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Show Notes
Introduction
– Ari bought first Bitcoin in 2014
– Really dove into crypto 2016
– Friend emailed him in 2011 asking to check out crypto, Ari said it won’t retain value, not backed by guns like fiat
– Ari: “For crypto you kinda gotta know a little bit about a lot of things”
– Got involved with crypto through crypto twitter
– Cunningham’s Law – “The fastest way to get an answer on the internet is not to ask a question, but to state something wrong”
Ari’s Headspace
– Long term mostly thinking about the future of crypto
– BlockTower bets on where the world will be in 1-3 years, not 10-20 years
– Fascinated by the big picture
– Huge believer in giving people defensive tools for overbearing states
VC Stuff
– BlockTower is a trading firm by nature, so they invest in projects that they can actually be power users in
– Ari: “Evaluating seed stage teams is its own skillsets, very different from evaluating something like Microsoft”
– Cobie skeptical of a16z’s success in crypto, followed like 4 deals they did and got crushed
– A lot of the time, timing is much more important than vetting skill
– Ari: “If you were trading NFTs 2 years ago, it almost doesn’t matter if you were good it just matters that you were doing it”
Privacy
– Ari: “There’s a whole tech stack for privacy that’s missing”
– Countries can control the internet very easily
– People think the internet is super hard to control – there is literally a bundle of wires that delivers the internet to an entire country
– Ari: “zk-rollup chains where you can shield the mempool… there is some super cool math we’re building into the system now that could change everything”
– You could fork Ethereum and add it as a rollup chain to Bitcoin
– Ledger: “Is there really a market for that?”
– Ari: “It seems likely in the next 2 years that we’ll get a soft fork to implement this”
– Ari: “There are bitcoiners who are pitching this as humanitarian technology but against adding privacy technology that exists…borderline unethical”
Making ETH Maxis Mad
– Ethereum is a risky startup competing on tech
– The odds it is a market leader in 10 years is under 20%
– Facebook didn’t need a single Friendster user or dev
– If you have an industry that’s going to 20x, you don’t need to take existing users
– Ari: “Solana has something like more than 10,000 active developers now”
– Ethereum does not have much of a moat, it has a little bit of brand recognition, a little bit of regulatory head start, some dev moat, but largely the moat is very small
– Ethereum cannot move as fast, cannot take as much risk. It’s hard to maintain its lead
– Cobie: “Do you think Ethereum should have a canary network, kind of like Kusama?”
– Ari: “(pause) I actually haven’t thought about that”
– Seems to be a real, good idea
Solana
– Ari has been recommending Solana for the last 2 years
– Well intentioned team, real project, very cool innovation at the communication layer
– *Ari still has a long Solana position to be clear*
– It’s quite centralized, depends on the team to stay up, has a real path to decentralization
– It’s a highly speculative early stage bet
BNB
– Exchange coins are basically sold as equities
– There are tons of regulatory actions which could likely be negative for $BNB
– Would not hold the coin
Cardano
– Ari: “Cardano I actually know very little about”
– The only thing he really believed would stick around for 5 years was Bitcoin, DeFi and NFTs
– Ari: “I worry that in 5-10 years the winning metaverse will be Facebook or Fortnite, some centralized entity, which scares me because I want a decentralized world”
– Ledger: “so Cardano” lol
– Ari: “I am deeply skeptical of Cardano”
– Ledger: “Dump it”
2017 Bull Market
– Ari bought $50k calls in 2017
– Did it to maintain upside exposure while not keeping material risk on
– Went onto CNBC to talk about it, they mid-curved his thinking
– Ari: “Options are a bet on volatility, not the direction, because you can always hedge the direction with the underlying”
– Ari: “If you can’t define skew and kurtosis then you probably shouldn’t be trading options”
Crypto Investing
– Ari: “If you’re investing with a lot of small bets in alts, it almost acts as a call option”
– Ari thinks vol is about fair today
– Basically every time Bitcoin vol gets below 60, Ari buys it
– Ari: “The crazier the bull market the crazier the retrace”
– Ari: “My basic thesis now is DeFi 5-10x’s here and then retraces 80-90%”
– Ari: “The biggest value add from crypto over the next 12-18 months is connecting DeFi to real world lending”
FINAL ALPHA
– Ari: “It doesn’t matter how much money you make, if you don’t keep yourself healthy you won’t enjoy it”
– Focus on your health!
Notes by Kevin
Music by GiovanniPickle
