🎙️ 79 - The Crypto Coalition | Ryan Selkis

welcome to bank list where we explore the frontier of internet money and internet finance this is how to get started how to get better and how to front run the opportunity this is ryan sean adams i'm here with david hoffman and we're here to help you become more bankless david ryan selcus on the podcast we cover two things first everything that's going on in the government regulation nation state versus crypto and second we got to ask him once again what his thoughts on ether has that changed since the last time we spoke

last time we debated it last time we argued it really interesting discussion here i really think ryan could be positioned to become one of our industries leaders here he already is at missouri but now that this um political conversation has really blossomed uh ryan really seems to be positioned to take a even more leadership position kind of helping the crypto industry navigate uh a part of the world that everyone really gets frustrated about and no one

really wants to have to partake in yet you're kind of damned if you don't and ryan seems to be having just a fireball of energy behind him with regards to how to approach crypto regulation to get what we want and rather than acting uh defensively which is like anytime some sort of bad regulation comes up crypto like rises to the challenge to defend us ryan is thinking offensively which is how do we attack these issues and uh instantiate crypto in the parts of the world that we want to instantiate them in before bad

regulation even comes about i think that's a fantastic strategy and i really enjoyed that part of the conversation and then like you said ryan in the second half of the show we turned to a rehashing of a debate that we had last time ryan came on the show about ether as an asset whether institutions are going to be interested in it and where it fits in his personal opinion in his a portfolio uh and there was definitely some concessions uh from versus last time that he came onto the show not as many as i would have hoped but i think if we

just keep on revisiting this conversation with ryan over and over it's simply going to be a death by a thousand concessions yeah there's definitely room for for growth there you know at the same time like the last conversation we had it was literally a debate on whether his money or not what we meant by that was is it a reserve asset worthy of monetary premium is it going to like do well in the future and uh well listeners will have to tune into that section to hear what ryan has to say um we'll leave it there before we get into the conversation we want to thank the sponsors that made this episode possible

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are so many apps coming online to arbitrom so you may want to pack your bags in preparation for the great migration to the arbitrary layer 2. to keep up to speed with arbitrary follow them on twitter at arbitrary and join their discord bankless nation we are super excited about our next guest he's been on the show before this is ryan selgus he's the founder of crypto analytics firm missouri crypto he's a long time crypto advocate he's been a content producer in crypto for quite a long time and more recently he's become a single issue

voter we're going to talk about what that means too ryan great to have you back welcome to bankless thank you for having me i'm surprised that uh you wanted me to come back and slap you around a little bit more oh man well you are alluding to the second topic we're going to cover which is uh eth and whether your thoughts on eath have changed we had a debate the last time you were on on whether eath is money or not i want to get to that but first man i got to tell you if it feels like you've been on a street lately or something missouri just raised 21 million from some massive names 0.72 bill that's

billionaire steve cohen that's his firm you've been spitting fire about unelected bureaucrats in government i feel like rallying the crypto industry uh about what's going on in the infrastructure bill and in getting the industry involved in in politics how's it feel man how's it feel to be ryan selkis these days uh feels pretty similar to how it did two weeks ago uh you know i've lived through a lot of chaos in the last eight years in crypto uh you know that's that's a lot of dog years so

um i think uh generally pretty pretty steady you know social media um can um can be read a bunch of different ways uh and i know when to dial down and and up intensity i think uh depending on on what's going on um but it doesn't really change my day-to-day um so i think the the first thing that is really important about the last couple weeks is what happened in the way that it happened with the infrastructure bill

in this last minute provision that was inserted and then the bipartisan efforts to amend this particular provision of the bill and then the last minute stonewalling everything about the process cover to cover was essentially a hundred percent of what everybody hates about the us government and government and today's decaying institutions in general so this was not a very like risky position to go out on a limb but it was an opportunity i think to

help shake people awake and and kind of catalyze people and and and get them riled up in the aria manual never let a crisis go to waste camp right so um i i do think that this is a crisis um for crypto i don't think that it's going to shut the industry down i don't think that it's something that's going to necessarily us but it's definitely a move in a very negative direction that we're going to need to work hard to overcome so it is a crisis and i think to the extent that people are finally starting to take political

effort seriously and ongoing engagement down to dc seriously that's important now when i say engagement that's a loaded word and a lot of my frustration and i think the unique voice that i have on this particular issue is i'm sick of the as is everybody else but most people can't actually say that quiet part out loud because they're running regulated businesses within crypto okay they're running an exchange a custodian they um they have a token um they're they're investing other people's money right so so there's

a a lot of things that i think are pretty unique about me um just from where i sit in the industry a running an information business and b not necessarily touching other people's money or processing crypto transactions so you can be a little bit more vocal about some of this um the other thing that's important is uh this is a very bipartisan response right now um i think if you look back to the early crypto days it's a lot of libertarians it's a lot of like you know crypto

anarchists and small government maximalists more than anything else but more recently crypto ethereum all the new application builders there there are a lot of progressives um or classical liberals i guess uh that have entered the frame more recently and uh it's not that they don't care about progressive issues um they do they just also happen to be very passionate about tech's ability to kind of advance humanity and and be a

part of the solution um particularly when you juxtapose with government and and some of these like legacy like monolithic institutions so i think um both from like right and left um the thing that has changed in the last couple of weeks is people are really fired up there's an opportunity to get engaged uh down in in dc and enforce the issue um because this is going to be very politically expensive for representatives on both sides if they end up on the wrong side of it and i think the the big um

unique uh tone or uh or niche that i think i i tapped into is the fact that engagement no longer needs to just mean education advocacy kissing ass essentially there is i think an opening to play a little bit of offense now and i think everybody right now is scrambling to figure out how do we do this productively because yes most of this is still a an education problem and the episode

that you guys just did with jake was perfect right like i agree with him like anything that can be ascribed to incompetence versus you know malice yeah generally it's it's incompetence and it's historically just been that they're not paying attention and they don't understand how this tech works but i don't think that's um i don't think that's really an option any longer um for elected representatives to not pay attention because crypt is the fastest growing sector of american tech i think it's important for us from the geopolitical perspective particularly when we compare ourselves to china and

our future competitiveness and it's basically the only technology that is doing anything to preserve civil liberties in this country and defend against the overreach of the ubiquitous surveillance state you look at apple's announcement um from last week that was buried or a couple weeks ago those buried on a friday that they're they're essentially going to incorporate back doors into their products um you think about basically what treasury's trying to do with this bill in making sure that all of d5 is surveilled and you know at some point we need to

push back against the illegalization of all private transactions and play a little bit of offense um and i think riling up the base um organizing at more of a grassroots level and uh and yes ultimately primary and unseating elected representatives that are openly hostile versus just ignorant about crypto is going to be a good strategy the difference between this year and years past is we have a lot of money to actually put this in action um and i think it has to be done now because the market has been going up and if

you're going to play offense play offense in a bull market when there's as much distress as the current currently is in in institutions um don't do it after a 50 60 70 drawdown when they can just slap us around on consumer protection on fraud on everything under the sun um that you know is coming the next time the market takes a dip i love i love your voice in the space and and for the listeners i think we're going to divide this conversation like two parts the first is we got to talk about regulatory nation state versus crypto and the second part

is uh i want to hear an update on your opinions on eth as an asset ryan but like let's stay with this theme of of playing offense crypto uh versus nation state um this is for bankless listeners this is kind of a taste of uh that the fire that ryan's been spitting lately on crypto and i think this really resonated there's a lot of likes on this tweet but it's basically the message i'm sick of feeling like we have to apologize for all our early stage and walk on eggshells around politicians and regulators this is ryan say tweeting this out we built a two trillion dollar

financial market from scratch in less than a decade with absolutely no institutional help and active encumbrances from government meanwhile the banks give you 0.025 percent interest on your deposits and front run your trades legally and dc grifters overspend and debates your tax dollars well they insider trade stocks with impunity this really captured i think a lot of the the zeitgeist and crypto and that's kind of that playing offense as you said it feels very much uh ryan like uh the politicians are kind

of like newly experiencing this force and not sure on what side they're going to fall on right so like it's a bipartisan thing it's not left versus right like almost everything else in our political discourse these days and the politicians haven't yet decided are they going to be crypto friendly like what what's the cohort what what what's the uh the coalition around um crypto that's going to support this or are they going to be anti-crypto and what's the coalition that's going to support that it feels to me like it's all squishy and they haven't figured it

out but um can we talk a bit about like i i'm curious it seems in dc that there is a certain contingent we asked jake this question uh as well but like that is against crypto and i want to know why like why do they hate us well because they can't control it um or they can't control it in a way that they would like to which is fully uh i guess for lack of a better term and and you know for for many decades now we've had a two-party system that is really just one big government

party with different policy goals um libertarians lose elections because they always say vote for me i'll do less work um and it's probably what we need but it's not a very good message because people want to know i'm going to vote for someone powerful they're going to advance my agenda they're going to advance my interest well i'm going to get you know this this and this from from this political leader when really what we need is is just you know a greater degree of of decentralization um and i think that's where crypto's been

pretty powerful um if you think about crypto basically being like an opt-out political movement in many respects it's a way to play that thesis proactively um and what i've uh compared it to it you know you think about like gold bugs versus people that are building in crypto gold bugs are waiting for the end of the world living in a cabin in the woods and digging holes in the ground to put shiny metal like back in from once it came um folks in crypto might have the exact same thesis

as those gold bugs but instead of being in a cabin in woods digging a hole in the ground and putting a shiny rock waiting to ride out the apocalypse they're actually on the front lines building things every day and every single day a new problem is created in crypto because of the unintended consequences of what has been built so far and and almost always someone immediately recognizes the problem and starts a business to solve that problem we've seen this for a decade now every single major problem that

crypto has uh unleashed onto the worlds the horror has ultimately yielded like a billion dollar business you look at chain analysis it's a five billion dollar business right now they they have have done data forensics to help regulators and law enforcement worldwide actually track money launderers you look at tax bid just a few year old business the narrative is that crypto is full of tax evaders and people that don't want to pay their taxes and this is just a way to kind of cheat the

government and your fellow citizens tax bid is a 1.3 billion business did they get there because people are evading their taxes or they're trying desperately to pay them in a manner that doesn't take a week and a half to understand how to comply with impossible tax policy in the u.s or abroad missouri we were created to basically be a first principles edgar repository for disclosures and and other project information solve the investment fraud issue i can tell you right now some of my investors have relationships

with ripple one of the first things that i did when we started the company was right a multi-month screed against ripple and how um how horrible uh their investment practices their took and selling practices were for their and investors and how shady the marketing was around it um so yeah there are folks in this in this ecosystem that want to see it survive advance and ultimately become more anti-fragile and get built out in a way that is going to be a force for good in the world

versus just sitting on the sidelines saying everything is going to ship everything is broken there's no way to fix it i'm going to buy gold wait for the dollar to get debased and then come out of my cocoon or my hiding after a decade when the dust has settled um and i think that's pretty powerful because it's techno progressives um and it's you know classical liberals and and it's like all the libertarians molded into one but playing offense instead of just defense and and basically saying you know what we're all screwed i feel like that's particularly true in d5 this whole idea of like we're

building a new better financial system that's the goal much more transparent more open right it's like i i'm curious what you think about this it seems like everybody in washington all the time is trying to protect us from crypto it's like this protection atmosphere is is you know what it is it's a it's just a massive projection right yeah it's this is what they this is what they do is it is it code they're corrupted for like control they want to control us is that what produces they're all all of their concerns just project their own corruption right they're they're worried they're

worried about um grift whereas the the revolving door in dc is just from a a seat in influence in dc to a lobbying seat or in-house at a big corporation and then back again you know janet yellen made 7.2 million dollars last year during covent when she was giving speeches to financial services companies via zoom 7.2 million dollars her time is not that valuable i refuse to believe that um

unless she was ultimately going to become the new treasury secretary which of course happened so that that's money well spence but that's just part of the crypts and this happens at all levels of dc people know that it happens it's you know it's it's it's just assumed that this is kind of the way that this is is done in dc and there's no real way to stop it so if you think about the ethos of dc and the people that are working there and and you know what the revolving door looks like and how people actually make their money

then of course they're projecting all the worst things onto tech onto you know crypto finance and and all the entrepreneurs that are working because this is how they would be operating if they're in the private sector it's just in their dna let me add so let's call that out okay so so it's in their dna but let me ask you this question because uh this is actually further an agenda we wanted to get to but let's get to it now um you you also tweeted out recently about crypto that we need to spend money lots of it like crypto should also be playing this

games what you're saying and we should also i don't know maybe pay for janet yellen to to come speak to us i don't know is that are are you basically advocating that um crypto play the same game that everybody else plays in dc and have a stake at the table is that something that's important to crypto and is there a is there a moral issue with that i hate it but i think you have to fight fire with fire and i think people are slowly starting to wake up to that and and you know here's the issue

crypto can be shut down china just proved that it can be um do i think the u.s moves that quickly do i think it's as dire the political situation and kind of surveillance state in the us is china no um but it's certainly not where it was 10 years ago 20 years ago 30 years ago certainly a couple hundred years ago when the country was formed so we are moving in that direction and i think the the reality is

there's a lot of damage that regulators and policy makers can do to crypto via um tax policy and by overextending the patriot act and all the you know associated provisions related to national security that they'll kind of throw at us we saw a sample of this with the treasury's report on privacy uh tokens late last year and if you remember in december january um

when uh steve mnuchin on his way out of office was essentially trying to sneak in some of these last minute you know provisions that would make it very difficult to support any privacy tokens this was you know uh is a big part of uh what they had in mind so um anything that they can't can't control um i think is scary to them and so if you uh ultimately want to get elected representatives in office that understand why this is important not just from uh constitutional theory standpoints but

from an electoral standpoint uh and and from the perspective of their constituents then that's gonna take active engagement beyond just yelling at people on twitter um you're gonna have to host fundraisers for uh politicians that are gonna be on the right side of the issue that have this as part of their platform that are gonna be going up in primaries against their 70 80 year old counterparts that have been in office since before the internet was created so i think there's no way around that because the

alternative is pretty bleak everybody likes to talk a big game that we can just like route around the government and and you know this is permissionless and and so you know even if it is shut down we're we're still going to be able to operate these systems that's all true but it's just gonna it will cover to cover be a black market and there's a sizable contingent of the world that is not going to play ball like americans and europeans are not going to transact in

systems that are deemed illegal by their authorities because those are still relatively functioning well-functioning societies that have otherwise you know robust financial services and so you're not talking about situations like argentina and venezuela and sub-saharan africa and high-inflation uh countries in southeast asia people will generally fall in line they'll be a you know some contingent that will not and they'll opt out but it doesn't change the fact that it will be illegal or it will be extremely expensive or cumbersome from cumbersome

from the user perspective to actually participate in these in these systems so you know the the folks that um you know uh that are the loudest and and have this battle cry on twitter that like we we you know we need to play a different game or we need to opt out the problem with that is there's no new land in the world there's no place that you can escape to there's no free world to settle like like we had when when america was settled and the country was founded um you can't even escape to the metaverse right like they will literally

tax this is what we're talking about they'll tax and surveil everything that you're doing in the metaverse even um and i i know that you were being completely facetious uh david this is you know more proof that i listened to you guys versus just kind of come on every once in a while to harass you but like one of you made the comment in the jake episode about like the irs literally wants to know when your axes are mating and it's not that far from the truth like any activity that you have in the metaverse they're still going to be they're still going to look at like where was your phone locked in

to establish a tax nexus which is insane and and so if there's no place to escape to physically um and you're not allowed to do virtual commerce even even if it's completely unplugged and kind of disassociated from the rest of the economy um then you have no other choice to put the kind of uh fight on their home turf and um i think you can do so intelligently so you know i'm not i'm not advocating for like january 6 insurrection like that's that's the the worst type of um

uh you know undisciplined theatrical dangerous uh type of of revolt and ultimately is completely counterproductive and it's it's extreme everybody knows that um i'm i'm not even advocating for like online harassment um or you know vitriol it's you know directed or you know female you know senators or congressmen getting misogynistic tweets and threats and and you know all the garbage that you see um what i'm suggesting and advocating for and i think a lot of people agree

with even if they're not as forceful about it because it can't be is you know we have to start grading these folks on a one-to-five system and the fives that are allies get a tremendous amount of support an eye-opening amount of support through social channels through grassroots campaign efforts through political donations through super pac contributions the ones have the exact opposite in terms of how well funded their enemies are and their political rivals and then the two through fours is where you can continue to focus on the education and

advocacy but the the education and advocacy work of for the two through fours will be infinitely easier if they see what's happening to the ones and fives because on the fives you've got a big carrot and on the ones you've got a big stick and if we can unseat some folks like brad sherman that are in the one camp as established as he is and threaten folks like that or even make their lives very difficult during the midterms um it's going to pay i think extremely lucrative long-term

dividends that's to say nothing of the you know the the broader impact that we can have just through social channels because crypto is very very vocal uh and i i think that the challenge there is like different but it's um it's how do you uh contain some of that enthusiasm or kind of channel it proactively so so we don't look like a bunch of nut jobs which may never be solved brian i i think i would think we definitely need to unpack this because i think this is a fascinating point of the conversation that we should really

spearhead here um i was going to ask you now that we have this like regulatory drama of the last two weeks in our rear view mirror what have we unlocked but i think you've kind of already answered that question in bits and pieces in the last 10 minutes or so i i think where this is going and what you're talking about when uh we're talking about like uh reviewing public uh our regulators on the merits of whether they support our industry or not i think really what has happened in the last two weeks for this

industry is everyone has taken a moment to reflect on what crypto really means to them and ask themselves the question am i a single issue voter when it comes to politics and crypto and i think we we all know that crypto is has so much uh tribalism and like a desire to defend our home turf and so much energy and as we all know so much capital behind it that perhaps the measure of a single issue voter body uh that is that

is the of the crypto world might actually be one of the most significant cohorts of a voting body that we've seen arise out of any part of the political sphere that we've seen in america in the last i don't know since since the nra how do you think that the let's go into details onto how you think the crypto voting body can galvanize itself and direct itself to get what it wants in washington dc what are the next steps now that we have identified that

we are here in this moment of time how do we actually adequately capture this energy and direct it to get what we want done in dc well i'll answer that question in terms of like what are the methods and and how can we actually make some forward progress there but but first you know it's important to note i i intentionally use the nra as a like a uh a call to action just because it's a good x for y comparison and it's provocative so it kind of hits all the twitter checkboxes but there couldn't be um anything that's

further uh from the truth in terms of the the um fundamental issue that i think crypto single-issue voters have with the government right now um you know the nra um you know guns are used in school shootings and mass shootings and and gun violence is a real problem in the country um you know other i won't kind of name drop other organizations but but most of the other organizations where you have single-issue voters the um the issues that they're talking

about are extremely contentious there's often like an element of violence um or like national security implications that kind of rallied people up and in in crypto the issue is there's no opposition like there are very few intelligent opposition leaders to crypto it's basically proponents and then people that don't understand it that's an extremely powerful position to be in because like i said it's not just about like right-wing or libertarian or

progressive um voters that are working in the industry right now and that actually care about building this tech and and preserving its ability to you know get developed um in a way where you can still regulate the the centralized organizations that are you know building broker services um and so i i think that is uh just a a major difference between some of the other lightning rod individual member-led um you know organizations the the card-carrying