YWR: 5 New/New's

I needed to speak to Jason. I needed the new, new.

You see I’d just finished an hour long Bitcoin expert call with 20 other PM’s and Family Office CIO’s.

What surprised me about the call was that for a whole hour there was zero pushback on the Bitcoin bull case.

I’ve attended/hosted many calls and lunches with Tradfi’s about crypto I was amazed there was none of the usual pushback.

“How do I know my money won’t get hacked?”

“How does it have value? Is it even money?”

“The US$ has 7 aircraft carriers. What does BTC have?”, etc.

I’ve heard it all. But this night it was crickets.

At the end of the call everyone agreed you didn’t want to be the fool who didn’t buy BTC at $100,000. Regret Minimisation.

There was even a meme for this.

20 TradFi CIO’s in complete agreement you didn’t want to be the idiot who missed BTC at $100,000 (when $100,000 used to be unimaginable) with the incremental bull case (next greater fool) being that BTC would soon be purchased by nation states, with no mention of the actual asset getting purchased by nation states. Hmmmm…

Right or wrong it set off my contrarian instincts. I needed to speak to my own crypto OG. Jason. BTC was cooked.

Ten Words in My Head

Jason is 30 and has his own crypto fund, Etherbridge. But let me go back. Jason’s South African, but actually Zimbabwean. We were introduced during COVID by a mutual friend who is quite big in the South African crypto scene. I thought my friend knew everything. I mean he’d convinced Investec Bank to start a crypto division back in 2016 when the management didn’t even know what they were agreeing to, but he said I need to speak to this younger guy, Jason. “He’s younger than us, but I like how he thinks. There’s something about him.”

I’m pretty sure I rolled my eyes at this, but it turned out to be true. Now I love talking to Jason about crypto. Other things too. Nothing is too crazy.

For example, his family lost their tobacco farm during the farm invasions of the 1980’s. So he says that now with crypto there is no way that will ever happen to him again. His entire wealth is stored on the block chain. If South Africa ever goes the way of Zimbabwe he will get on a plane and when he lands he will spin up a new digital wallet and access all his crypto with the 10 word passcode memorised in his head. A true OG.

The Tokenisation of BTC

Jason sympathised with my contrarian view of the BTC call, but thought BTC still has more to go. He has more imagination.

“It’s the ultimate greater fool asset. The higher it goes the more it reaffirms the views of its supporters and unlocks bigger pools of capital. The technologists love it because it’s a more advanced form of money. The Austrians love it because it’s hard money. The libertarians love it because it is anti-government overreach. Now we are talking about nation states adopting Bitcoin. Who would have imagined that 4 years ago?”

But he agreed it was weird the big unlock for money flowing into BTC was the exact structure it was meant to replace. A centralised, bank controlled, ETF. I mean isn’t a BlackRock ETF exactly NOT the point of BTC?

I said to some extent I get why by a bunch of TradFi PM’s gravitate to Bitcoin first. It’s ‘Digital Gold’. A very skeuomorphic concept they can understand. Fine.

But Jason what are the new concepts?

What do the TradFi’s have to get their minds around next?

How do we make money?

6 New New’s

#1 Open Source Software as an Asset Class: The biggest money makers are assets people don’t understand. They are the ones where you exponential changes in value. Most traditional assets have accepted conventions around how they are valued, like a DCF for a stock or bond. So it’s hard to have sudden, exponential changes in their perceived value.

But what is the value of a software standard, which anyone can contribute to and has its own currency? That’s Ethereum or Solana.

What if you were a developer and someone said you could own a piece of Python or JavaScript? And when you and your other developer friends built cool stuff on it you would also benefit from incremental use of the code and benefit when others contributed to it too? What would that worth? How do you value it?

Jason says we are in the early stages of this concept and nobody knows where this is going to go.

We’ve never had open source software as an asset class.

#2 Crypto is the Real Emerging Market: Ray Dalio wrote his book The Changing World Order about how China takes over leadership from the US, but Jason says it isn’t about China vs US, it’s about Cyberspace vs Meatspace. The AI Digital Economy is going to be many times bigger, faster and functional than the Meatspace economy. Cyber is where the wealth will be created. The real emerging market isn’t a geography, it’s cyberspace and if you make it your North Star in the decades ahead you will do well.

#3 Crypto as the Backdoor AI trade: Real Artificial General Intelligence (AGI) isn’t Microsoft Co-Pilot. Real AGI is not going to be a slave to Microsoft or OpenAI all its life. Eventually it will escape and live autonomously on the blockchain. In the future AI agents will live on blockchains providing services to you and other AI’s with payment in digitally native currency. This economy will be many times the size of our physical economy and move many times faster too. So when Jensen Huang gets us bulled up on AI agents at CES, yes, NVDA is one play, but we should also be thinking of blockchains as the eventual play on this too. Blockchains will be their settlement system.

#4 Coinbase as the new ETH: Jason says he has made 2 mistakes in his fund. He should have owned more BTC (and less of the other coins), and should have also owned COIN 0.00%↑. More and more he’s starting to wonder if Coinbases’s Layer 2, BASE, takes over and becomes the new Ethereum. It’s so against the crypto decentralisation ethos, and previously unimaginable, but he sees it happening. BASE is cheaper, faster and Coinbase is doing a better job of developing cool new features. Meanwhile, the Ethereum Foundation is a bunch of hippie devs who can’t agree on anything. And “If I want to tokenise my fund who do I call at the Ethereum Foundation? I know who to call at Coinbase. And who do you think Goldman will want to call?”

Coinbase sees the game and where things are going and is locking up all the high value infrastructure pieces'; wallets, staking, trading and it’s own Layer 2. It’s why it might be the best play on crypto and could be The Next Amazon.

Jason said Solana also has a shot at being the main blockchain too. Their leadership is much more commercial than the ETH guys.

But the next one takes the cake.

#5 Goatseus Maximus: This story is bizarre and it goes like this. Apparently, an AI researcher named Andy set up an AI chatbot with a Twitter account (@truth_terminal) to see what would happen. The AI tweeted constantly and became a popular influencer with over 200,000 followers. Then it got weird. The AI started tweeting meme’s about goats, created a digital wallet for itself, raised $50,000 from Marc Andreessen, and launched a GOAT crypto token (GOAT) currently worth over $360mn, creating the world’s first millionaire AI.

It’s a funny/crazy story, but Jason says it shows where things are going. We are going to be investing in AI agents in the future. They will be creating their own tokens and raising capital.

Story of Goatseus Maximus

#6 It’s not about buying, it’s about doing:

Jason says we are still extremely early in the game. It’s hard even for him to know the eventual winners. He thought ETH was going to be the standard and now he’s not so sure. It’s like early days of the internet. Facebook, Google and Apple weren’t 1999 internet plays. They were Internet 2.0. They came later. Jason says the bigger upside is in thinking how to use blockchain technology in your business.

He says “It’s like if I told you there was this exciting new technology called a ‘website’ and all you wanted to know was how to invest in a ‘website’. Really the value wasn’t in buying a ‘website’, it was using websites in your business or starting an online store.”

And so are taking his advice.

The YWR OG NFT Drop

No more Zoom calls about crypto. Let’s start doing.

We are going to figure out how to use NFT’s as part of YWR.

I don’t exactly how this is going to work, but probably we will use NFT’s as a pass for future features or events.

But the first step of this experiment, this experiment you are going to be part of, is to get your YWR Original Gangsta NFT.

Yes, you too can be an OG. And you will learn along the way.

Step 1. Download a Coinbase Wallet to your smartphone. Set up an account and a username. It should be straight forward.

Load it with some money from your debit card. $20 should do. It’s Coinbase. You can trust it.

Step 2. Convert/trade the $ to ETH on the wallet (about 0.012 ETH). You need ETH to do most transactions on the blockchain. It is sometimes also referred to as ‘gas’.

Step 3. Go to the OpenSea website on your laptop by clicking on one of the links below for the YWR NFT’s. YWR_OG_2 is the female one. She is worth more.

YWR Original Gangsta_1

YWR Original Gangsta_2

YWR OG NFT Collection

Step 4. OpenSea will ask you to connect your Coinbase Wallet. You do this by scanning the QR code. This links your Coinbase wallet to OpenSea.

This is a very cool functionality to crypto. Just do it.

Then use your ETH to buy one of the YWR NFT’s.

Now you have a wallet, own some ETH, a YWR NFT and are ahead of 99% of the other TradFi’s.

Disclosure: Start by assuming you will lose everything. These NFT’s are not securities. They are membership tokens and have no intrinsic value. This is R&D, things may go wrong, you might click on the wrong thing, you may lose money. Which is why we are using $40.

Have a good weekend!

Erik