[ { "i": 0, "speaker": "Speaker 1", "text": "some point in the future, five or 10 years, there's not going to be this concept of public or private. Um, I think all investable assets will be ownership will be recorded on a blockchain at some point in the future." }, { "i": 1, "speaker": "Speaker 1", "text": "I think things will trade 24/7." }, { "i": 2, "speaker": "Speaker 2", "text": "[music] Hey everyone, welcome to the Level Up podcast presented by the Medici Network, the exclusive community for financial institutions to engage with blockchain native funds and founders. I'm your host" }, { "i": 3, "speaker": "Speaker 3", "text": "David Brerder >> and I'm your host Sean Farrell. Before we kick [music] things off, make sure to hit the subscribe button and follow us on Twitter for the latest episodes." }, { "i": 4, "speaker": "Speaker 4", "text": "[music] >> This podcast is forformational purposes only and nothing here and should be considered financial, legal, tax, or investment advice. The views expressed by our hosts and guests are their own" }, { "i": 5, "speaker": "Speaker 4", "text": "and do not reflect those of the Medici network, Funstrap Global Advisors LLC, Fality CP Management LLC, or their respective affiliates. All listeners should consult their own professional" }, { "i": 6, "speaker": "Speaker 4", "text": "advisers as to the [music] legal, tax, financial, or other matters before making any investment decision." }, { "i": 7, "speaker": "Speaker 5", "text": ">> Now, let's get into it. Our next guest has built an entire business telling people outside of blockchain why they need to be in blockchain and he's done it very successfully and I'm" }, { "i": 8, "speaker": "Speaker 5", "text": "very excited to have him here. I've been trying to get uh Barry Silbert since 2018 since our very first event and I'm very excited that one of his former employees, my partner David Grryder and" }, { "i": 9, "speaker": "Speaker 5", "text": "Sean Frell, the host of our Level Up podcast uh are here to interview him. So guys, please join us." }, { "i": 10, "speaker": "Speaker 5", "text": ">> All right. Can I start with a story?" }, { "i": 11, "speaker": "Speaker 1", "text": ">> Absolutely." }, { "i": 12, "speaker": "Speaker 1", "text": ">> So, Eric, who was just on stage, Eric, if you're still here, I'm gonna give you a shout out. So, when I first heard about Bitcoin in uh 2011, um there was nothing online. There was" }, { "i": 13, "speaker": "Speaker 1", "text": "like there was like one wired article." }, { "i": 14, "speaker": "Speaker 1", "text": "There was nothing you could read. There was no way to study up on it. And um Eric was um the second person that I ever met or talked to who had any knowledge of what the hell this Bitcoin" }, { "i": 15, "speaker": "Speaker 1", "text": "thing was. And I don't know if people got it from this fireside. Um Eric is he's a he's a pioneer. He's a philosopher. And he Bitcoin wouldn't be here wouldn't be where it is today" }, { "i": 16, "speaker": "Speaker 1", "text": "without without Eric. And I don't think and and people now know Eric for Venice and what he's doing on that front, but he he he truly is the Bitcoin OG and we all owe him a debt of gratitude for" }, { "i": 17, "speaker": "Speaker 1", "text": "getting Bitcoin to where it is today." }, { "i": 18, "speaker": "Speaker 6", "text": "So, take that. [applause] >> We got We got to give the pioneers their flowers while while we can, right?" }, { "i": 19, "speaker": "Speaker 6", "text": ">> Yes." }, { "i": 20, "speaker": "Speaker 6", "text": ">> On that, I think I think David has some flowers to give yourself." }, { "i": 21, "speaker": "Speaker 7", "text": ">> Well, look, let's uh that's a great intro actually to kicking it off. So, um, you know, you went from, you know, uh, meeting Eric, getting involved in in Bitcoin. Um, and then you went on, you" }, { "i": 22, "speaker": "Speaker 7", "text": "know, from Second Market to, you know, founding DCG and Grayscale. You know, a little personal story, you know, I'm thankful to you cuz when I first got into, uh, crypto, I think it was 2015, I" }, { "i": 23, "speaker": "Speaker 7", "text": "I bought GBTC and, um, so that was a gateway for me. Maybe, you know, >> Bitcoin was around what when you bought >> I think around 500 bucks at the time." }, { "i": 24, "speaker": "Speaker 7", "text": ">> Nice work." }, { "i": 25, "speaker": "Speaker 7", "text": ">> Yeah. So, uh, you know, I wouldn't have had that access if it wasn't for the product. Maybe, you know, talk us through, you know, the early days, you know, when you really kind of took the" }, { "i": 26, "speaker": "Speaker 7", "text": "full plunge, you know, from Second Market to building ECG and what that looked like." }, { "i": 27, "speaker": "Speaker 1", "text": ">> Yeah. So, um, yeah, so I heard about Bitcoin in 2011." }, { "i": 28, "speaker": "Speaker 1", "text": "And I think like most people, I was completely dismissive and skeptical and I said, there's no way that this thing is going to be successful. And I think that at the time the price was um maybe" }, { "i": 29, "speaker": "Speaker 1", "text": "maybe $2, a dollar or $2. Um and I was like I I I said this is this is not going to work. But I was like I thought that's such a cool idea like decentralized digital money. Um and and" }, { "i": 30, "speaker": "Speaker 1", "text": "I just kind of kept on I kept an eye on it. There was I forgot where we got the prices back then. I think it was maybe like an it was like a peer-to-peer market or something and then the price" }, { "i": 31, "speaker": "Speaker 1", "text": "went like to $10. I was like, \"Ah, damn.\" Like, I I missed it. And for about like 6 months, I just I kept on thinking about it. I became obsessive about it. And every every kind of" }, { "i": 32, "speaker": "Speaker 1", "text": "question that I I had about it, I came up with a reasonable explanation or or response or defense. And I got to I remember I distinctly remember getting to the point, and this was in early" }, { "i": 33, "speaker": "Speaker 1", "text": "2012. I was like, I think that this has the potential to be completely transformative. And if I don't if I don't have the coonus to uh to do something, I will regret it the rest of my life if it" }, { "i": 34, "speaker": "Speaker 1", "text": "actually becomes something. And so I started buying Bitcoin below 10 bucks. And um and then it went to like $2 again. I was like, I'm an idiot. And then eventually it recovered. And and this was like" }, { "i": 35, "speaker": "Speaker 1", "text": "2012. And when it went to like 50 bucks, 60 bucks, 70 bucks, I was like, okay, well, I'm an investing genius, of course. And so I said, \"But I I should really like diversify out of this.\" And" }, { "i": 36, "speaker": "Speaker 1", "text": "so I started taking the Bitcoin that I had bought and I started looking for companies that were building infrastructure within the space. And back in 2012, 2013, there were I mean it" }, { "i": 37, "speaker": "Speaker 1", "text": "was Eric's company, Bit Instant. Um there was um Brian hadn't yet formed Coinbase. Um and so there were just like a handful of companies that I was using Bitcoin to invest in. And to answer your" }, { "i": 38, "speaker": "Speaker 1", "text": "question, had I just held on to that Bitcoin and not made those investments, I would have done much much better. But it was important because that infrastructure that was built is is is" }, { "i": 39, "speaker": "Speaker 1", "text": "kind of on the shoulders on which the industry ultimately was was built. So I got to the point um in 2013 where I said, \"Okay, this thing is this is this is rocking.\" And Second Market" }, { "i": 40, "speaker": "Speaker 1", "text": "was the company I was running at the time. And I said, \"Okay, well, the the best way to bring more people into this market is to create some kind of investing vehicle.\" Because at the time" }, { "i": 41, "speaker": "Speaker 1", "text": "you could you could only buy Bitcoin from like Mount Gaus in Japan and and a few other smaller exchanges. And so that was the creation of the Bitcoin Trust, uh, GBTC. Um, and then that that turned" }, { "i": 42, "speaker": "Speaker 1", "text": "into Grayscale and then that turned into DCG. And today we have five wholly owned subsidiaries. We've invested in 400 plus companies and um we're we're kind of I think really kind of the epicenter of" }, { "i": 43, "speaker": "Speaker 1", "text": "all that's happening which is a lot of fun to be in." }, { "i": 44, "speaker": "Speaker 6", "text": ">> That's great. So uh maybe that's a good segue to talk a bit more about Grayscale. Um I think that's would be the next big chapter in the story." }, { "i": 45, "speaker": "Speaker 6", "text": "Obviously we know how you started with Bitcoin but how did you take us through you know the what you observed through the maturation of the space different assets that you viewed were suitable to" }, { "i": 46, "speaker": "Speaker 6", "text": "be held in this uh you know ETP wrapper um and just broadly how you interpret the the progress that we've seen from an asset management perspective over the past few years. Yeah. I mean, wow. I" }, { "i": 47, "speaker": "Speaker 1", "text": "mean, it, you know, in uh when we launched the Bitcoin trust, um I think the the entire market cap um of Bitcoin was oh, I mean, it was, I don't know, maybe $10 billion was like the entire" }, { "i": 48, "speaker": "Speaker 1", "text": "asset class. And you look in creating on-ramps, um all the companies that did it, you Grayscale and Coinbase and Eric's company, I mean, it it was all important to kind of make Bitcoin" }, { "i": 49, "speaker": "Speaker 1", "text": "investable. and like look the asset class, you know, had you told me, you know, then that, you know, Larry Frink would be, you know, kind of the the number one spokesperson for Bitcoin, I I" }, { "i": 50, "speaker": "Speaker 1", "text": "would have I I would have laughed and I would have said, I'm not sure that's a good thing, but but I would have laughed. And here we are today and and, you know, brokerage firms are now" }, { "i": 51, "speaker": "Speaker 1", "text": "suggesting allocations of, you know, 1 to 5% of kind of crypto or Bitcoin in your portfolio. So, the asset class is here to stay and and you know, I I you know, I don't really um as I'm saying, I" }, { "i": 52, "speaker": "Speaker 1", "text": "don't really do much talking anymore." }, { "i": 53, "speaker": "Speaker 1", "text": "Um, but I've certainly gone on the record to say I think 99.99% of crypto projects are complete dog and they're not investable and there's there's they have no reason to exist and and so but like there's been like" }, { "i": 54, "speaker": "Speaker 1", "text": "millions of tokens created. So, out of the millions of tokens that have been created, I do think that there are some really important interesting infrastructure projects. There's there's" }, { "i": 55, "speaker": "Speaker 1", "text": "things that that on which the the stable coin rails are being built, the tokenization revolution is happening." }, { "i": 56, "speaker": "Speaker 1", "text": "There are some really interesting projects at the intersection of crypto and AI. So, so if you kind of look at the asset class today here to stay, Bitcoin is digital gold is finding its" }, { "i": 57, "speaker": "Speaker 1", "text": "way into a growing number of portfolios." }, { "i": 58, "speaker": "Speaker 1", "text": "The institutional pools of capital haven't really even started allocating yet. um you know from a from a Grayscale perspective um the team has been very successful getting its products onto the" }, { "i": 59, "speaker": "Speaker 1", "text": "largest wealth platforms but they actually haven't even like flipped the switch yet. They haven't even like given permission uh for the advisers to start actually advocating for allocation. So I" }, { "i": 60, "speaker": "Speaker 1", "text": "think there's a title wave of capital that's about to flow into the asset class. But those those asset managers the or the um the wealth managers they're only looking at Bitcoin right" }, { "i": 61, "speaker": "Speaker 1", "text": "now. Some of them are thinking about Ethereum. None of them are looking at anything below Ethereum at this point." }, { "i": 62, "speaker": "Speaker 7", "text": ">> I just want to ask, you know, one risk that I hear from Tradfi people a lot is this, you know, quantum risk with Bitcoin. Um, you guys obviously hold quite a bit of Bitcoin through JBTC. Um," }, { "i": 63, "speaker": "Speaker 1", "text": "how are you guys, you know, thinking about uh that risk and just how it evolves? Well, as the uh as the chairman of Grayscale, I have the I have the fortunate position of not having to" }, { "i": 64, "speaker": "Speaker 1", "text": "worry about that type of thing, but I do know the team is very focused on um how best to secure the assets of its customers as clients. Um Gayscale is using third party custodians, the" }, { "i": 65, "speaker": "Speaker 1", "text": "Coinbases of the world. Personally, on the quantum front, um I I think the risk is completely overblown. I think it is not happening um um anytime soon. And I I like to think that the uh the" }, { "i": 66, "speaker": "Speaker 1", "text": "developers and the community within Bitcoin are going to figure out a way to um kind of um collaborate and uh it's very hard as you guys know it's very hard to push through any improvements or" }, { "i": 67, "speaker": "Speaker 1", "text": "upgrades to kind of Bitcoin. There's lots of um examples in history where there's been wars that have happened. Um but I I think that the quantum risk is overblown personally. Um, and if there" }, { "i": 68, "speaker": "Speaker 1", "text": "is going to be a group of people who are going to figure out how best to kind of um develop quantum resistance, it's certainly going to be the Bitcoin community." }, { "i": 69, "speaker": "Speaker 7", "text": ">> Now, if there's a fork, I suppose uh it's not going to be like the prior one." }, { "i": 70, "speaker": "Speaker 7", "text": "You're not going to get involved like everyone [laughter] else." }, { "i": 71, "speaker": "Speaker 1", "text": ">> We don't need to relive that." }, { "i": 72, "speaker": "Speaker 1", "text": ">> Yes. So, no, I'll stay out of uh politics." }, { "i": 73, "speaker": "Speaker 1", "text": ">> You're going to stay out of this. I will stay out of your partics." }, { "i": 74, "speaker": "Speaker 7", "text": "All right." }, { "i": 75, "speaker": "Speaker 7", "text": ">> Um maybe one other just kind of related topic on Grayscale. Um, you know, obviously you've seen a lot of regulatory changes and I think, you know, the industry has to thank you for" }, { "i": 76, "speaker": "Speaker 7", "text": "getting the ETFs through. It wasn't for the legal battle that Grayscale did." }, { "i": 77, "speaker": "Speaker 7", "text": "Might not be here today with those." }, { "i": 78, "speaker": "Speaker 7", "text": "Maybe we would with Trump, but you know, it would have been a lot." }, { "i": 79, "speaker": "Speaker 1", "text": ">> I mean, who who su I mean, who sues the SEC? Well, Grace did and we kicked their ass, which was great." }, { "i": 80, "speaker": "Speaker 7", "text": ">> Yeah. I mean, I think there is probably needs to be a lot of thankfulness in that and with the battle you did. Um, but the regulatory front has evolved now. There's a lot of companies going" }, { "i": 81, "speaker": "Speaker 7", "text": "public and I think that you know since the new administration's come in you saw a wave of companies Dats Circle others you have you know I'm not asking you to speak specifically about uh you know" }, { "i": 82, "speaker": "Speaker 7", "text": "your the filing with uh Grayscale but maybe just talk us through kind of how you see the capital markets landscape for you know public companies in the digital asset industry today. Yeah, I" }, { "i": 83, "speaker": "Speaker 1", "text": "look I think I think we're, you know, fast forward, I don't know what, 10, 15 years since I started doing seed investing in the space, and we're finally at the point where there's companies that have great business" }, { "i": 84, "speaker": "Speaker 1", "text": "models, product market fit, real, you know, kind of revenue and and uh and uh and and profits. And so, it's exciting to see um these companies that are finding their way into the public" }, { "i": 85, "speaker": "Speaker 1", "text": "market. Look, it takes too long. One of the things I'm most excited about is the potential for capital formation to evolve um thanks to things like tokenization and stable coins where you" }, { "i": 86, "speaker": "Speaker 1", "text": "can I mean right now if you if you if you are running a private company or invest in a private company it takes you 10 15 years to get liquidity um and that's just crazy whereas you know in" }, { "i": 87, "speaker": "Speaker 1", "text": "the world of crypto you can launch a project and you know access capital and have liquidity on day one so I do think that there is um while there are going to be a growing number of companies that" }, { "i": 88, "speaker": "Speaker 1", "text": "are going to find their way into the public market um in the next few years who have reached this the the kind of scale of maturity. Um I am even more hopeful that we're going to see over the" }, { "i": 89, "speaker": "Speaker 1", "text": "next five or 10 years some real well some regulatory clarity um around tok to tokenization but also some real um attempts to kind of create some type of bridge or something that that exists" }, { "i": 90, "speaker": "Speaker 1", "text": "between the private and the public um um uh status of a company. I mean, it's it's crazy that, you know, the most exciting, fastest growing, most valuable private companies in the world are not" }, { "i": 91, "speaker": "Speaker 1", "text": "going public until they're trillion dollars in value. That's terrible for US markets and terrible for investors." }, { "i": 92, "speaker": "Speaker 6", "text": ">> Do you think we just see both worlds merge >> private and public stock anymore? It's just something between." }, { "i": 93, "speaker": "Speaker 1", "text": ">> I don't think I I think at some point in the future, five or 10 years, there's not going to be this concept of public or private. Um, I think all investable assets will be ownership will be" }, { "i": 94, "speaker": "Speaker 1", "text": "recorded on a blockchain at some point in the future. I think things will trade 24/7. I think that there will be it'll be a global um it'll be a level playing field globally. I think there's going to" }, { "i": 95, "speaker": "Speaker 1", "text": "be very little friction. I think there's going to be it's going to open up a lot of fantastic opportunities for investors and I think it's going to lower the cost of capital for people want to start" }, { "i": 96, "speaker": "Speaker 1", "text": "ideas or start projects. Um that's I mean it's it it is it's just really silly that you know retail investors um in the US you know they only have access to whatever 5,000 kind of publicly" }, { "i": 97, "speaker": "Speaker 1", "text": "traded companies when um you know you can go buy 5 million tokens across these exchanges all of which are worthless not all which most of which are worthless [laughter] >> you said it I didn't that's moved down" }, { "i": 98, "speaker": "Speaker 6", "text": "the the DCG stack you know another uh large entity within uh the DCG ecosystem system is Foundry which is uh I think has the most hash rate out of any mining pool. Is that correct?" }, { "i": 99, "speaker": "Speaker 6", "text": ">> Largest money pool in the world. Yeah." }, { "i": 100, "speaker": "Speaker 6", "text": ">> Yeah. Um and so I think uh a pretty topical conversation to have um you know it's been tough to find out performance in the crypto market. One area of outperformance that has been a safe" }, { "i": 101, "speaker": "Speaker 6", "text": "haven for a lot of folks uh is the miners and um they've done really well not because they're mining a lot of Bitcoin because they're actually uh converting to uh AI HPC compute um and" }, { "i": 102, "speaker": "Speaker 6", "text": "uh you know being rerated on that and I'm curious you know what your take is with the perspective of operating the largest mining pool on you know all of his hash rates moving from Bitcoin" }, { "i": 103, "speaker": "Speaker 6", "text": "to AI, you know, does that pose any kind of risk in your mind to the network, you know, open the door for non-economic actors to move in or does it open opportunity for for other folks to move" }, { "i": 104, "speaker": "Speaker 1", "text": "in and mine more profitably?" }, { "i": 105, "speaker": "Speaker 1", "text": ">> It's a really interesting um time, I think, to be a Bitcoin miner. the economics are relatively shitty. Um, and the capital available to them is fairly limited and the there's absolutely this" }, { "i": 106, "speaker": "Speaker 1", "text": "opportunity to better monetize your infrastructure by you know uh catering to AI uh AI and um uh the AI industry." }, { "i": 107, "speaker": "Speaker 1", "text": "So um but what's interesting is over the past few years we've seen uh foundry has seen this with a pool but um there's also been a bunch of headlines about Bitcoin mining moving um away from you" }, { "i": 108, "speaker": "Speaker 1", "text": "know kind of miners into um uh like energy like energy production energy companies um uh uh governments um uh government states and so I do think that over time we're going to see and I think" }, { "i": 109, "speaker": "Speaker 1", "text": "this is probably a healthy thing I think we're going to see mining kind of move to more of kind of like um more of like um like a utility type concept. It won't be the the sexiest investment you can" }, { "i": 110, "speaker": "Speaker 1", "text": "make and it won't be the one that has the highest um upside, but I think it'll create some interesting kind of investing opportunities as that shift happens. But today, it's look, it's um" }, { "i": 111, "speaker": "Speaker 1", "text": "the the the Bitcoin miners are they're they're they're not diversifying outside of Bitcoin. Um and we own a mining business called Fortitude. Uh which um I we have gotten very excited about Zcash." }, { "i": 112, "speaker": "Speaker 1", "text": "And so, Fortitude has been uh ramping up its its its Zcash mining um operations and the economics around Zcash mining are dramatically better than Bitcoin mining. Um and so it's a it's a great" }, { "i": 113, "speaker": "Speaker 1", "text": "time to be investing there because the public miners are essentially not investing at all in buying more equipment and building out their fleets." }, { "i": 114, "speaker": "Speaker 6", "text": ">> So why that's that's Chad Zcash then. Um I think that's that's a good uh let's start with that point cuz you know I was I was uh talking with a leader from you know the leading Zcash DAT" }, { "i": 115, "speaker": "Speaker 6", "text": ">> and um you know I asked him you know why why aren't we seeing these miners convert to mine Zcash? Um so I'll pose that question to you. Why are we seeing that hash rate move over and" }, { "i": 116, "speaker": "Speaker 1", "text": ">> I mean they can use the same money and go buy Nvidia chips and make a fantastic return um as compared to Bitcoin. And I think for the most part, their shareholders, if they're public" }, { "i": 117, "speaker": "Speaker 1", "text": "companies, the what their shareholders are now investing in are companies that are scaling up their AI infrastructure." }, { "i": 118, "speaker": "Speaker 1", "text": "And the last thing that they're going to do is invest in machines that are going to mine something other than Bitcoin, especially something that is a financial privacy focused token." }, { "i": 119, "speaker": "Speaker 6", "text": ">> Got it. And do you think that has to do with a gap in knowledge or um you know of the thesis or broad adoption? And further, I would love to just get your pitch on on Zcash. Oh, I get to pitch" }, { "i": 120, "speaker": "Speaker 1", "text": "Zcap. Yeah. Okay, fantastic. Uh, all right. Any Okay, so I used to do this in the early days of Bitcoin. All right, audience poll. Who here is it is a privacy token, so you don't have to put" }, { "i": 121, "speaker": "Speaker 1", "text": "your hand out, but who here owns Zcash?" }, { "i": 122, "speaker": "Speaker 1", "text": "All right, some friendly Zcash investors in the audience. Um, who's never heard of Zcash?" }, { "i": 123, "speaker": "Speaker 1", "text": "Okay, a few people. Okay. So, um because I don't have to do too much of the explaining, but you know, essentially look, Zcash is identical to Bitcoin in that it's a proofof work token. It's got" }, { "i": 124, "speaker": "Speaker 1", "text": "21 million cap. Um it is it halves every four years. It's serving the same use case, which is a store of value. And the difference is that when you transmit a transaction with Zcash, you can" }, { "i": 125, "speaker": "Speaker 1", "text": "essentially uh shield it. You can send it privately. And what's interesting is in the early days of Bitcoin, when we got involved, Bitcoin was essentially anonymous. there was no there were no" }, { "i": 126, "speaker": "Speaker 1", "text": "tools to kind of trace um Bitcoin transactions. So in the early days of Bitcoin, a lot of the reason why a lot of us got involved in Bitcoin was because we thought that this decentralized digital store of private" }, { "i": 127, "speaker": "Speaker 1", "text": "money was something you know worth getting involved with. Today that's not the case. Today you can trace a Bitcoin transaction and with AI you'll soon be able to find someone's home address with" }, { "i": 128, "speaker": "Speaker 1", "text": "with with it. So Zcash um I think u has the potential to capture a meaningful portion of the addressable store of value market which we think is it's about $2 trillion today in crypto. Um I" }, { "i": 129, "speaker": "Speaker 1", "text": "think financial privacy is an investing theme. We've not yet had a privacy kind of investing theme boom. Um we it's actually you know I was saying backstage it actually has not been even" }, { "i": 130, "speaker": "Speaker 1", "text": "comfortable to talk about financial privacy up until recently even though a lot of people involved with Bitcoin uh from the early days are very passionate about privacy. So I think Zcash um has" }, { "i": 131, "speaker": "Speaker 1", "text": "the potential to um capture a a a growing portion of the overall store of value market and at the end of the day um I think I think I think a global decentralized digital store of money uh" }, { "i": 132, "speaker": "Speaker 1", "text": "you know a Swiss bank account in your in your in your wallet in your pocket I think is a super compelling investment thesis and investment case and you know as opposed to when I got involved in" }, { "i": 133, "speaker": "Speaker 1", "text": "Bitcoin and the price went you know I mentioned from 10 to 50 to 100 we were I was using it to invest in companies we were selling it. Now I think people who now are investing in Zcash, I think that" }, { "i": 134, "speaker": "Speaker 1", "text": "they now appreciate that there is a $2 trillion addressable market. Like back then we didn't know that there was $2 trillion of available capital to go into a store of value project. So it's look," }, { "i": 135, "speaker": "Speaker 1", "text": "it's it's super early um with Zcash, the ecosystem super strong, bunch of companies building in the space and so I'm actually kind of fortitude is is investing heavily um in building out its" }, { "i": 136, "speaker": "Speaker 7", "text": "fleet to be able to mine Zcash. You know, I um when I first got my first privacy coin, it was actually Monero." }, { "i": 137, "speaker": "Speaker 7", "text": "That was back in 2017, >> buying drugs, I guess. Oh, >> you know, everyone's got to get an online marketplace somewhere. Um but, you know, I guess, you know, why why Zcash over other options? And then where" }, { "i": 138, "speaker": "Speaker 7", "text": "do you think the, you know, the flows are coming from, whether that's, you know, people say it's the OGs or the miners, you know, diversifying, what, you know, those two things like what," }, { "i": 139, "speaker": "Speaker 7", "text": "you know, why there and how who?" }, { "i": 140, "speaker": "Speaker 1", "text": ">> Well, if you look at the um the landscape of privacy tokens, I mean, you mentioned Monero and I, you know, I have kid. Were you buying were you buying drugs? Monero has that taint. It has the" }, { "i": 141, "speaker": "Speaker 1", "text": "it has generally speaking um you know when bad things are being done with privacy cryptocurrency. Um it historically has been Monero. Um and that's that's partially because it was kind of first mover on privacy. Part of" }, { "i": 142, "speaker": "Speaker 1", "text": "it is it is privacy like there's no there's no opting in out. I think it's also because of that why I think Zcash has a leg up because it, you know, for for whatever reason Zcash does not have" }, { "i": 143, "speaker": "Speaker 1", "text": "that same taint. And I think part of that has to do with the optionality around being able to send something shielded or unshielded. Um, and so you can now buy Zcash on Coinbase, you can" }, { "i": 144, "speaker": "Speaker 1", "text": "buy it on Robin Hood, Grayscale has a a publicly traded product uh for Zcash, but Monero you can't you can't buy it in these places. And so for in order for any token to be successful, it's the AC" }, { "i": 145, "speaker": "Speaker 1", "text": "access has to be there. So I think I think Zcash um is better from better than Monero from an accessibility perspective. It's also quantum resistant um um on the way to being quantum proof" }, { "i": 146, "speaker": "Speaker 1", "text": "uh which look if Bitcoin ends up being quant at risk of quantum Zcash is a fantastic hedge. And then um ultimately, you know, I I do think that there will be ETFs and things like that for Zcash," }, { "i": 147, "speaker": "Speaker 1", "text": "whereas I don't expect that to happen with Monero. So to answer your question about who's buying Zcash, I mean, the over the past few months, um it's been on quite a run. Um what we're observing" }, { "i": 148, "speaker": "Speaker 1", "text": "right now is um it's it's it's definitely a um it's a it's a it's a like it's a it's a reflexive trade in that um as more people buy it and more importantly as more of Zcash moves into" }, { "i": 149, "speaker": "Speaker 1", "text": "the shielded pool which is kind of like the the non-transparent part of Zcash which has gone from like 0 to 30% over the past year it becomes more useful the utility increases from like a privacy" }, { "i": 150, "speaker": "Speaker 1", "text": "perspective so it's very refct So price goes up, people get excited, they buy it, they put it into the shielded pool." }, { "i": 151, "speaker": "Speaker 1", "text": "Shield pool goes up, it makes it more useful. So part of that's part of what's happening. Part of what's happening is there's some great tools that have been launched. There's a wallet called Zodel" }, { "i": 152, "speaker": "Speaker 1", "text": "um which we just invested in the company to make it easy to in a non-custodial way um by Zcash. And the other thing that's happening is a bunch of early Bitcoin people like me uh are saying," }, { "i": 153, "speaker": "Speaker 1", "text": "you know what, like we got involved in this crazy industry because we thought that um you know, decentralized digital forms of money that were um you know, private, you know, by design is good for" }, { "i": 154, "speaker": "Speaker 1", "text": "the world. And a lot of the early Bitcoiners that um are getting excited about Zcash, they kind of feel like you like let's get back to the original ethos of why we got involved in this in" }, { "i": 155, "speaker": "Speaker 1", "text": "this space. And these these early Bitcoin people, they tend to have um a lot of credibility. They tend to have fantastic networks. They also have tend to have a lot of money. And so it" }, { "i": 156, "speaker": "Speaker 1", "text": "doesn't take a lot of allocating of your existing crypto holdings to go into Zcash for it to have a pretty positive impact on the price." }, { "i": 157, "speaker": "Speaker 6", "text": ">> It's great. So, just to I think you said you think Zcash has the opportunity to opportunity to siphon off say 10 to 15% of Bitcoin." }, { "i": 158, "speaker": "Speaker 6", "text": ">> Did I say a percentage? I don't say that. I didn't." }, { "i": 159, "speaker": "Speaker 6", "text": ">> All right. Well, I'll bet you on the spot. What What is your outlook in terms of uh what's your Zcash price target?" }, { "i": 160, "speaker": "Speaker 1", "text": "[laughter] >> Um you know, I would look I would never give a price target and look, nor do I think that this is like a Zcash wins, Bitcoin lose thing. Um I do think that the addressable market um the I think" }, { "i": 161, "speaker": "Speaker 1", "text": "the pie is going to increase. Um but but I like I do think you [clears throat] know Zcash at whatever 400 bucks today um if you overlay where Bitcoin was in 2013 and the Zcash price it we're kind" }, { "i": 162, "speaker": "Speaker 1", "text": "of tracing a similar price trajectory and from 2015 to 2020 Bitcoin went on this run from 500 bucks to 30,000. So, uh, whatever percentage that is, that that is a I think that there's now a a" }, { "i": 163, "speaker": "Speaker 1", "text": "clear path that is possible that we didn't appreciate or knew existed when Bitcoin first went from 500 bucks to a 30,000." }, { "i": 164, "speaker": "Speaker 7", "text": ">> I will say Zcash does have the best um, opening price chart of any digital." }, { "i": 165, "speaker": "Speaker 1", "text": ">> Sure does." }, { "i": 166, "speaker": "Speaker 1", "text": ">> So, that's it's interesting. So, a lot of the a lot of the people who who throw FUD uh uh out about Zcash, they look at the price chart of Zcash. Do you know why it looks the way it does?" }, { "i": 167, "speaker": "Speaker 7", "text": ">> Because it was mined just like Bitcoin from day one and then everyone wanted to buy the first block and then the next block and then the supply was >> Yes." }, { "i": 168, "speaker": "Speaker 1", "text": ">> very limited. I remember it well. So the so for those who are not following so it was a fair launch and so it starts being mined and if you wanted to sell your Zcash the the on day one there were" }, { "i": 169, "speaker": "Speaker 1", "text": "literally like I don't know 5,000 total Zcash in existence. So I guess for shits and giggles somebody decided they wanted to be the first person to buy the first Zcash and I think they paid like four or" }, { "i": 170, "speaker": "Speaker 1", "text": "$5,000 for it. So when you look at the chart the first it literally the chart it's like it starts at $4 or $5,000 and then it goes down to like a dollar or something like that. So the people you" }, { "i": 171, "speaker": "Speaker 1", "text": "know kind of the idiots on kind of crypto Twitter they love to say ah you know it's down 99.9%. But that's yeah that was the market cap is up thousands of percent but the first trade" }, { "i": 172, "speaker": "Speaker 1", "text": "is certainly if you were that uh person that you're you are down 99%." }, { "i": 173, "speaker": "Speaker 7", "text": ">> It was a fun time to watch. Um, now Zcash isn't the only token you are very adamant about these days. Maybe let's talk a little bit about Tao and you know uh blockchain based AI. Give us kind of" }, { "i": 174, "speaker": "Speaker 1", "text": "the overview of what Tao is and why people should care." }, { "i": 175, "speaker": "Speaker 1", "text": ">> Yeah, so Tao is the token um underlying the Bit Tensor network. Okay, so another audience poll. Um who here owns Tao?" }, { "i": 176, "speaker": "Speaker 1", "text": ">> Okay, a few people fewer than Zcash." }, { "i": 177, "speaker": "Speaker 1", "text": "Great. Um so who's never heard of Bitensor before?" }, { "i": 178, "speaker": "Speaker 1", "text": "Oh wow. Everybody's heard of Betensor." }, { "i": 179, "speaker": "Speaker 1", "text": "Fantastic. Okay, great. So, um, so Betensor is a decentralized network on which a uh we think the kind of the worldwide web of AI is being built and essentially um it is it is I think the most" }, { "i": 180, "speaker": "Speaker 1", "text": "ambitious the most interesting um project that exists out there in crypto today. uh because it is it is creating what I think is um this market-based incentive layer on which we're already" }, { "i": 181, "speaker": "Speaker 1", "text": "seeing there's 128 of these called subnets these different applications being built that are harnessing the crowd for people to comp to compete based on contribution to compute data" }, { "i": 182, "speaker": "Speaker 1", "text": "storage and and what you're seeing is this this Cambrian explosion really of all these really interesting applications that are being built on top of the potential network. You have you" }, { "i": 183, "speaker": "Speaker 1", "text": "obviously have the training pre-training inference, but you have drug discovery and you have vision analysis and you have security analysis and the community within potent is very reminiscent to me" }, { "i": 184, "speaker": "Speaker 1", "text": "of the early Bitcoin days of people who were really missiondriven. Um there is they tend to come more from the AI part of the of of the world, not the crypto part of the world. And as much as I love" }, { "i": 185, "speaker": "Speaker 1", "text": "my crypto peeps, crypto peeps tend to be kind of focused on number go up, whereas the people in the potential community are really focused on creating kind of a transformative um network on which some" }, { "i": 186, "speaker": "Speaker 1", "text": "real innovation can happen. Super early." }, { "i": 187, "speaker": "Speaker 1", "text": "Um we're we're at DCG we're investing in tow we're um we started a new company called Yuma that I'm actually the CEO of as well where we're accelerating these subnets. Um we um have launched an asset" }, { "i": 188, "speaker": "Speaker 1", "text": "management business to enable people to invest across the potential ecosystem." }, { "i": 189, "speaker": "Speaker 1", "text": "It's for people who who and it's very as you know potential is very hard to explain. Um it's one of its drawbacks but it is it is worth spending time looking into because I do think of all" }, { "i": 190, "speaker": "Speaker 1", "text": "of the crypto projects that are out there. It's the one that has the most um uh ambitious vision for what it could be and should be and what I think will be." }, { "i": 191, "speaker": "Speaker 6", "text": ">> Should we go to Q&A? Oh, >> I can talk forever." }, { "i": 192, "speaker": "Speaker 8", "text": ">> All right. Yeah, >> he's got some uh >> good questions for Barry." }, { "i": 193, "speaker": "Speaker 8", "text": ">> Great. Only at Medici do we get to hear from not one but two legends on privacy." }, { "i": 194, "speaker": "Speaker 8", "text": "So, thanks Adam for that. Um you you know you spoken a lot about Zcash which is um certainly one of the most interesting coins out there but just curious Barry to know your perspective" }, { "i": 195, "speaker": "Speaker 8", "text": "on how you see privacy playing out in the more institutional realm. you've got sort of compliance related projects and infrastructure and then you've also got more of the composability stuff like the" }, { "i": 196, "speaker": "Speaker 8", "text": "rail guns versus the canton. So I'm just curious to get your perspective on where you see the momentum really coming from." }, { "i": 197, "speaker": "Speaker 1", "text": "I think that there is from a US perspective, I think there's a couple years of um opportunity for projects to innovate and attempt to achieve mark product market fit before we start to" }, { "i": 198, "speaker": "Speaker 1", "text": "see the the the push back um uh and the attacks from you know what who who whatever is kind of the stakeholder group that doesn't want to see these things be successful. And you you" }, { "i": 199, "speaker": "Speaker 1", "text": "mentioned rail gun, you mentioned Canton. There's there's there's, you know, let's call it half a dozen to maybe upwards of 10 different projects that I think actually are are applying" }, { "i": 200, "speaker": "Speaker 1", "text": "privacy in a way that I think is um needed um and useful um and where that there's a token that exists that actually has a has a has real utility." }, { "i": 201, "speaker": "Speaker 1", "text": "But look, I it would be naive for me to say that um Zcash or Rail Gun or Canton or or Venice or Betensor, whatever is going to be successful uh without there being um ultimately, you know, some some" }, { "i": 202, "speaker": "Speaker 1", "text": "government, regulator, bank, law enforcement agency that doesn't like it." }, { "i": 203, "speaker": "Speaker 1", "text": "Um but the beauty of these decentralized networks, if they're done correctly, is they're they're ultimately unstoppable." }, { "i": 204, "speaker": "Speaker 5", "text": "Zcash, TA, Barry, you are the front end of the spear for our industry. How do you decide which projects to get behind with and bring the whole Grayscale army behind that >> and is is are you going to accelerate" }, { "i": 205, "speaker": "Speaker 1", "text": "that effort?" }, { "i": 206, "speaker": "Speaker 1", "text": ">> Yeah, so um at ECG we see well we see most everything. Um, and it's at the having been in this space in the asset class for as long as I have been, it's just very easy to kind of eliminate" }, { "i": 207, "speaker": "Speaker 1", "text": "something from being, you know, kind of interesting or investable. Like my bar is very, very high for something that I'm going to get excited about and especially something that I'm going to" }, { "i": 208, "speaker": "Speaker 1", "text": "spend time speaking in front of an audience um, and trying to um, explain why I'm excited about it. Um, and and look, Zcash, I got involved with Zcash when it first was created by by Zuko. Um" }, { "i": 209, "speaker": "Speaker 1", "text": "and and you know it's been there was like what is that 2016 2017 it's been like eight or nine years of people making fun of me. Um and honestly that to me I get energy from that because I'm" }, { "i": 210, "speaker": "Speaker 1", "text": "I I know if everybody is like ah that's a great idea. All right like that's that that that that idea has played out. So you know so for me um you know betensor uh we got involved with betensor in it" }, { "i": 211, "speaker": "Speaker 1", "text": "must have been I 20 when it was when the paper was first written and it was first kind of getting launched. we got involved with it. Um, and I kind of tend to have like one good idea every 10" }, { "i": 212, "speaker": "Speaker 1", "text": "years. And so I had I had Second Market, then I had Bitcoin, and then I had Zcash. And now um I like to think Betensor is my next kind of big idea." }, { "i": 213, "speaker": "Speaker 1", "text": "And at DCG, we have the ability to bring um you know, kind of our entire ecosystem of subsidiaries and portfolio companies kind of into the tent and help kind of educate and evangelize um why" }, { "i": 214, "speaker": "Speaker 1", "text": "we're excited about these things. And you know, Grayscale like I'm the chairman of Grayscale. I don't run it day-to-day. Grayscale has its own process around deciding which projects" }, { "i": 215, "speaker": "Speaker 1", "text": "to create products around. They independently got came to the conclusion that these are projects worth creating products around. Um, and um, I'm going to spend um, you know, more of my time" }, { "i": 216, "speaker": "Speaker 1", "text": "helping to kind of build out these networks because I'm truly passionate about um, like I said, the importance of financial privacy and I think the intersection of crypto and AI um, if" }, { "i": 217, "speaker": "Speaker 1", "text": "done right, Venice is doing it right, potential is do doing it right, I think is transformative." }, { "i": 218, "speaker": "Speaker 7", "text": ">> You know, I have one followup on this." }, { "i": 219, "speaker": "Speaker 1", "text": "Tao has subnets which have their own tokens. Are there any one or two we should spend a little time looking at in particular? So it's so early um in that um I think that the the tokens they you" }, { "i": 220, "speaker": "Speaker 1", "text": "know as you're as you're mentioning every subnet um on on Betensor has its own token that trades priced in tow and um the the tokens that are highest in price are around the subnetss that have" }, { "i": 221, "speaker": "Speaker 1", "text": "best product market fit starting to monetize the output of that subnet. Um I think we're kind of in you know circa 1994 of the internet where I don't I don't think yet we have seen the Amazon" }, { "i": 222, "speaker": "Speaker 1", "text": "or the Google get created. Um and so we're still at the you know the I don't know ask jeves or whatever is the right right website to use. And so actually it's one of the reasons why at Yuma we" }, { "i": 223, "speaker": "Speaker 1", "text": "launched um funds that are investing. We have a large cap subnet fund. We have a composite fund which inc invests across all the subnetss. The idea being okay I'm going to invest in this wave but I'm" }, { "i": 224, "speaker": "Speaker 1", "text": "not gonna try to try to pick winners." }, { "i": 225, "speaker": "Speaker 7", "text": ">> Any other questions?" }, { "i": 226, "speaker": "Speaker 6", "text": ">> Last one." }, { "i": 227, "speaker": "Speaker 6", "text": ">> All right. [laughter] Well, >> good question actually." }, { "i": 228, "speaker": "Speaker 1", "text": ">> Yeah, sure." }, { "i": 229, "speaker": "Speaker 1", "text": ">> DCG is I I I love running this business because we're we're a private company that has permanent capital. um where we get to try to predict the future um and allocate capital and resources to try to" }, { "i": 230, "speaker": "Speaker 1", "text": "get us there faster. And because we're not a fund, we don't have to worry about um you know, kind of putting up quarterly numbers. So, I get to, you know, we get to invest in Zcash in 2017" }, { "i": 231, "speaker": "Speaker 1", "text": "and look wrong for 9 years and then now we look really smart and and that's that's a that's a real luxury. Um being able to invest, you know, for a very long-term horizon. And the most" }, { "i": 232, "speaker": "Speaker 1", "text": "important thing is we have great people and we have great people like Travis who go on to be fantastic investors um on their own." }, { "i": 233, "speaker": "Speaker 6", "text": ">> All right with that." }, { "i": 234, "speaker": "Speaker 6", "text": ">> Well, yeah, I think we wrap it up there." }, { "i": 235, "speaker": "Speaker 6", "text": "Yeah, thank you Barry for joining us. Uh absolute legend." }, { "i": 236, "speaker": "Speaker 3", "text": ">> That's a wrap for this episode of Level Up, where liquid token protocols meet the sharpest minds in institutional investing. If you found value in today's conversation, don't forget to subscribe" }, { "i": 237, "speaker": "Speaker 3", "text": "and share it with your network." }, { "i": 238, "speaker": "Speaker 3", "text": ">> For more deep dives into blockchain's most compelling projects, reach out to us or follow the Medici network for more insights. Until next time, keep leveling up." } ]