust, absence of trust, you end up creating a situation where every single thing is just unnecessarily friction filled. You see it in human relationships when you've gotten a divorce or something. Something as simple as picking up the kids at school or, you know, something as simple as scheduling a parent teacher meeting or whatever the hell it is just becomes a nightmare.

And you know, it's like first you call them and they're super fucking passive aggressive and, you know, and then all this other stuff comes up and when they show up, they treat you like shit and you treat them like shit and all this other stuff.

It's so unnecessary because like, let's say you like each other. You're like, hey, Jane, you know, I want to do this thing with the kids. OK, yeah, that sounds fun.

Yeah, it's just it's the same thing. The kids get to go and do their thing. But the difference is just how emotionally draining and taxing it can be. And a lot of people get, it's the same if you have a toxic boss. It's the same if in any relationship where there's some damage in that, it just fatigues you. So imagine if your government is this way, where every interaction with the government, you have no trust and respect and you're just angry all the time. Then any interaction is a negative interaction.

There's no way for it to be a positive interaction.

The tukin dara.

So oftentimes it involves alcohol in YouTube. That's where most of my bread ideas come from late at night. So years ago, I was watching YouTube videos and I came across this guy went did a bullet ant ritual.

And bullet ants are like these giant ants and they have these big stingers and they inject you with nerve toxins and these neural toxins are super painful. It feels like getting shot or set on fire. It's really horrible.

Oh, it's so bad. So so anyway, they have this ritual where you go down to the Amazon, find this tribe called the Satari Mawe, and then you convince them to basically let you collect the ants, put them in gloves and put your hands in the gloves and let them bite you a bunch of times. So I said, you know what, that sounds like a lot of fun. So I kind of look for an opening of my schedule.

It did. It did. You know, I'd rather do that than some of these things at conferences. I'll tell you that. But anyway, so I I went down to the Amazon. I trained for a whole year to do it. And it was a big mind game. And we had to go find the tribe. So, you know, sailed up the Amazon River and eventually found them. And then we had to convince them to let us do it. And so then they do everything their power to kind of like psych you out and make you quit. So the first step is you have to go find the ants. And so you go out in the jungle and you have to find this very particular tree and tap it with the machete and then these giant ants come out. They're just they're just huge. And they kind of crawl out of the branches and they give you a little stick and you have to use the stick to collect them. Of course, they sting you while you're collecting them and you put them in a tube. And that was the first step. And then after you fill the tube with a ton of ants and you have all your stung hands, then you go to stun the ants. And so the next step is you have to find these very specific leaves and some are poisonous and some are a sedative. And they all look exactly the same. And, you know, your cell phone was of no help. So then you have to find the right leaves and hope you didn't pick the poison ones and then grind them up and then put them inside the bowl of water. And then you pour all the ants in the tube and hope they don't bite you into the water and then they go to sleep and sedative for them. Then you take the sleeping ants and you have these gloves and you got to weave them into the gloves one by one meticulously and hope they don't wake up and sting you while you're doing it, which of course they do, because, why not. And then and then they just mess with you more. They're like, it's lunchtime. Let's go get some lunch. And so then you go and you're eating lunch and you're like, I don't want to fucking eat. I like if I get bit by these things, am I going to throw up and shit myself? I mean, what am I what am I going to do here? I don't know what's going on. So so then we go and eat this fish, which is really good fish. But then you say maybe it has parasites in it. I don't know how it was prepared, but oh, well, you know, when in Rome. So you eat the fish and then they say it's meditation time. So go out and just like sit around for an hour.

Yeah. So just sit for an hour and think about how bad of a decision this is for you. So then when you're done, they take you down to your underwear and then you go down. They paint you with this black paint and then you put your arms on it and they put the gloves on for eight minutes. And it feels like a sewing machine with a hot needle going into your hands just like this, you know, and it's just biting you and biting and they make you dance for all those eight minutes and this weird ritual where you dance in a circle around and while you're getting stung and then you start getting used to it. You're like, yeah, I can do this. This is good. This is good. It's it sucks, but it's like it's like a good suck. It's a doable suck.

And then it's a neural toxin. So here's the problem with neural toxin. It starts kicking in. So after they take the gloves off, you feel pretty good. You're like, all right.

And then then you just get this deep throb. It's like a waow, waow. And every time it does, it feels like someone set your hands on fire. It just, all this sucks. And it starts like rabies working its way up your arm, you know, and it's just the fire just keeps going and going. And then it gets into your chest and into your face and to the top of your head, the tip of your dick, all the way down to your feet. You just feel like you're on fire and just it doesn't quit. It just every hour it builds up. So like the first hour you're like, okay, this has got to stop now, right? And then the next hour you're like, oh man, this is this is going to stop. Right? And then the third hour is like, it's getting worse still.

Six hours it took to reach the peak. And then it broke for me and still the whole day kind of slowly declined. But that just sucked. Um--

But then what was so crazy, you wake up the next day and just feel great. And I did it with all these special forces guys and, and we're like, man, that was awesome. And we're like, yeah, it was great. And what was really cool is that we just, I entered the jungle where everything was trying to kill me. You know, it was just crazy, you know, like we were, you know, canoeing down and they had what we called the Jesus spiders. There's these giant tarantulas and they walk on water. And I'm just like, we're just canoeing the boat. We just look over these giant spiders walking across where like, oh, come on. Like he has risen, you know, and then you have like, trees with snakes in them. And the guide's like, 'Oh yeah, you don't want to, you don't want to sail under them because they'll drop on you.' And it was like, oh, okay. The trees will drop snakes on me. That's good to know. Um, and scorpions everywhere and all these things.

But then after the bullet ant ritual, you know, we started becoming like one with the jungle and--

Yeah. We slept in the jungle. We did like night spear fishing, which was really awesome. And, uh, you could start developing like all the sense and, uh, you start developing all the hearing and. You get a really good sense of like how the jungle operates. And by the end of all of it, I really started enjoying being in the Amazon after nine days being in there. And you know, also it's like a pharmacy, like all, every plant has some medicinal property, like, this is for diarrhea. This causes diarrhea. You know, this one cures burns. This one causes burns. And so you go with these guides and they just know everything. So we had this one guy, uh, that we went with and he's like, let me show you some really cool. And he goes and grabs this leaf. It looks almost like a banana leaf. He cuts it and he makes a rope out of it. He puts it around his feet. Then he just climbed up a palm tree. Just went all the way up 60 feet.

I got a video of it. It's the craziest fucking thing. It's just, he just climbs up the tree, comes on down and he's like, what the hell you just grab a leaf and you just climb up this tree--

and do the whole thing.

No, no, no. That was days. That was days after the hallucinations. Um, but, uh, yeah, they even have pink dolphins down there.

Yeah. There's pink dolphins in the Amazon.

I think I got my pink dolphin picture.

Oh yeah. Here we go. This is one of the pink dolphins that's there in the Amazon. Isn't that crazy?

Yeah. They're really cool. They come jump out at you.

Yeah. Send the picaroo fish down there. And, but the Caymans were the coolest cause you're canoeing and they just kind of follow you with the canoe. I may have a Cayman picture too. The Amazon.

75 countries.

Here's one of the Jesus spiders.

Yeah. That thing is just huge, right?

And they can just run on the water.

Yeah. They jump and fly.

They go to the trees and all that other stuff.

And here's some of the scorpions. They're scorpions everywhere.

The scorpions are a lot more dangerous than the spiders, but boy, yeah. I just loved every bit of it. And you know, we, after the bullet ants, we became one with the spiders and they show you how degenerate these military guys are. Cause all the special forces guys over there, they're like, we find the tarantulas and he's trying to teach them how to smoke.

Yeah.

Green Berets are the best, man.

Well, the most valuable thing in life as a rite of passage for people is to be at the front of the dragon cave and go in. You know, it's the Hero's Journey, and there's something terrifying and scary and they build it up and you hear the roars and you smell the sulfur and then you just have to have that courage to go in. Cause everything in life that requires greatness, everything in life that, that where you really want to do something, you're going to get tested and it can be a small test. It can be a hard test. You can think about a single mom with three kids and working two jobs to pay all the bills and, uh, you know, after like a 16 hour day comes home and one of the kids has broken the sink and it's just the whole kitchen is flooded. That's the same amount of courage as the Tucan Dera in a certain respect, cause you have to do that every day. You have to show up every single day. So you have to occasionally take yourself out of a comfort zone and you have to put yourself in a situation where it's terrifying. It's deeply uncomfortable. It's challenging, but you know, if you, if you just commit to it and you go in it, you'll find a way to get to the other side. And when you get to the other side, you gain some deeper appreciation. For me, it was a reconnection with nature, you know, cause I, I live this life that's so digital and it's so in the cloud. I'm always on my phone, always talking, uh, through these different channels. And, uh, I've ignored this beautiful natural world that was out there. So to be able to take nine days and see it for what it is and be part of that was tremendously beneficial for me. You know, the other side of it is I've developed this hyper tolerance for pain. You know, uh-- I just, I can stand and

stand on nail boards now and do all this other stuff and probably break my leg and, you know, just get out of it. You know, so--

Yeah. You know, I won't be like Leonin Rogozov, that surgeon who operated on himself in Antarctica, but I think I can comfortably get through a lot of stuff. And I know that I can survive pretty much any challenge if people put it there. And you need that as an entrepreneur, you know, you're going to face so much uncertainty, you're going to face so much adversity and difficulty. It was hard the last four years under Biden where the US government was literally unified to kill our industry. They sued every major exchange. They shut down people's bank accounts, including one of mine. And they just were just vicious and so unnecessarily vicious and Kafka-esque, they say, come in and register. And then Coinbase tries to do it and they sue them for it. I mean, horrendous.

So you have to learn how to survive and all those things. And you have to develop that resilience.

If you want to see it, uh, go to YouTube and enter in 'Charles Hoskinson bullet ants', and we made a video of the whole thing.

Yeah, absolutely. This was a lot of fun. Yeah. Thank you.