PREMIUM: Ryan & David on the Animal Spirits Podcast

Hey Bankless Nation. So Michael and Ben from the Animal Spirits podcast had David and I on their podcast recently. And if you're not familiar with Animal Spirits, it's been described to us as like bankless, but for stocks, I think that's uh probably accurate. So they took the host role in this conversation and interviewed both David and myself, and this is a recording of that episode.

We were just giving them a download on what's going on in the crypto world. Uh the ECTF, the Bitcoin ETF, AI meme coins kind of giving what is the bankless of stocks a download on what is the bank list of crypto, uh, which is us. Uh so if you just are kind of wondering what it's like to um peer over the fence or from a equities market perspective into the world of crypto, this is what that's like. So we'll go ahead and get right into that conversation. But first a moment to talk about some of these crypto sponsors that make this show possible.

We're very excited to be joined by the Bankless guys. This is David Hoffman and Ryan Schott Adams. I guess I started listening to you guys

uh, I don't know, 2019 maybe, 2020?

Oh wow.

Something?

Would have been 2020. We started the podcast in 2020.

2020? Okay.

I I hope you guys loaded up on some crypto at that time. We were uh, you know, we were down bad. It was a good time to buy.

I don't know if I bloated it. We we dabbled. We'll we'll get into that.

All right.

Um, all right, so

I don't think that so for our audience and for my benefit, I've listened to you guys for a while, but I don't think I know your origin story.

How do you guys meet? How'd you get into crypto?

Why'd you start a podcast? Just give us the whoever wants to take us, just give us the uh the background.

Do you want to do it, David?

Sure. Yeah. Well, so we met on Twitter because we were just saying similar things about crypto. Crypto has always been like in flux, in debate, people debating about what crypto is, what's its future. And in in 20 like 18, when Ryan and I like discovered each other on Twitter, and I think like meeting each other counted as just like him following me, me following him, and engaging in each other's tweets. We were just saying similar things about like what the future of Ethereum could be. And in 2018, that the concept of like Ethereum as it is today just didn't exist. Like Ethereum, Ethereum as a blockchain was contrarian inside of crypto at that time. And crypto was contrarian to the rest of the world at that time. And so there it was a very small group of people who were like publicly supporting and interested in and having conversations about Ethereum. And so everyone knew everyone else in that circle of like people on Twitter engaging in conversations, trying to discover truth. And then me and Ryan were just like saying similar things for a sufficiently long amount of time. And one day we just like, for whatever reason, like hopped into a Zoom call just to like pick each other's brains. And it turned out we just had a lot of similar ideas. So that was kind of like the foundation of it all.

I was actually a listener to David's podcast. So he he had this podcast at the time where he would argue with a uh Bitcoin maximalist.

Yeah, different podcasts. Different podcast from Bankwest.

And I found it so entertaining. I was like, this I like this guy. I don't know about this other host, but I like this David Hoffman guy. And so one day I I saw an article you wrote, David. And I don't know. I think I slid into your DMs. I don't know if it's the other way around, but I think that's how it happened. And then

really? I don't know. Yeah, I think we'll never know.

I'm pretty sure Michael and I met on Twitter as well.

You guys met on Twitter too?

We did.

This is so funny. And by the way, I'm in the we're in the recording studio here. You guys are using Riverside and had some of your uh production folks on. This feels so similar to how we do things at Bankless. This is how we do it. And it's like uh our audience has told us that uh Animal Spirits is like the bankless for stocks, basically. So uh yeah, it it it's really cool to meet you guys and like talk to our our counterparts in the uh the equities world. What we would call in crypto the TradFi world. I don't know if that I don't know if that's a slur for you guys, or you just like uh are you okay with being trad fi?

Uh totally okay. No, I embrace that. So just but you I'm curious about how you guys even

taking a step back from that. How did you get into crypto? Are you guys computer nerds or money guys? Or what's your story?

What?

Well, Ryan Ryan, you got into crypto before I did, so I want you

Yeah, I uh probably a computer nerd, uh, not not really a finance guy. I learned everything I know about money and finance through crypto, which is kind of like an interesting way to learn it. I I should step back. I did a business degree, okay, and then went on like to an entrepreneurial bench. So I knew the basics, right? I I knew how to read financial statements and such. But for me, it was like discovering Bitcoin in 20 uh 14. There was a guy I knew and he told me he was um running machines from his house. He was like crypto mining and he was earning Bitcoin. And I thought, well, that's some weird shit. I should look at like what does that mean? And uh 2014, I just figured out what Bitcoin was, did a lot of uh Andreas Antonopoulos like books and talks. And basically it was just sort of a wow, this is going to be big, as big as the internet type of moment for me. It's like transmitting money over internet protocol. It just like uh it very much appealed to me. But after that, there was like you could buy Bitcoin, you could move it around, there's not really much you could do with it. So my second trip down the rabbit hole was really Ethereum, like 2016, 2017. And so it's the idea of like money being also programmable. So, you know, if if you imagine like something like Bitcoin, you've got a spreadsheet and it's got like it's just a ledger, right? Um, credits and debits kind of ledger all the way down. Well, if you think of Ethereum, it's the idea of you you have a spreadsheet, you have something like Excel or Google Sheets open, and then every single entry point uh in in the cell is like you can program it. It's you can launch a macro from it. And if that appeals to some finance listers, it's like if-then statements for every single transaction on the ledger. So it's this concept of programmable money. And then I started to use like these early primitive forms of DeFi and they sucked. Let me tell you, the user experience was absolutely terrible. But I used some of I remember using some of my uh ether as a as a collateral asset and taking out a loan on uh this this um protocol called Make Your Dow. I was like, oh my God, I just took out a collateralized loan. I was in the process of like refinancing my house and the amount of paperwork, you know, like hundreds of pages of paperwork to get a collateralized loan against an asset that I held, which is basically my house. I could do this, even though it's a clunky ass like UI, uh, but like I could do this in a few clicks without signing any paperwork, without paying, you know, tens of thousands of dollars in refinance fees. That was amazing to me. And then uh met David and he was saying the same things. It was like 2018, 2019, everyone was fading crypto. Not only were they fading crypto, within crypto, they were also fading DeFi. They were fading Ethereum, this whole concept of programmable money.

So David and I thought, well, that can't be right. And we sort of uh launched Banklist to fight back against this. And it started as a newsletter. And David's like, you know, you should get it, you should try try podcasting. It's great. And I was like, what are we going to talk about? And uh so we launched the podcast, and then I don't know, 900 episodes or something later, we're we're like, we're still talking and we're still doing things. And uh yeah, it's been an incredible experience. And we've watched crypto grow up, we've watched it go through cycles, multiple cycles now. Uh so 2022 and the bust and all of that. And now it's now it's kind of risen like a phoenix from from those ashes as well. So here we are, 2024 for uh

David, what's your what's your origin story?

Yeah.

Uh I discovered Ethereum through mining. Um I discovered that like my gaming computer, I could just get like $5 a day from mining Ethereum. Uh and I had no idea what that meant. Uh but um I was trying to like save up some money to go to physical therapy school of all places. Uh and that kind of interest in just like some passive income um

uh grabbed my attention. And if I continue that story, it'll be like a pretty generic like crypto background story. I I think the the patterns that are kind of worth like pulling out are like um I had a bunch of friends who went to a business school at my university and I was in the psychology program of all of all things. Uh and all of them were like they were.

It's pretty useful for crypto, though.

The yeah, exactly. And so all of my business major friends, my finance major friends, like they couldn't wrap their heads around crypto. And I had like as little financial education as possible.

Like my like relationship with the RS was that they paid me money. Like I like I didn't get it. Like I like savings, like marketing, entrepreneurialism, all of that I learned just like Ryan through crypto. But the psych element I really like lean into as like part of my origin story because it gave me first I didn't have to unlearn finance to learn crypto. Whereas a lot of my financial like major friends like really struggled like understanding crypto from first principles because they just they had to unlearn stuff before they could learn crypto. And I never had to unwrap myself in my previous, like previous education to really understand how crypto works. But it's really like, and I think the uh Ryan also definitely has a skill as well, but like the skill that I that like gravitated me towards psychology and also I think helped me understand and how to navigate crypto is pattern recognition. Uh and crypto is a lot of patterns, uh, and it's very multidisciplinary as well. Uh, and so it's not really just one uh field of study. Crypto is like an integration of many different uh fields of study. And I think both for for Ryan and I, it was just a huge nerd snipe. Totally. And a lot of early people who who came into crypto, like there's the meme of like in it for the tech or in it for the money, or one of the things. A lot of people are just in it because it's so interesting. There's so many like facets to to peel back and to understand. Is it it is the great educational system of like the wild of nature. It's like the wild west of education. It's just like raw.

Raw learnings and you you also like it's it's live too. Like everything is a market. Uh, and so you get to like place your bets on how you learn uh and you get validated or not validated. It's just it's a fun game.

Where do you guys think crypto is today

versus where you maybe hoped it would be idealistically?

When when you first got involved. And David, I'll just I'll tee you up with your pinned tweet.

You said this is in 2022, crypto wasn't created to make you rich, it was created to set you free. So riff on that.

Sure, yeah. Uh a lot of people like to do like the whole like crypto is in like the 90s of the internet, which is like a fun comparison.

Uh I kind of I kind of prefer comparing crypto to like a biological organism and and seeing it on its like growth arc.

And I think right now crypto is in like early stages of puberty.

Um, like Bitcoin 2009, uh, Ethereum 2015. Uh, so Ethereum's now nine years old. Bitcoin is uh fifth 14, 15 years old. I think the industry is around like what we would call like um

Like uh 13, 13, 14, or 15 years old in human terms. Uh just like starting to figure things out, like not an idiot, but like still a lot of growing up to do. Like not done growing, not done maturing. Uh, and that comes from a variety of different like places. Uh, all of our protocols other than Bitcoin still aren't finished. Like Ethereum, not finished, Solana not finished. Like there's a lot of work to do on these smart contracting platforms. And so the like the layer ones, the the tech uh still is, and they have like developmental roadmaps that they need to complete. Uh, and then how to use these things, the applications that we're using, uh just experiments, all experiments. Some have like meaningful like adoption growth, like stable coins, very, very mature. Stable coins are the most secure, uh mature part of crypto. Other things we have like directional um uh security ends, like we know we're going in the right direction, but like we're still not done yet. Uh, but overall, I was I would call it like we're in we're in like an early puberty phase of just the entire uh the entire movement.

One of the things that surprised me about the onset of the Bitcoin ETF

uh was just how much excitement it caused from both TradFi, people like you said, and crypto people. And it seemed like crypto, the crypto community, I'm painting a broad brush here, was pretty receptive to like letting Wall Street and other people in to the ETF. And I don't that would have surprised me a few years ago. I almost view like the crypto natives as soccer fans in a way. Like, you know, soccer fans are like very knowledgeable, uh, they're a little snobby, no offense. But and it's some sometimes soccer people like they the fans they don't want like other people outside of soccer into their inner sanctum. But crypto, the crypto crowd, it seemed, was very welcoming.

When Black Rocks of the world and Fidelities came in with these ETFs, did that surprise you guys at all?

Go for Ryan.

I think um let's see, it's actually the more the the most surprising thing was

the adoption

Of uh Bitcoin and that like the size, the growth that it's seen has like, I think, floored people in crypto, but also on the on the trad fi side of things. I'm not surprised that the the social uh community around crypto like uh was excited for this because there's one sort of soccer chant that you like just is throughout crypto and always will remain in crypto, and that is the chant of number go up. So anything that that starts making number go up, and if you are talking about my bags, you are good. If you are talking against my bags, you are bad, right? That that is just like the um you know, like the the the monkey brain, the lizard brain at the back of every everyone in crypto's head. And it, you know, Bitcoin is is certainly no exception to this. So to hear Larry Fink, who is kind of like a banker establishment type guy, start shilling, start shilling Bitcoin, right? It's just kind of like whoever shills Bitcoin is good because Bitcoin is good. This is kind of like the ethos and rationale. I do think that can go too far. I think that there is a um a failure mode where crypto gets captured by like bankers and institutions and like easy to see. Let's say all of the Bitcoin or all of the ether ends up inside of institutions and no one is actually using these assets to go bankless, right? It's just like, what have we done? Well, we've probably recreated uh the banking system that we just left, and like what's the point of that? I don't think we'll fail in that way, but that is that is certainly a uh a concern that crypto would have to avoid. But right now, you know, just like given that 50, 15 years old, as David said, this entire industry, the biggest threat for something like Bitcoin or anything like in crypto is that it gets strangled in its crib. And when you have like the most powerful asset managers in the world now just like being advocates for this thing, and you and you look at it and you're like, oh my God, how far have we come?

from this uh crazy internet money that like everyone was fading to to now, I think that's what the the crypto community is really celebrating here.

So the podcast is called Bankless. Again, David, you said that crypto is created to set you free. Let's

zoom in on that. What exactly is wrong with the current institutions and the way money works? What are you trying to set us free from?

Yeah, crypto is all about like individual sovereignty and individual power. Cryptography, in its essence, is a technology that strictly benefits individuals over institutions. And so you have like the institution, the large centralized institution of like a government, and then you have the many, many, many individuals. Like cryptography strictly benefits individuals. And applications of like, and this comes in the form of just like communication privacy, like privacy to a privacy channel between two humans, freely able to communicate between themselves without like the government also watching. And so it's a sovereignty tool. Cryptography is a sovereignty tool. Cryptocurrency is similar when you apply cryptography to the world of finance. A big Bitcoiner philosophy is that just like, and also Austrian economic philosophy would say this is as well as like the individual is the best decider of their local like market environment. They are the best decision maker of their own uh of their capital and how they allocate it. Uh and so like cryptography does similar things of pushing the decision making powers and and to the individual. And this cart starts from like what Ryan and I call like being bankless, going bankless. Uh like

Do you think those are dollars in your Wells Fargo account? Like, are you sure about that? Uh, because that's actually up to Wells Fargo. Like you're you're custodying your capital, your savings, your money, your investments with intermediaries, and you're bestowing your trust on them. And inside of America, that generally works out okay, but there's plenty of instant in like instances where like your money in your bank gets stolen from you by the bank, by the government. Like, look at Venezuela, look at Argentina, look at India, who like just like invalidated uh bills, like denominations of bills one day, just canceled them. And so the idea of like crypto is really about making sure the individual has a maximum amount of sovereignty. And that starts with like uh in Bitcoin, it would say a money that is out of the purview of a central bank. And Ethereum would say um banking out of the purview of a commercial bank. And so the assets that you control are yours and no one can steal them from you. And it really kind of starts there. And we use banks and going bankless as an idea to accept that.