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00:00:01
/crypto IRL: what happens next?
49 Plays17 days ago
What happens when crypto collides with real-world regulation? In this episode, we unpack how stablecoins work, why they matter, and how they’re poised to disrupt everything from cross-border payments to brand loyalty programs. We also explore what developers and businesses should be thinking about as the lines between traditional finance and DeFi continue to blur.
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Transcript
00:00:02
Speaker
man, like that could add up to a lot of savings and there might be a lot of benefit on the QSR side. And this is the type of disruptive technology that that can, not only will it start changing consumer behavior, but I think it's also going help the old guard innovate and do more for their customers and not just sit on the tired old frameworks and networks and protocols that exist today.
Introduction & Guest Background
00:00:42
Speaker
Welcome to the forward slash podcast where we lean into the future of IT by inviting fellow thought leaders, innovators, and problem solvers to slash through its complexity. Today, we're talking to Daniel Silva. We've had you on the podcast before. Welcome back, Daniel.
00:00:55
Speaker
Thank you. Daniel's a principal consultant here at Clarity, bringing a wealth of experience in leveraging technology to create business value. Beyond software development, Daniel is a strategic leader and team builder who has navigated complex challenges across a wide range of industries, including security, intelligence, defense, finance, and logistics.
00:01:15
Speaker
Notably, he served as a chief information officer and chief technology officer for the Subway Franchisee Organization Independent Purchasing Cooperative.
Early Career in Defense
00:01:24
Speaker
demonstrating his strong leadership in transforming operations.
00:01:28
Speaker
Daniel's passionate about helping organizations simplify their approach to technology and building robust future ready systems. that's That's a bio right there.
00:01:38
Speaker
That's fantastic. I didn't know you worked in the defense. ended that's that's That's how I started my career. Is it really? No kidding. Yeah, yeah, yeah. ah ah I'm from South Florida, right from Miami.
00:01:49
Speaker
And us Southern Command is headquartered or was headquartered in Miami at the time. I think it still is. And yeah, like coming out of college, I had opportunities to to to work there. And that's where I started. Yeah, that's where i started.
00:02:05
Speaker
Yeah. Don't tell me anything like that. You'll have to kill me. know what I mean? one I was on one of those sort of deals. No, I worked on nothing like that. it's all good. So how many, you'll never know James. You'll never, that's right. I don't know. But thank goodness. Cause then you'd have to kill me.
00:02:19
Speaker
All right. So how many Subway sandwiches have you consumed in your life since you worked for Subway?
Tech Experiments in Subway Restaurants
00:02:25
Speaker
gosh, many. Yeah. 500 at least more. That's a lot. I never got tired of it.
00:02:30
Speaker
So at IP, at the IPC offices, On the top floor, we used to have a subway restaurant, just just like the, you know, the furniture and it was essentially a restaurant, right? But it was like kind of like this bigger lab but and we would do like experimentation on foods and things like that.
00:02:51
Speaker
And they would stock every day for lunch. You could have, you could go there, you'd make a line and you would make yourself like they wouldn't have, They wouldn't staff it. It would just be up to you. You make a line, you go ah around the back and you make yourself a sub.
00:03:08
Speaker
I mean, something that might be interesting interesting. So as a part of IPC, at least at the time when you joined, you had to do a tour in a subway restaurant.
00:03:20
Speaker
You'd be assigned at a restaurant. They teach you how to do all the different functions in the restaurant. And you would work in the restaurant for a couple days. You would make sandwiches for customers. You would serve them.
00:03:31
Speaker
You would get to know those customers and, and get to know, you know, and yeah, it gave you an appreciation for the work that we were doing, right? Supporting. That's awesome.
00:03:42
Speaker
I love that. I love any company who does it. They immerse you in the business to like, you have that empathy for yeah really where they make money. I love that. Now, do we need to go back and rerecord the, uh, the bio to introduce sandwich artists, do I need to add that to your accolades? No. Okay.
00:03:57
Speaker
All right. Because you technically, you probably are qualified. I am a sandwich artist. You are a qualified sandwich artist. could work at Subway. Yes. So if this whole programming thing you doesn't work out for you, you've always got to. Make sandwiches or start so become a Subway franchisee or another kind of franchisee.
00:04:18
Speaker
Fantastic. But yeah. So you, because of the the IPC, that was, that was big on the, you did a lot of work around payments
Stablecoins & Financial Disruption
00:04:27
Speaker
and those sort of things. So one of the things but that we wanted to talk about was kind of, you know, there's, there's a lot going on in, you know, the financial services world right now. Um, there's, there's some deregulation going on. There's some new regulations happening. Uh, so it's pretty exciting right now, honestly, to, to see what's going on.
00:04:45
Speaker
Um, one one thing in particular is and this just happened kind of recently in July was the, the genius act. I mean, this is within yeah days ago or something. Right. So the stable coin era, right? Like we're, we're now getting like, that this is becoming a real boy. So what is this whole stable coin thing?
00:05:06
Speaker
Yeah, so stable coins are this idea of it's a crypto currency coin that's pegged or, you know, backed one to one typically. And I think the Genius Act talks about this to some underlying asset. So, for example, it could be tied to current like an actual fiat currency, like a US dollar, or it could be backed by another type of you know, class, like it could be gold or silver or some other mineral.
00:05:40
Speaker
It can also be backed by other crypto. Why not? You know, you could have a, you know, Bitcoin is very expensive per Bitcoin, but maybe you can have a stable, a stable coin that pegs one of those coins to some fraction of a Bitcoin.
00:05:57
Speaker
And the whole idea is that The value of that stable coin is always going to be pegged. It's always going to be pegged to the value of the underlying asset. So and the way it keeps its value is that it's essentially through arbitrage, right?
00:06:15
Speaker
As the value naturally goes down because maybe people are overselling it. then other people will buy it and that'll drive the price up. ah Likewise, if the price goes up too much because a lot of people are buying the stable coin, then the issuer of that stable coin, the administrator that stable coin can go ahead and either mint more or it could buy some of some of its own stablecoin to then kind of bring the bring the price ah ah down.
00:06:43
Speaker
um ah or Or sell rather. or It could mint and it can sell or others other participants in the market can sell. And then that'll naturally bring the price down. and it lets you know exactly what what you're getting now why would you bother like why would you take a hundred us dollars say and trade it in for a hundred crypto coins that's pegged to the dollar Well, it's because, well, first of all, there's liquidity, right? So if you put your money in, you have some high degree of certainty that you can get it back out. I can get 100 coins for my $100 and at any point I can trade in my 100 coins and get my $100 back.
00:07:24
Speaker
And I have some degree of certainty. Maybe I want to play, right? meaning Meaning maybe I want to get in when it's at 98 cents and get out when it's at 102 and I'll just monitor it. Maybe I'll just put in those orders ahead of time and I can just kind of play play a little bit of the market. I mean, just for sake of argument. um ah But more importantly, I think, right, beyond just having that confidence that you can convert it back to the underlying asset, is that now you've got crypto.
00:07:54
Speaker
Now you're in the crypto space. Now you can do things with those crypto coins that you could not do with the US dollars. um That might be...
00:08:06
Speaker
having to do with smart contracts on the blockchain, right? With some other crypto. It doesn't even have to be like ah the actual stablecoin crypto, but it could be the, you know, some other cryptocurrency that you want to do something with, but you can't easily exchange.
00:08:21
Speaker
ah Like, let me pick Solana. Like maybe I can't easily. Solana is a bad example because you can actually you can buy Solana with US s dollars. But but maybe you that maybe there's something that you want to do where you can't do it directly with US dollars.
00:08:37
Speaker
You exchange it for the stablecoin. Now you're in the crypto universe and now you can do something with the crypto. So there's like a lot of applications and it's a very interesting ah yeah like just a ah a very interesting technology that has developed on top of you know blockchain and and using the crypto and seeing the Genius Act pass. It means more of an acknowledgement from the government that, hey, this is a real thing.
00:09:02
Speaker
And let's go ahead and and ah make sure that it's safe for participants. So, okay, man I'm painting a picture in my head. i have to admit, like the whole cryptocurrency blockchain world is kind of a bit foreign to me. I know...
00:09:18
Speaker
a little bit about it. So the idea is if I if i buy one stable coin or something, you know, some coin issuer issues these stable coins, let's let's say they're one stable coin is equal to a dollar.
00:09:32
Speaker
It's I now have the the right, basically, it's kind of like a promissory note almost, right? like a digital promissory note, right? So I have the right to now request an actual US dollar with this stable point, but then I still have to have, still have to participate in, they're backed by, it like as you were saying, like kind of that blockchain. There has to be that proof of this this thing in existence.
00:09:54
Speaker
But then there's some underlying body that's making sure that yeah there is a dollar somewhere out there in the world that if you come with to me with this table coin, you can have a dollar for it That's what the genius act meant to address, right? Like the, the, the genius act said that if you're going to be an issuer of a stable coin, then you have to have at least one to one, however many coins there are minted that much of the underlying assets. So let's take us s dollars. If you're going to create a stable coin and you're going to start with a,
00:10:31
Speaker
ah let's say you're going to start with an inventory of 10,000 coins, you have to have at least $10,000 in the bank. and And it's a little bit more like you you actually need to be more capitalized than that, but not much, right? Like it it is around like that's where the Genius Act is trying to say, okay, if you're going to be an issuer of a stable coin, you have to be responsible.
00:10:52
Speaker
That way that liquidity is there. There's a lot of other rules around it. But one thing I'll just quickly note, is that um it's much more stringent than say a typical bank.
00:11:06
Speaker
A typical bank just needs to have, I think 10%. I could be wrong about that, but they don't have to have 100% of their deposits on hand. ah in in And so suddenly I think stable coins is going to start bringing in some customers that might otherwise like I think there's going to be an interesting transition ah from what people typically go to a bank for. They'll start going to these stable coins for they might find them safer in some ways, etc.
00:11:39
Speaker
And and that's going to leave the banks in an interesting spot. um But we'll have to see right like that just over time we have to see how that plays out and and stuff. And some of the I think from what I'm understanding from this, this whole genius act thing, because it now sets them up as regulated and whatnot. So that i think all of the regulations that we've come to know and love, you know, know your customer, OFAC and all of the anti-money laundering, all of these things.
00:12:08
Speaker
apply still so the the the people who are issuing these stable coins they still have to go through the you know this this isn't opening up pandora's box for fraud and all that sort of thing there's still banks and financial institutions that that create these things and back these things so it's on them to still do the know your customer i need to that's daniel silva that's that's buying 16 yeah right like all all of those things and i need to make sure that i'm not issuing them to someone from a A terrorist organization. Yeah, yeah.
00:12:39
Speaker
All of that still applies. So that that kind of helps you know level the playing field. And I think a everybody's kind of holding their breath in the financial services industry. Some were kind of waiting for ah some regulations and to let them know which way the wind was going to blow a little but a little bit, I guess, so they could know, like, okay, which which way do we want to take this thing? So it's it's it's fascinating. And I think it's it's really opened up a door.
00:13:03
Speaker
So technologists, as technologists, what do we need to become familiar with now? If we're going to be servicing financial services, you know, apps and companies, how do technologists, how do they need to educate themselves? What do I need to know about?
00:13:19
Speaker
Well, you know, in terms of the technology, I think definitely understanding how crypto works, the general understanding of decentralized finance, because stable coins start bridging that gap, right? Between kind of like your traditional ah banking systems, networks to this new kind of world of different crypto coins, exchanges, things like that.
00:13:43
Speaker
um I think ah starting to understand that is important. You know, there's this concept of DApps, which are applications that you can ah develop and then deploy into the blockchains themselves.
00:13:59
Speaker
Now the blockchain is a ledger and it's going to be recording your coins, right? So it's this idea of I can buy the coin um and then I can attach a smart contract to it, which is like another word for an application.
00:14:12
Speaker
ah And I think starting to understand that as developers, like we even if we're not interested in necessarily developing or deploying applications in the space, think every developer should be at least aware of how that works.
00:14:28
Speaker
you know For a while, I think we were saying it's the new generation of web, right? Like web 3.0, web, you know what whatever whatever the next generation of web is with this idea of Let's not let's you know, the current state of affairs is you have these big centralized service providers like Google, ah for example, like just to pick on one who has, say, YouTube and a lot of the video content.
00:14:55
Speaker
Yes, it's on YouTube, but you only have so much control over how it's served because, for example, YouTube wants to monetize its service. So it might put ads into your video in like it'll just splice them in.
00:15:08
Speaker
um uh and things like that and of course the creator gets a cut right so whatever revenue of that ad they get a percentage of it etc in this new world of like blockchain backed you know kind of crypto based applications maybe the creators can get remunerated with these you know they can get paid back with these you know kind of crypto coins and and and things like that and it creates a whole just like a whole different paradigm and way to think about the the incentives around creating the incentives around and and just the platform, right? That it's not just about
00:15:48
Speaker
one kind of private business that is building these platforms and maybe they're a public business, so they have to continue to grow and they have to continue to find ways to grow and continue to find ways to make more revenue.
00:16:01
Speaker
And that could start infringing on, you know, the, the, the creator, you know, this starts freeing up the creator. There's a little bit of the kind like the philosophies behind it and, um, hasn't taken off yet.
00:16:12
Speaker
So, but I, I, think that developers really should, technologists in general, really should have just a basic understanding of how that works, why is that happening, what is that movement about, how does it relate to crypto, how does crypto play into that.
00:16:29
Speaker
um i mean, that's whole one whole area. i think beyond that, we should also be thinking about applications of this technology. um So stable coins, Once you have a stable coin, you can now exchange it for another crypto. So you can imagine foreign exchange becoming a simpler operation rather than going through the SWIFT network to try to change some set of dollars, a basket of dollars into a basket of yen.
00:17:01
Speaker
i can instead take my basket of dollars for a US-based stablecoin, exchange that US-based stablecoin for a yen-based stablecoin, and then exchange those stablecoins for yen.
00:17:16
Speaker
And that could all happen within the same business day, because within the same business day, so it's not even like T plus zero, it's like real-time transactions. Yeah.
00:17:28
Speaker
yeah I mean, everything I just described and you could build. so then going back to like applications, you could potentially build an application that's constantly monitoring the market of both of both currencies.
00:17:41
Speaker
And then you could write some code that is doing some arbitrage plays where if suddenly if one exchange is valuing the yen less than another,
00:17:53
Speaker
You can go stablecoin to yen on one, then go back to yen on the other and make a profit. prospecting or you could do this cross Or you could do this cross. Yeah, yeah, yeah. There's a lot of interesting applications. Now that's more like for how can one maybe wrap a business around it.
00:18:09
Speaker
I think in terms of features or in terms of how we can help clients think about how this stuff can serve them, especially if they're in the financial industry. I think it does come down to, for example, if you offer a foreign exchange service,
00:18:23
Speaker
How can you keep the interface intact, offer a new feature, which is, hey, we can do real time foreign exchange. But then all of this is happening behind the scenes, meaning all the customer sees I exchanged some dollars for some yen and it happened immediately and I got a great rate.
00:18:39
Speaker
But behind the scenes, the implementation isn't through your traditional Swift and all that stuff, but it's actually through leveraging these stable coins and the the different crypto exchanges to make it happen. So you might avoid some of those like those interchange fees that happen as you're trying to go through these networks, to the payment rail networks to move It might be more cost effective. I mean, there's there's something called gas fees, which is essentially the cost of, ah ah you know, underlying all of these crypto transactions.
00:19:08
Speaker
is all the compute that's happening to make the blockchains work. And depending on which stable coins and exchanges you work on, there's always going to be some fees that you're going have to pay to make these transactions work.
00:19:20
Speaker
And you've got to think about that. But yeah, like, wouldn't it be cool if say like, you you know, imagine we were helping a bank think about how this technology could maybe help their foreign exchange services.
Stablecoins vs. Traditional Banking
00:19:32
Speaker
You could potentially have algorithms that are every 10 minutes checking what the cost would be using the two avenues. And when a customer goes to exchange, it can pick from last reading, which is, I pick 10 minutes, it could be every minute, i don't know, maybe every hour, but it can pick the most efficient route based on that outcome, right?
00:19:54
Speaker
um Man, and so then then that would have, I think, a reverse impact on the market because now, in some ways, the interchange fees They have a monopoly, right? There really isn't a competing network that processes payments at the same volume terms of dollars and transactions like the visas and the MasterCards of the world.
00:20:18
Speaker
But if now you're introducing the stuff, they have to now rethink, right? Because now they're going to want incentivize people to transact on their networks or maybe they're beginning to use crypto behind the scenes as well.
00:20:31
Speaker
So it's an interesting market. It's an interesting space. And I think there's a lot of opportunity there for for for businesses to think about, hey, I mean, to in terms of financial services, hey, what what can we what can we do there to lower our costs and potentially provide our customer a better ah better value, right? Like ah ah ah a better product.
00:20:51
Speaker
and what So one thing that's interesting that kind of, don't know, from a maybe from a technology standpoint. So that we've had something similar to this for for a bit, right? Like the PayPal and Apple Cash and Venmo, you kind of could put your money into this.
00:21:08
Speaker
Peer to peer. Yeah, you could put your money out in the ether, right? So you can take some money out of my my bank account and i can I can now have a Venmo balance. So there's like this ledger. So it's kind of reminds me of this whole stable point. So what how does stable coin make that world better? We already figured it out with Venmo. And does it does it send standardized things? Does it does it make it simpler? Does it what does it do to that?
00:21:33
Speaker
Well, yeah, it it i I think it provides new and potentially more in efficient implementation options for these networks that are trying to enable these peer-to-peer payment services, right? This idea that you can request $5 from me.
00:21:50
Speaker
and I'll send it to you. um And you immediately have it and it's there, right? The fact that it's there, that's not a pending transaction. that's not a That's not something that, okay, you have $5 and you have to wait until tomorrow for that transaction to clear and then it'll be there.
00:22:09
Speaker
And even then it's still a pending transaction from your perspective. It might be available to you, but It hasn't really settled yet. Like you won't see it until two days later. No, these peer to peer payments are immediately, they're they're immediately available, which means that, you know, these different banks that are holding these accounts or they they are able to do Apple Cash is an interesting one, great, because Apple is the they partner with, I think, Goldman Sachs also for the Apple Cash underlying. I know they do for the consumer credit.
00:22:43
Speaker
Yeah. um Which Goldman Sachs wants to get out of. But that's a whole other. That's an interesting conversation too we want to talk about that. But um And these peer-to-peer networks, like suddenly you have different options and it's not, you know, it kind of goes back to what I was saying. It's like you have the underlying networks. Zelle is a network that powers a lot of it. PayPal.
00:23:10
Speaker
is another network that and by network I just mean they have a protocol and they have a set of connected points. PayPal's protocol for peer-to-peer is actually Braintree.
00:23:21
Speaker
If you remember that company, PayPal bought Braintree. Yeah, they acquired Braintree like a long time ago and Braintree is the technology and the API that they use but it's essentially a protocol. you know, it's like Here's way to send, here's a message structure, and here's a message you you could send.
00:23:38
Speaker
and and it's And it's got the connectivity, meaning it's got the servers that are supporting these APIs, and it's got the APIs published and the integrations to these different ah service providers that are the ones that are then, they're the interfaces that you're interacting with.
00:23:51
Speaker
right So say if I send you money on, and it it works the same in terms of a general pattern, If you request $5 from me and I send it to you through an Apple iMessage, all Apple is doing is calling some underlying API, provided in this case, I believe by Goldman Sachs, and Goldman Sachs is then doing all of the transaction and it's doing it in real time. and um behind the scenes, there might be some settlement that's still happening, meaning the money movement of it hasn't actually happened yet.
00:24:23
Speaker
But the integrity of the transfer is there such that from your perspective, you've got the cash. The transaction is settled. It's done. You could spend it and that transaction will further continue. And then, you know, maybe the chips will fall and it'll all settle at the end of the day or whatever. Right.
00:24:41
Speaker
It's really cool technology. So what's interesting to me is, I think it through this, like with Venmo. I'm just going to use Venmo because that's the thing most familiar with. yeah I take some money out of my checking account, and and it goes into my Venmo, or somebody pays me, and that's just it's just sitting there until I cash it out. So at some point, that person had to take, actually, as you were saying, take money out of a real bank.
00:25:04
Speaker
And it goes into this kind of Venmo. I would assume it goes into Venmo bank account somewhere. They must have actual cash sitting there. So do these stablecoin folks, are they just kind of sitting on this mountain of cash while they while they operate and control this ledger?
00:25:19
Speaker
So just to draw a quick distinction, right? Service providers like Venmo, they're not banks. Right. So they don't actually have the stacks of cash. all All Venmo is providing is the connectivity and the integrity of the ledger such that they're liable. So should anything go wrong? Should there be a dispute? Should there be anything?
00:25:39
Speaker
um ah Venmo as a business is absorbing that and paying that out and stuff like that. And sure, they need enough. They need to be capitalized enough to support those kinds of disputes. And, you know, because otherwise trust is broken and they're out of business and things like that. But they're not regulated like a financial institution would be.
00:25:56
Speaker
Now, to draw a distinction, stable coins and stable coin issuers, on the other hand, do need to be well capitalized. they do need the cash on hand and not only the cash on hand um to ah satisfy the sellers, but they also need the cash on hand to mint new because the stable coins value can can kind of go down or up, right? Depending on how many people happen to be exchanging it for the coin, right? That's going to drive the price up or how many people are exchanging it for the underlying asset that's going to drive the price of the stable coin down.
00:26:33
Speaker
And it's up to the issuer to keep it pegged by either being the counterparty on that, although that doesn't make for an efficient market. The the idea is, is if you have some stable coins,
00:26:47
Speaker
and I have the dollars, I would exchange my dollars for your stable coins and then and and the issuer is out of it. like the That's the most efficient way, but it doesn't always work that way. Supply and the demand aren't in perfect equi priium equilibrium ever.
00:27:01
Speaker
So the issuer has to step and either ah buy some or sell some or and if they have nothing to sell, they have to mint them. ah and and potentially they have to take out of circulation as well.
00:27:16
Speaker
Yeah, go ahead Is it similar like, I know like in mind retirement account, if I don't have money that's invested in things, it kind of sits in like this cash reserves thing and that's supposed to stay very stable.
00:27:28
Speaker
and they But they do it does go up and down a little. There's little fluctuation. Yeah, maybe it has like a money market or something behind it. Yeah, yeah it's it's it's very minimal. It'll be adjustments here and there. It's the same. Dividends or whatever.
00:27:40
Speaker
It's the same idea. It's ah it's it's it's the same idea. um They're still risky, though. you you can You can imagine the theoretical possibility that if trust is lost in it, everybody will sell it.
00:27:53
Speaker
Right. and it will And they will sell the coin at a rate faster than the issuer can stabilize it. And that's when a coin becomes de-pegged.
00:28:04
Speaker
And that's a term. And it is on the issuer. Right. And, um, there have been some examples of, uh, uh, of stable coins spiraling out, but if it's backed by something like the U S dollar, those have been good.
00:28:20
Speaker
It's more like, cause you can have it backed by anything. So there have been stable coins that are backed by other crypto and that can be super risky. It doesn't sound very stable to me. That sounds like the opposite of stable. It, it, it, yeah. Like there, you know, uh,
00:28:37
Speaker
ah In a lot of ways, when I think of crypto, I think of how we are rediscovering. and So if if I can kind of zoom out for a second, right?
00:28:50
Speaker
We sit here in 2025 on a mountain of, in, in we we play in a financial market. that is regulated by a mountain of legislation and policies and improvements that and say are the result of over a hundred years of learning and protecting customers and protecting and incentivizing businesses to be in business. and And so we get to like this nice point where we can invest and have confidence and and all those kinds of things.
00:29:24
Speaker
Crypto kind of started from the beginning again. In, in part because they wanted to kind of like, they're, it's a complaint, right? It's like typical financial markets are under a mountain of regulation.
00:29:39
Speaker
let's create a you know completely efficient you know run by the people for the people financial system that isn't correlated in theory like this has changed over time but you know but at the beginning of kind of crypto you like with the bitcoin and and and and all that you know that is sitting outside of the default financial market that isn't correlated to it and that isn't way weighed down by all of the regulation And then what's happened is over time, ah the crypto...
00:30:15
Speaker
community itself has been self-regulating has been realizing, Oh wait, it's actually, it's actually not good for the market for someone to find a loophole in a smart contract and then exploit it and steal a bunch of people's money.
00:30:31
Speaker
That's bad because now people lose confidence, not just in that particular, um I'm thinking of a very particular story, the month mango token, but, um, uh, and that's a whole story we can talk about it. But, uh, uh,
00:30:45
Speaker
the crypto community realized not that isn't only bad for the mango token. It's, it's bad for all of crypto because now there's less confidence in it. So we need to create a backstop for that.
00:30:57
Speaker
And, you know, companies like Coinbase have been pleading the SEC, please give us the rules. Don't just point to the old rules. Um,
00:31:11
Speaker
that were not made with crypto in mind, tell us how they apply. Help us understand how to play so that we can provide this market offering in a way that is legal, in a way that is safe, in a way that can inspire confidence by the consumer or inspire confidence in the consumer um or by the consumer in in the crypto stuff.
00:31:35
Speaker
um Yeah, it's it's it's fascinating, you know? Every time I would read about it, it was like they they're basically regulating and and putting some you know codifying rules around payment stable coins so they're very specific about this these are not securities right these this isn't like so you can't make investments with stable coins this is purely to be used for payment purposes only so then you don't get the sec involved you don't get the oh you got to get a prospectus every 90 days or whatever you know all of those things that would come in with real securities so that would you know a whole bunch of stuff plus
00:32:12
Speaker
that one of the things was, well, if I can put my stuff over in the stablecoins and I can make, you know, because there's really no overhead, really, right? Like like and like the banks have, right? to They like can charge better interest under these table pointss or maybe just yank all their money out of the banks right and they put them Yeah.
00:32:29
Speaker
That would be the bad, right? ah So I thought that was one thing that was interesting. but I think they took a pretty good, prudent first step into you know delving into these waters. One thing that's, that's from ah from a technology standpoint, as um as we're building solutions, as we're trying to you know solve problems for our clients and for you know when we build things, the stablecoin market now, it's like it's almost like the...
Domain-Specific Stablecoins
00:32:52
Speaker
not the wild wild west because of regulation, but there's no limitation on like how many stable coins there can be. And for very good reason, the United States said every state can't issue their own currency. We have currency for the United States of America and it's called this.
00:33:10
Speaker
Are we going to go through that sort of thing again? Do we need to be careful trying to build all these these solutions that support like, you know, 50 different stable coins? are we going to get so you know have to consolidate all back down to one again like well right why would you pick one versus the other right and it's one of those things where i do think that uh maybe some of the value added services might be a part of it you know like you started mentioning special purpose stable coins so maybe we can create a stable coin that's specific for
00:33:44
Speaker
buying some goods and services. It can even be a slice of the market. Maybe it's so let's think about everybody has a smartphone. So or at least I saw this interesting statistic that more people have owned smartphones and toothbrushes.
00:34:01
Speaker
I don't know if that's true, but I think that's funny. Well, I live in Kentucky, so that that would make sense. You know what I mean? I'm just kidding. Wow. Okay. But let's let's say emma yeah i can I can imagine a reimagining of federal services being given through stable coins, things like EBT cards or social security payments, etc.
00:34:28
Speaker
or things like that, there's a lot of costs and overhead when it comes to from the idea of, okay, what are you entitled to, to then putting that in your hands? Um, we have direct deposit ACH and a lot of these technologies, but a lot of these technologies cost money. They take time.
00:34:45
Speaker
Um, and then once you have that money in the bank, what can you do with it as on the other side, right? The payment side, the more people can, uh, the more merchants accept right, right alongside your typical credit card. They also say, Hey, we'll take your stable coins too.
00:35:07
Speaker
because maybe they can do something with those stable coins you can't do with the us dollars. Maybe they're taking that and they have some side business venture with where they're investing that crypto in a way that is generating more value than just having the fiat currency, uh, might be, um,
00:35:24
Speaker
Like I could see that as a way right of of like just an application of this stuff to slowly start getting out there into the marketplace. um It's potentially also safer. ah ah It's going to be more cost efficient for forever all the participants involved because today's marketplace, everybody has a hand in the cookie jar, right? Like the the the the fees are high and that potentially raises the cost right of of consumer goods.
00:35:52
Speaker
um So yeah, it's it it'll it'll be interesting to see how these kind of special purpose coins. Yeah. Yeah, it's interesting. You just can't kind of brought up an idea. so you I put my hands in my mouth and I'm talking in my fingers. That's not good for recording.
00:36:07
Speaker
and So you' you brought up an interesting idea. So that if if these stable coins, perhaps, maybe they're kind of bound to a domain. And that maybe the quickest analogy I would have to that is something probably very near and dear to your heart would be like loyalty or or like a gift card, right? So instead of like, I can buy these stable coins, but they're only redeemable other than for the cash value that they have.
00:36:28
Speaker
Like I can only go buy a subway sandwich with that, right? That this is a subway stable coin and I can go buy it. But I get perks with that. So, yeah you know, the fact that I'm buying and I'm staying in the subway land with my money, you know that they i get perks for that. So is that kind of the idea what you're thinking about? but that would be like domain That would be amazing. It does not have to be...
00:36:47
Speaker
It does not have to be anonymous and it doesn't even have to be like a merchant specific coin, a merchant, or maybe what will emerge is that a stable coin will become popular in the quick service restaurant space for whatever reason. Maybe that coin has some side features that stable coin has some side features that are targeted at merchants and consumers of these brands.
00:37:09
Speaker
So now Subway is like saying, yeah, you can buy this sub for $6.99.
00:37:14
Speaker
ah ah you can buy this footlong for $6.99 US dollars or for six QSR coins. And this QSR coin happens to be one to one to the US dollar. So why would you spend the extra buck or 99 cents using fiat when it's one to one for you to X-ray it?
00:37:35
Speaker
Now there's still a little friction because you have to have the QSR coins. But if you're constantly shopping, this is the way that you do things, right? i have six kids and they're constantly wanting to go to Dunkin', to Starbucks or whatever.
00:37:49
Speaker
i know, right? like it ah Man, like that could add up to a lot of savings and there might be a lot of benefit on the QSR side. And this is the type of disruptive...
00:38:00
Speaker
technology that that can not not only will it start changing consumer behavior but I think it's also going to help the old guard innovate and do more for their customers and not just sit on the tired old frameworks and networks and protocols that that exist today and they don't enable a future They work well for now, but these stablecoins, they could potentially start disrupting in these ways.
00:38:32
Speaker
And the Genius Act is genius, right? Because that's going to inspire confidence in this technology. You're not going to be afraid that the issuer is going to go out of business.
00:38:43
Speaker
Yeah. Yeah. I mean, I guess you could kind of like... white label the stable coin to your business so the fact that it's a subway coin or whatever it is it may be underneath the cover qsr coin yeah the white label coin that's even more brilliant yeah it's like an xyz coin underneath the covers but i label it as you know um so ironically enough a subway a subway coin could be a stable coin backed by QSR coin, which in and of itself is backed by the US dollar. So you can't have abstractions.
00:39:15
Speaker
Right. Um, uh, Nobody steal my idea. White labeling stable point thing. And I just came up with that. So all eight of our list, I'm just kidding. Well, we haven't even talked about derivatives, you know, or like this is, this is just the asset.
00:39:29
Speaker
There's, there's a million things you could do with it. Yeah. I think it will be interesting if they do open it up to more security so you can kind of treat it like a money market. lawyer Well, I can imagine... imagine... i can imagine um
00:39:46
Speaker
Yeah, this is a little bit of a complex idea, but I want to talk through it, right? All right, all right. I can imagine you live in a country where X coin is allowed, but Y coin is not.
00:40:00
Speaker
So build a product... Or or let let's just say let let let let's say X coin is not allowed, but X coin would be really valuable to you.
00:40:12
Speaker
So you can create a new coin, let's call it Y coin. And for whatever reason, Y coin is allowed. But behind the scenes, the way Y coin is collateralized is by X coin. So really, you're just getting economic exposure to X anyway.
00:40:25
Speaker
um But now Y would trade at a premium to X because it's it's essentially not only X, but it's also access to X. So now Y coin is worth more. Yeah, like, you know, i can imagine this in more constrained markets like China, where maybe in China you want access to some Western thing that isn't allowed for whatever reasons, right? On principled grounds, you know, um maybe they were critical of the leader. So you can't do business here.
00:40:55
Speaker
ah ah There's a lot of, and that's what I would put in like in the in the category of derivatives, meaning you have the thing which is in and of itself valuable, the white label coin or whatever, but then you've also got like these.
00:41:08
Speaker
um It's wild. it it it almost you know it reminds me of... you know You've got these gift card exchange markets where they'll give you $70 for a $100 Subway gift card because they know you'll never go to Subway.
00:41:21
Speaker
So $0.70 on the dollar is better than nothing or better than just having that gift card you know that grandma gave you and just kind of sit in your... you know, in your in your closet or whatever.
00:41:32
Speaker
um This kind of reminds me a little bit of that. And I think stable coins is going to open all sorts of new exchanges and marketplaces where where you can access cash. I mean, I think in the US we're very privileged, but I think in other countries, man, like stable coins could be even more powerful.
00:41:49
Speaker
I wonder if it opens up the Because again, if if we're building solutions, if we're one of the one of the issuers or or whomever that's that's dealing in stablecoins and using them for payments,
00:42:04
Speaker
we're still regulatory, is that a verb? I don't know. We're still bound by regulations to sit to make sure that you know know your customer and and the anti-money laundering and stuff. Is it going to make anti-money laundering difficult? The reason I thought of that is like you brought up like, oh, if I translate from one stablecoin to the other,
00:42:22
Speaker
If you, I'm going use an analogy from like the shipping and industry. So you may say there's an embargo on China and I can't send, i can't ship goods from China to the United States, but I can, if I wanted to be an illicit person, I could say, okay, send my shipment from China to Burkina Faso in Africa.
00:42:45
Speaker
And they kind of don't care about those embargoes, right? They don't care about what we say. and there is no embargo from Burkina Faso to the United States. So they'll offload a shipment. put it back on another container and zippity-doo-dah, ship it to United States. So the origin, country of origin now is a different country, right? Not yet. Yeah. yeah so So if there are illicit actors in the middle like that don't really enforce the anti-mon law and our anti-money laundering and those sort of things, could it open us up to risk? and Oh, yeah, absolutely. And a lot of this is new.
00:43:19
Speaker
i think that we've not yet discovered... all the ways in which this can be exploited. And I think over time, we are going to learn that and that could potentially take down some exchanges along the way. So this isn't completely risk-free and it'd be foolish to say that we fully understand this technology.
00:43:42
Speaker
we We understand on some level what it could do and we're beginning to get a sense of how to And I want to be clear, the incentive to combat things like anti-money laundering is, or to combat money laundering is not,
00:44:03
Speaker
ah for moral grounds right it's not because it's it could be a good thing to do it's it's because it makes the marketplace safer it's because it the marketplace won't draw scrutiny the last thing you want is oh two thousand of my us dollars are trapped in a stable coin that i can't make liquid because the fbi has seized it and has frozen everything because there's some illicit act you know like it it I like to think of it in terms of efficiencies, right?
00:44:34
Speaker
the the The more illegitimate behavior is happening, whether that's exploitation of the technology, whether that's illegal behavior, just things that aren't allowed certain jurisdictions happening on those exchanges, then the more that that risk exists.
00:44:53
Speaker
and And yeah, like there's there's you know there's a lot that we have to learn along the way. Well, one thing that's, I guess, maybe that's in the benefit here is the whole notion of that blockchain, underlying blockchain, that you can inspect the chain itself to look for...
00:45:10
Speaker
funny business, right? i I would guess.
Blockchain in Future Finance
00:45:12
Speaker
Yes, that you probably yeah that might help. The only intrinsic value to any of this stuff is the yeah is the the the distributed, trustworthy ledger.
00:45:24
Speaker
ah Without this, you really just have, like, like it wouldn't work. um So, yeah, there are a lot of tools with which to, you know, we're we're learning a lot. that we In a lot of ways, we're going back to zero or going back to the beginning ah on purpose, right? We just, we want to, maybe we've forgotten why some of the regulations are good and we want to start from scratch and just start with the things. And it's also a new world, new generation, new ways to think about money, new, yeah, new opportunity, right? So, yeah.
00:46:01
Speaker
So I think in some level, in some sense, this blockchain technology and crypto in general, I think has a future. It's just a matter of you know what how how it plays out. And these stablecoins, I think, are going to be a great transition into that future.
00:46:17
Speaker
All right. so future trends, anything, opportunities that you would say, next? What do you see on the horizon for this? For stable coins or for, yeah, i i see more what I see wider adoption on the merchant side.
00:46:36
Speaker
i see, you already see it a little bit, you know, like someone like Elon Musk saying you could pay for your Tesla and Dogecoin or something like that.
00:46:47
Speaker
That's a little bit more meme worthy and not... more for attention grabbing than it is for like some kind of fundamental economic reason. But I can imagine is these as technologies mature underneath and as technologists like us build the services on top of them to make it possible for merchants to accept stable coins as forms of payment,
00:47:11
Speaker
then i I do see how that will then become the grounds for the US to create its first kind of digital official digital currency yeah that eventually will replace the US dollar and other countries will follow. And in some ways, money is already bits on a ledger anyway.
00:47:34
Speaker
It has been a long time. it has been for quite some time yeah so moving that right to the main you know moving that from the old mainframe base you know kind of old technology to the blockchain the stable coins are going to hasten that and i i i see a lot of that crypto becoming more mainstream ah there being a lot, you know, there being more application. I could imagine crypto being the de facto security method, meaning when you buy stock, it's really just buying coins on a, ah you know, ah on on some exchange, on some blockchain that represents that sake of ownership in that business.
00:48:20
Speaker
um And then that's going to start upending other things. it's It's going to be interesting. and that There's a reason Bitcoin has blown up. It was the original. It's it's limited in quantity. It's, you know, people see as the future. And in some ways to me, Bitcoin is like a museum. It's like, it was the first, it was the ultimate store of value.
00:48:44
Speaker
Um, and, uh, Yeah, it's cool to see kind of like then everything that's come after that and what we do with it. That's interesting. yeah like Of course, history repeats itself, right? oh you know We had the dollar and at first it was the gold standard and it was backed by gold. And now we've got this new thing called...
00:49:04
Speaker
You could think of the dollar the original stable thing. Yeah. So now we have stable coins in there and they have to be backed by the dollar. Maybe they won't be backed in the future. Right. that's the That's what we did. We went away from the gold standard. Are we going to go away from this backed by the dollar thing, as you were saying, and how it becomes its own thing?
00:49:20
Speaker
I don't know. It's kind of crazy. It'll just be backed by the full faith and credit of the United States of America. The United, yeah. um The good old US of What about like, that was that's an interesting thought where you said that you know when you buy a stock, so you would have like an AAPL coin.
00:49:38
Speaker
If I'm buying Apple stock, I would buy an AAPL coin. I don't need to go through the New York Stock Exchange. don't need to go through any those. I just buy a state of stupid coin. Cuts out that middleman. IPOs are...
00:49:50
Speaker
pretty easy to do. um At that that point, it's probably a easier. Think about it this way. There is no more IPO. It almost it it blends or blurs the line between private and public equity.
00:50:04
Speaker
Because now, as a proprietor of business, if I create a cryptocurrency that is meant to represent stock ownership in my business, meaning that's in the legal, that's in the it's binding. If you buy a coin,
00:50:21
Speaker
And let's say one coin represents 0.01, right? Percent ownership in like... Yeah, yeah. I don't know. Or shares or whatever. or Or let's go even lower. It could be 0.25 basis points.
00:50:35
Speaker
Every coin it represents some unit of stake of ownership with an understanding that that could be diluted if I... issue more shares or more coins or whatever. Sure.
00:50:46
Speaker
Yeah. Like that, that's, I'm being very pedantic about it in a lot of ways that are, if I were to create a coin and then release it and then say, all right, I'm selling this coin and you could, why would you buy it? Well, because if you buy it, it's going to help me raise money to build a business.
00:51:04
Speaker
ah And the idea would be, is that the value of the business we correlated to the value of the coin. So it doesn't even have to be a strict, this coin represents a share, fraction of a share in a business, but it could just be that this coin's existence and its name correlates to the business. So as the business increases in value, so will the coin, or at least that's what you hope.
00:51:27
Speaker
So that's already happening on some degrees, right? And these are the companies that are being sued by the SEC to say, hey, you can't do that. That's a security. and And you can't just do that, right? Like you can't sell... ah you cancel sell coins to people who are thinking they're investing. what What's the great... There was a definition for a stock. It's... Oh, man.
00:51:49
Speaker
ah It's an investment in a common enterprise hoping to profit from the works of others. so Something to that effect. I'm butchering the sentiment. If I was Joe Rogan, I could say, like, hey, Jamie, pull that up for me, would you? You know what i mean? i don't have that. Yeah, and I don't want to Google it right now. but I just have my dogs.
00:52:04
Speaker
They don't do anything. But that's essentially what they're doing. They're buying the coin, expecting the coin to go up in value because of the effort of someone else, the company's proprietors. And the SEC is like, that you can't do that. that's ah That's a clear security, right? That's a difference between, say, um Ethereum, which is saying, hey, if you buy that if you buy this coin, that this coin just has its worth. And it has its worth in the marketplace.
00:52:28
Speaker
And it's got its market rate. It's not a stable coin, meaning people that are buying and selling it and giving it the value. Yeah. yeah um Just not backed by anything other than other people wanting it Other than itself, yeah yeah yeah. Other than its integrity and its feature set and and and why you would want to.
00:52:45
Speaker
um The prestige of owning the thing. Yeah, maybe, right? like so it's it's in yeah like ah I do see a lot of application of this.
00:52:55
Speaker
If brokerages start accepting stable coins for investments, that starts getting really odd, right? Because it's like, okay, I'm trading crypto for stock ownership. And at some point I could see that just kind of blurring to, on behind the scenes, ah an exchange or a broker, market maker still needs to um buy or sell the stock which is presumably still sold in some fiat currency so they have to take the stable coin turn it into that but if the companies themselves are starting to offer crypto suddenly they can do the stable coin directly for the for the stake in the business express as crypto
00:53:35
Speaker
And to go back to like a point i was thinking about earlier when you said like IPOs are the nature of IPOs, like now if there's a framework for it, companies can just go public, period.
00:53:45
Speaker
there's no their their Their version of going public is just saying, hey, here's a new crypto. It is directly correlated to this business. And buying it is buying in the future of this business. And it's it is a security. I've registered it with the SEC, just like any company would register their publicly traded stock.
00:54:05
Speaker
And yeah, like that that is, if not upon us, like
Crypto in Investment Markets
00:54:10
Speaker
really close. And Stablecoin is only going to hasten that because it's going to bring more participants and more people in.
00:54:17
Speaker
Yeah, I think thinking through that, would almost be... It would almost have to be dividend less. Like you you probably wouldn't pay dividends on those type of investments. that They would just be traded among each other. And you're probably, it's basically prospecting tool of saying, I think your company's awesome. I'm going buy into that.
00:54:34
Speaker
Somebody else thinks, oh, it's really, really awesome. I'll pay you this much money more than you invested to buy that from you. so it just becomes this like trading up, trading down thing. but But paying dividends based on that would be the part where it would probably fall apart, I'm guessing.
00:54:49
Speaker
Yeah. Anyway. All right. So next segment on the show is what we like to call ship it or skip it. Ship or skip, ship or skip. Everybody. We got to tell us if you ship or skip.
00:55:05
Speaker
ah This is here. It's kind of like hot or not kind of thing. Right. So you're, you're supposed to, you know, yeah, I like it. Let's ship that to production kind of thing or no, skip it. Let's not do that. Right. So, okay um,
00:55:16
Speaker
Do you currently use, like, what about these, like, all these these payment mechanisms that aren't coined? Like Venmo and Apple and all of this. Oh, yeah. yeah you use that That's how I pay my allowance. Ship it.
00:55:30
Speaker
Absolutely. i'm i'm ah I like the idea. The only thing I wish that that from for me personally for doing you know like home finance, the thing that bugs me is like when my wife uses Venmo to pay everyone, all it says when i'm using I use a you need a budget, YNAB, to categorize transactions, all it says is Venmo.
00:55:50
Speaker
It doesn't say who it's from in that application. So I have no idea. It just says Venmo, Venmo, Venmo, Venmo. And I have no idea what it's for, but it's for all these different things. So that frustrates me. I wish they would like flow through like the payee information. so and Don't use Venmo. Use another one.
00:56:07
Speaker
Well, that's and maybe that's it. Maybe I'll tell her to start using like Apple Cash. Or whatever integration you're using, because I doubt it's Venmo's fault, right? Like, sure Venmo makes available in the transaction data, the amount in the source and the target, right? And so um however you're importing that stuff, maybe maybe they're ignoring or dropping that.
00:56:27
Speaker
I think it's just a matter of it it's transforms it's a company the bank you know really well um is is who I use but the i think that the issue is like when you take money out to go to Venmo they don't know what that's for necessarily it could be just i want to put money Venmo oh I see what you're saying yeah so the integration is with the bank not with Venmo so all you just get the bank's perspective yeah they dont so you need to import the Venmo data and then have it overlaid right yeah like somehow sync it up somehow yeah that'd be great So with Apple Cash, I can quickly say, um when when you whatever note you write, so you can send money and then there's a space to send a message and that whatever you send along with it does get recorded with the message.
00:57:10
Speaker
And on the bank side, I actually see that memo. Oh, okay. I'm switching to Apple then. Which is useful, what about but not everyone uses. like For Apple, you need to have an iPhone or you need to use an Apple device. Not everybody uses that. So it limits your market, right? like That's part of the problem. It's not platform agnostic. But it's otherwise really cool.
00:57:29
Speaker
And like I said with my kids, they all use it. so I don't hang out with people who don't have Apple phones. so I just don't. I mean, I just don't associate myself with those people. I'm just kidding. No, i I do have those friends, that did the green bubble friends. I do have those folks in my network.
00:57:45
Speaker
I love them just as much, for sure. What about, don't know, this is kind of really broad, but like quantum computing. Are you are you kind of hyped up about this, or is this something you're like, and that's all that's that's just hype. It's not going to happen.
00:58:00
Speaker
i i'm I'm not as well versed in it, ah but i yeah I tend to get good vibes. So I say ship it. I'm a little concerned about... ah Maybe a common thing you'll hear is when that goes live or when quantum computing becomes more mainstream, rip our encryption mechanisms, right?
00:58:19
Speaker
Yeah. But um I'm i'm still you know i'm all um'm all for it. i My son happens to be into it, into kind of like the math and the physics behind it.
00:58:32
Speaker
Yeah. um I say ship it. i keep Keep exploring, keep investing. It'd be cool to have new and exciting ways to compute other than the basic binary way that we've been doing it pretty much since you know the dawn of computing, right?
00:58:49
Speaker
since Charles Babbage. um I'm with you. I'm going to ship it on quantum. I think it's it's ah it's going to be a fascinating era for us. I think, the like you said, we're we're going to have to think differently about computing and and the way you structure algorithms. It's...
00:59:07
Speaker
it's it's going to make us expand our horizons a little bit and and kind of reframe our brain. and And maybe just just the fact that that gets introduced, we might think about how we've solved other problems in the past. We might think about problem solving differently.
00:59:21
Speaker
i think it's going to be cool. i think it's going to expand our horizons and and just the way think. It's exciting. Man, yeah I got to tell you that intersection, like when I was younger, Physics always interested me. At some point I had to make a choice, right? And so I leaned in more into computer science.
00:59:37
Speaker
To me, it felt more applicable. There was more applications and not just purely theoretical. But man, like that future, like if I were younger, like I would lean in a lot into it personally. It is very exciting to me.
00:59:50
Speaker
I was very excited about physics too. I took one of those tests, like when you're in high school and the like the army or whatever shows up at your high school and says, here, take this test and just kind of evaluate you. Apparently I did pretty well.
01:00:01
Speaker
And I was very interested in being a nuclear physicist, but they were like, hey, we want you to go on this submarine for six months at a time and stand next to this nuclear reactor on this submarine. And was like...
01:00:13
Speaker
now i think I think I'm gonna go with computer science, because I'm very claustrophobic. I don't think I could stay under the ocean for months and months at a time. yeah That was kind of scary to me. Not my thing. so Shoulda, woulda, coulda, right? Okay.
01:00:27
Speaker
What about the this one? I know you're you're kind of into music, and you're into art, and you're into writing, I think, is one of your big things. One of the stories I saw, a headline I read, I think yesterday the day before, the gentleman was talking about, like,
01:00:43
Speaker
you know, there was a band, should have looked up the details again, i was Joe Rogan. Hey, Jamie, bring that up. ah But I don't have to. There's a band that's not really a band. It's an AI generating music. Completely yeah But they topped the Spotify charts and then then kind of people were finding out that this isn't really a band. They were torn by that. Like, wait a minute, I like this music. What do you mean I like this? music I can't like this music because it's not real music. There are people. what what What do you think about this whole era we're getting into where nothing can be real anymore, right?
01:01:16
Speaker
What's the opposite of ship it? Skip it. Skip it. I say skip it. I think... I think what gives art its meaning is that a carbon-based life form created it.
01:01:29
Speaker
Now that's a hot take. Okay, fine. Okay, i love that's a hot take. I like it. But simulating, ah having a simulation of a carbon-based life form trying to create something that it thinks a carbon-based life form would create is on some level artistic but it's a different category i would not put it side by side and i would not equate it and i would not consider it the same and i mean i don't know in a i was gonna say 100 years might be like in 10 years
01:02:07
Speaker
you know We might all just be you know submitting to our AI overlords, but for the time being, i very much prefer i very much prefer... ah and i went to New York recently with my family and I wanted to write a blog post about it. So I thought this would be a great opportunity to OpenAI.
01:02:26
Speaker
um ah you know, ChatGPT technology. And I prompted it with some of my experiences and asked it generate a blog article. And I read it and I'm like, there's no way I'm going to publish this.
01:02:40
Speaker
ah it's It's not me and I don't even like it. i think it's not good. um Now, it did give me some ideas for how to maybe structure my article and then and then go ahead and write it out. but So much of art is not just the, how can I say this, the value of the output, um the journey is a huge function of it.
01:03:04
Speaker
And i don't think prompting an AI to do something is the idea. I don't think that's the journey we're talking about. And I don't think that's the output that reflects that.
01:03:16
Speaker
Right. There's nothing that went into it, so it it doesn't have a... say... That's why we value these things, because it took something to make it, right? At least the state of the art, i say skip it. right ae that's it's It's an interesting question, I think. um you know If you think of, let's say music in particular, like does the fact that it was generated artificially, like if I can dance to it in the club, right like that's is that ah okay? Is that enough for me to enjoy?
01:03:45
Speaker
Oh, that's... That's definitely fine. yeah I think. i don't I don't think everything needs to be this groundbreaking um expression of our of you know of our humanity.
01:03:57
Speaker
um but and and and and But at the same time, hearing you say that, you know hey, someone um you know someone artificially created some music that is topping the charts, it makes me cry for our collective taste in music.
01:04:12
Speaker
Yeah, that's my opinion. yeah I mean, now, I guess you could... You can put like some some music like um up against... like If the music's entertaining, it's interesting, I can dance to it, and it and it it you know makes me happy, whatever, brings joy. You know you you put that up against some of music that's actually...
01:04:31
Speaker
written by human beings and, you know, subjectively, you could say, oh, that song sucks compared to this this song in particular. I don't know. I'm a skip it myself. and that Like, the the get off my lawn side of my personality is, like, totally skip it. Get away from this stuff. This is crazy. I'm with you. Like, carbon-based life forms have to create art only. Like, this this is...
01:04:52
Speaker
It's just something else, yeah I guess. It's not even that it's good or bad, but if we're talking about art, I think that's very much a function of human beings and not ah and not human beings prompting. like not not a theres There's no ah ah ah level of in layer of indirection there.
01:05:08
Speaker
It's directly us. But what do I know, man? you know hey It's not my world anymore. It's the younger generations. Vanilla Ice is art, you know, so that's, I don't know. People probably have no idea who he is, right? But you're from Miami, right? So you know. A1A, Beachwalk Avenue. Yeah, right? That's right. So you know Vanilla Ice.
01:05:32
Speaker
I know Vanilla Ice. I have to get my 80s references in. It makes fun of me. i I'm always talking about a All right, stop, James. Collaborate and listen. That's right.
01:05:44
Speaker
Okay. Because ICE is back. ICE is back. We're going to stop. We're going to stop. We can go through the whole song. That's right. We can. All right.
Rapid-Fire Questions
01:05:53
Speaker
All right, so let's go on to the next segment of the show. This is, again, we we make sure everybody, we have to set the stage for this. And you've been on the show before, so you kind of know. ah But this is really important.
01:06:05
Speaker
This is where we get down to what the audience wants to hear about. This is the, the um that all of the rest stuff, they fast forward through that. This is what people tune in for, is the the lightning round. This is the impact to society. This is what makes humanity better.
01:06:39
Speaker
There are correct answers. ah So I'll warn you, make sure you you know think about your answer. But answer answer as quickly as possible. Okay, okay. um But... Are you ready?
01:06:50
Speaker
I'm ready. Okay. Let's go. yeah right you you You seem well composed for this. I'm pumped. You are pumped. All right. Are reindeers real creatures? No.
01:07:01
Speaker
Godfather or Star Wars? ah ah um Godfather. Okay. Are rats cute? No. No.
01:07:16
Speaker
if you were given an all expenses paid trip to Cleveland, would you take it? Nope.
01:07:23
Speaker
No. For our listeners from Cleveland, we love you.
01:07:28
Speaker
Yeah. I don't think we have any listeners in Cleveland yet, so we can still do that question. Not ever. ah Dark chocolate or milk chocolate? Dark chocolate.
01:07:40
Speaker
Every time. right I taste raisins, even when there are no raisins in it. like i do I love dark chocolate. It's the best. ah Do you think anyone considers you a hipster?
01:07:55
Speaker
No. Nobody. Absolutely nobody. not a Not a soul on this earth. okay Or ever.
01:08:05
Speaker
yeah um There's a couple here that like... I have a list of these. and Usually I try to skip around, but there's a couple of them right in a row here that I think would be good ones for you. like okay Super Mario Brothers or Zelda?
01:08:17
Speaker
Zelda or Link. I don't know. Like Zelda. Yeah. On a scale of one to ten, how good are you at trivia? One being not good, i would say like a three.
01:08:31
Speaker
Really? fine I find surprising, me actually. I have really great book knowledge. I'm not very good at like... um Or like, yeah, I guess it would be the opposite. Yeah, I'm not good at trivia.
01:08:42
Speaker
Ask EJ. Like, we'll go to trivia night and i we always lose.
01:08:48
Speaker
If there was a hair in your soup at a restaurant, would you return it?
01:08:54
Speaker
i don't I wouldn't drink it. i wouldn't eat it. But I'd probably, i don't know if I'd make a fuss about it. Depends.
01:09:05
Speaker
Who inspires you?
01:09:08
Speaker
My wife. Well done. Well done. That's a sincere answer. That's a good answer. I like it. Do you think she'll listen to us? Probably not. No, I doubt it.
01:09:21
Speaker
My kids might. Well, next time we see her, we'll make sure like, Hey, you, you should see like the call out he did on the, on the podcast for you. That'll get us some more listeners. We should do that.
01:09:33
Speaker
All right. Great job. You did a wonderful job. but I would 78th percentile on the lightning round. Cool. That's, that's pretty good. I mean, that's all on it. You know, I mean, you did better than the 78 out of a hundred people.
01:09:47
Speaker
Are reindeer real animals? I think they actually are. They are, right? As soon as I said no, I'm like, well, Rudolph isn't real. But a reindeer, I don't think they fly. But I think a reindeer is an animal.
01:10:00
Speaker
yeah i don't think I mean, grandma got run over by one, right? So it's got to be real. yeah They don't have glowing noses, and I'm pretty sure they don't fly. I'm not possibly. Yeah.
01:10:13
Speaker
This has been a lot of fun. Thank you. yeah This has been really cool. Thanks for joining us. Thank you for inviting me. This has been a fun conversation. Let's do it again soon. Absolutely. Anything you have going on? Anything you'd like to you know promote? Do you have any...
01:10:31
Speaker
blog post that you've recently written or anything you'd like to... I've been writing a lot more on my Medium. i like have a medium.com slash at um Daniel's Web is my blog.
01:10:45
Speaker
So I definitely recommend ah if you're you know if you're into reading. um ah But yeah, for for for now, that's yeah that that's that that's really the only thing I've got going on. I'm pretty fully dedicated to the work that we do and then everything beyond that goes to my kids, to be honest, you know, just spending time with them. So, um, but you got six and that's ah and, and, and they're growing up, right. And they've all had different needs and got one going to college here in the fall.
01:11:17
Speaker
ah um I've got like full-time. mean, my son also goes to college, but he's not full-time there. He's still in high school. um ah But yeah, just you know from 9 to 17. it's like a lot of different.
01:11:31
Speaker
but um But thank you for asking. And yeah, if you guys want to check out my my blog, that'd be awesome. And I'm going to continue to write in there. and ah And yeah, it's a goal that I have to express myself more and and you know I have a lot of ideas in my head and I want to take the time to start putting them to paper, so to speak. so And it's not going to be that AI-generated drivel.
01:11:54
Speaker
Well, I am gonna use am'm going to use AI to help me sort through ideas, but um i will I will write them. I think that's important, too. like I think the exercise of of of writing it hate to say it but it might become a competitive advantage in the future people are going to stop people are going to forget how to like think it won't take long communicate it's already happening yeah it's already happening i i wrote an article about how to maintain your authenticity in the in the you know the llm era uh in your writing and how to do that and how to use an llm but still maintain authenticity and yeah
01:12:36
Speaker
I should read that. You haven't read discipline. I find myself like going away from even the advice I give sometimes. yeah so Well, it comes back to what, why, why you're doing what you're doing. I mean, if, if the goal is to communicate something.
01:12:49
Speaker
then yeah sure. Lean in let it, let it help you do that. But don't lose touch with your ability to think and put ideas down. it be And I mean, outside of a prompt input box, um and ah as long as you practice that, then I think that,
01:13:08
Speaker
um and and oh and if anybody is doing this if anybody's just generating stuff in ai and then copy pasting without reading ah don't do that it will be evident it is not good it won't represent you well and you cannot blame it you will have to take full responsibility so ah don't do that at least read your stuff uh and do you some copy editing and then ship it and that's okay Well, apparently there's a new technology somebody was mentioning a today with Notebook lm You can actually have it.
01:13:42
Speaker
Oh, I love Notebook I do too. Audio podcast? You can generate a podcast. Oh, yeah. I think our listeners will know without a doubt we did not generate this. my My preferred my preferred ai engine is Gemini.
01:13:58
Speaker
And when you're doing something in Gemini, at least with the pro version, you have something called Canvas. And what Canvas does is it creates a shared workspace between you and the AI agent where it will put stuff in there and then you could put stuff in there and it's constantly reading it. So so it's a very collaborative environment.
01:14:17
Speaker
And then in the end, you can say, okay, generate a generate a podcast of this. And it will do it, an audio overview. And it ah it's impressive. I do a lot of, you know like I shared, I do a lot of creative writing. And and I've been trying to get into that space more.
01:14:32
Speaker
And I'll create like different characters that I might want to write stories about. And I will tell it to you know generate an audio overview of these characters. And it's amazing the job it does. I get to hear back what I wrote.
01:14:48
Speaker
and it does add its own flavor to it, it does sound like two people having a conversation about your content. And it it creates this interesting feedback loop where you'll hear something, you're like well i didn't realize that.
01:15:01
Speaker
And then you'll fold it in, and then you'll generate another one. And it is a really cool time that we live in, think. Yes, we have all kinds of cool things to To collaborate and create.
01:15:12
Speaker
Yeah. it's It's fascinating. right. Well, again, thank you. This is this has been great. i always have a great time talking to you, Daniel. Thank you, Jay. Thank you. If you'd like to get in touch, drop us a line at the forward slash at Caliberty.com. Thank you again, Daniel, for joining us and see you all next time.
01:15:31
Speaker
See you. The forward slash podcast is created by Caliberty. Our director is Dylan Quartz, producer Ryan Wilson, with editing by John Corey. Marketing support comes from Taylor Blessing. I'm your host, James Carman.
01:15:43
Speaker
Thanks for listening.