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our daughter's head has dropped because the our doctor she she felt the head and she was like yeah it's it's hey chamoth
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whose head has gotten bigger uh yours or your daughters [Music] what do you mean don't quit your day job sex yeah it sucks that didn't quite land that didn't last
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he's trying out material total flaw we are not in rhythm you know why it's mercury retrograde our 50th
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episode is gonna suck because of this here we go three two let your winners ride
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[Music] rain man [Music] david source it to the fans and they've [Music] all right the facebook whistleblower hearings occurred and facebook um
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where's your hey everybody hey everybody here hello everybody hey everybody welcome to another episode
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of the all in podcast episode 50 we made it to 50. nobody expected us to make it here we are we've made it and everybody is uh thrilled uh to be here with you and
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thank you for the support over the first 50 episodes episode closer to getting cancelled one episode close man how
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great would it be to be canceled and never have to work again oh that would be wonderful okay so uh
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francis haugen uh revealed herself on sunday night on 60 minutes and then appeared we don't
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get our own personal interests or no we're done with that unbelievable mercury retrograde mercury retrograde mercury retrograde doesn't the audience know us by now after 50 episodes
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with us again this week is the rain man himself david sacks and the queen of quinoa david friedberg i love the intro of course the dictator chamoth paulie
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apatina and i'm your boy jacal sacks i gotta say i think i think your aum is positively correlated with the bags
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under your eyes if you mean it's getting bigger i mean yes they're happy they're heavy good lord they're heavy dragging you down that's where you're hiding all that
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solana in your [ __ ] under your eyes you better clear that salon position what's your lock up 24 months [ __ ] no he's trying to sell it to me on text message yeah of course
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we're negotiating discounts i just had the foundation hey you're [ __ ] the whole thing up bro you don't you don't
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think you keep i'm holding anything without a discount everything is a discount everything's discounted you want to clear that position in an llc are you saying i got a billion
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dollars of solana no bro i'm saying i have one but you know i brought it at a discount but you're holding correct
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ish yes okay yeah me too well i mean if something appreciation in an asset that you've invested in early something you need to you know at least
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clear a position of and lock in a win i mean what what's enough 100x 500x you gotta
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at some point bank a win right well i think you have to put things in a bucket of like is it an investment or is it
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something that represents uh an idea that you love so much if it's the latter you should never sell if it's the former yeah you got to manage risking or rather you know is it a trade or is it
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something you want to own by the way let me just clean this up because um solano was not a direct investment for
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us what we did is we invested in um in a crypto uh venture firm called multi coin
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capital this is back in 2017 we realized like crypto was becoming like a full-time job for us it was a
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total rabbit hole and we were like we don't have time to figure out this like 24 7 trading stuff but we met kyle and
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tushar who were these two young guys we met him through vinnie lingam actually and they were creating multi-coin
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capital and we actually invested we gave them a million bucks at a 20 cap to help set up their firm and then we invested
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in their they had both a venture fund and a hedge fund and they were like the first money into solana so
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that fund i mean it's like a 100x fund it's just like bonkers crazy and so as a result of
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that we are um indirect beneficiaries of this huge increase in solana it will end
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up being about you know a billion dollars of i think solana for us in terms of returns but um but it's the multi-coin guys determine the trading decisions on that yeah and so people who don't know
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solana is a programmable you know ethereum uh competitor i guess and it's at 50 billion dollars so market cap it was trading at a dollar not long ago and now it's at 164. it's
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an ethereum competitor basically for you know a smart contract platform and there's a lot of people i'd say smart
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money in silicon valley who are betting on a flipping where solana could ultimately overtake ethereum as the preferred platform but even if it doesn't overtake ethereum it you know
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it's the number eight cryptocurrency right now you know it could go there's a lot of people betting it'll go to number three or you know what have you
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additionally it is a fraction of a penny for a transaction uh and it can do many
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more traction actions than ethereum so it's you know technically should be much cheaper if you're buying
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nfts right now you're probably spending you know tens of dollars you know uh in fees on ethereum whereas if you did those same nfts which some people are starting to do on solana
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they would cost a fraction of a penny correct david or chama yeah i think the the platform is is known for being a
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faster cheaper you know blockchain really really congratulations and if vinnie lingam's
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instagram is any indication he did pretty well because his instagram suddenly turned into a world tour on
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private jets yeah he's like which which pro which island should i buy and well like vinnie uh was sort of like a i
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don't think he's full-time multi-coin but he was sort of a venture partner to kyle and tushar and he helped set them
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up this is back in 2017 he helped bring us in as the first investors and i mean for us it was sort of a founder bet combined with a like a team like sort of a space bet
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like we knew the cryptocurrencies were starting to be traded 24 7. we knew it required more of like a hedge fund
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skill set than what we had and um so we made you know we made a bet on those guys and man
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strategies right sax is if you are lp in new fund managers uh which i've done a couple of times now you get to learn from them uh and basically dive
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into a data set of a new market right i mean it's like one of the nice things about being an lp in a fund is you can
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place a small bet whether it's 50k or 500k or 5 million whatever it is you you get like this meta education of
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an entire sector correct yeah but i think you know we didn't do it to learn from them although we have
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it's more that we realized that crypto was like i said becoming such a rabbit hole like we realized we would either
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need to do crypto full-time as a fund or we would need to like partner with people who actually did yeah and you see
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that with like a lot of vc firms now is they're creating like specialized crypto funds or at least they have specialized crypto partners there's so much to know
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about the crypto world it's a hard thing to invest in unless you're like totally focused on it i've struggled with that
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like i've tried to go deep on a couple topics and like i realized holy [ __ ] i've been in this for like four to six
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hours just trying to learn this stuff and i'm not like there and then i feel uncertain about making any decisions i i
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totally get it i mean you got to have folks like working on this and the the pace is changing um so rapidly uh you really need to kind
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of be up to date on what's next you know what the other issue is when you look at crypto people use the
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word crypto as if it's like that's all there is totally crypto is like that's like distributed computing yeah right
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ecash cryptography uh you know financial modeling or building new economic systems chemoth there's business model innovation there's technology innovation there's economic
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innovation it's distributed computing innovation yeah infrastructure infrastructure hardware i
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mean there's there's quite a lot of uh layers of activity are you spending time in crypto yourself or do you have
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people doing it for you or how are you kind of yeah we have look we have we have a lot of it um
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a lot of a lot of everything so yeah we have things but did you go deep yourself to mop like how do you spend enough time to really get up to speed on all the goings on
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i cherry pick and i snipe and uh opportunities where i get intellectually curious and jump in but a lot of the credit goes to my team
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there's a couple folks that spend a lot of their time in it and you know we've we've had a couple
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people do extremely well for us you know similar similar to david's story back in the day you know i invested uh in barry silbert
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and uh decent market barry silver yeah and uh you know dcg is now i don't know i'm guessing a 20 billion dollar company maybe more i don't know so how does it
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mechanically work with your team they they are investigating opportunities and then they come to you and bring you you
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know hey we'll do a meeting and i'm going to share four with you and then you say hey let me get on the phone with that guy do you basically go deep go
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deep when something shows up no so so basically what happens is they have carte blanche to do whatever they
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want and what they're typically doing is they're working with entrepreneurs to seed projects and you know to
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to to get projects off the ground and then at some point when those when those projects become
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large enough then they'll issue tokens and you know we'll get a certain allocation of those tokens and so we've done that for you
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know call it i don't know some number of projects that we think are valuable then along the way you know
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they'll have certain views on bitcoin they'll have certain views on ethereum they'll have certain views on solana and
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will make capital allocation decisions they tend to have the ability to do whatever they want and then what i tend
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to do is just think about when it gets above like it to me i need to see the chance to make at least
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you know in the rough justice around you know 500 to a billion dollars and then i'll get involved but otherwise they
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just kind of run the whole thing let me ask you guys a question here you know when you look at the market caps of
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these projects it seems like things are changing uh cardona or cordana is number three now and uh tether still remains number five
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xrp still number six but so i would encourage people to not look at it like that i think looking at it as a rank
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list betrays what it is so you know i'll give you a simple example let's like compare the the fate
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of two projects or actually right now there's a distributed form of um discord that's being built discord the chat app yeah in a completely distributed way with an
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integrated crypto wallet because if you look at discord it's really two cohorts of people there's gaming and there's crypto right
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so those are the two big ones yeah so you know that's an example of a really interesting
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product that has some real potential then if you look at something like diesel diesel is a decentralized
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social programming framework then if you look at something like helium that's completely about building a large distributed you know connection of um of onramps to
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the internet so internet connectivity so those are three completely different ideas with three completely different
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paths to success if to invest in those tokens you you have to believe in three totally different sets of things yeah so to look
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at it on a rank list and just buy something because it's cheap it's stupid don't worry no no that wasn't really my question my question was you know we we have an extraordinary
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number of the public who've invested in bitcoin and ethereum as number one and number two and those projects
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feel may be stagnant when compared to the dynamism of what i'll call you know the projects launched in the last three or four years because they're at the different no no but you're talking about confusing again that's what i mean those
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are layer one protocols right meaning they are at the core substrate of how all of crypto is going to work then you
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have these other projects that build on top of these things in different ways or build around them so my point is
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if you don't have if you don't want to take the time to understand which layer twos you want to
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own and which layer ones you want to own and why i think you're much better off i i
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understand your point my point etf or something else because there are there are ways to own these things so for example david
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david solana is does not need ethereum to exist so my point is do we do we see a day when this you know the past decade has been about bitcoin and ethereum do
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we see a day when maybe people stop buying those and start buying these new ones anything's possible but here's
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here's the evolution of our thinking i mean the first step was realizing okay we need to own bitcoin why because
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you know there's now enough evidence where what like a decade we're more than a decade into this nobody has been able
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to essentially counterfeit a bitcoin it is you know new money it is it is better
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money so if you so i'm not going to convince people right now of the argument for bitcoin but if you believe in it that's
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sort of the first step is you realize you really need to have one to two percent of your portfolio in bitcoin in the event that fiat money
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sort of becomes debased and eventually moved to crypto then you realize well wait a second bitcoin is just one
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application of blockchains there's a bunch of applications of blockchains so maybe we need to own not just sort of
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you know digital money but we also need to own the underlying blockchain platform and that leads you to ethereum
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then you realize that there's a bunch of competitors to ethereum and it's still very early days and one of those guys
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might ultimately displace ethereum as a blockchain platform then you realize that there's all these applications on
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top of all these blockchains and so you know the conclusion i come to after all of that is i can't figure all this
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out and well maybe i could if i was willing to go back to school and like make this a full-time job which i just
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don't want to do i mean i'm lazy and that's why i focus on sass like that's what i know you're killed investor yeah
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like i'm not going to reinvent myself it's like you playing hold'em versus plo right right right exactly so but this is why we
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partner with multi-coin capital so what i would just say is like the idea that you as an individual investor are going
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to like you know pick off the one cryptocurrency here or there to invest in i mean that's going to be a lottery i
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would i would find a manager basically who is really good who has a track record who understands this stuff our
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approach is to hire very young extremely technical computer scientists and mathematicians to basically do the work that's that's working yeah and you know
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one of the things that i think these guys do and the reason why it is very helpful for them to be computer scientists is these are all open source
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projects so they go look at the repos just go look at it go look at it and actually see the changes being made and
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this is like do you realize there's only 12 people who are actively working on solana in the but
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you need to look at all the code check-ins you need to look at the velocity of the code check-in so you can see like how many projects are being created
00:15:35
on these platforms the white papers are also really exceptional like if you if you read these white papers they are
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they're they're they're really incredibly thoughtful and and well written and you can really understand
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what their goals are and you can make some informed decisions there but again if you're not going to
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be in the business of being in this ecosystem because i think david's right everything is moving so fast um what's
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successful today could be just a dog tomorrow and vice versa that i think speculating in this market
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will um not only will it be super volatile but more than likely you're going to lose all your money so i would encourage
00:16:11
people to not speculate in crypto i would encourage you to figure out an elegant way of having an abstracted
00:16:16
bet if to the extent you care about it and by the way in the uk for example there are ways where you can own publicly traded mutual
00:16:24
funds that give you exposure to this it's just simple yes yes yeah but there are mutual funds of credit do the work find these mutual funds just own those things and let
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somebody else do the hard work because it is too it's too hard some of the other investments we made back in 2017 2018
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time frame one was a company called bitwise which was creating an etf for crypto so it's a uh a a monthly rebalanced portfolio of i think the top
00:16:52
10 cryptocurrencies and you could buy it they finally got approved by the sec and you can buy it like a uh like with a
00:16:58
ticker symbol from your e-trade account exactly so that was that was pretty incredible to see the progress they've made and then the other big bet we made was just uh institutional custody back in
00:17:10
2017 we invested in bitco actually bill lee helped found that company uh many years ago and then that became last year uh galaxy announced a deal to acquire them for i think 1.2 billion largest
00:17:23
crypto acquisition to date the thesis there was just that crypto would go more institutional and i think we're starting
00:17:28
to see that now where endowments and so on are realizing they need to have some portion maybe one or two percent of
00:17:34
their portfolio in crypto and so it's unrealistic look we have two almost three trillion dollars of market cap in
00:17:40
crypto it's unrealistic for folks to expect people to be able to be living in discord channels and doing
00:17:47
all of this work i think what that means is that the sec is going to be asked increasingly more often
00:17:53
to approve simpler on-ramps for this stuff and now in the last week by the way we had a pretty important two things happen both
00:18:00
jerome powell and gary ginzer basically said crypto's here to stay and you know we're not going to ban this stuff and so
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hopefully what it means is that you get some etfs passed in the united states you know grayscale is one there could be
00:18:12
more and i think that stuff makes it much easier for folks to own this stuff well clear regulation
00:18:19
would be a great thing for the industry for people to buy into it and removing some of the
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let's call them i don't want to say bad actors but people who are maybe questionable like tether you know i don't know if you saw the bloomberg story yesterday but you know a bloomberg
00:18:36
reporter basically found out that tether he got the list of what tether owns with their stablecoin
00:18:41
and it looks like they're giving a lot of loans to other crypto projects and own a
00:18:46
lot of chinese paper in that they are basically making the float on 69 billion sweeping it
00:18:53
which then incentivizes them to take risky bets because they get paid on them and it's anything
00:18:58
but a stable coin if you think about it from that regard it's i don't know the details on tether i won't speak to that
00:19:04
but i'll say that any stable coin if it's not 100 backed by dollars if that's the currency
00:19:12
that's going in and out or yeah other hard currency that's not a stable coin right you know a stable coin is supposed
00:19:18
to be a service it's not supposed to be a a speculators currency it's basically just supposed to be a mechanism by at
00:19:26
the on-ramps and off-ramps of the crypto ecosystem you can convert your dollars into a temporary
00:19:32
uh again stable coin that will hold its value so you can a poker chip that you can use to then buy bitcoin or ethereum
00:19:39
or whatever yeah usdc usd uh c jeremy alaire's circle competitor from circle just said that he would switch to a hundred percent to what you're saying cash cash equivalents it guys this is
00:19:53
this has always been a money market fund it should be right treated like a money market fund and it should be regulated and managed
00:19:59
like money which was tethered original vision and then they flipped the script because i think they got greedy and now they own i think that's what because
00:20:05
they weren't regulated by by the way by the way it speaks to the role of regulation like you know a lot of people have trust
00:20:12
and faith because they make some claim but there's no regulator actually checking on their claims the only people that want regulation are two ends of the
00:20:18
spectrum so young and so disruptive where they want rails to operate legally and so big and so over the top that they
00:20:24
want to basically entrench themselves for the rest of their lives that's it no everybody in the middle doesn't
00:20:29
really want regulation well what's a uh what's a what if you're a crypto company or if you're a big tech you both want
00:20:34
regulation yeah well but there are some narrow cases like again you know if if if a
00:20:41
stable coin is going to say that we are just a money market fund we're 100 dollar reserve it is really nice to have
00:20:47
a regulator somebody we trust to go in there and put the stamp of approval on it
00:20:52
trust it that is a valid role i think for a regulator in traditional financial markets you have these self uh regulating bodies um i i think it's finra is a self-regulating body right
00:21:04
and so you know somebody's self-regulating bodies should be formed in the crypto community i don't know if they're doing this i'm so naive in this
00:21:10
space but certainly would make sense to have an sro form that that does self-policing effectively within the
00:21:15
community rather than try and bring in a government regulator here's the thing if you police yourself you can uh really uh define the
00:21:22
execution uh and the ramifications of that policing if you have 30 call it competitors and cooperators in the in the market space doing this together it can be a highly effective model
00:21:33
for creating a system of trust and reliability and not having to you know bring in you know call it
00:21:39
outside incompetence to overseeing the rules and rights yeah another area we need standards is around the token
00:21:46
cap tables for these projects right so how much how much of the token cap table goes to the founders what are the rules
00:21:52
around them selling what are those investing periods and what are the disclosures around them selling in
00:21:57
public markets we have 10b5 so if you're an insider who runs these companies you have to disclose when you're selling
00:22:04
there's no similar rule for crypto i think there probably should be right like if you own the if you own the token
00:22:10
and you run this project as publicly traded and the public can buy it you should really probably have to disclose your your sales yes and maybe um you
00:22:18
know these it's very strange because they're running foundations and i had a crypto person on from a music crypto
00:22:25
project and he said they had like three or four hundred million in this project in panama i was like who's on the board of
00:22:30
that and he's like i can't say why can't you say and he said security reasons i was like well anybody who's on
00:22:36
a public board has to be public and of course they have you know people who are on the board of ge or ibm or amazon they
00:22:42
have security issues like they deal with their security issues that doesn't mean they don't disclose who they are he's like yeah i'm not comfortable saying who
00:22:47
they are and it's like okay well they sold three or four hundred million i was like how do they give that money out i'm like he's like i'm not sure i'm not on
00:22:53
it i'm like what like there's some organization in panama that's uh it was really weird and i think one thing that i'll say positively about about these crypto
00:23:04
founders is that they uh will never allow a single venture investor to clog up their cap table
00:23:10
number one they do a great job of creating these large broad syndicates of participation when they seed their
00:23:16
projects and then you know a lot of it goes into treasury where then they issue coins as needed and i think that that
00:23:22
strategy actually is very pro employee and pro ecosystem so you know when we see these projects all these companies tend to raise you know three four five million bucks
00:23:32
it all tends to be at like 30 million pre and it all tends to be uh distributed so like you know you know
00:23:39
it's us andreessen sequoia and it's like you know we put in 200 grand each or 400 grand each you know that's why you're
00:23:45
forced to then go into the market if you believe in a project and then spend hundreds of millions of dollars to buy into it after the fact and i think that
00:23:52
that's very um very powerful it's a really important dynamic that if it comes back to uh traditional venture
00:23:59
could be really disruptive why well could you imagine a sas founder that basically all of a sudden says all
00:24:05
right you know what i'm raising a six million dollar series a you know craft can take 500k sequoia you
00:24:12
can have 500k um you know blah blah folks and then you raise 6 million bucks that way and you
00:24:17
never allow anybody to have more than call it you know a few percent of a company so the fact that it's like a
00:24:24
it's like a mini ipo it's like a private ipo on sand hill road yeah and then your board construction looks entirely
00:24:30
different and then as a result you know founder protections probably go way up employee protections probably go way up it's like governance goes way down
00:24:37
uh no i actually think what will happen is you're less likely in a round like that to be okay with some dork dingleberry
00:24:44
joining your [ __ ] board you're going to actually point to some industry expert and say this person is joining my
00:24:50
board she does xyz job at such and such a startup and then the investors say wow well that's a pretty great advocate for the
00:24:56
business go ahead and do that another thing i learned about this whole token space was when i talked to anatoly
00:25:03
from uh solana when they sold their three or four hundred million uh tokens to fund
00:25:08
uh the company because they consider them utility tokens not shares they paid taxes on it
00:25:14
so the irs is getting massive amounts of tax revenue well think about it they're
00:25:20
selling the token it's supposed to be for utility well therefore it's a taxable event that actually was really smart that is showing i think some
00:25:26
wisdom because there's a lot of founders who want to have their cake and eat it too which is to say they want to say
00:25:32
that these are utility tokens um and and they don't pay tax and then when they later get traded they want to say that they're not you know they're not securities but so when does the tax get paid i think it's really smart to pay
00:25:43
the tax up front to establish that this is a corporate sale they're basically paying the corporate
00:25:48
tax right yes that is what is because this is this is the problem is if if you wait until they're traded
00:25:55
publicly and then say no no no they're they're utility focused on security tokens the government's going to ask you well why didn't you pay
00:26:02
corporate income tax when you sold them right so that is actually showing some perspective i think uh could somebody look that word up for me
00:26:12
four-sidedness jkl okay great awesome it's so great that you have the two producers on either side of you right
00:26:18
now feeding you vocabulary words well done so here's here's um you know uh another question with this if the majority of people sacks um just put your legal hat on for a second if
00:26:31
the majority of people who bought a token in a a project we'll call it the you know acme crypto project they buy
00:26:37
acme coins if they're buying them and they have absolutely no interest in using them for
00:26:44
the utility and they say i bought these as a speculative device and the founder says there are utility
00:26:49
tokens but let's say 70 percent of the people who bought them said i didn't buy them for that reason
00:26:54
they just came out right and said i bought this to speculate on the price what should the government do should
00:27:00
they deem them a security or should they deem them a utility token i think that's a complicated question
00:27:07
but i i think that there should be an opportunity for these cryptocurrencies to establish themselves as utility
00:27:13
tokens because they are they do serve a purpose they are designed to be part of a system right
00:27:19
they're not just objects of speculation and by the way even if they were we don't we don't treat baseball cards as
00:27:26
you know as as sort of as security so it wouldn't necessarily make them a security just because they're speculated
00:27:32
on they actually do serve a function in a designed computer system so i think what's important here is that there's a safe harbor where these crypto companies know what the rules are and if they
00:27:44
if they can basically meet the criteria such as by paying corporate income tax when they sell the
00:27:49
tokens and other things like that that they won't later be deemed to be engaged in an unlawful sale of securities i
00:27:56
think the i think the important thing is just that entrepreneurs founders know what the rules are so they can abide by
00:28:02
them and not be and they don't right now well so they don't get surprised later they don't get whammied but with basically you know
00:28:09
because they are building something legitimate here you know right but it would seem to the sniff test if the people buying the tokens have no
00:28:19
idea have never written a line of code have no use for them uh i don't see why that's relevant i don't see why that's
00:28:25
relevant well because they're profiting off of them as if they're shares and unlike baseball cards which you can't
00:28:31
sell a thousand baseball cards for an increasingly uh you know you know in a in a very instantaneous way you would have to put them in an auction yeah you could say a lot of friction there'd be a lot of
00:28:42
friction certainly like yeah uh freeberg what do you think if the majority of people buying a token
00:28:49
are doing it to speculate can the founders say it's a utility token and then those people who are trading it like either baseball cards
00:28:56
minted coins whatever analogy shares you want to use are in it for the increase in the value should it be a
00:29:02
security and should they have to play by the rules we play at in the traditional venture startup game
00:29:08
i mean the question is what's the utility so i mean if you can demonstrate some utility then maybe that's the uh the and this will probably be litigated at some point
00:29:20
right i'm sure there'll be enough capital sloshing around here that someone will
00:29:25
say you know what we believe strong i mean we're seeing this happen with ripple already but um someone will litigate this and
00:29:32
we'll get some clear definition on you know what statutes are going to be referenced and what those statutes
00:29:38
might say with respect to the how this ties to the definition of utility and then that'll become hopefully a standard
00:29:44
that people can kind of look to to guide them in the future but it's definitely the wild west right now and everyone's going to try it the reason i bring it up
00:29:51
is because gensler was sort of floating this argument chamath what do you think i think that um you can't wipe three trillion dollars of value out of the world
00:30:02
and so so pragmatically hard to do got it so it's here to stay and it's too institutionalized now so you know there's just way too many organized pools of capital that are now
00:30:15
speculating inside of this entire ecosystem you know i saw a tweet today there was a
00:30:20
there's a firm i think like called jump trading or something it's like a high-speed frequency trading
00:30:26
organization and they tweeted out some pictures where you know they're they're uh they hired a bunch of folks to start a
00:30:33
jump and they did a coding bootcamp on solana that was their onboarding as an example so when you have people in high
00:30:39
finance you know really vested in this thing and you have three trillion dollars of value that'll go to 6 trillion and then
00:30:45
go to 10 trillion this can't go away so that's why i think powell and genzler had to say some version of that on the record which is you know we're not going to ban this stuff because they know it's not
00:30:57
possible so i think david's right you have to create some rules make folks and let folks pay their taxes
00:31:05
you know i remember for example like i did this bitcoin transaction in 2014 or something i bought some land i used
00:31:10
bitpay i transferred some bitcoin bought the land blah blah i was like you know whatever but
00:31:16
whatever yeah i mean i i i left i mean i i owned a lot at the time so it wasn't that big
00:31:22
of a deal but my point is finding a way for me to pay my taxes was a huge deal i remember and you know we
00:31:28
filed the tax return and we tried to make sure that we paid our taxes these are very complicated even if you want to be conformant to the
00:31:34
government it's impossible right now so they just need to create some rules where folks can say here's what i own
00:31:40
here's what it's worth tell me how much i owe you and we're all willing to pay or not maybe we're on i'm i am because i
00:31:47
just think it's like make sure that we can we can trade around it hedge it structure it do the
00:31:53
things that we would normally do with any other risk assets right now that's very hard and when you own
00:31:58
lots of this stuff it sits in your balance sheet and you just take these enormous swings and you're just like god
00:32:05
you can't do anything around this stuff and that's not a viable financial market that doesn't yeah
00:32:11
to be specific about against lorcet i just looked it up here you know he compared
00:32:16
utility tokens with you know laundry mat tokens or tickets to the opera and he said entrepreneurs are choosing to
00:32:23
perceive their tokens as utility to sidestep regulation um and that here's the quote there are highly speculative
00:32:30
investment tokens for people who are trying to save or speculate for the fut their future and that's why i think it's
00:32:36
appropriate to bring them inside the investor protection perimeter i agree with him i also agree with you chamoth
00:32:41
that this is a can of worms that i don't know how you put the genie back in the box but he's he's partially right i mean
00:32:46
he is partially right on some tokens but he's not completely accurate on some other tokens i think it's on a
00:32:51
case-by-case basis and it depends listen i think anybody who is buying these tokens right now knows that
00:32:57
they're engaged and in financial speculation this idea that people in middle middle america are going to blow
00:33:03
their retirement savings on crypto i don't i just don't know but if they know if they're doing speculation then it
00:33:08
should be a security no no david i think you're totally wrong i totally buy it look at the quarterly
00:33:13
returns uh the filings of earnings from companies like robin hood and how much and square and how much money they make from crypto and look at their audience that's totally not true but don't you
00:33:24
think that audience skews really young and they're getting their like covet stimulus check and they're yoloing it
00:33:29
into meme stocks or crypto what does that have to do with well because you're making it sound like they're going to blow their retirement savings okay well
00:33:35
if you're talking about a 25 year old who's got 5 000 retirement savings maybe but they still got you know they still
00:33:41
got 40 years of work ahead hold on a second wait no they don't this is going to be the least hard-working generation of our lifetime
00:33:47
why no no not not because you're not hardworking why there's 70 trillion dollars that boomers have that they are about to pass down to these folks on average between 2 and 3 trillion
00:34:00
a year for the next 30 years also they know how to do gig work like they're so smart this generation they
00:34:06
know how to do projects for five grand and float themselves you're gonna take one entire turn of the world's gdp
00:34:13
and give it to a hundred million people in america over the next 20 to 30 years that is what is actually going to happen
00:34:20
so yeah look i think i think of course they're going to keep yoloing this stuff yeah look i think i think we're getting off
00:34:26
on like a little bit of a tangent here my point my point is not that there shouldn't be investor protections but
00:34:32
rather that i think we also need to balance another important objective which is
00:34:37
to create a hospitable environment for innovation and the fact of the matter is that you've got a lot of brilliant young entrepreneurs computer scientists building this financial infrastructure
00:34:49
of the future with crypto it's not just speculation there is a lot of code being written it has functionality there's a
00:34:55
purpose to it we don't we don't necessarily want to interfere with that to to them every starter has to do their
00:35:00
securities though david all the other startups that are not in crypto are playing by the rules so it's crypto
00:35:05
people get a pass it's unfair i agree with jkl people make this claim and i just think it's so specious do you think
00:35:11
that you would have made a single professional decision in your life based on tax rate have you ever made a single
00:35:17
like i'm going to start this company i'm going to make this product you know i'm going to change this job i just think
00:35:23
that most i'm not talking about paying taxes i think it was smart for for example solano to pay corporate taxes on
00:35:29
their token sale i think everyone should pay their taxes that's not what we're talking about here um and i'm not saying
00:35:34
that gensler shouldn't prescribe regulations i think that part of the purpose of those regulations should be to give
00:35:40
entrepreneurs predictability to be able to give them a safe harbor so they can build what they want to build let me make one final point i'm just saying
00:35:46
from my perspective i just think that if you have clear sensible taxation that's 90
00:35:52
of what this industry needs and i don't think it will it will change anybody's real motivation to work inside this
00:35:58
ecosystem just like just like entrepreneurship doesn't change when capital rates capital gains rates look i
00:36:03
i've paid i pay taxes um at you know on on my crypto sales like it was any other
00:36:10
investment since the beginning no that's not the issue the issue is when you're a company and you're raising money should you be allowed to not follow securities
00:36:16
law because you say it's a token freedberg uh when you look at this an nft company came out last this past week
00:36:23
that was selling shadow shares in startups and anyone in the world could buy a shadow share in a private company like stripe etc in this fantasy football league they wound up shutting it down
00:36:36
or changing it because they didn't want to trade on other people's intellectual property they were concerned about that
00:36:41
but just looking at it the public in america 96 of them who are not accredited cannot
00:36:48
buy shares of stripe in the secondary market but you can buy nfts in it and speculate on the nfts which are
00:36:54
accelerating from you know a thousand dollars to five hundred thousand dollars in these different clubs
00:36:59
um how is it fair that crypto companies get to not obey basic securities laws freed berg well it's not a security there's no underlying asset okay it's a collectible and nft is
00:37:11
clearly a collectible jkl uh okay i don't know when you legal i don't know for people to sell them and they're appreciating i mean i do agree with something different it sounds like art to me yeah you could go draw a piece of
00:37:24
uh a picture of stripe and put it on a piece of paper and go down to downtown wherever and stand in front of the
00:37:30
burrito shop and try and sell it than a security but they're acting as securities in relation to the
00:37:35
fundraising of these projects so i think that's the change not everything is a security yeah there's no secured
00:37:40
interest you don't have any secured interest it's literally just a uh like an image a figure i was just offered a
00:37:46
giacometti sculpture but i turned it down how much 60 million is not going to comment on the price yeah i have to say no was stephen cohen selling it not commenting on the seller i bet
00:37:57
stephen cohen was selling it that was the record deal uh stephen cohen bought that giacometti sculpture a few years
00:38:02
ago was like the highest uh price ever paid at auction for a piece of art media can i can i just tell you my problem
00:38:08
with with it i i took the price and i divided it by the height in centimeters and it just tilted me
00:38:15
is price per square inch of metric and it is in my head in 2016 15 stephen cohen paid 141 million dollars for the giacometti
00:38:26
sculpture lom odo or deut uh incredible and i think you're right it's about 12 inches tall or something
00:38:39
it looks like it was done by a uh 12 year old oh my god stuff oh jacal cal you're gonna stop yeah this is the billionaire equivalent of uh of cr of
00:38:50
crypto and nfts right totally totally i don't know what scam this guy's running but that looks like anyone can raise
00:38:57
their hand and say i have an independent objective assessment of the value of anything in
00:39:03
the world um and you can look at it from high to low and this is all um effectively
00:39:08
subjective it looks like it was a sculpture that was in a giant fire and that somebody pulled out of the ashes it's a beautiful piece if you want to read a little bit of art history yeah
00:39:19
you can understand a little bit about yakimati's work but it's um it's a 70 inch piece not 12 inches sorry
00:39:25
and um yeah his work is all about kind of like how do you capture the essence of the form anyway this is a that's
00:39:30
super ridiculous it's like somebody made something out of mud somebody showed it into a clay oven
00:39:37
i have a very funny stevie cohen story so this is like 10 years ago at art basel in miami
00:39:42
and uh the day before the art fair opens it's called the furnace people and so uh you know uh it's like a
00:39:48
day where you can go and see the the stuff the day in advance and you can you know kind of buy stuff or whatever
00:39:54
and uh it's very funny it's kind of like um you know like when walmart does like a
00:40:00
black friday thing like everybody lines up and then they open the doors and we all run in and i was standing side by
00:40:05
side we were right at the front of the line and i noticed that he had these uh this was my first time there he had new
00:40:10
balance running shoes and i thought what is he doing but then when the doors went open they just took
00:40:16
off and started running and i was walking wearing normal loafers and then i realized i should have been wearing running shoes you don't own normal
00:40:22
loafers you were wearing italian loafers uh i missed that the balloon dog guy it's like the it's like the running of
00:40:27
the bulls it was it was the running of the bulls i missed out on everything running of the billionaires i got to the things after
00:40:33
and i was like oh sorry i sold it to stevie cohen christ i had blisters on my feet it was brutal do you guys know we haven't even started our agenda
00:40:47
i'm [ __ ] moderating this three two all right facebook let's start our show i'm sure everybody by now has seen uh francis haugen uh on
00:41:02
60 minutes and testifying uh she seemed incredibly credible well spoken and had very common uh sense
00:41:12
non-extreme views about what should be happened what should happen with the research that facebook has been funding
00:41:18
that shows like other media forms uh instagram and facebook have a really terrible effect on young people
00:41:25
specifically young girls and uh body dysmorphia uh which seems to be the one thing that is landing pretty well her suggestions were not to break up facebook
00:41:35
hers was to have a regulatory body and to do soft interventions if you don't know software's questions
00:41:41
her suggestions were worse than breaking up facebook well soft interventions let's get to that uh include things like
00:41:46
hey in order to retweet the story on twitter you probably should read it first she thinks she wants to reform or she's an advocate for reforming section 230 in relation i think to the algorithms uh
00:41:58
and the idea here would be that the algorithms are making an actual editorial decision uh which is something
00:42:05
that i remember in the youtube early days they said we will not feature your videos uh that you're making but we will
00:42:10
have the algorithm pick them because that keeps our safe harbor uh zuckerberg came back and uh wrote a uh spirited defense uh basically saying why would we
00:42:22
do this research if we didn't care the people at this company care uh a ton sacks and the uh uh entire peter thiel
00:42:31
cobble of you know acolytes and friends are coming on strong as uh pro facebook i'll have him uh talk about that
00:42:41
he thinks it's uh facebook uh it's uh laughable that people are addicted to facebook yadda yadda so uh
00:42:49
who wants to go first you chamoth or sax well look let me let me say a couple things i think that um
00:42:55
i think zuck's the title of zuck's uh internal uh company post could have been titled uh which basically is his way of saying
00:43:06
this is ridiculous and i don't believe it the the thing that she asked for in substance is a little different than what the doj did with microsoft in 2000 but in form
00:43:18
is actually quite similar which basically is like gumming up how the internal product development would work
00:43:24
inside the company and you know the most damaging thing you already saw which is that they had a bunch of planned product
00:43:30
releases and then they put them on ice and i think this is really where unfortunately the most damage gets done because
00:43:41
engineers won't really tolerate that for some amount of time right they'll put up
00:43:47
with it initially but you know you've had uh i don't know i think like a 20 reduction in stock price so you had you know you lost 200 billion dollars of market cap
00:43:57
there's probably going to be more turbulence in the company you can sustain and get through all of
00:44:03
it as long as the engineers hold the line but if you basically slow down and put a
00:44:09
pin in their ability to generate code and to put out features on the margins enough people i think
00:44:15
will get frustrated and leave and i think the way that she you know what she is asking for was tantamount to that and i think
00:44:22
that's the really destructive part of of what could go on here so they need to get this
00:44:28
pinned down quickly get in front of regulators get some laws passed whether it's section 230 or whatever that's the
00:44:34
path to salvation for facebook sex what do you what do you think i see you're basically saying this is like ridiculous
00:44:41
and silly on twitter mike salan is saying that uh obviously peter thiel is on the board of uh facebook and you're
00:44:47
gonna have to you're gonna have to give me time to unpack this jkl without getting hysterical because there is there's a lot of historical i want i'm
00:44:53
getting i'm literally throwing it to you in a non-hysterical way you think that this is there's nothing to this
00:44:59
let's understand what this really was okay you have this so-called whistleblower
00:45:06
who is working with the staff of the senator committee giving documents to the wall street journal and then appears on 60
00:45:12
minutes in this great unveiling 36 hours later she's testifying on capitol hill that does not happen the senate committees do not operate that fast this was coordinated she's got a
00:45:23
democrat a well-known democratic operative named bill burton working for her she's got a team of lawyers she's got a pr team this is coordinated by who
00:45:30
this is a coordinated hit okay by anti-facebook forces starting with the senate judiciary committee who want to regulate who she's working
00:45:42
you're already interrupting jason i'm asking you who you said working with somebody i don't know who it is just let him make this argument and then just
00:45:48
stop let i want to hear what he has to say okay what is the purpose of this testimony first of all we can go over
00:45:55
the details of what she said i don't think there's anything new here this is all the same arguments we've been hearing from these same sort of forces
00:46:01
who want to regulate facebook whether it's the um whether it's the senators on the committee who've hauled up zuckerberg no
00:46:07
fewer than four times to lecture him about the need for more censorship uh or it's these forces in the media who
00:46:13
basically want facebook it's all about you know having more censorship but in any event there was nothing
00:46:18
really new there um what this really was was corroboration and uh of of of the same talking points they've been hearing for years and where and what it's all leading up to is there's a very
00:46:30
important part of her testimony which is this is really the crux of it is that they that she proposed and what
00:46:37
blumenthal wants he's the chairman of the senate district committee is a dedicated oversight body this is in this
00:46:43
clip okay with a power to oversee social media platforms so what we have here is the
00:46:49
government is now going to have a new agency they're saying like the ftc then she said a regulatory home where somebody like me could do a tour of duty after working at a place like this and
00:47:00
and hoggins said right now the only people in the world who are trying to analyze these experiments to understand what's
00:47:06
happening inside of facebook are people who grew up inside of facebook or pinterest or another social media company basically people with her
00:47:12
experience i mean i have to admire the hutzpah i mean she's basically proposing that she be made zuckerberg's boss okay
00:47:20
that a new oversight board be created by the government which she would be appointed to which she presumably would
00:47:26
run and this board is now going to uh prescribe regulations and rules for social networks in terms of how their
00:47:32
news feed is going to run that is what was proposed on capitol hill that is what this operation is all about so it's
00:47:39
about her getting a job and being uh lording over facebook is your claim no i think i think i think i think the purpose of all this is to create new regulatory oversight social networks i
00:47:50
simply would note that she has proposed herself as somebody who would be on the sport which is pretty amazing but what
00:47:57
this is really about is that new oversight power and is that a republican or a dem
00:48:02
are you insinuating it's democrats who want to regulate this or all politicians want to regulate this because they're scared of facebook having too much power
00:48:09
which i think we all agree facebook has too much power in in the public you've had the leaders
00:48:14
you've had the leaders on the senate judiciary committee now for months calling up zuckerberg and dorsey and
00:48:20
other social media leaders and basically lecturing them on the need to censor more to take down more material that is
00:48:26
their objective this is not a conspiracy theory on my part this is expressly what they've said okay now until now is it
00:48:33
left or right or both we come to that i think the republicans are a little bit confused on this issue but let me get to that so what you've heard until now is
00:48:41
uh is that is is a tax on the supply side of the platform so what they've advocated is
00:48:47
de-platforming people with heterox heterodox views dissenting voices and they have been
00:48:54
de-platformed in large numbers obviously it started even before trump but certainly the sitting president united
00:48:59
states was de-platformed youtube just took down a million coveted videos because they disagree with official position on covet so until now the
00:49:06
censorship has been on the supply side of the platform what they're advocating for now is censorship on the demand side
00:49:11
of the platform which is we're going to rewrite these news feed rules okay we're going to rewrite them because we can't
00:49:17
give people what they want they're making these algorithms sound like they're these incredibly evil
00:49:23
sinister things all the algorithms do at the end of the day is give the user more of what they're looking for okay that is
00:49:30
not good enough for these politicians they want to rewrite that's not actually what they said they want to rewrite these rules to determine what people see
00:49:37
no no what they said about the algorithms was that the algorithm had a multiplier on it and that this
00:49:43
multiplier of people resharing it re-engaging the content would lead people and this was statistically proven
00:49:48
in facebook's own research that things that were either misinformation or that were supercharged uh you know a polarizing issues they would rise
00:49:58
quicker which then gave people not what they wanted in their feed they gave people what would increase the length of
00:50:04
a stay on facebook or on youtube or on twitter for that matter and they think the antidote for this is to maybe not
00:50:11
allow things in the algorithm to go viral because what you're doing is saying things that are either misinformation or polarizing
00:50:19
um or will make things go to the top of the list and maybe we don't want that as a society let me intervene with a with a
00:50:26
point of view on this because i think you're headed down a path that um to me i i don't think actually speaks to what's really going on it sounds like there's some sinister arc
00:50:37
uh you know architecture here that's driving this outcome if you've never said that yeah well i
00:50:43
mean it's implied because it's like oh well they're they're multiplying sinister stuff what do you do i'm saying
00:50:48
they're just care about length of stay on the site my belief is they just wanted to care about revenue yeah so that's my exactly my point they they
00:50:55
care about what consumers want to consume and consumers demand what they want to consume so think about media in
00:51:01
the old days right we used to have books that an author would put out every year and so the author would get feedback on
00:51:07
the book and so it would be one year on that feedback cycle then magazines would come out magazines would come out every
00:51:12
month and so every month the magazine would get feedback on what sales were and they would make decisions editorial decisions and they would iterate tv
00:51:18
shows came out every week newspapers came out every day cable tv came out every hour and they could adjust their
00:51:24
content accordingly in the internet age the media is getting a much more kind of instantaneous feedback cycle and the
00:51:32
call it publisher or editor or curator of that media ultimately ends up putting in front of the consumer more and more
00:51:38
of what they want as a function of what they're choosing to watch and what we're calling kind of these algorithms quote
00:51:44
unquote are really just the same thing that editors and publishers and others have done in the past which is looking
00:51:50
at what the consumer votes by what they choose making decisions to put more of the things that they want in front of
00:51:55
them the consumer consumes more of that and here's what's messed up we're getting a very ugly look in the mirror and what
00:52:02
humanity and what citizens and what individuals actually want to consume and choose to consume and get turned on by
00:52:08
and that is what's making this all so ugly and when we see that we don't like to accept the fact that maybe that is
00:52:14
just what humans are attracted to and what humans want to consume at scale and we end up wanting to blame someone
00:52:20
and i could argue and i think others could argue that these algorithms that are effectively just recursive optimization functions they're
00:52:26
recursively trying to figure out what do people want to consume and then giving them more of what they want you keep saying solving for those very specific
00:52:34
needs and use cases and and i don't think that those algorithms are necessary go ahead why is it not want i i i i'm
00:52:40
interested in that unpacking it no the i everything free brooke says it's absolutely right but it's not the word
00:52:47
want it's not what they want it's what they will react to the most and sometimes what they react to the
00:52:52
most subconsciously want i don't know but my point is that there's there's a i guess i don't i don't use facebook but
00:52:58
they went from thumbs up and thumbs down when i was there to like this nuance like there's likes there's tears there's
00:53:04
angry shares but there's also analytics data on engagement right like on how long someone's watching a video or what
00:53:09
i saw in there was that there was an amplification of things that were more extreme emotional
00:53:15
reactions right now and and the point is that i think everything you said is absolutely right
00:53:20
the algorithms are amplifying i think all i would say is i would restate what you're saying is these algorithms tend
00:53:26
to amplify the things that are the most extreme and elicit a reaction yeah those
00:53:31
reactions aren't necessarily the things that you want those are the things that you will react to the most and that's
00:53:36
why the algorithm wants to serve that's why you see that the top 10 things that are reshared the most often tends to be
00:53:42
very extreme right fundamental emotional responses are typically associated with things
00:53:49
that i think we call hedonism and the things that you can ignore your emotional responses and take another
00:53:54
course of action we typically call altruism or what have you this is a kind of a common reason why people would
00:54:01
want to watch a comedy or watch a horror film because there's some emotional response it's not a universal response
00:54:06
and people aren't rushing to the theater to watch documentaries they're not rushing to the movie theater to be like oh i want to be informed and educated on
00:54:13
something that's factual and interesting they want to go and have emotional experiences and that's how humans are biologically wired and the same is
00:54:20
happening in these short forms of media these little tweets or david do you understand that they won't show
00:54:26
murders and porn on facebook so they're making an editorial decision to say hey we're not gonna every night on the local
00:54:32
news if it bleeds it leads that how long has that been the motto in media so i'm
00:54:37
remembering i'm listening to haagen on 60 minutes i'm hearing her describe a corporate profit-making machine that
00:54:45
tries to get more reach more ratings by fueling polarization and division and i'm thinking is she talking about
00:54:50
cable news that's what she's talking about isn't she is she talking about the new york times did she talk about the
00:54:56
traditional media because every single thing she said about how social media fuels polarization and division applies
00:55:02
to the media and yet those same voices in the traditional media are the first ones howling about facebook and calling
00:55:08
for its regulation it is completely hypocritical because the real purpose here is not to reduce
00:55:15
divisiveness or polarization or society the regulations on facebook will not do that it is to seize control and
00:55:22
influence over the machinery of social networking why because the news feed now controls the flow of information in our society don't you think the damage has been done though meaning in the sense
00:55:34
that if you [ __ ] facebook's product velocity and you shrink the surface area of the areas in which they can operate
00:55:45
isn't that more damaging than any regulation no people will just stop using it and then they will find another
00:55:50
place together on facebook i've already stopped using facebook okay i don't find it compelling at all and
00:55:57
i'm not really on instagram either i i do find twitter rather compelling and i'm probably more addicted to that than
00:56:02
other things yeah he's addicted off the rails probably not very good for me okay but
00:56:08
but here's the thing i think i think all of us on this show right now none of us find facebook particularly
00:56:14
addictive in our own behavior okay i think we understand in our own behavior that facebook is sort of like a
00:56:21
mildly diverting amusement that occasionally yields information sometimes it's useful okay we understand
00:56:27
that it's sort of like a news feed with a lot of noise okay in our own usage but somehow we've bought into this larger
00:56:33
narrative that in everybody else's uh usage that somehow this is a brainwashing machine that is pumping
00:56:40
people full of disinformation and warping their thinking in other words there's a sharp dichotomy between how we perceive our own usage and other
00:56:47
people's usage and what i would submit is our own usage is what we know and what we know to be true and what we
00:56:54
believe about other people's usage is simply a narrative that's been fed to us over and over again by the traditional
00:57:00
media who hate facebook because it's disremediating them that is what's really going on here you may be right
00:57:06
i'll i'm saying something different which is getting apart from all of that stuff what's happening practically on the
00:57:11
ground right now is that is a company who has to now slow way down and what i'm saying is that's not dissimilar to what microsoft had to do which was there was this 10-year period at microsoft where they really couldn't
00:57:23
innovate and that's really how the government solved the microsoft problem yeah they made them
00:57:30
less aggressive right they gummed up the internal machinery so that microsoft couldn't really be there for the next
00:57:37
few major so for example we just spent we just spent 40 minutes talking about crypto what do you think the chances are
00:57:43
that you know facebook now can land a really compelling crypto project right they got totally shut down with libra
00:57:49
right i mean they went after it and the regulator stepped in and it's too bold for them to launch that after what
00:57:54
happened it's it's zero you know with their behavior in other arenas i think that like microsoft uh back in
00:58:01
the the late 90s i think there are real and legitimate concerns about the power of these big tech companies about how
00:58:08
uh power how big and powerful they've become about their ability to crush competitors i think those are all legitimate and in a weird way if this
00:58:15
government scrutiny slows those companies down that's not an altogether bad thing but i am concerned about that i'd say
00:58:23
separately just because these companies do deserve to be scrutinized more i do think that we have to see
00:58:28
that the people who are engaged in this really coordinated hit campaign against facebook they have other they have another agenda and that is to control the flow of information online it is to
00:58:40
control online discourse it's already been happening over the past year with censorship on the supply side of the
00:58:46
news feed and now they're trying to control the demand side i think we have to be extremely wary about this well david isn't you you've been on the other
00:58:53
side of this because on previous podcasts you've talked about facebook being too influential having too many
00:58:58
users and now you're saying well these tiny little news networks that get a couple
00:59:03
of low millions he has a he has an issue jason with the way in which they're going after facebook okay i get that he
00:59:09
thinks it's a coordinated hit fine but you also have had an issue with facebook having too much power
00:59:17
to take somebody off the platform or to promote certain ideas yeah so which is it it seems like you're a little bit um
00:59:25
both can be true no it's perfectly it's it's no it's perfectly consistent i've expressed concerns about the way in
00:59:31
which facebook is is de-platforming people it's samara summarily silencing them and ghosting them it's it's engaged in censorship i've expressed concern about that but we should understand that the people in the
00:59:43
senate judiciary committee who hauled up who had this hearing who featured and spotlighted haagen and turned her into
00:59:48
this great hero their agenda is even more censorship they they are complaining about the fact that facebook is not censoring enough and that is what their real agenda is
01:00:00
i i do think it should have been disclosed that hagen does stand to gain financially from
01:00:05
whatever happens you know i don't know that that's been confirmed that there is a whistleblower reward here so we'll
01:00:11
have to wait and see about that i haven't heard there's no reward until there's a fine but chicago is right that she qualifies if she's a whistleblower
01:00:18
she qualifies for what a 30 portion of or some very large percentage would define b here though
01:00:24
what would the fine be how would that be frame off this whole thing is just getting started they're going to be they're going to be
01:00:30
actions and there will be settlements from those government actions and the the and facebook as you all know will
01:00:36
pay any kind of fine to put this behind them you're the one that said jason they spent 5 billion just so that they
01:00:42
wouldn't subpoena zac and cheryl right that's what you said last week we talked about that last week yeah so i mean i yeah i think
01:00:47
there's a fine coming but let's let's be honest i i do not think lena khan uh or gary gensler or any of these other
01:00:54
folks are going to be in the business of making a quick decision nor the doj nor any of these other folks they're going to want to really take their time to figure this out but what i'm saying is it's not the ultimate
01:01:06
result of it because i again i go back to like if you look at what happened in 2000 in microsoft
01:01:11
the substance of what microsoft had to agree to was was ultimately not as bad as the way in
01:01:18
which it was implemented which is that you know my understanding was like microsoft had to submit feature reviews
01:01:24
to lawyers at the doj who would then approve you know updates and upgrades to their code base for things like windows that's what caused them to miss an entire wave of compute
01:01:35
and so this is the this is the point which is i think practically speaking the beginning of what microsoft went through facebook is going to have to navigate and so the faster they can try
01:01:46
to say all right folks you're right you caught us let us tell us what to do maybe actually
01:01:52
the the better path because it allows them to get past it because the longer this this this period of like gray
01:01:59
stretches out i think is is actually the worst outcome well let's go through what we each think would be a possible
01:02:04
solution here to allowing free speech to occur on facebook but maybe not having the things that you know fake news uh you know misinformation
01:02:17
you know maybe lowering down the rhetoric and the charged nature of the algorithm freyberg do you have any
01:02:23
common sense solution here that might address both sides of the issue freedom of speech and
01:02:29
maybe things being amplified to 100 million people that are fake and and just simply not true we've talked a lot about this
01:02:36
notion of like decentralized social networks i mean we haven't talked a lot we've talked a little bit about it
01:02:42
but um if you end up putting a regulatory hammer down on facebook and twitter and
01:02:48
telling them what consumers and remember these guys aren't media creators they're platforms
01:02:54
effectively for search discovery and access so you as an individual can discover
01:02:59
third-party content on their platform if they start putting the regulatory hammer down on these quote-unquote platforms
01:03:05
telling them what they can and cannot make available to their users there will be another platform that will
01:03:10
emerge and that platform may end up being in this kind of decentralized model and in that decentralized model
01:03:15
you're not going to have the same degree of regulatory oversight and that system will end up solving the same use case
01:03:21
eventually consumers will get what they want which is you know what your mother calls kind of this emotional response
01:03:28
eliciting this emotional reaction they will consume it until they you know achieve one of their kind of seven
01:03:34
deadly sins objective which is what's driving the emotion underscoring their decisions on what to watch what to
01:03:39
consume and uh and there will be an alternative so you know go ahead and play whack-a-mole you'll play whack-a-mole
01:03:45
for a few years maybe a few decades but at the end of the day digital technology in a connected world will drive
01:03:51
consumers to exactly where they will naturally find themselves which is consuming ever more of the things that
01:03:57
create this emotional response in them the consequences are unfortunate um you know i don't know what the right
01:04:03
solution is you know we've we've to some degree put a regulatory hammer down on things like uh smoking and
01:04:11
in some places things like sugar things that have kind of a you know uh an obvious effect on our physical uh
01:04:18
health uh these other things that we're seeing now are having an effect on our mental health and i think that there may
01:04:24
be kind of an emerging regulatory regime around mental health standards and how much of things can be consumed and i think what we're seeing is the leading indicator of this is what's gone on in china because china is the nation
01:04:37
that i would say is probably at the forefront of research and understanding of what the consequences are of
01:04:42
consuming more or more of media and content that causes an emotional response to you and what happens down
01:04:48
the road isolation loneliness suicide rates go up unhappiness etc it certainly is the consequence but it's not a function of any individual company's misconveyance of content to consumers
01:05:00
it's just a function of where these systems end up going because of the way humans are biologically wired
01:05:07
and so i guess my my first concern is maybe we end up in a decentralized system that ends up replacing all of these tools and this just doesn't end or
01:05:14
you end up being worse or yeah and it could be worse or you end up having these kind of regulatory regimes emerge
01:05:19
that would be better a decentralized solution is actually no better in one no it's better in one key way which is that
01:05:25
it's fundamentally harder to create the exact same network effect and density that you can have with one monolithic closed system so you're much more likely to actually have
01:05:36
a very fragmented ecosystem of hundreds of different solutions depending on what of the sins you want to feed or you know
01:05:43
what of the feelings you want to feel at any one time i think it's a big assumption that it would be a fragmented network if you did replicate facebook on
01:05:51
a decentralized platform and then some piece of misinformation came out and it trended all the way to number one like
01:05:57
say the january 6 insurrection no no no no no no no no no no no there's nothing to that there's not one network there's no understand
01:06:04
let me finish my point if one network became so large and there was nobody who could turn off something what if people
01:06:10
said hey there's a riot going on at the capitol and more people showed up with more guns right you have nobody to sit
01:06:16
there and say hey don't go to the capitol turn those trending posts off go ahead sex okay so let's let's talk about this
01:06:22
problem of misinformation okay i think there's an old mark twain quote saying that the a lie can travel around the
01:06:29
world faster than the truth can put on its shoes okay correct there is a problem of falsehood
01:06:34
spreading online i agree with you there the question is what you do about it and
01:06:39
the problem we have right now is that is that truth isn't that by the beholder there is no uh truth api and so at the end of the day it's the people in power
01:06:50
who get to decide what is true and what is false if you give them the power to sense their misinformation example we
01:06:57
just saw we talked about in this program the rolling stone ivermectin hoax provably false story and yet rachel
01:07:03
maddow still had it up on her post she was not sanctioned by msnbc twitter never told her to take it down and she
01:07:09
was not fact checked however the hunter biden laptop scandal or story which came out in the new york post a couple weeks
01:07:15
before the election turned out to be a provedly true story and yet it was taken down by facebook and twitter at the end
01:07:21
of the day this term of misinformation is just another vector for partisan attack and it will be used by whoever we
01:07:28
give the power to to decide what misinformation is so what is the answer then to this point of falsehood
01:07:34
spreading online well at the end of the day the answer to bad speech is more speech you try to create
01:07:40
a free marketplace of ideas to let to let the good speech ultimately uh drive out the bad feature prove that it's wrong that's the best you can do
01:07:50
that's the best you can do in a free society yes but we've this is the first time a free society has had social
01:07:56
networks that can reach a billion people instantly in you know an hour so i think
01:08:01
there's one differentiator there that we must think of if somebody defames you on a social network they are absolutely
01:08:07
liable i mean you can sue them okay but i think and you should and i think we've talked about canceled culture people are
01:08:13
destroyed before they even get their day in court i think i think that's being destroyed for something different i think if
01:08:19
somebody it's because it trends if it didn't if it couldn't trend to so many people it wouldn't leave lead to the cancellation and destruction
01:08:25
of somebody's life you've talked about that many times yourself if if somebody libels you i think they should be you
01:08:31
should be able to sue them and i think we could actually we could have a libel regime more like the uk where it's
01:08:37
easier to prove these cases in court and people are much more careful about defaming other people i would be very
01:08:42
much in favor of that okay because defamation is not free speech but the question really is about really
01:08:49
we're talking about non-defamatory statements that somebody in position of power has decided is not true many of
01:08:54
these statements are subjective dave portnoy got labeled for his subjective opinion about aoc's dress why did that happen and why is that kind of labeling only used to protect one side of the
01:09:06
political spectrum so i mean that that's what's really going on here let's end with this uh has anybody watched chappelle's the closer
01:09:13
i did incredible i i watched it pretty incredible i mean fearless fearless is a word i was really um i think that he
01:09:25
slightly missed it because i think he could have really actually called out cancel culture and
01:09:30
wokism more i think he kind of left it a little bit to me where i was like a little
01:09:36
i don't know i just i just didn't think they were as good as his other ones and i felt like he didn't really make the point he wanted to make it was
01:09:43
a little convoluted somebody who can actually stand up and and actually you know be
01:09:48
more satirical and tell the story of why all this cancer culture and defamatory statements
01:09:54
and judging people doesn't make sense but then did he seem he didn't he didn't get the job done i felt like well dude
01:09:59
let me ask you this about the performance did he seem qualitatively different than you in that the other times he seemed very light on his feet
01:10:06
you know having a good time being a comedian and this time it felt like he was personally hurt or he was it wasn't
01:10:12
comedy it was less it felt less comedic i agree it felt like he had an agenda he was hurt he wanted to get some stuff off
01:10:20
his chest and there were some jokes in between which is very different like the percentage of jokes on this is like 20
01:10:25
and the like heavy on max max and then the other ones were 80 jokes 20 social commentary this felt like he um he was actually really hurt and like i don't want to say bitter but just
01:10:37
fed up maybe frustrated he had a chip which made it interesting to me you know in the in the early 2000s chappelle for me was really important because he was an
01:10:49
advocate for minorities and i felt seen and protected by chappelle and [Music] i thought that was really important and then his his comedy was just so
01:11:01
sharp oh yeah and i i said i just think that it was a little bit of an opportunity lost
01:11:07
yeah i i think if he had really actually taken the you know it to its conclusion he would have actually
01:11:15
there was just too many uncomfortable moments in that thing it was super uncomfortable at times and
01:11:22
i you know i really would like to see it again um because you know if you just think about his
01:11:28
career you know him talking about police brutality him talking about race in a very fearless
01:11:34
you know entertaining but also informative way and just being a truth teller yeah this was uh so uncomfortable
01:11:41
at times i agree with that i need to watch it again and i need to let it sit because i always take it it's on netflix
01:11:47
it's the last contract yeah i mean this could be i almost felt like he was trying to break netflix because he does
01:11:53
seem to have a he does seem to have a streak in him where he's like okay i'm gonna i'm walking away from
01:11:59
comedy central and he does seem to burn the boats it felt like he was burning the boats with netflix to me i don't know if you got that vibe where he was
01:12:05
like this is the last one i'm being canceled after this [ __ ] y'all i'm out um and he has that i
01:12:11
mean he torched it sacks i mean you're gonna watch this thing oh now i'm definitely watching it i have not seen it yet but i'm definitely watching i'll
01:12:17
watch it tonight i give it a 50 chance that netflix takes it down well let's watch it quickly though there
01:12:23
were there were everybody was screaming for for him to be de-platformed everybody was screaming well then i i
01:12:29
like it even more you know one of the ironic things about these warning labels i've noticed they've started become a badge of honor where you know if if the
01:12:36
if the hall monitors a twitter are trying to label your tweet as as uh you know being incendiary maybe it's just
01:12:43
interesting right it's a buy signal it's a yeah exactly so you know um i was listening to uh antonio garcia martinez interview uh camille on um on call in
01:12:56
and they they labeled that i mean just the post about they were gonna have a conversation you're saying the link to
01:13:02
it was even flagged as like oh my lord i think there needs to be a netflix for a comedy where it's only subscription and
01:13:10
it's owned by the comedians like if dave chappelle were to create his own netflix i think it gets 10 million paid
01:13:16
subscribers over the first two years overnight no overnight overnight okay so wait a second how do we wet our beaks on
01:13:23
this if we go to chappelle and we say hey listen here's 25 million dollars we'll set up the tech team um
01:13:28
i'll ask i'll ask them this weekend i think that yeah you get k heart you get chappelle you get seinfeld you get
01:13:35
um now do you get louis ck in there or ck what's his name i never found that guy funny
01:13:40
that guy never did it for me but i mean anyway you know who's funny you know what's funny have you have you had this
01:13:45
asian guy ronnie chang he's on uh he there's a great netflix special on him he is [ __ ] funny and then jo koi jo koi is very funny yeah i think ronnie chang
01:13:57
taped his own special hassan minhaj he's legit but i mean i this would be a great way for them to just control their destiny and not have to worry about cancer culture because i
01:14:08
think a lot of the folks who are on well they are probably the last line of people that actually
01:14:15
will be the defenders of free speech yeah it's pretty scary as much as i think facebook should be more thoughtful
01:14:22
about their algorithm uh you know back to you know circling netflix and censorship back to the facebook issues i
01:14:29
just think facebook should say hey listen we've throttled the algorithm so that any one piece of content
01:14:34
can only reach this many people over this period of time and yeah sure that's going to lower our time on site or
01:14:40
whatever but we want things to have a little bit of time to spread and get fact checked does anybody think that
01:14:46
that's a good idea to say just you know if you're trying to cancel somebody instead of it going to number one on trending topics before the person
01:14:52
has a trial the algorithm would just take a little bit of time to propagate content here's
01:14:57
what i can tell you conclusively if facebook wanted to solve these issues in the ways that the government expects in their head for these problems to be solved
01:15:10
facebook market cap would be 250 billion dollars and they'd have a million people working there at the company
01:15:16
so this is not an issue of whether it's possible the question is is it right and does it actually get at the solution or
01:15:22
does it just as friedberg said create whack-a-mole someplace else and so you know i don't know what obliterating
01:15:28
three-quarters of a trillion dollars of market cap will do but i suspect that the government is going to want to find
01:15:34
out sacks you think that throttling the the velocity of the algorithm so that news doesn't spread as fast and violently or which could be misinformation could be
01:15:45
valid information do you think that's a possible solution look i i think that at the end of the day
01:15:50
we're disclosing algorithm maybe with both facebook and twitter you only see stuff from people who you're
01:15:57
following or you're friends with it's actually not true what do you mean if things they will insert stuff into your
01:16:03
twitter algorithm now that's adjacent to you and facebook will do that i mean well maybe maybe if people respond to someone who you're
01:16:10
following but i've never seen anything in my twitter feed other than an ad that's not from somebody i follow so you
01:16:15
know trending topics no i mean not my feelings the explore fee oh okay no but you the explorer
01:16:21
feeds right there and they are surfacing things in your feed now that are not people you follow but what they're really doing okay is
01:16:27
there's a universe of people who you're following or you're friends with and you could just see all that content in a
01:16:33
reverse chronological feed but that would be too much it'd be overwhelming originally worked yeah
01:16:38
exactly and i get it and that was fine i didn't i liked it okay but as you're following thousands of people now
01:16:44
there's too much content and so they will simply surface the tweets that you're most likely to want to interact
01:16:50
with i don't believe by the way that those tweets are necessarily the ones that make you angry i think
01:16:56
i think for some people it is clearly but it's not certainly not the case in my case what i would say is it's more refined than that it's the
01:17:03
tweets that you think are interesting it's the tweets that perhaps express a sense of outrage that agrees with your
01:17:09
sense of outrage it's a little different than anger but it's it's basically the subset of
01:17:15
content that you through your reveal preferences have have shown facebook or twitter that you know that you care about the most and that's basically what they're doing they're giving the
01:17:25
consumer more of what they want and i think that we've blown this thing so far out of proportion
01:17:30
i mean yeah if there's an analogy that it's addictive but i think that it's been blown so far out of proportion
01:17:37
we've exaggerated the fear beyond any reasonable recognition by the way i think the i think the reason that that tweet was flagged i'm guessing is that in the tweet uh
01:17:48
camellia says he's going to talk about critical race theory and that may be why conversations foreign this can be intense that's all i think because he says the gloves are coming off it looks like two people fighting or whatever i
01:18:02
just think it's sort of ridiculous um you know like this is where like the warrior is a little patriotical yes it's
01:18:08
a little condescending like people like this [Applause] you is my oh boys i love you happy 15th episode and what's going on with you friedberg
01:18:44
and sax that you're you won't make the journey down to the poker game is this like some sort of david uh
01:18:50
protest here i will come back i will i will start playing again if we get if we get the game going on like a regular time or is
01:19:00
it what the [ __ ] is on your screen are you talking nothing going on okay yeah you have nothing going on saks
01:19:06
all right i'll start you know i'll start making i'll stop evading your family stay in the city
01:19:12
come see your [ __ ] friends play some cars give me some money we're not playing blo
01:19:18
yeah no plo i mean we did at the end just to get skye's money but he just keeps guy there for another 30 minutes
01:19:24
since he was flushing cash good sexy poo we beat him up with skyfall when you crumble actually the new uh i'm really excited to see the new daniel craig double 07. i
01:19:36
can't believe that can you still rent a midtower movie theater for like 50 bucks yeah uh 300 bucks so yeah it used to be
01:19:42
not it was 99 during the pandemic it was awesome 300 now 300. i haven't done it the last two times i went with the girls because it was first run movies and the theaters were pretty empty but it's 300
01:19:52
if you get like 10 of your friends to come it's like basically five of your friends to come it's worth it i mean that's 60 bucks each and yeah i mean
01:19:58
it's or we just go to taxes theater he's got the sax's theater is better because you
01:20:04
have a chef there who will make food but yeah and for those of you asking about the all in summit saks and i are leading
01:20:10
the charge for a february or april we got a couple of locations thank you to everybody who sent us location ideas two
01:20:16
days uh 250 people 200 paid tickets 50 by scholarship and you can go to the all in website when we have information we will post it there but we're just in the planning phase right now but we're
01:20:29
thinking two days right boys yeah two days for one summit and then five hours of content something like that a day we
01:20:35
each interview people yeah and then we're done okay and miami is the host city and we'll
01:20:40
draw a high card for who picks the next city chuma you said you're picking something in italy i'm to probably pick
01:20:45
my rover venice romer venice i'm going to probably pick new york for mine or austin and then freeburg where would you
01:20:50
pick napa or something marin county oh wow where everybody wants to go great go to anti-vaxxer town [ __ ] you friedberg moran county wow what a destination
01:21:03
i'm a free book where would you pick um so who are we doing miami first is that right miami's first then we draw a high card for the next city who gets to pick next city each bestie picks for four years each party picks
01:21:15
one if we go twice a year even better i mean i'd probably split it between uh london and uh
01:21:23
london and somewhere in hawaii oh yeah hawaii's inspired choice can you imagine 250 degenerate london's great
01:21:34
iconoclastic but london would be we would take over miami is freaking out run over
01:21:40
annabelle's boys i bring you out to annabelle that's incredible that pride that members club is i think the most over
01:21:46
the top thing i've ever seen you're you're referencing something that no one knows what you're talking about yeah nobody knows what you're talking
01:21:51
about is that a nightclub yes it's a nightcraft well no it's a private annabelle's
01:21:58
no you have to have members clubs in london because because you can't drink alcohol after like 9 00 p.m unless it's a private club yeah all right we'll see
01:22:05
you all next time on the all in podcast here's to another 50 everybody first 50 done love you guys let's get another 50 in the books let your winners ride
01:22:17
rain man david sacks we open source it to the fans and they've just gone crazy with it
01:22:29
[Music] it's like this like sexual tension that they just need [Music] we need to get back [Music]
01:23:07
i'm going on [Music]