The Delphi Podcast

Latest Episodes:

Celsius’s Founder Alex Mashinsky: Interest Income Is Crypto’s Killer App Feb 19, 2020

Show notes

Host Tom Shaughnessy talks to Alex Mashinsky, CEO of Celsius Network. Alex discusses the impetus for creating MOIP (Money over IP) and Celsius Network, what has prevented blockchain from becoming mainstream thus far, and his predictions for the future of MOIP technology.

Key Points:

There is a high barrier to entry for new users of crypto and blockchain technology.
The shift for crypto becoming mainstream will be generational.
2020 will be a defining year for crypto adoption.

Quotes

“The main thing that I think is the killer app is the idea that you can do something that you could not do any other way with any other platform.” –Alex Mashinsky

“We need to grow the crypto community first before there’s enough demand for all of these products to start migrating from the traditional Wall Street and Main Street services to the crypto rails.” –Alex Mashinsky

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Episode Highlights:

Alex has raised over $1 billion in capital for several startups over the past 30 years and is one of the developers of VOIP technology.
It’s easy to get people to use VOIP, but much harder to get people to trust you with their money for new banking technology and MOIP.
Celsius Network creates interest-bearing accounts for people who hold crypto and lending with crypto.
There’s a high bar for involvement with Celsius Network because you have to understand crypto first.
The banking industry will not survive as is if crypto becomes mainstream; they would have to evolve their entire business structure dramatically.
When VOIP came about, it massively disrupted phone companies, who made most of their money off long distance call charges.
Children today don’t see digital currency as foreign because they already play games that use tokens as currency; what’s foreign to them is their parents writing checks.
The blockchain community has thus far failed to convince the average person that it’s something more than just a toy for techies.
Celsius has now raised the bar for other crypto and blockchain companies and many of them have started to offer interest on deposits, but none has better rates than Celsius does, on every service they offer.
What Celsius does is make services that in the mainstream are only available to the top 1%, available to everybody.
Celsius created their own token that they treat essentially as airline miles—something that incentivizes them to continue using the platform.
You can choose whether you want to earn interest in your stable currency or in the Cel token.

Resources Mentioned:

Chain Reaction Twitter: https://twitter.com/chainpodcast
Tom Shaughnessy Twitter: https://twitter.com/Shaughnessy119

Tlon CEO Galen Wolfe-Pauly: Urbit Is The Personal Operating System For The 21st Century Feb 18, 2020

Show notes

Host Tom Shaughnessy talks to Galen Wolfe-Pauly, CEO of Tlon, which is building out Urbit. Galen discusses his vision for Urbit, how developers can work with it, what’s on the horizon for Urbit in the near future, and more.

Episode Highlights:

Galen learned programming really young and was interested in web and app design.
Urbit functions like an operating system rather than an app and provides a better user experience.
Urbit is the platform from which you contact the blockchain, and Galen sees them as two systems working cooperatively.
Galen’s vision for Urbit is for it to be the ultimate productivity tool.
Tom summarizes Urbit as a general-purpose code base that people can use as their own personal cloud computers.
Galen hopes this is the technology that you are able to use less because you don’t have to think about it as much and doesn’t incentivize them by mining their data.
There will be a finite number of users on the platform to retain its security and value, through address blocks.
Developers will own pieces of the system through these address blocks, incentivizing them to improve the system.
Urbit is designed for digital communities to shape their own environments.
The most important thing with new technologies is their stickiness.
Many Bitcoin users have adopted Urbit because it has an authenticated digital identity through which you can communicate with people and transact.
As people adopt Urbit, either platforms will develop to run on Urbit or they’ll simply go away, like AOL did when the Internet grew.
Galen wants an actual archive of his data that won’t go away when the company folds, which most things will.
Now that the Urbit infrastructure is stable and reliable, they’re now shifting to think about it as a product.
Galen most worries about Urbit’s current shift towards wanting users who don’t care about the technology.

Key Points

A big reason more people haven’t adopted blockchain technology is that it has terrible user experience and is too difficult to operate.
The most important thing for new technology’s longevity is its stickiness with a particular population of users.
All technology will eventually go away and be replaced by something else.

Tweetable Quotes

“If you’re a developer it should be easy to build on top of this whole stack. You ship to the network & when people install it, they can easily port their data from one thing to the next. So you have more fluid competition between different alternatives.” –Galen Wolfe-Pauly

“We have the benefit of these early incentives from relatively technical address space holders & honestly just people who think this is really fun. Which I think is bigger than people think. A lot of the internet was built either for fun or on a gov't grant.” –Galen Wolfe-Pauly

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Fidelity Digital Assets’s Ria Bhutoria: The Paperwork Crisis to Crypto Custody Today Feb 06, 2020

Show notes

Host Tom Shaughnessy talks to Ria Bhutoria, Director of Research at Fidelity Digital Assets. Ria discusses her recent article about Omnibus model, the importance of proof of solvency, technological developments in crypto and DeFi in financial institutions, and more.

Key Points

The omnibus account model has been important to large financial institutions as the cryptocurrency market has grown.
Using omnibus accounts with digital assets means some value is stored online and some is stored offline.
Large financial institutions are buying into digital assets and developing new technology for it slowly, but surely.

Tweetable Quotes

“It’s easy to get lost in the day-to-day, and we’re so used to seeing constant news flow and announcements that it really takes taking a step back to realize how much progress we’ve actually made.” –Ria Bhutoria

“There’s a lot of development going on, and a lot of it is just seemingly small improvements, but in aggregate I think it’s making the whole ecosystem more robust and stronger.” –Ria Bhutoria

Episode Highlights:

What is Ria’s background and how did she end up at Fidelity Digital Assets?
The Omnibus model means that assets of multiple parties are combined and service providers establish segregation between clients in their books and records.
Omnibus accounts came into existence after a paperwork backlog crisis in the 1960s and 1970s.
The omnibus model helps improve liquidity for the account custodian.
The ratio of what you have stored in cold offline storage vs hot online storage matters.
Ria explains why ‘proof of solvency’ is important.
Ria and Tom are excited by the increase in major financial institutions developing technology and increasing their understanding of digital assets to embrace cryptocurrency.
There’s a lot of high-level development happening in the crypto tech space, but it takes a long time to implement changes the average user can see.
Ria is most excited to see the kinds of services that institutions are going to offer to extend beyond what’s offered for traditional asset classes.
There’s a range of experience and interest in DeFi, given that many people still don’t even understand Bitcoin.
Fidelity has been doing research in digital assets by mining Bitcoin for years.

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Resources Mentioned:

“The Omnibus Model for Custody” by Ria Bhutoria: https://medium.com/@FidelityDigitalAssets/the-omnibus-model-for-custody-96b69710f92d
Fidelity Digital Assets Website: https://www.fidelitydigitalassets.com/overview
Ria Bhutoria Medium: https://medium.com/@riabhutoria
Ria Bhutoria Twitter: https://twitter.com/riabhutoria
Ch

Camila Russo: A Deep Dive Into Ethereum’s Inception Feb 04, 2020

Show notes

On this episode, Host Tom Shaughnessy is joined by Camila Russo, founder of the Ethereum based newsletter The Defiant and author of the coming book on the birth of Ethereum titled, The Infinite Machine: How an Army of Crypto-hackers Is Building the Next Internet with Ethereum. We dive into why Camila decided to research Ethereum's early life, how she has been tirelessly researching the protocol for months and what to expect from her new book.

Pre-order here while you're listening.

About The Book

Everyone has heard of Bitcoin, but few know about the second largest cryptocurrency, Ethereum, which has been heralded as the "next internet."

The story of Ethereum begins with Vitalik Buterin, a supremely gifted nineteen-year-old autodidact who saw the promise of blockchain when the technology was in its earliest stages. He convinced a crack group of coders to join him in his quest to make a super-charged, global computer.

The Infinite Machine introduces Vitalik’s ingenious idea and unfolds Ethereum’s chaotic beginnings. It then explores the brilliant innovation and reckless greed the platform—an infinitely adaptable foundation for experimentation and new applications—has unleashed and the consequences that resulted as the frenzy surrounding it grew: increased regulatory scrutiny, incipient Wall Street interest, and the founding team’s effort to get the Ethereum platform to scale so it can eventually be accessible to the masses.

Financial journalist and cryptocurrency expert Camila Russo details the wild and often hapless adventures of a team of hippy-anarchists, reluctantly led by an ambivalent visionary, and lays out how this new foundation for the internet will spur both transformation and fraud—turning some into millionaires and others into felons—and revolutionize our ideas about money.

Resources Mentioned:

Pre-order The Infinite Machine
The Defiant Newsletter
Camila's Twitter
Chain Reaction Twitter: https://twitter.com/chainpodcast
Tom Shaughnessy Twitter: https://twitter.com/Shaughnessy119
eToro Offer: b.tc/etororeaction

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Check out eToro to Create Your Perfect Crypto Portfolio

Delphi Digital's Research

Disclosures: This podcast is strictly informational and educational and is not investment advice or a solicitation to buy or sell any tokens or securities or to make any financial decisions. Do not trade or invest in any project, tokens, or securities based upon this podcast episode. The host may personally own tokens that are mentioned on the podcast. Tom Shaughnessy owns tokens in ETH, BTC, XTZ, STX, SNX, RUNE, sUSD and HNT. Lets Talk Bitcoin is a distribution partner for the Chain Reaction Podcast, and our current show features paid sponsorships which may be featured at the start, middle and/or the end of the episode. These sponsorships are for informational purposes only and are not a solicitation to use any product or service.

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Blockchain Capital’s Aleks Larsen: The Tsunami Of DeFi Innovation Jan 24, 2020

Show notes

Host Tom Shaughnessy talks to Aleks Larsen, part of the Investment team at Blockchain Capital. Aleks discusses issues with decentralization, DeFi growth and opportunities, what place security tokens hold in the DeFi space, and more. This episode builds on a recent episode we hosted with Blockchain Capital's Spencer Bogart.

Key Points

Nothing is entirely decentralized yet because we’re still learning best practices for blockchain and DeFi tech.
The user experience on DeFi is generally lacking, and to grow the user base that will have to change.
There are a lot of opportunities with blockchain and DeFi in financial services to address global disparities in access to banking.

Tweetable Quotes

“If your token doesn’t accrue value, it’s going to be really hard long-term to align incentives within your ecosystem. No one’s gonna want to hold it. So the most attractive tokens are going to attract people to use it for reasons other than the service itself.” –Aleks Larsen

“Over time, we’re going to figure out some things that work, and over time, the points of failure that exist today, or the points of centralization, will hopefully become less of an issue.” –Aleks Larsen

Episode Highlights

Aleks was working in traditional investments, but became interested in DeFi as he casually researched Bitcoin and Ethereum on his own.
Choosing new projects to invest in comes down to intangibles; Aleks doesn’t have a strict framework or methodology around choosing.
Right now, there’s a lot of experimentation and testing in DeFi tech, trying to find a model that will work more broadly.
Most DeFi platforms aren’t entirely decentralized yet.
In the early days of a chain, it’s safest to have a point of centralization so that there’s a failsafe as the tech develops and loopholes or bugs are discovered.
Aleks doesn’t see faster transaction speeds as a significant enough advantage over secure transaction settlement, so if you have to wait a few minutes for space on a chain, that should be okay.
Some of the most interesting new tokens from Aleks’s perspective are ones that give you voting rights, feel like equity, or outright gives dividends.
Tokens now often have use cases beyond just raising money, including as collateral for other tokens.
The amount of assets you have locked in DeFi is not the best metric to use for value because it really comes down to volume of transactions.
Aleks believes the DeFi space is ambitious and optimistic, but launching new products usually takes 2-3x longer than predicted.
New applications either need to address a market that has been experiencing significant pain, or it needs to create a big market that hasn’t existed before.
Adding open source applications to your stack, like a savings account that you can access anywhere, is of huge value for use cases like developing countries where millions of people do not have access to basic banking.
Facebook’s move into crypto with Libra is an interesting way to make financial services available to people who don’t otherwise have access to banking.
Security tokens have unexplored potential to redefine what it means to own something in the digital age.
Security tokens simply aren’t a good way to raise money.
Aleks thinks at least for the for

Multicoin’s Kyle Samani: The Evolution Of the Web3 Stack Jan 21, 2020

Show notes

Host Tom Shaughnessy talks to Kyle Samani, Founder and Managing Partner of Multicoin Capital. Kyle discusses his predictions for the middle layer and full-stack development, attracting developers to the crypto space, how competition in the industry will develop, and a complete discussion on the Web3 Stack.

Key Points

While there are a lot of opportunities higher up the stack, there is the most money in layer one because that’s what has been proven stable over time.
The next few years will see an explosion of Web3 experimentation.
In crypto, like with everything in technology, developments will happen very slowly, then suddenly very quickly.

Quotes

“When I think about opportunities for investing in the middle layer, they are generally less competitive as a function of market size, and not as many developers recognize that those markets exist.” –Kyle Samani
“As these services continue to mature, we’re going to start to see people build world-class applications—we’re going to start to see new things come out over the next 12 months or so.” –Kyle Samani

Episode Highlights

Kyle recently published his 2019 update to the Web3 stack, which is about inverting the data model that powers the internet so that users own their own data.
Kyle predicts that what we will increasingly see over the next few years will be more heterogeneity in investments, which will lead to more consolidation.
Tech companies and teams that don’t pivot the right way will likely go down with their last dollar.
Kyle thinks companies that are forced to run on a chain other than Ethereum or choose to explore that will choose chains that are very good at one specific thing.
It’s difficult to attract new developers into crypto because the business models to make money are not yet understood.
People are not good at having an historical sense of technology and understanding that once the basic idea for something arises, it takes many more years for the first iteration of the thing that will make those core ideas work.
There are a lot of opportunities right now in the middle layers.
There is the most money in layer ones.
Developers typically want to know what will be possible in 12-24 months so they can build better applications upfront.
There are structural issues with pushing complexity up the stack; the whole purpose of layer one is to abstract the complexity.
Kyle agrees with Spencer Bogart of Blockchain Capital that most competition will eventually happen vertically, on one or a small number of chains.
Kyle predicts that Polkadot will attack Ethereum this year, based on their recent behavior.
Full-stack integrated approaches are great, but no one team can pull off all that complexity in any reasonable timeframe.

Resources Mentioned:

Chain Reaction Twitter: https://twitter.com/chainpodcast
Tom Shaughnessy Twitter: https://twitter.com/Shaughnessy119
Multicoin Capital Website: https://multicoin.capital/
Kyle Samani Twitter: https://twitter.com/K

Tradecraft’s Jake Ryan: The Age of Autonomy Jan 16, 2020

Show notes

Host Tom Shaughnessy talks to Jake Ryan, Founder and general partner of Tradecraft Capital and author of an upcoming book on crypto investing. Jake discusses his prediction for the Age of Autonomy, the challenges of predicting where crypto will go, and more.

FYI: We're looking for long term show sponsors. To be considered as a sponsor this show, contact Tom@DelphiDigital.io

Key Points:

Society is at the end of the Age of Information and is headed into what Jake calls the Age of Autonomy.
Competition drives adoption of new technologies.
Automation and human intervention, and centralized and decentralized currencies, will likely always need to coexist.

Quotes

“As we see these technologies converge, we’re going to see orgs & businesses start to build autonomous operations, & businesses that don't have autonomous operations simply won’t be able to compete with those that do bc autonomy is the ultimate competitive advantage.” –Jake Ryan
“Humans do a great job at envisioning the future and they do a really terrible time at timing it. It’s just too complex.” –Jake Ryan

Episode Highlights:

Jake’s book on crypto investing is set to come out in the first quarter of 2021.
He moved from app development into angel investing about 5 years ago, which is what led him to crypto.
Jake calls this the “age of autonomy,” based on theories of short-wave and long-wave economic cycles driven by technological revolutions.
By autonomy, Jake is referring to automation, artificial intelligence, the internet of things, robotics, and now crypto.
Jake sees us as being in the mature phase of the Age of Information.
Jake urges us not to view these changes with judgment, as right or wrong, but simply as fact.
He sees a future intersection of these various technologies, with blockchain as the glue between them.
Automation will not drive out humans if we make more complex and decentralized governance systems, but overall, over decades, human intervention will become less and less required.
The economy needs a currency that will ride the economy through inflation and deflation, and a currency that stores value well over time, and those appear to be mutually exclusive.
Jake believes we won’t go to full decentralization but that we’ll always have both centralized and decentralized currencies.

Resources Mentioned:

Crypto’s Role in the Age of Autonomy - https://hackernoon.com/cryptos-role-in-the-age-of-autonomization-2bf414ceb5d2
Chain Reaction Twitter: https://twitter.com/chainpodcast
Tom Shaughnessy Twitter: https://twitter.com/Shaughnessy119
Tradecraft Capital website: https://www.tradecraft.capital/
Jake Ryan’s Twitter: https://twitter.com/TradecraftJake
Book recommendation: Technological Revolutions and Financial Capital by Carlota Perez
Technolog

Blockchain Capital’s Spencer Bogart: A Bold Outlook for 2020 Jan 14, 2020

Show notes

Host Tom Shaughnessy talks to Spencer Bogart, general partner with Blockchain Capital. Spencer discusses the current state of crypto, his predictions for its future, and more.

FYI: We're looking for long term show sponsors. To be considered as a sponsor this show, contact Tom@DelphiDigital.io

Key Points:

Crypto is becoming increasingly relevant to global macroeconomics.
It’s difficult to pinpoint exactly where in the crypto development arc we are, so some believe it’s growing more slowly than expected and others believe it’s moving faster.
There is an overall shift in crypto from horizontal competition to vertical construction.

Episode Highlights

Blockchain Capital has over 300 million assets and 80 portfolio companies.
Spencer got into crypto after buying some Bitcoin, which led to him getting more and more interested and eventually writing some research pieces on the crypto space.
Bitcoin is just starting to become relevant on a macroeconomic scale.
Political unrest globally could be a driver towards crypto to avoid government regulation and interference.
Technological developments and the best tech are not what establish standards.
Spencer predicts that rather than a new protocol launching and becoming number one, more success and better standards will be established by people building on top of existing protocols.
People will build for the chains that have the most end-users, and those options are Bitcoin and Ethereum.
Now that it has become easier to build up the stack, Spencer predicts we will see more innovative and creative solutions.
Tom thinks given new involvement in crypto from China, Facebook, and other places, that we’re maybe moving slower than expected, but Spencer disagrees.
Spencer points out that asset value is not the only way to assess a crypto’s success, but that you can also look at the transaction value.
Spencer suggests when pitching to a VC, don’t overrepresent what you’re doing.
Be cautious about assuming that what you see online, on crypto Twitter for example, is representative of everything that’s going on in the industry; some of the most knowledgeable and impactful people aren’t on crypto Twitter because they’re too busy building.
Spencer’s long-term view of the industry is that there’s an overall shift from horizontal competition to vertical construction.
Bitcoin probably does not need vertical construction to grow because it is focused on a specific market and specific use cases.

Quotes

“Keep in mind that any kind of venture investor that you’re going to go and talk to, they just see a lot of opportunities, so they’re looking for reasons—as much as they’re looking for reasons to invest in something, they’re also looking for reasons not to invest.” –Spencer Bogart

“It’s only because of fee pressure that we started to get innovations on things like lightning. So the other option would have been to increase the block size to try to keep transaction fees low, but the reality is there’s unbounded demand for cheap block space.” –Spencer Bogart

“We’re seeing a shakeout in terms of trying to establish standards. So I think these standards are trying to basically create the foundation for programmable assets. And standards are almost never set by best tech.” –Spen

Yan Liberman, Phil Bonello and David Puell: Tokeneconomics and Valuation Jan 09, 2020

Show notes

Host Tom Shaughnessy leads a roundtable discussion with Yan Liberman (co-founder of Delphi Digital), Phil Bonello (former Head of Research at Ikigai), and David Puell (Head of Research at Adaptive Capital). They discuss the difficulties of crypto valuation, productive vs. unproductive assets, the differences between some projects, and more.

Key Points

It is very difficult to establish any intrinsic valuation of cryptocurrencies.
Many strategies for short-term growth do not lead to long-term stability or sustainability.
Tracking cryptocurrency growth and valuation has gotten more difficult as more transactions move off-chain.

Episode Highlights

Yan feels the token economy is the high-level understanding of the token structure, how the token accrues value, and how the token interacts within the ecosystem.
Phil categorizes assets as either productive or unproductive.
David thinks about the token economy in a way that includes game theory.
Exchange tokens need to accrue value while also being a usable asset.
The industry still relies heavily on operating in relation to the cost of Bitcoin, so it’s almost impossible to establish the fundamental value of anything.
The “burn model” is not effective to extrapolate an intrinsic value.
The “velocity problem” is that the more use of a currency there is, the less value it holds in the long term. Bitcoin avoids it by having a scarcity model.
Maker tokens work as an incentive, but it requires considerable growth to outpace the burn rate.
Now there is a token that you can use as collateral for synthetic assets, as a way to bootstrap your way to a sustainable value.
It isn’t possible to make future projections without enough historical data of crypto value.
Diversification and differentiation are big problems in crypto.
At Ikigai, Phil didn’t avoid trading assets with low valuation but wanted to approach all trades with a full understanding of the function and model of the assets.
Most agree that Bitcoin halvening is a bullish move.
For Yan, it’s easy to say that a number of projects shouldn’t be in the top ten, but harder to say what should be in the top ten that isn’t.

Resources Mentioned

Chain Reaction Twitter: https://twitter.com/chainpodcast
Tom Shaughnessy Twitter: https://twitter.com/Shaughnessy119
Yan Liberman Twitter: https://twitter.com/YanLiberman
Phil Bonello Twitter: https://twitter.com/philjbonello?lang=en
Phil Bonello’s blog: https://philjbonello.substack.com/
Adaptive Capital Website: https://adaptivecapital.co/
David Puell Twitter: https://twitter.com/kenoshaking?lang=en

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Decred’s Akin Sawyerr: Governance Reimagined Jan 06, 2020

Show notes

Host Tom Shaughnessy talks to Akin Sawyerr a Strategy and Governance Lead for Decred. Akin discusses getting involved with the Decred platform, governance, and community-building.

Key Points

Decred is unique for its transparent, token-holder led governance.
A community mindset of searching for the best solution to a problem increases transparency and decreases contention.
Decred wants to build incrementally and develop iteratively in order to maintain a strong community and culture.

Episode Highlights

Africa is the most expensive area to move money. The free, open-source tech isn’t the issue, but the government network.
Anyone in Decred’s network can propose, vote on, and debate ideas and feedback.
There are pitfalls to token-holder governance, which is why Bitcoin doesn’t have it, but Akin sees it as giving the people with economic stake in the network and a stake in governance.
Decred is working towards being a DAO, and using their cryptocurrency Politeia and technology built for Politeia in new implementations and new use cases.
Decred is one of the only cryptocurrencies that hasn’t had a major PR scandal or problem arise.
Decred’s biggest goals looking forward are to launch lightning support and a split-ticketing system.
Akin believes Decred isn’t in the top 10 coins because it requires a bit of a learning and participation curve to get involved.
Decred has the highest voter turnout for governance issues of all cryptos.
Decred has a consistent philosophy about their protocols, down to having a constitution

Resources Mentioned

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