Comments
Transcript
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PFYou said all fiat currencies failed, but the sterling pound is here for many hundreds of years.
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RCI'm kind of late to the party and given the commentary maybe that's a good thing. I'm a little bit amazed by some of the extreme negativity. I'm perpetually shocked by what pop culture elevates to the level of iconography but I don't rage about it. Pointless. These two guys are smart and industrious characters who've risked capital to build things. If you're not interested in what they have to offer then don't tune in.
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DLFirstly, I'll say I've only watched this video and the plan B one. It seems to me that the blockchain idea has merit in that it is sort of like a combined paypal and property/share register. So you put some money on a token (maybe it works like a train travel card) and give someone else the code to cash in the token and whatever property you get in return is on the blockchain. What is unclear is why that token would have any intrinsic value just for being a token. So a bit like an Opal card with zero dollars on it - it has no value. The opal card is a token on a network but is only valuable if you top it up. Unconvincing arguments: it's the future, you don't get it, there's only 21 million BTC, it's a store of wealth, you're just saying that because you don't own it, as more people buy more will have to.... To me BTC is not the same thing as blockchain and the usefulness of blockchain does not confer any value on to BTC. Maybe there is a video in this two weeks I missed where someone goes into this so please feel free to highlight it. I know there're a lot of bright people in this community so if you have a different take on it I'd love to see it. Thanks.
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GWSo if banks are disintermediated where would corporates and individuals get their loans from i.e. how does the new financial system work in this new world where money is segregated? Also, given that bitcoin is in the hands of the very few (and mostly in China given the cheap state subsidised electricity fueling the Chinese miners) how does bitcoin benefit the West and the world free from dictatorship? Seems like we will all be beholden to the 0.0000001% Genuine questions since I am a bitcoin enthusiast with an interest in having insurance in this new world order but I still don't understand what the implications are even after watching avidly the last two weeks.
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MMThese guys who tried to convert from Wall Street to "crypto" have all come up with different applications of the same idea. Create a technology as a go-between. Get between the end user and the real asset to make money off of fees in the middle. Whether it's Paxos or Bitcoin futures, it's the same game. Buy some Bitcoin, run a full node and store your own Bitcoin.
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mhGreat piece, please keep bringing crypto and blockchain content! We are witnessing the creation of the new financial system, keeping up with these topics is crucial.
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ahFor me, this is THE interview of the series so far - both Yusko/Cascarilla know their block chain - yusko leads him into the important questions - and this is just it - this is all bigger than just gold / bitcoin debate - its way bigger - also very very gd timing considering what XI 's just announced for China and blockchain over the w/end! brilliant
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rwGoldmoney already did this.
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SSChina, who stopped the bitcoin train, now understands it can track everything and will do so. The CCP is only promoting it now to track the digital system. They aren't doing it to benefit anyone except themselves. Trust is the only worldwide currency and the backbone of financial systems. Unfortunately, trust in the US Gov't, and otherse, is slipping away. Can we trust BTC? All the reasons to buy into the BTC and crypto ideas, have already been molested. I just don't see governments allowing the crypto world to flourish without getting their pound of flesh, then trying to get two pounds of flesh and so on.
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asReal Vision has always had a zero h(edge) tilt to it but there were always a few gems that kept me interested. Unfortunately with the focus now on broadening the audience, content and marketing the good stuff gets thin. I understand that is the direction and nature of media and publishing but for me it becomes harder to wade through and closer to the thing RV tried to distinguish itself from, soon to become just another financial media channel with a ZH anti mainstream veil to try and differentiate it.
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HMHmm, what's the value add of the Pax token vs just owning Ethereum tokens if it was dollars? (sure, it may be useful for other asset classes..)
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WBYusko and Bitcoin. I'll pass. Can we move on from Bitcoin now? You've wasted 2 weeks on it already.
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JPInternational wire transfers only take "days" to third world countries.
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JWHas anyone calculated the energy requirements of bitcoin transactions scaling another order of magnitude?
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CBMy complements to RV and Yusko/Cascarilla. This video was interesting and despite having invested in bitcoin and been reading about this space for several years I learned something new. The background on Paxos was useful and I personally did not take as a marketing pitch. In fact kudos to RV on the entire crypto/gold series.
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NRThe RV Bitcoin pump is getting old. Millennials took over the asylum? Why is so much time being dedicated to such a tiny part of the investment universe? This is hugely unproductive for serious subscribers. Sect-like, almost fanatical. If you are going to keep at it at least stop bringing in people who repeat there will only be 21 million bitcoin as a reason to invest. An irrelevant fact given the infinite future supply of crypto, some of which will no doubt be more technologically advanced and secure than version 1.0
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NPI'm a millennial and what I see is all that old guys in the comment bashing Bitcoin are all ignorant people. Replace ignorance by knowledge and you'll all have that 'Aha' moment.
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DPAt one point both are mentioning how banks are FDIC insured up to 250k and how the FDIC holds only 3% of reserves, hence creating a problem if many banks go down simultaneously. I checked where Paxos holds your assets if you choose to use them. Here is the answer below, is it me or this guy is a charlatan??? Where are customer funds kept? Customer funds are held in segregated accounts at FDIC-insured, U.S.-domiciled banks.
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SSCertainly the world seems to be heading in this direction, but it doesn't mean it's without regulation or potential third party control, now or in the future. The distributive ledger, IMO, is an instant road map by any regulatory third party on what you own or have "trust" rights to. They can see what you transact in from the beginning of your time using crypto. BTC and crypto's, have not been tested in a financial crisis! Seems like ALL crypto's are converted to something else, more as a transaction function to earn fees and which is really held with third party claim. I'm interested in the future of this, but not really on board yet with all of this weeks guest(s) opinions and ideas. The real money seems to be in making fees and spreads in this new world of exchange, just like the past and present world of exchange. Same old shit, new brown wrapper. Something goes wrong with any of the components needed to make this digital world function, who ya going to call-----Ghost Busters?
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DRGreat interview. Good to hear Chads story and perspective. I really cannot understand all the naysayers in these comments. I’m Gen X and really think people should be more open minded to generational change.
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mePlan B says its going up
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DHThe GFC was due to no blockchain at the time? This just gets more ridiculous with each crypto promoter. This wasn't an interview. It was a marketing presentation with many questionable assertions about technology.
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MMInteresting points. Now its time the governments have an aaha moment.
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BDLol Chad advocates low fees as one of the key advantages of crypto... Mark runs a digital asset index fund and charges 2% pa to track an index!
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GWGreat discussion on AOL.
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CBNot for or against Bitcoin but it's a crazy world we live in when someone writes some computer code, it gets wash traded up to a ridiculous value and millions of people jump right in due to FOMO.
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CBWhile I am no fan of big banks, can understand the value of self banking via bitcoin I'm curious how many bitcoin have been lost by sending to a wrong address by accident. At least with a "bank" this can be reversed. no take backs with btc
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JRI appreciate the explanation about tokenization, something I've heard a lot about but heretofore haven't understood.
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PWPaxos is the same as Goldmoney I for one will still own my PMs, in the back yard so to speak, in a safe location. Maybe this will not play out in my life time but my kids will be very happy!
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TROne Question I have for all the people providing comments regarding the finite number of Bitcoin, the key stock to flow value - all compared to Gold that grows at roughly 1 to 1 and half percent per year consistently over time. If the world's population grows at 1 to 1 and 1/2 percent per year overtime (appreciating that could change - with a growing population assumption, is a finite number really a good thing for a currency? Clearly an asset with persistent perceived value over time, can have its finite characteristic support its perceived value over time, similar to collectibles and other assets with finite quantities, but in the role as a currency, wouldn't something tracking with population be a better currency characteristic - otherwise, with a finite quantity and a growing population you end up more with the haves and the have nots?
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BPAgain prison coin, prison chain whatever you want to call this garbage will prove to be the MOST REPRESSIVE monetary scheme in the history of mankind plain and simple. WAKE UP!!!!
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DSsounds to me like onion peeling.. never getting to the bottom..
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PNthat felt more like a 45' commercial on that firm. M. Yusko is invested in it and took here the role of the promoter. Wouldnt mind listening to the pitch because it offers the viewpoint of a participant in this new ecosystem. However there was hardly anything here but the pitch
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CT"The code is written because we are required to have the capability to freeze or seize tokens ourselves. This is something we don’t take lightly; it’s an action we will take only if required by law, the spokesman wrote. The coin wouldn’t have been approved without the addition of the backdoors." - Paxos CEO You do not own it, they do. It's the same as stocks, or Gold ETFs or money in the bank or anything else that can be confiscated from you. It's not the same as owning physical gold or owning BTC. In BTC, you're the bank. You own it and it cannot be taken from you except by violence (and with solutions like multisig-setups, not even that way).
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AKI do not quite understand how a gold backed token is merely an asset and not someone else liability? If I have a token representing gold I obviously have a claim against the company issuing the token as well as the company storing the physical gold. To claim that this is pure equity and not someone else liability is, and I do not use this word lightly, intellectually disingenuous. If you want people to invest in a gold backed token, then fine. But to claim that the token represents pure equity, I mean come on Chad and Mike that is kind of offensive to the viewers intelligence. The ledger would obviously be centrally controlled, and the token can therefore be sized or censured at will. The only way gold is pure equity without counter party risk is if you hold it yourself, as soon as you enter the "trusted custodian" game it is no longer pure equity, tokenizing it just creates another layer of required trust.
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CTPaxos has backdoors to allow seizing of your funds. BTC has no backdoors. No CEO. No rollbacks. https://thenextweb.com/hardfork/2018/09/20/stablecoin-backdoor-law-enforcement/
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CTIt had to be on Ethereum of course. The platform of choice for scams. Pre-mined, with rollbacks, no cap, not scaling and centralized. Yeah, no thanks, if I want to put my money on shitcoinery I'll just keep some more Mario Draghi coins. I'm sure that will do a lot better than all the other "metal tokens" (DIG, etc) - oh wait, it won't. Buy BTC, it's the only way to avoid the parasitic system.
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agSecurity ?
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AKIt would have been better if this was a Mark Yusko interview.
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GEThis a good application of blockchain
CHAD CASCARILLA: What happens in this case of a tokenized dollar, you send $1,000 to Paxos, I send you 1000 tokens. Now, why is that useful? Well, you have those thousand tokens, you can send them to anybody anywhere in the world. You can not only just send it anywhere in the world, you can send it 24/7, so it's not nine to five, Monday through Friday. 24/7, you can send it and you can send it instantaneously. It's not ECH where it's bashed. This is not a wire that might take hours or international wire that takes many days. It happens instantaneously, and the fees are low, and you don't need to have a bank account.
MARK YUSKO: Everyone, this is Mark Yusko, CEO and CIO of Morgan Creek Capital Management, here today with Real Vision to talk with Chad Cascarilla, the CEO and co-founder of Paxos. Very excited about this conversation today, to get to know Chad, talk a little bit about the backstory of Paxos and then maybe talk a little crypto. Chad, welcome to Real Vision and great to have you here. What's the backstory? Where'd you grow up? Where did it all get started?
CHAD CASCARILLA: I grew up in Cleveland, we share Notre Dame in common, I went there for undergrad and got involved in the asset management world, was on the buy side, investing, really, globally and financial services companies. I started my own asset manager in 2005, hedge funds and private equity vehicles and some early stage VC. We did a really good job of catching a lot of trends in financial services. We really think captured early the concept of exchanges and clearing corps market structure shifting from floor based and not for profit to being electronic and being for profit, and it was a big shift in how markets operated and functioned and what value there was a financial market infrastructure.
We're very much involved in subprime and commercial real estate from the CDS perspective going into the crisis. We created a stressed fund coming out of the crisis. We came across Bitcoin when it was at three or four cents. We were really fascinated by it, partly because of our experience going through the crisis and really seeing how the plumbing of the financial system exacerbated the crisis in a very meaningful way. It wasn't the cause of it, the cause of the crisis is too much debt. We probably still have that problem.
MARK YUSKO: Even worse now.
CHAD CASCARILLA: Yeah, exactly. In many ways, just worse. Maybe we don't have subprime mortgage debt, but we have a lot more debt and the plumbing of the financial system, by the way, is just as bad as it was during the financial crisis. It really underscored to us how it was like a 19th century sewer system in a way. I live in Manhattan here so we're used to this, which is it's everything's fine when the weather is okay. You got a storm, and the streets flooded. I think that's exactly how the financial system is set up, which is that it looks okay but really everything is running on cobalt mainframes from the '70s.
That means the system is batch processed and archaic, and you're taking days to settle assets and move trades around and that doesn't really make any sense. You can order a toilet paper at your house in an hour, at least here in Manhattan, you can, but you want to sell a stock, you got to wait days and that doesn't really make a lot of sense. All these things are electronic. That exacerbated the crisis.
We saw Bitcoin, we're like, wow, here's a distributed system and that could really change how the financial markets operate. I think we're really early to that, but we didn't fully understand that Bitcoin was never going to be like this distributed ledger of record for all assets, but it has a meaningful position as a store of value and I think that's what it's shown over time. That really fascinated us and that's what got us to start Paxos.
MARK YUSKO: Yeah. When you think about this blockchain Bitcoin conundrum, some people are like, well, it's all about blockchain, not about Bitcoin. Others are like, it's all about Bitcoin, not about blockchain. You're talking about infrastructure, you're talking about settlement systems and financial plumbing. I love the analogy of the sewer system, as all the toxic stuff floats to the top when you get a storm, that's exactly what happened in the financial system and boom, Bitcoin emerges from that with the origin block with the bank bailout. As you thought about coming into the sector, what was the impetus to leave this nice, safe, secure nine to five job, well, not nine to five, but a regular job in the hedge fund industry to go into this nascent new world of blockchain tech?
CHAD CASCARILLA: What we're really passionate about was thinking about how you could change the financial system in a way that reduce systemic risk, solve this very big problem, create a more access, more democratization and I think more resiliency, and to do that in a way that could really change society for the better. That's an exciting thing to be able to do. I love investing, I'm always going to be an investor, but creating a business that you built from scratch that could really fundamentally change how financial markets operate is a challenge that I just thought was a real opportunity for us to try and address and to be able to take blockchain and be able to apply it not as just some piece of technology, but to an actual problem.
I think when you look at how you could take $600 trillion of assets, which is how many assets exists around the world, it's a huge number, and how you could put them on a blockchain over the next 20 or 30 years, that is something that's so hugely transformative and I don't think that's not the overshadow the concept of Bitcoin or the 200 billion or so of crypto native assets like Bitcoin and Ethereum. There's a use case and there's a value to them that's very real but it's still always going to be a small fraction of what the whole opportunity is, which is how do you take the $600 trillion of assets, change essentially where they set so that they can be moved around instantaneously, and really, by a much wider variety of people.
That changes access that opens people to the financial system that don't have access right now. That's really powerful, and I think it can really make a big, big difference to financial markets, which everyone is exposed to.
MARK YUSKO: Yeah. Let's back up for a second on this idea of technology, blockchain technology is this enabling infrastructure technology that is going to allow us to upgrade the financial system, as you said, in terms of these analog and electronic assets that now can go fully digital. Talk a little bit about that transition as we go analog, literally pieces of paper sitting in DTCC to electronic CUSIPs, but now, pure digital ownership.
CHAD CASCARILLA: I think this is a really key point. When I think of blockchain, sometimes, I like to tell everyone, just forget that word, which is a bit of a buzzword and say database. You can have a paper database. If you think about it really fundamentally, that's what a piece of paper is.
MARK YUSKO: Save it in a file drawer.
CHAD CASCARILLA: Save it in a file drawer, it's a paper database, you can have a centralized database, which is what historically we think of as a database and that's electronic, or you can have a distributed database. Then there's a whole continuum of how you could operate on database, but having a distributed database is very powerful because we're all sharing one together. When you need to be able to commonly be able to move things around, having a shared database can be very valuable. I think what you're describing is going from pieces of paper to either a centralized or skipping centralized and going right to distributed. It's a database upgrade.
That can even still sound a little esoteric, but it's simply, hey, how can we take asset ownership from one place that is hard to move it around and put it onto some platform where it's easy to move? It's like going from your computer that was sitting there and not networked, not on the internet, to go to like a fully networked computer, fully on the internet. That's, I think, the analogy here and so imagine how much more powerful it is that you're able to communicate with everybody instantaneously on the internet, instead of just having your home computer by yourself.
MARK YUSKO: Well, and you talked about a couple things that I think again, most people don't really think about in terms of fault tolerance and resistance systems. Our whole world is built around these hierarchical systems and it's all about leveraging the person at the top. Everybody else exists to lever that biggest brain, it may not always be the biggest brain, but it's all hierarchical and centralized. We have one home office, one CEO, the way to kill off a centralized system, kidnap the CEO or blow up the home office, I'm not saying do terrorist acts, but it's really simple to stop. Where Napster was going, they want to stop it. They arrest Sean Parker and blow up the server, but a distributed network, maybe talk about the benefits of that distributed network or that distributed system relative to hierarchical systems.
CHAD CASCARILLA: I think that's a really key point. Because if you look at the financial system, part of the reason why there's systemic risk, and part of the reason there's too big to fail, is because it is centralized. You have to keep pushing information through to someone that you can trust. That's usually someone who's bigger and bigger and bigger. Eventually, you get so big that you can't allow them to fail. You create socialization risk, and that's really ultimately how the system is set up currently, but that's not how it needs to be set up.
The whole point of blockchain and certainly, I think one of the key points about Bitcoin is that by having a decentralized system, you create more resilience and you create more access, you create more transparency and so that creates more competition, that creates more fairness, and allows people who have access who don't have it today. I think that's fundamentally important in order to create more resilience in the financial system because the more you have to rely on centralized intermediaries to move information and to hold your assets, the more you have this risk to somebody failing like Lehman Brothers, and it creates a domino effect.