44 - The Bull Case for ETH | Ethereum Community

if you want to live a bankless life you need to get a hardware wallet there is no alternative for storing your crypto in a self-sovereign fashion that's why i have four ledgers that i use to manage my different crypto assets using the ledger live account as well ledger live is like your home base for managing your ethereum defy and crypto accounts it does a really good job of aggregating all of your different ethereum wallets if you are the type of person that uses more than one but you can also add other

cryptocurrencies like bitcoin or cosmos or whatever your preferred blockchain is and then it will display an aggregate portfolio of all your accounts at the main page one thing that ledger is doing a really good job of is enabling all the money verbs that me and ryan talk about with the bankless skill cube enabled in the ledger live app so right now in the ledger live app you can buy sell lend swap and stake your crypto assets which is doing a really good job of fulfilling all of the money verbs in the bankless skill cube something that's new to ledger live is ledger swap where you can

swap assets one for another directly inside the ledger live application ensuring trustlessness in your financial activity on ethereum and on bitcoin if you want to learn more about what you can do with a ledger go to the blog post the power of ledger live on the ledger website where they share some of the more advanced things that you can do with your ledger that you might not have known about there's a link in the show notes that will take you to the ledger shop where you can get your preferred ledger hardware wallet i personally like the ledger nano x but i also have both

they're both great options when you own a ledger you own your own assets in the way that they have been designed to be held by the user and the user alone so go get your ledger today to make sure that you are as self sovereign as possible the bankless state in the nations are brought to you by wiring wiring is defy's first self building community run project which i just get really really excited about wiring is a system that seeks out yield in d5 and it does that in a number of different ways a very aggressive way is

with the vaults where you can deposit your preferred asset of choice and different defy experts will come in and generate a strategy for what to do with your deposited token right and so it'll go find ways to get yield in that deposited token in d5 for those who want to just earn yield on their stable coins the urn system is for you where you can deposit your preferred stablecoin and wiring will go and figure out which money market on defy and defy is producing the best interest rate whether it's dydx it's compound or ave

it looks around d5 to see where the yield is coming from and it directs stable coins automatically so you don't have to check them out at y earn.finance to get started and also check out the stats page to see what other people are doing bankless nation we've been waiting for this episode for a long time we have got the three most bullish people we could find other than david and myself about ether on today we've got eric connor anthony cesano dc investor these folks were bulls when it was not popular to be bullish eath they've been

through the tr the trenches of the bear market we are out the other side in what looks to be the beginning of a bull market and we are here to talk about why they are bullish ethereum the network and the asset gentlemen fantastic having you on bankless how's everyone doing doing great fantastic thanks ryan doing good thanks for having us guys you know what i'm going to start actually with uh dc so we want this to be kind of a canonical

ethereum episode that people can refer to and uh that provides some context on what ethereum and ether actually is could you kind of start us off dc what is aetherium to you how would you explain it to someone off the street so well well off the street is a tough ask but i'll do my best and i i always the way that i think of ethereum is that it is a it's a network that provides a programmable and globally shared ledger

of record so it's kind of like this it is this database for really important fiduciary grade data um which everyone in the world can access and anyone can write to permissionlessly and in a censorship-resistant way so that at its most at its core that's what it is but the real question is what does it allow and i think what it allows is it allows this economic coordination across anybody anywhere in the world and and that's a really powerful concept and and you see

that embodied in modern day defy as well and as far as the types of properties that ethereum has and what it could mean i think ethereum will become home to the world's most important digital assets the ones that really have financial value and most importantly it's home to ether which i believe and i know we're going to talk about today is going to become the world's most important programmable decentralized asset in fact i think it already is and that programmability is why i think eth is also going to emerge as a very

important macro asset alongside bitcoin as we've already seen and i think it's kind of in a class of one or two and we're already seeing that with billionaires piling in to to to bitcoin and into ether and now we're seeing cme future so the path for ethereum looks incredibly bright dc do you think it's hard for people to get their like heads wrapped around with with bitcoin there's just one name right you say bitcoin it's a network it's also an asset but with ethereum you sort of have to explain okay well there's this thing

called ethereum the network and just as you've explained it and then there's this other thing called ether the asset and both are important is the ethereum narrative just like hard to understand or do you think this cycle people mainstream investors will begin to understand why both the network and the asset are important yeah i mean i do think in some ways the narrative is certainly harder to understand than bitcoin and bitcoin is a pretty

simple narrative it's a scarce supply censorship resistant digital asset and i think ethereum has some of those same properties as well but ethereum does a lot of other stuff and i think the concept of like what is a smart contract and what does that enable is difficult for a lot of people to understand unless you get into the technical details so at its core you know when i really think about it i view ether as programmable money and and and i think that you know i've i've discussed it that way with some people outside of the space and i think that resonates with them it's this

decentralized programmable money where you can run applications that no one controls and you can manipulate that value to do all kinds of incredible things i do think that the space is also going to become more sophisticated during this cycle just i mean it took people a cycle or two to really understand bitcoin let's not forget that and i would argue that was really only in the 2017 cycle that people really came to understand what bitcoin is prior to that it was kind of more of a play toy for nerds and i think ethereum has been at that stage

but we're about to hit this moment where ethereum is going to enter the zeitgeist during this cycle and i'm really excited about that eric let's turn to you next because you've been in the ethereum space since you know since day one right and ethereum you know every everybody has their own perspective or angle to understanding ethereum and why it's valuable and why it's so cool so what's your angle like what does ethereum mean to you and why is ethereum so awesome i think what dc just said is important to understand and like i'll go

you know yeah it's been six seven years on the ethereum journey now and i think what we've realized is it takes narratives a while to not only be realized but to take form so bitcoin's been around over what 10 years now or something like that and they kind of went through these at first there's like peer-to-peer cash and then like it's gone through these like seven narrative changes one of the most fascinating things to me about this current bull cycle we're going on is bitcoin has seemed to have won the digital gold narrative and i you know

that's that's cool we're here to talk about ethereum though but what what can we learn from that it's that that narrative and dc was just talking about this was not really understood until basically today it took them four or five years to figure that out and for you know the mainstream to adopt that and i think ethereum is two to three years behind in the d5 narrative and i think personally that the d5 narrative is 10 to 20 times more powerful than the digital gold narrative but it's also a little bit more complicated right and

i've recently been saying and tweeting and thinking about you know how do we explain ethereum to people i think of it as think about the internet but the internet for finance and eth is that money used on the internet of finance and i think as we kind of hone in on to this narrative and a lot of people will say you know it's complicated to explain which it is you know why isn't the narrative perfect yet it's because we're still pretty young right and like even once you find that narrative you need to kind of like have other people understand it and you know sell it maybe not the right term but you

do kind of have to sell it to people that don't understand it right so i think you know to me i've said before multiple times when i first saw ethereum this concept of d5 this concept of financial money you know being transacted easily across the internet was what captured me it wasn't the world computer maybe that's 10 or 20 years down the line um but i think ethereum's growing into its own and that we've we have found our narrative we're kind of like you know sculpting it now and like soon

we're embarking on the early stages of pitching it and what it is um and you know it's not just a marketing tactic like it is powerful being your own bank having someone not tell you what financial transaction you can do or you know and not like shutting you down or whatever like that is extremely powerful there there was debates on twitter today about what is cypherpunk i don't think bitcoin cipherpunk at all i think cyberpunk is having true privacy solutions being your own bank bitcoin offers none of that they can be digital gold that's fine

they're layered two is banks but ethereum's looking for something bigger it's just going to take a little longer to get there and i'm totally fine with that anthony so eric's saying so so dc that uh ethereum and ether is sort of a maybe a cycle behind bitcoin in terms of its narrative understanding maybe three or four years would you agree with that and what would you add to the the definition of ethereum and ether yeah i would totally agree with that and i think it's not even just in terms of like narratives and awareness it's also in terms of in terms of like i guess

price and market cap of these kind of assets too it seems that if uh you know you just looking at the charts seems to be following you know bitcoin's last cycle and it's just it's crazy when you look at it like that because the you know the supplies of the coins are different it's not like a one-to-one mapping right but magically the prices are similar right um and it seems like we're just one cycle behind uh in terms of like i guess price but awareness as well and i've been saying this for for a little while now but i think you know bitcoin owns the macro narrative right

you know when you think of crypto as someone outside of crypto you're thinking of bitcoin that's the first thing you hear about it's the first thing you're going to go and investigate you're going to learn about and it's a much easier thing to wrap your head around right but then once you venture into crypto pretty much everything is happening in ethereum right bitcoin becomes the boring asset or the boring network within it within crypto uh if you want to get involved and get more excited about something then you venture on to ethereum then you fall down that rabbit hole and you have defy right which is just another even

rabbit hole within the rabbit hole so that's kind of what i've been uh kind of explaining to people especially newer people that i talk to is that get to learn about bitcoin get to know bitcoin understand what it is and then go and venture into ethereum and you'll never go back like i i don't see how you can fall down the ethereum rabbit hole and then go back to to being only bitcoin after that um you know maybe there's a few people that have done that but the majority of people that i talk to don't um and that's just better that's just going to increase the

awareness of ethereum and increase kind of like the the social consciousness of ethereum and we're going to have more and more people being evangelists for it and then it goes from like bitcoin being the only kind of thing that the media talks about um the mainstream media at least to to ethereum being alongside it and i think we're already seeing that happen dc and they say uh kind of mentioned that these billionaires are investing in btc right these funds and everything but they're also investing in eth if you had told me a couple years ago that this would be happening for btc

i would have said yeah that's that that that makes sense right i can kind of see that for eighth oh god no no two years ago it was viewed as a joke right as an asset because we just came off the ico boom it was a bear market it was getting kind of like destroyed in that market and if you told me that billionaire fund managers was going to be buying eth alongside btc that would have been a crazy notion so i guess i think we've already come so far and i think that it's not going to take us as long as it took bitcoin because we have that that kind of infrastructure already

laid out that consciousness already laid out you know crypto to the mainstream is now becoming like an inevitability it's not like will it work is it a fad or stuff like that people are accepting that they were wrong about bitcoin right they were wrong about um a bitcoin going away and going to zero and they're capitulating and i feel like that's going to happen with with ethereum a lot quicker because people aren't going to get the wrong idea they're already going to accept that these networks can exist and then once they say ethereum they're not going to have those initial doubts anymore they're going to be like okay this is like bitcoin but you can do all

of this stuff with it so i think yeah we're one cycle behind but it's going to be faster to play out at this point so each of us have mentioned price a few times and in kind of your intro anthony uh you were talking about price maybe price being sort of a market cycle behind uh bitcoin but some would argue that like in ethereum the price of eth doesn't really matter and i think there have been elements of the community even the ethereum community that have argued that over time like anthony don't worry about like don't be focused on price

price doesn't matter for ethereum it's it's about the technology it's about the network what is your response to that does price actually matter and if so why yeah so if we take this price doesn't matter to its logical conclusion and you think you know money doesn't matter right money doesn't buy happiness money isn't isn't important right that that make that makes sense to me but my my pushback is that the the money within the ecosystem uh as

the number goes up we have more money to build things with right we saw after defy summer there was a couple months where a lot of people made a lot of money and then uh it was funny i was talking to eric about this on on ether podcast like we were talking about fundraising you know multiple projects fundraising every week after that happened right and why do you think that happened because people had more money like it's not it's not a hard thing to grasp if people have more money if people feel richer they will reinvest that money they're not just going to sit on it like some dragon hoarding it's

gold like a and i think you know that that kind of plays into uh basically number go up being so important for for the ecosystem um just for that reason alone but there's also a bunch of other reasons right like the security of the network goes up if its price goes up right that's a fact you cannot you cannot argue against that uh in my view right um you know it brings in new users as much as you know for better or worse it brings in new users and maybe they come for speculative reasons they stay for other reasons later on i mean i'm sure i'm not

alone in saying this but like i first got into it because i saw the price of you know kind of eat going up and i was like wow okay um i want to buy some right before i even like jump down the rabbit hole in 2017 i kind of bought it and then jumped down right and the reason why it came on my radar is because my friend told me hey you know this thing is going up you should look into it right so that's how a lot of people will get into the ecosystem so if you're a builder right i actually see this rhetoric a lot from like developers and builders and things like that not to generalize but that's who i kind of

generally see it from um but if you're if you're that kind of person just think like okay you know how are you gonna get funding for starters for the stuff that you're building right if there's no money around then you're not going to get funding for it right and you want more users to come into the ecosystem so that they use your apps so i mean it it just for me it's like second nature to to to know that that price matters but and i can't kind of square why people just don't think it matters even if you think that money doesn't matter it doesn't matter like you personally can

still hold that belief you can think that money isn't everything and that's fine but not everyone wants number to go up just to buy a lambo right or anything like that like you know for me personally i made some investments after defy summer as well like i want to give back i donated on get coin you see so many people donating on get coin the rounds are the biggest they've ever been right in terms of matching so i just i don't see how number go up can be viewed negatively unless you view it with the lens of oh everyone just wants to buy a lambo everyone just wants to be rich and and do extravagant things which i think

especially within the ethereum community is not true because we reinvest the money and we see that happening kind of every few months uh when the cycles play out uh so yeah i guess long-winded way of saying that price matters uh pretty much more than anything but not for the reasons that a lot of people think uh it matters a an ethereum or crypto skeptic could illustrate and i've seen this illustration before of ethereum is that it's it's not this like internet native like economy it's more of like this this kind of like private park where there's

a bunch of like you know financial fun games being played like it's like it's a it's a casino it's like it's not it's not really globally accessible and you know it's more really really niche and it's not it's not really going to be like this world financial platform it's more of just like this kind of like money theme park that lives on the internet and it's just a bunch of toys that that's that's a a defy skeptic or ethereum skeptics take that i've heard um and the and so i want to ask the question is like when when you know eath price goes up and we're

seeing all these seed investments into these d5 projects into these different different ethereum protocols into these uh things that are going on in the ethereum economy what are these things like what are these the every single entity that is uh receiving funds are trying to solve the problem right and so when we view them holistically what are these problems that we are trying to solve right like what what are the problems that ethereum is trying to solve uh dc let's let's turn to you like what are the overarching problems that these people that are fundraising for projects or just building something on

ethereum like generalized what is the problem that you know each individual team or project was trying to go after so so i think one of the crazy things about ethereum is the breadth of problems that are being tackled on the platform and some of those efforts are going to be successful some of them are going to be failed experiments and right now we don't know which ones are going to be which but i think fundamentally something that ethereum tries to achieve is to remove this reliance on intermediaries

which we have become very accustomed to in our financial lives and other parts of our lives as well and when you think about the the proliferation of entities like banks and how difficult they can be to deal with other financial institutions they can be inherently unreliable and beyond that it can also be difficult to do things between them right and so when you're working with a financial institution in a given type of account oftentimes that account can't quickly talk to your account at a brokerage or

something like that right and so you've got to send the money through some antiquated system which can take days or on the weeks if things go wrong in some cases and i think that is a problem because those intermediaries also extract rents in that process and not to say that they don't provide value for service but if we can do that cheaper more reliably more transparently on ethereum then why wouldn't we want to i think the other problem that ethereum solves or or is that it creates this new

i wouldn't say it's a problem that solves but it creates this new opportunity with ether as an asset in particular um the world has never seen a programmable decentralized asset with the characteristics of ether and especially when i know we're going to talk later about like eip five one five five nine and fee burn and staking i mean that asset alone is going to create the potential for all kinds of services that frankly we can't imagine yet right i mean who could have imagined even if you read the ethereum

white paper would you imagine that something like die from maker would exist you know a few years later based tapping into that decentralized value to create something and transmuting that value into something else so and i want to kind of riff off of what anthony was talking about with respect to price price is important because it's liquidity and liquidity in the system in the ethereum economy allows us to do more things and do more impactful things that are relevant to the world yeah i'll add a little bit here so it's

we always kind of think of like what are we building for the end user right and i'll use this i ran across this hacker news um post most people listening probably know what hacker news is it's pretty popular message board around among like developers and i guess hackers right and it was like someone posted like why why does every developer i know these days somehow have a connection to ethereum and that like really hit home with me and i think like when we talk about defy and like open finance and ethereum being

open we should also realize that like not only are we building for the end users to be bankless and be able to you know transact however they want but it also gives the ability for anybody sitting anywhere in the world to build a financial platform to build a money lego like there's no barrier for anybody right and like now you kind of be need to be connected you need to know like some accredited investors some vcs and raise some money you need to like have ends in the banking industry now some kids sitting in some random country 15

years old or whatever can fire up a piece of code and it becomes an essential money lego on ethereum and i think like that is just as powerful as you know having censorship resistant transactions and being your own bank and things like that and i you know i i think the power we're really seeing is just this like crazy reach that ethereum has dc just said it like we're tackling so many use cases on chain but the fact that anybody can just spin up a line of code no one's telling them no

is just fascinating to me i've been thinking about that post i saw on hacker news for the last few weeks and i think it speaks to i really do think almost all like younger developers have some toad dipped in the ethereum ecosystem at this point which is just insanely powerful so eric like as we're maybe getting into d5 a little bit and kind of the the ethereum economy uh it's it seems very much that ethereum's destiny is at least partially tied to the success of of d5

right um there's also some competitors to d5 too right so if you think about uh say the bitcoin ecosystem uh and doing things on bitcoin um a lot of the money verbs as we might call them on bank list that you could do on on bitcoin you do generally through a crypto bank right through like a coin base or a gemini coinbase is now recently launched it looks like the the intent to to ipo that means a larger war chest that they'll

have at their disposal um how do you think this defy ecosystem of of startups with some of the strengths that that you you mentioned but also like the weaknesses right i mean these are like small developers not necessarily a lot of budget uh harder in some ways user experience at first there's private key management that sort of thing how can they hope to compete against the crypto banks do you think d5 versus crypto banks do you think defy can come out ahead

yeah it's definitely an interesting battle to talk about and i i've always said i think these universes are going to run in parallel for a while mainly d5 versus traditional banks but i kind of i'm putting coinbase in those in the traditional banking industry at this point like to me they're kind of just banks right they're more modern banks these crypto banks um i think you know it takes like having a bad experience in a traditional finance system to really start to understand the benefits of d5 so i i don't think as like you know

someone that lives in the us the first world country and doesn't have too many issues with banking and finance right now other than you know i graduated around the time where the financial crisis was going through here and it was hard to find a job other than that you know my banking life's pretty easy now i think we like kind of get locked into this bubble sometimes wait why would someone want a bitcoin as a hedge to monetary policy why would anybody want d5 there's a lot of people in the world that have hyperinflation currencies that have struggle to access a banking system

right so i think it's going to start there and grow like you know i guess in the u.s we could have inflation we got weakness in the dollar we're starting to see a lot of like censorship around traditional financial transactions regulations coming in those scenes can slowly creep in and i think it's going to take like the younger generation to realize the benefits um and it's going to be the slow wave right i i don't i've never been one to expect like the next year is going to be like where d5 takes over right i think this

is a long play of these two systems running and slowly people start to see the benefits and just with some of the other younger generations finding benefits like technology and mobile apps and all this stuff that we've all witnessed over the last 20 years they're going to slowly start to realize the benefits of you know being your own bank and having privacy and all that kind of good stuff so uh david letterman had bill gates on in like 1994 and there's a clip on youtube where like he's asking bill

gates about the internet right and um bill gates is kind of describing like he's like what do you do with the internet bill gates says well like who knows you can watch videos on it you can listen to music on it and letterman says something like like music like do you mean like a radio i mean like i already have that so the audience laughs right but what he couldn't picture back in 1994 is something like spotify the access to you the entire world's inventory of music on demand wherever

you want it right uh maybe turning the question to to to anthony's do you think that this is some of the promise of defy too that like we've just invented these primitives that you guys have been talking about these new money legos right and so we have the potential to leapfrog traditional finance and banks and their capabilities with this whole new thing that we've unlocked called programmable money we haven't even seen the full extent of or can't even imagine the full extent

of what's possible do you think there's an element of truth there and are there any examples that come to mind yeah i mean i think about this quite often uh and you used a good example there with bill gates trying to describe the internet i think in that moment or around that time bill gates was like this internet thing is going to change the world i just don't know how i know it's going to change the world i just don't know what way it's going to right and i can he couldn't really articulate it too well to people that were still stuck in the old world mindset right it

is definitely a mindset thing uh it is something that it's kind of like a virus that needs to to spread to like a mind virus it needs to spread for people to kind of accept a new paradigm and that's what the internet was right and then you know 20 years later it's like oh that was obvious right of course we're going to have music on the internet of course we're going to have spotify you know of course we're going to have youtube which is one of the biggest sites in the world um so i think with ethereum we're in the same position now where we all know that there is something here right there is something special here we know it's revolutionary we see the revolution

playing out in front of our eyes but we can never quite pinpoint what how it's going to play out or what's the what the next killer app is going to be right um you know even even like something like uni swap which everyone thinks is obvious you know automated market makers have been a thing for like decades like this is not a new concept right it's just that they didn't work before but now that you have a neutral kind of composable atomic infrastructure like ethereum automated market makers are the best thing you can build on ethereum at this point right in terms of product

market fit and you know even uh people that they created ethereum like vitalik right and the core team they would i mean they wouldn't have been able to tell you exactly how it was going to play out like no one saw defy coming but they knew something was special was here they knew building ethereum was going to enable something special they knew that decentralized applications were going to to work and they believed that and they just they couldn't yeah they couldn't articulate it um to to like uh to basically give like any accurate predictions and i don't think we can at this point either

give give too too accurate of prediction like we know d5 is going to be big we just don't know how it's going to play out we don't know how it's going to enter into the mainstream consciousness we kind of have you know theories that centralized institutions will build on top of these decentralized protocols which i actually think is how it's going to play out but we can't say for sure if uh d5 will usurp kind of c5 as it's known or tradfi for example um and i do agree with eric that there will be parallel worlds for a while uh people some people or at least maybe

maybe even most people will always um prefer that kind of like security of centralization um for example and that that experience but the optionality is there to to opt out of that just like the internet gave you the optionality to opt out of a lot of centralized kind of things right you don't have to use gmail for your email you can have your own email server because it's on a neutral protocol right you can do all these sorts of things you can basically run your entire life you know off centralized institutions on the internet yes your experience may be maybe a bit