The Evolving Crypto Landscape

Published on
September 29th, 2020
64 minutes

Blockchain as a Solution to Financial and Hardware Infrastructure Inefficiencies

The Evolving Crypto Landscape

The Interview - Crypto ·
Featuring Nicolas Carter

Published on: September 29th, 2020 • Duration: 64 minutes

Nicolas Carter, partner at Castle Island Ventures and cofounder of Coinmetrics, explains how he got started in the blockchain space. Carter describes his background, what led up to the creation of Coinmetrics, and some of the exciting ways that that data is being used by institutions. He explains the evolving regulatory regime around crypto and how he expects this to change over the next several years. Carter also touches on the central bank's growing interest in crypto assets and how stable tokens have the potential to disrupt banking across the developing world. Filmed on August 28, 2020.



  • DF
    Dan F.
    16 October 2020 @ 12:04
    Nic- I'm interested in the comment on a return to 'free-banking'. Have you given consideration to multiple reserve assets? For example 1) bitcoin 2) allocated physical gold that is digitized and using a blockchain for tracking 3) 'other'... my observation is most all central banks and many old money families own gold, and I wonder if this asset may be useful in the new digital banking world ?
    • NC
      Nic C.
      20 October 2020 @ 17:39
      Gold-backed stablecoins like DGLD, XAUT, and PAGX are very interesting. They are gaining a fair amount of traction. The reason I like Bitcoin as a reserve collateral for a reprise of the free banking phenomenon is due to its natural auditability, which compensates for the ways in which it underperforms gold (like volatility). It's trivial to prove to a third party that you are fully (or partially) reserved with Bitcoin, which reduces the trust requirements of engaging in a custodial relationship. This is why I advocate for proofs of reserve ( It's also easy to take 'physical' delivery of Bitcoin as a depositor, which makes the market more competitive and efficient, if depositors can easily withdraw funds. Both of these features – auditability and cheap physical delivery – are not shared by gold, which is why I feel that it's less suitable to be a reserve asset for a neo free banking system. That said, I have a very positive view of gold generally, and feel that there's absolutely a place for it during this monetary dislocation.
  • KK
    Kiwoong K.
    11 October 2020 @ 04:31
    we HAVE to bring the gold bugs on board. I used to be a gold bug that used to bash crypto. I was waiting for certain things to happen with crypto before I gave it credibility, and those things are starting to happen. Now I can defend bitcoin against almost any and all types of criticism. Currently, my allocation is bigger in crypto than gold-related assets. Also, I love PAXG lol
  • DP
    D P.
    6 October 2020 @ 05:32
    Ash is very, very good at his craft.
  • SV
    Santiago V. | Contributor
    2 October 2020 @ 16:11
    Nic is one of my favorite follows on both Twitter and podcast. His discussion w/ Lyn Alden on Swan Signal was incredible, highly recommend a watch: He's one of the seminal thinkers in this space and someone I respect greatly. I hope I get his attention in answering some of my questions and addressing some comments. I would like more insights into Nic's view on a few of the statements made during this interview and stake some minor issue with some of the sentiments expressed, which I'll present here. There is no intent in generating any kind of drama from my questions, but I think value will be had with a respectful challenge to some points made. 1. Early in the interview Nic states: "It [Bitcoin] doesn't have any dependencies on really any outside systems. It is self-contained.". I think this statement is either too forward looking (he may end up being completely correct in the end) or a bit hyperbolic. The entire bitcoin tokenomic incentive mechanism is dependent on existing societal structures (either the fiat money rails used by miners & exchanges, developers, etc. to pay the bills and keep the proverbial lights on) and/or the supply chain of compute components that depend of fabricators in equally fiat dependent supply chains. To say that the system is self-contained maybe getting a little ahead of ourselves. But this brings up a more important point. How do we migrate from a system in which these ecosystems are so fiat dependent, for both ensuring network security to incentivizing developer support, to one in which the cradle-to-grave dependencies I itemized are paid for solely in bitcoin (true non-dependency)? How do we do this without/before hyper-bitcoinization? 2. I think we should reserve judgement on the idea of immaculate conception as it relates to distribution systems of different digital asset projects when imagining how "fair" we as a collective assess them to be. I realize that it's ultimately a subjective determination and will admit that the Bitcoin distribution model may be the "best" of the worst, nevertheless it's important to point out some critical nuances. For one, we know the developer(s) of Bitcoin were the first to "mine" the asset when at the time the difficulty was so minor one could do it with a laptop and a lightbulb's worth of electricity. At that same time the monetary incentives were NIL and the game theory moot. In this context of low compute requirements and electricity consumption it's estimated that early adopters, including Satoshi, mined between 150,000 to 1 million BTC, the distribution of which is entirely obfuscated. I'm not sure one can stand there and state equivocally to all objective viewers that this is a fair distribution mechanism when considering the endgame of hyper-bitcoinization, particularly to either naive or the technically challenge, who through no fault of their own end up with "sats" rather than bitcoins. Historical conditions matter. I acknowledge that current wallet distributions are improvements on this as time progresses (as you referenced the Gini coefficient migrating from 1 to some other value) but it's not a foregone conclusion that the trend of better distributions is assured or sustainable, particularly if as an asset class the wealthiest fiat holders do buy into the SoV narrative, that distribution could likely resemble what we already have in society. Aren't large fiat holders (private/institutional) presently in the best position to systematically accumulate Bitcoin? 3. At the current $200 Billion dollar market cap for Bitcoin the premium on block space is sufficient to drive behavior to high value transactions in exchange for secure settlement & liquidity. What happens when Bitcoin price appreciation brings the race of the digital asset space towards similar market caps (i.e. Bitcoin at $1 Trillion with alternates at ~$200 billion) and people are confident in securing their settlement / transactions on other blockchains without having to compete for block space? Aren't we just shifted in maturity with respect to the premium of any given block space? 4. As a general comment, the analytics being done by Nic and his group are incredible and ahead of the curve with respect to public transparent blockchain and how they are deconstructing traditional equity structures (including claims on cash flows, governance, etc.). This is the revolution that's happening from the ground up in the disintermediation of traditional financial instruments. Kudos to Nic for the vision and interest to pursue this subject. 5. CBDCs are indeed a desire to increase monetary goals of the central banks and obtain the telemetry from citizenry, data which we know that is already carried by Visa, MC, PayPal, etc. New masters, but one's with a Federal mandate, very concerning. That being said, CBDCs are likely to be necessary with respect to a fully digital global Fx market and the ability to interoperate value across pools of liquidity. What do you anticipate will happen to private stablecoins in the context of CBDCs if they become equally ubitquitious? Worse yet, what happens if VASPs are forced to remove fiat based stablecoins (those with fiat proof of reserves as apposed to algorithmic types) from their offerings / reporting to promote/force CBDCs? Once again, I loved this video and Nic. He's one of the few that I consider capable of answering the above questions in a thorough way with an informed view. I hope to meet him someday!
    • NC
      Nic C.
      3 October 2020 @ 01:01
      Hi Santiago! Thanks for the kind words. Happy to address your points. 1. I believe what I meant there was that Bitcoin doesn't require (as other cypherpunk cash systems do) external input in the form of price feeds, or active monetary management, or anything like that. Of course, Bitcoin is this elegant system but when it collides with the real world it becomes exposed to the eddies of financial markets, as we see today. Mining being dependent on fiat infrastructure doesn't concern me too much; Bitcoin pays its miners in a unit which is perceived as valuable and through that acquires a high level of security. If you zoom out it's really just a matter of society valuing Bitcoin, so Bitcoin is able to marshal resources to cover security. If miners used wampum to settle their debts with power companies, it wouldn't make much of a difference to Bitcoin. However on that note I have seen instances of miners taking Bitcoin-denominated loans, so that closed-loop commerce system is already developing. This makes sense because their revenue is Bitcoin denominated! So they're an early class of entity which is suitable for Bitcoin-denominated finance. This is one reason I'm so interested in bitcoin credit creation, which I think will is a precondition to Bitcoin becoming more of a UoA. 2. Satoshi definitely mined 700k-1m BTC, but that was necessary of course to keep the network secure in the early days. There's a few things Satoshi did which give me a high degree of confidence he/she was not interested in being a crypto-oligarch: Satoshi has never moved their coins, aside from a few test transactions; Satoshi gave the cypherpunks 3 months notice about the release of Bitcoin; Satoshi gave other miners a 5 minute "headstart" after they mined a block (; Satoshi turned off their miners when the network was sufficiently secure; Satoshi encouraged Laszlo (bitcoin pizza guy) to delay creating GPUs to mine Bitcoin – suggesting Satoshi cared greatly about the distribution. Granted, it wasn't perfectly fair, and my critique would be that the distribution curve (releasing 50% of coins in the first 4 years) was too aggressive. But I believe Satoshi did their best to achieve an equitable distribution. Large asset owners are definitely best positioned to acquire BTC – nothing we can do about that. Every time a new commodity monetizes it's the first to recognize its usefulness that gain relative to the holdouts on the old monetary standard who suffer as their SoV is demonetized. I think Satoshi created the best conditions (within the constraints that existed at the time) for equality of opportunity, but they couldn't mandate equality of outcome; the market ultimately makes those allocative decisions. 3. Good question. The question of alternative blockspace is a very salient today as ETH miner revenue is exceeding that of BTC. The question is really – is alternative blockspace a perfect substitute for bitcoin blockspace? I think so far evidence mostly points to the contrary, at least so far. Long term I think Bitcoin's ability to ward off competitors is a function of its monetary credibility (and the corresponding lack thereof for alternatives), its adoption generally, and the growth of a bitcoin-native economy. As you see with wrapped BTC circulating on ETH, Bitcoin is becoming the native 'hard asset' of the entire crypto industry and it may end up circulating elsewhere but ultimately settling to the base layer. I expect that volume of final settlement will be sufficient at maturity but it's an open question. 5. It's hard to forecast the fate of private or semiprivate stablecoins, at present they are on a regulatory knife-edge with the permissioned pseudonymity model. It depends on whether central banks are willing to permit real digital cash (with true autonomy and privacy assurances). If so, you could imagine them either creating CBDCs that resemble physical cash in a digital context (fast settling, token based, privacy protections) or allowing the private sector issuers to continue their growth, and possibly giving them direct access to the Fed window so they have liability free backing. However, based on all the conversations I've had with central bankers about this, I'm not optimistic that they would want to create true token-based CBDC. I could see private issuers growing in stature though, at least in certain jurisdictions. If you roll through Boston, give me a shout! Email: nic [at] niccarter [dot] info
    • SV
      Santiago V. | Contributor
      3 October 2020 @ 01:38
      Wow, incredible replies Nic. Thank you for the effort, time and thoughts. I'll likely consider these a while longer for a meaningful reply, the information density is approaching near singularity, so I'm treading carefully lest I be sucked into the event horizon. I happen to live on Cape Cod so not too far outside of your neck of the woods. I'll definitely take you upon the offer when the climate has improved for socialization again and I come out of my cave. Best wishes.
  • FR
    Frank R.
    2 October 2020 @ 04:15
    Good interview. I'm surprised that someone who is very knowledgeable in the space like Nic doesn't know that Celsius Network not only created leading in this space but is also the biggest lender too. They are far bigger than BlockFi. They offer higher yields and lend at 1%.
  • SS
    Sami S.
    1 October 2020 @ 04:51
    Very, very valuable conversation, much thanks to Nic and Ash! Nic, do you have a view or data on the trend of amounts of btc in cross border transactions, such as from developed economies to emerging economies? I.e. how far are we in people switching to btc to send money home etc? Thanks.
    • NC
      Nic C.
      1 October 2020 @ 21:03
      This is a very tricky question to answer because bitcoin transactions are pseudonymous, and many users that are using bitcoin for cross border txns are doing so to escape capital controls or other encumbrances, so they have an interest in not identifying themselves. That said, there are some good inferences that can be made. The most comprehensive coverage on the topic is probably chainalysis' 'geography of cryptocurrency' report, see here:
  • LB
    Lukas B.
    30 September 2020 @ 11:20
    "Credit is the foundation of civilization" That's a tad overstated....
    • LS
      Lewis S.
      1 October 2020 @ 02:51
      It makes sense to me. Owing and trading favors probably came before trading goods.
  • DP
    Duane P.
    1 October 2020 @ 02:46
    This guy is a wizard!
  • BN
    Brady N.
    1 October 2020 @ 01:45
    45:50 If the belief and trust in golds value could be removed from it's atoms you'd get BTC.
  • NC
    Nic C.
    30 September 2020 @ 23:29
    Thanks for having me! To RV subs: all my commentary and published work is available at If you have any questions about anything I said in the episode feel free to email me at nic [at] niccarter [dot] info
    • KB
      Kurt B.
      30 September 2020 @ 23:54
      Outstanding as always. And was Ludwig von Mises ever interviewed for Real Vision by Ash B? No he was not.
  • MD
    Matt D.
    30 September 2020 @ 00:22
    Excellent interview Ash and Nicolas! Liked the discussion on CBDC's (well, this is a concern!), their paradox, and the "idea" of stablecoins as tokenisation of bank balance sheets. Interesting - second RV Crypto guest who is not saying that BTC is the new dollar, but a dollar "distributor" or legitimator. Which to me seems more sensible. This guy is smart and a great guest. Thanks.
    • PD
      Peter D.
      30 September 2020 @ 12:56
      Can you provide a link to the other commentator who cited BTC as a dollar "distributor"...?
    • MD
      Matt D.
      30 September 2020 @ 21:22
      @Peter D - no problems. The other RV Crypto was the one a few days ago with Santiago and Halsey Minor (25th September 2020 published). I think about page 4 of the transcript it is first mentioned. Its a long one, but there are some amazing ideas in there in my opinion. Buying a coffee with your Google Shares was one that stuck in my mind - the potential of something like that is huge.
  • CH
    Crag H.
    30 September 2020 @ 20:22
    Nic is hands down the best commentator in this space. Can't recommend his work highly enough! I especially like his paper called "A Most Peaceful Revolution". A fantastic read (see the medium link below). I also enjoy Castle Island's podcast "On The Brink": Bring Nic back as a regular!
  • RA
    Rick A.
    30 September 2020 @ 20:12
    This was a good interview. Nick obviously understands this financial segment more fundamentally than even most any in the crypto world. His perspectives run much deeper than simply the technology.
  • HR
    Humberto R.
    30 September 2020 @ 18:36
    Well done Ash! Nick is a rising star worth following going forward.
  • PD
    Peter D.
    30 September 2020 @ 12:05
    Great interview. Ash Bennington rocks. Two additions to his "greatest hits:" 1. Bitcoin "Terminalists" 2. Enantiodromia ... Jung's identification of the tendency of a thing to become its opposite. Look forward to following the crypto stream ...
    • AB
      Ash B. | Real Vision
      30 September 2020 @ 16:01
      Thanks, Peter!
  • Sp
    Scott p.
    30 September 2020 @ 01:38
    So who's next after Venezuela? Share of respondents who said they used or owned Crypto Currencies: Turkey 20% Brazil 18% Colombia 18% Argentina 16% South Africa 16% Link below
    • LB
      LUIS B.
      30 September 2020 @ 13:55
      Not sure if my experience can be extrapolated, but I only hold a sufficient amount of BRL to pay the very near term bills in Brazil. Otherwise holding zero savings in the Brazilian banks or BRL denominated securities. Brazil's history of seizing people's savings and inflating away the currency is harrowing.
  • DW
    Dean W.
    30 September 2020 @ 11:26
    Best crypto interview I've seen on RV so far. Please have Nic back on every few months.
  • Sp
    Scott p.
    30 September 2020 @ 01:30
    Awesome to see Nic on, one of the best writers in the space.
  • PR
    Private R.
    29 September 2020 @ 21:49
    Great to have someone who really knows their subject and isn't caught up in DeFi and dreaming. Great interview.
  • MH
    Matt H.
    29 September 2020 @ 21:47
    Great interview but one point of note, BlockFi is not the largest Crypto lending platform it is Celsius.Network who have over a Billion under management
  • KM
    Kelly M.
    29 September 2020 @ 21:29
    Nic's comments on crypto enabling dollarization of foreign countries plays into the Dollar Milkshake theory quite well. You would get effective abandonment of local currencies in favor of US dollar backed stable coins which would drive demand for dollars and hence a dollar spike. We really have a binary set-up here. Dollar secular decline vs dollar spike (possibly followed by collapse) as other currencies are abandoned or collapse. The secular decline/inflation camp (which Julian appears to be in as well as others) assumes that the system works as it always has and the pivots in asset trends up/down make sense according to what has happened in history. The dollar milkshake theory, if I understand it, looks at the demand for dollars ultimately overwhelming the availability but driven by debt. But the crypto dollarization argument provides a direct mechanism that we've never seen before that could drive it. Fascinating!!!!!
  • LK
    L K.
    29 September 2020 @ 18:43
    Excellent interview, thanks. It will be fascinating to see how the SEC, CFTC etc. deal with non-sovereign digital cash in the coming years.