Ran Neuner:
I think when we talk about AI agents, we're not going to talk about what date and what time. We're just going to say it's block 16742. That's a good block. And when is the loan repayable? The loan is repayable in block 9,009 billion, 9 trillion, whatever the block is.
Laura Shin:
Hi everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin. Thanks for joining this livestream. And we will first take a quick word from the sponsors who make this show possible.
This episode is brought to you by 1inch Aqua. The shared liquidity layer from 1inch. Back multiple liquidity positions with one wallet balance and keep your tokens in your wallet until a swap fills. See how it works at 1inch.com/aqua.
Before we get started, I want to ask you for something. We're making a bunch of decisions right now about Unchained, what we make next, when we go live, what we should be doing more of and I'd rather hear from you before we make them than after. So we put together a survey. It takes just a few minutes. It's anonymous and there's a box where you can tell me what we could be doing better. I read all the responses. The link is in the show notes or you can snap the QR code on screen or go to unchainedcrypto.com/survey. Thanks.
Today's guest is Ran Neuner, founder of Crypto Banter. Welcome, Ran.
Ran Neuner:
Laura, so good to see you. I was just saying, we were just talking in the back here and I'm saying that you're one of the few people that started in crypto media around the same time that I started around 2016, 2017. In fact, I think you started before me.
Laura Shin:
Yes, 2015 in the blockchain not Bitcoin era.
Ran Neuner:
Yeah. For those of you who don't know, Laura was actually writing. You're writing for Forbes in 2015.
Laura Shin:
Yes. Yeah.
Ran Neuner:
Yeah.
Laura Shin:
Yeah. So we, you and I have seen it all and this morning we are in an interesting place. The 10-year is at its highest since 2007 and you tweeted that you think this will bring fresh liquidity into the system. So explain what it is that you think is about to happen and where you think this nascent crypto bull market is headed.
Ran Neuner:
So, I mean, I think you said it correctly that we're in a crypto bull market. I mean, if you... I just want to show you one or two charts on the screen, maybe it'll make it a little bit easier to digest. But we're in a crypto bull market. We have the peaks and then we have the one-year bear markets. This bear market was about 11 months.
And if you dig into what caused this increase in the bull market. It was when Scott Bessent took on the bond market and basically said he's going to double the Treasury buybacks. And up until now, he's basically brought fists into a big fight because in order to make a dent in the long-term Treasury yields, he needs to do much more than the $4 billion or the $6 billion worth of buybacks. And so yesterday we got 2 data points which basically scared the bond market a little bit.
The first data point that we got yesterday was the PMI numbers, which were heated. And so the market's worried about inflation again. And the second data point that we got was that the US was struggling to sell its 5-year Treasury yields. And so there's no demand for US Treasuries. Now, what does a country do when there's no demand for its own Treasuries?
Well, ultimately, what they do is they'll end up buying their treasuries or they'll end up buying their debt back themselves. And Scott Bessent has basically come out to the market and basically said, look, we're going to buy our own debt. We're going to double it, we're going to triple it. And ultimately, he's got an account called the Treasury General Account. There's $1 trillion in that account, which he could call on to buy back their own debt. And there are many other means that they can deploy.
The one thing you have to remember, though, is that Scott Bessent is a market genius and specifically a currencies and bond markets genius. He's done this for many years. He did this under George Soros back in the day. So he knows exactly what he's doing.
And I think he's probably engineering the ultimate short squeeze. I think he's waiting for the bond vigilantes to pile into the long-dated bonds or to short the long-dated bonds. And then I think what he's going to do is I think he's going to create the ultimate short squeeze by putting money into the economy. And either way, I mean, I know the markets are starting to get a little bit jittery but the reason why markets are going up is because the markets are counting on Scott Bessent actually coming to save the long-dated Treasury yields.
And the only tool that he has at his disposal is actually bringing more money to the party. So for me that's really what started this Bitcoin bull market. That's when Scott Bessent came out and said, I'm taking on the long end of the curve that started this Bitcoin bull market.
So that's the Bitcoin bull market thesis. I also think, as I said to you earlier, that we're going into crypto's first bull market. So, I mean, everyone's going to go like, not really. How can you say it's crypto's first bull market? I really think that we're going into crypto's first bull market, not Bitcoin's first bull market. We can probably break that down a bit later.
Laura Shin:
Yeah, well, go ahead. I mean, that... so I don't know what you mean by that. So go ahead and say.
Ran Neuner:
So let me break it down for you. And I think, again, let's maybe just look at one or two charts just because I just think it paints a real picture here. So you and I have been around for a long time. We've seen multiple Bitcoin bull markets.
And I think if we go back to the bull markets, I think the last bull market for Bitcoin was the first bull market where Bitcoin was actually accepted. You could say that the first bull markets were very small on the Bitcoin radar, this was 2017, this was 2021. This was the last bull market.
I think for those of us who've been around for a long time, Bitcoin only found a real product market fit as a store of value and a hedge against the debasement trade probably in the last bull market. So that's Bitcoin.
I want to show you another chart. This is the chart of ETH versus Bitcoin. I'm just using this chart because ETH is probably the biggest altcoin and it represents all altcoins against Bitcoin. And I think for those of us who've been here for the last 9, 10 years, this is the chart. It's been a downward sloping chart. And if I were to break that down in a story, then I'd say ETH launched and had the promise of big things to come and it really outperformed Bitcoin for a very short period of time. And then we realized that smart contracts don't really work. They're too slow, they're too expensive. There's no real use case because the use case of ICOs basically died.
And then we tried it again in 2021, DeFi summer. We tried to create this market called DeFi and we did this thing called yield farming, and we used to emit tokens to get people to invest their money. And that also collapsed because ETH was too slow and too expensive and practically unusable. And so we were rejected again. Ultimately, ETH has been a bit of a dog against Bitcoin for quite a long time.
However, if you draw a trend line here, what you realize is that for the first time in 9 years, we've actually broken out here. Now, let's just... that's a chart but let's break down what that story actually means. It means that for 9 years, the... well, initially the only use case for this crypto technology that we had was Bitcoin. And for 9 years, no other use case managed to create an upward trend against the use case that we created for Bitcoin until tokenization.
So I think for the first time, crypto has found a product market fit. What is the product market fit? Well, I think there's a couple of product market fits. The first one is tokenization. And I think this cycle, tokenization is happening. It's happening on ETH, on ETH sidechains, on Solana. We are using ETH as a proxy for all altcoins over here. And so I think for the first time, we've got a real use case in crypto. What is the real use case in crypto? Well, I actually think there's two use cases in crypto.
Before I take you there, I want to show you one other chart. This is the chart of others. Others are the smaller altcoins against Bitcoin. Pretty much paints the same story. So 2017, the altcoin market runs against Bitcoin. It then gets rejected because all the altcoins are shitcoins. 2021, the same thing happens. We go up here in excitement and then it all gets rejected.
But ultimately, what you can see is it is an upward sloping trend, which means that the technology against Bitcoin is actually starting to improve. I think that in this cycle, this chart does something like this. I'll show it to you. So I think that this cycle looks something like this for altcoins. Yeah, I mean, I'm not going to draw it exactly but that's what it looks like.
Now the question is, what could take the altcoin market cap to give you a 7x against Bitcoin? So what could make altcoins outperform Bitcoin by 7 times, which is by the way, what I think is going to happen this cycle. Now, you may say that's crazy. But if you look at the last cycle, so that's 2017, the altcoins outperformed Bitcoin by 19 times. If you look at 2021, and I'll draw the line for us here, the altcoins outperformed Bitcoin by 6 times. So it's not impossible that if we draw this line over here that we outperform Bitcoin by 5 or 6 times or 7 times. So what could cause the market to do that?
And I think that there's two things that Bitcoin found its product market fit. And I think that crypto found its own product market fit. Bitcoin's product market fit, pretty simple currency debasement trade, you want to hold scarce assets, hold Bitcoin. That's been the thesis for the last couple of cycles.
For crypto, there are two use cases. The first use case is what I call social trading. So what is social trading? It is... imagine the world's biggest social network and the world's biggest casino having a baby. So just imagine the world's biggest social network and the world's biggest casino having a baby. That's FOMO, that's PumpFun. And yes right now they are meme coins and stuff like that.
But ultimately, what these platforms have created is the ultimate investment dopamine machine. Now, what I mean by that, well, if we think about how these platforms actually work, why is Instagram and why is Twitter so successful? Because they managed to release dopamine in your brain. How do they do that? Well, dopamine is the reward, self-validation, and motivation drug.
So if you do work and you get validated, it releases this drug in your brain called dopamine, which says you're a genius. So if you write a nice tweet, you post a tweet, you get a lot of likes, you feel like, yeah man, I'm a genius. Why? Because you're getting self-validation and that's the drug of dopamine.
That's how these social networks work. They're dopamine machines. They've been criticized for being dopamine machines. You do work, post your picture on Instagram or you post a tweet on Twitter and the dopamine just keeps running in your brain because you get the self-validation of the likes.
Now, how much more so when the validation is not only likes but actual money? And that's what crypto has created. It's created transparent trading machines where everyone can see P&Ls, and people are starting to share them. So if you look at apps like FOMO PumpFun, we've created a master use case in crypto, which is dopamine-driven social trading.
And what I think is actually going to happen, if you take that and you combine that with the tokenization of everything, all of a sudden you've got this industry, which is a combination of a casino and a social network. But instead of a casino, let's call it an investment house, an investment house with a social network, that's a monster business. That's more powerful than any social network. And in fact, I think that Elon Musk and Twitter have seen this because they're starting to incorporate trading into your Twitter and people that are testing the Twitter buttons.
And so the ultimate social network doesn't only reward you with likes but actually rewards you with increase in net worth. And to me, that's the first use case in crypto. And it's the first time that we've had it. And the reason why we've had it is because we're tokenizing everything legally. And now all P&Ls basically get brought onto chains and everything becomes a bit more transparent. And so people are going to trade more because it becomes more social, et cetera, et cetera.
With people trading more, I mean, I think you understand how that's more transactions. More transactions means more work on blockchains, et cetera, et cetera.
So why did I say it's crypto's first real bull market? Because the first bull market where crypto applications are actually making money. Who's making money? Well, social trading apps. Who are the social trading apps? Hyperliquid's make $3, $4, $5 million a day sometimes. Pumpfun is making $1, $2, $3, $4, $5 million a day. That's real numbers. Even in real-world finance, businesses that are making $100, $200, $300, $400 million, $500 million a year, that's big business. FOMO making very similar numbers, $1 million a day, et cetera.
So for the first time, we have a bull market in crypto. Because there are applications that are actually being used and actually making money. Uniswap, Hyperliquid, Aerodrome, NEAR Intent all are actually making money. And so we're seeing crypto's first real bull market.
Another one, Venus. I mean, Venus is making a ton of cash and burning a ton of tokens. So we're really seeing a bull market in crypto. And I say a bull market not just prices going up but actually a bull market for usage of crypto products. So that's the first reason why I think crypto is going to have its aha moment. But to be honest...
Laura Shin:
Ran, can you hold that thought? Hold that thought. We're going to come back here for the second reason. But first, we're going to take a quick word from the sponsors who make this show possible.
Ran Neuner:
All good.
Laura Shin:
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Back to my conversation with Ran. So Ran, you were going to give us your second reason for why we're in a crypto's first real bull market.
Ran Neuner:
Yeah. So the first reason is I think social trading. And to be honest, again, I'm going to take you back to the chart just because to me, the charts paint nice pictures that we can talk around but I guess that doesn't take you from there all the way to there.
And just I want to give you an idea of how big this number is. If you assume, if you go back to Bitcoin, and you say, well, in the first bull market, Bitcoin did 20, 22x and the second market did an 18x, in the third market it did a 7x. Let's just assume that in this bull market, Bitcoin does a 3x or a 4x just for fun. Let's say a 4x. Okay, a 4x from the bottom, $250,000 Bitcoin.
So if Bitcoin does a 4x from where we are today and altcoins do a 5x what Bitcoin does, you're talking about a 20x in market cap. So we're talking about a $30 trillion market cap. Okay, so the social trading thesis doesn't give you a $30 trillion market cap, impossible. So then the question is, what does?
And Laura, I don't know about you but making content during the last couple of months has been one of the hardest things I've ever done in my entire life. I don't know if you felt the same way but the market wasn't moving. We had to make content. I made content every single day. It broke me because from February to August, Bitcoin was in a range of $60,000 to $70,000, and I had to try and make it exciting every single day.
But ultimately it was really, really, really boring. And I got to a point about here, about July, where I was done. When I said I was done, I was never going to give up because I've been here for so long but I just hated this place. And at that point I tweeted something and I hope that I've got the tweet. I said, the tweet says, here's what you're not seeing. All asset markets will be 24/7, 365. All markets will be settled onchain immediately. Humans won't be trading them.
Instead, it'll be 100 billion agents trading at a frequency that we can't even imagine. And all those fees will be captured by crypto protocols. And that was in the pits of the bear market. And I think that writing that tweet got me so excited about crypto again. Because what I realized was that we're living in an AI revolution. And up until now, what if you look at this chart, this is a chart of the AI NASDAQ. In other words, stocks in the NASDAQ that are AI against crypto, which went down from 10/10. So AI just continued to go up and crypto went down.
Up until now, the market has been funding infrastructure to power AI. What is that infrastructure? Well, it is data centers. It is energy, it is chips, it is buildouts, it is Frontier Labs to write models. That's what the market has been funding. And that drove the NASDAQ as high as the NASDAQ is. And I'm using the NASDAQ as a proxy for I'm using the NASDAQ as a proxy for AI development but it's the NASDAQ, it's the KOSPI. It's any market that is AI ready.
So all that while crypto was bleeding was the infrastructure so that we could have AI. Okay, now question, when we have AI, what's AI going to do? AI is going to be a bunch of agents. And those agents are going to be transacting simply as that.
So all this infrastructure that has been built is so that we could all have agents. And that the agents could be transacting. So you ask yourself, well, okay, how many agents is it? So I've read a couple of studies. This is one. This one says they're going to be... there's going to be 1 billion agents by 2029. Okay, this is one study. There's many others.
I would say there's probably going to be much more than that but a billion agents by 2029. The entire human workforce today is 3.3 billion people. They're talking about adding a billion agents by 2029. The only difference between the agents and the humans is that the average human doesn't even do one internet transaction a day. And these agents are going to be executing 217 billion transactions a day.And that's in 2029.
Now, yesterday BlackRock came out of the report and in the BlackRock report, this is not a dummy report. It was written by BlackRock. And in that report, they say two things. They say the rise of agentic AI and machine-to-machine payments will likely increase demand for blockchains and other programmable payment infrastructure, stablecoins, native crypto assets, et cetera. Existing rails such as ACH card networks, blah, blah, blah, make them less suited to always on very low-value transactions requiring programmatic execution.
So what did BlackRock basically say? They said there's going to be a billion agents in 2027. They said the billion agents are going to be doing 217 billion transactions a day and those transactions are going to be settled on blockchain rails because traditional existing rails like ACH just aren't relevant for those transactions. And then you say, okay, what's going to capture that value? Layer 1s, hedging mechanisms, DEXs, because they're going to be trading in and out of different tokens. And then you start thinking to yourself, hold on a second, Maybe this chart is actually conservative. Maybe the altcoins actually outperform Bitcoin by 50x. Why? Because whenever you use a protocol, ask yourself a question. Could an AI and will an AI actually use this protocol?
Solana, AI could use Solana. Hyperliquid, AI could use Hyperliquid. NEAR Intent, AI could use NEAR Intent. And then you start thinking to yourself, hold on a second, if these numbers are true and I mean, they should be true because I actually think that we'll have much more than a billion agents in 2029. And you said, maybe this number is wrong, maybe it won't be 217 billion transactions a day, maybe it's only 20 billion transactions a day, let's just say.
And let's just say that there really isn't another viable payment mechanism other than blockchain. There are but it comes with bank accounts and prepaid cards and giving each agent a prepaid debit card so that they can do microtransactions with one another doesn't really feel like the way the future is going to work.
And then you say to yourself hold on as a crypto guy, my thesis was always that this is going to happen. And that's why I tweeted that tweet at the end of July. But since then, I've been trying to find someone to disprove my thesis. I went to conferences, I asked bankers what's going to happen? How is this all going to happen? And everyone gave me different versions of how AI agents will transact and none of them are better than blockchain.
And then yesterday, I saw the report from BlackRock, and I'm like, holy moly maybe the thesis is actually right. And if the thesis is actually right, then what we're talking about is we're actually talking about the difference between not having electricity and having social media. That's how big the revolution is. That's how crazy the revolution is.
And when I saw that, I was like, I don't think we can comprehend how big this bull market is actually going to be. And it's a real bull market. And the reason why I know it's a real bull market, is because I already have like 10 AI agents working for me. I've got a Grok bot and I've got multiple Grok bots doing multiple things for me. And sometimes I just wish that they could transact on my behalf.
I mean right now, to be honest, my agents are not really transacting on my behalf, even though one or two of them do have trading MCPs. But they're not really trading. They're not really transacting. But suffice to say, by 2029, which is 2.5 years away, or 2 years away, I think that agents will be transacting. And then ask yourself, what are they going to be using? And then ask yourself if you're actually invested in those protocols. And if you're not, then as Raoul Pal says, he says the total addressable market becomes almost infinite because there's just more and more agents just springing up.
Laura Shin:
Yeah. I love this thesis, it makes a lot of sense to me. In a way it, well, I personally think it's super obvious. But the one thing that I did want to ask you about was at the beginning of your thesis, I thought you were going to go in a totally different direction because you were talking about RWAs and you had that chart about ETH.
So I'm curious to hear. So basically, where I thought you were going is I thought you were going to say that this is the first time that blockchains are being used for the backend of finance and financial markets are so much bigger than the crypto markets. And so I'm sure you've heard that thesis before.
And then you ended up with this whole other area, which is that crypto is creating a new beast that is creating its own market crypto and social. And so that took a turn that I wasn't expecting. So I'm just curious to hear. Do you also think that RWAs and the dopamine machine are going to be part of this first real bull market or do you feel the social aspect is going to dwarf this thing that we're seeing with RWAs?
Ran Neuner:
So RWAs are the equivalent of in the old days taking magazines and putting magazines on the internet. So if you think about all they did, they took...
Laura Shin:
This was my job, my first job in journalism.
Ran Neuner:
Yes. So, I mean, if you think about what RWAs are, what we're saying is let's take the existing financial system and let's just migrate it onto a better system. And then we created things like being able to share something, and then we created things like being able to make things interactive and then that eventually transformed into social media.
So I think the first step is taking the magazines and putting them onto the internet. And that's what I think RWAs are. We call them real-world assets. It's just the migration of traditional assets onto blockchain rails. And that's step one.
And then once we do that and the old financial system is working on new rails, just like in the old days when Forbes went from paper to becoming online and slowly, slowly the Forbes, the readership of the paper just died down and then everything evolved. I think the same thing is going to happen with real-world assets.
So if you think about Robinhood, Robinhood has been trying to do social trading for a long time. eToro has been trying to do social trading for a long time but they've been limited. They've been limited by NASDAQ hours, for one. They've been limited by NASDAQ KYC rules, for two. It's just not a great experience for social trading.
Now you can tokenize any stock that you want. It trades 24/7, 365. It just makes much more for social trading. So, and when I say social trading, social trading is merely the act of being able to share your trades and others being able to see all trades and decide whether they want to follow it or not. So I think that that's pretty obvious. I think in the new age, social trading is going to be the only way that we trade. I think most trades are going to be transparent, people are going to see what's going on. You're going to be allowed to follow or not follow et cetera. And ultimately, I think that's what's going to happen. I actually believe...
Laura Shin:
Okay finish and then I have a question.
Ran Neuner:
I believe that crypto exchanges are going to be replaced by social trading apps. So I think Binance will eventually be replaced by a social trading app like FOMO. And I'm not saying it's going to be FOMO replacing Binance. I'm saying there's going to be a version of FOMO that's going to be so powerful that is so much fun because it combines a social network with a trading experience. And when that happens, it's going to be just much more fun than trading on an exchange. Already FOMO is more fun than trading on an exchange. It...
Laura Shin:
Okay, but I have a question because obviously I'm sure you're seeing this whole privacy meta that's taking off and just all these privacy coins are pumping. So how does the social trading square with the privacy trend?
Ran Neuner:
So I think they're two different use cases. I think you have a right to privacy, specifically when it comes to your own money et cetera. I think when we actually... In the old days, when we signed up for Bitcoin, we thought that we were getting privacy. What we didn't realize is that we thought because it was an address and we didn't KYC back in the day, we thought that was privacy. And we very fast realized that ultimately the addresses are all going to be tracked.
And so I think that the right to privacy is going to be cool. But I have the right to privacy in my personal affairs too. But yet I choose to post most of it on social media anyway. I have the right to privacy and so do you but we both have Instagram accounts. So I'm assuming you have an Instagram account. I have an Instagram account. I share probably a lot too much on my Instagram account. And you know why you do that?
Laura Shin:
I don't share anything.
Ran Neuner:
Oh, you know why most people do that? Because they need social validation. Because it's actually a massive part of how the brain functions. The brain works on dopamine. It's one of the four key components that your body needs for happiness. You need dopamine, oxytocin, serotonin and endorphins. So you need to get your daily fix. Now, dopamine is the most powerful of all of them because it's the most addictive of all of them and that's why people do what they do.
So I think there's a massive market for real-world assets that are going to be amazing. Real-world assets trading socially are going to be even more amazing. Real-world assets and digital assets, all trading virtually are going to be crazy.
Now, let me give you two more use cases, which I don't think we're... so AI agents creating their own businesses, starting their own businesses, creating their own businesses, using their own compute power as collateral. I mean, I don't know if you ever thought about that but what is the only asset that an AI agent has? It's compute power.
And so the AI agent may say, look, if I default on my loan, then you could have my compute. Okay, I'm just giving you an example of things that could happen without any human intervention. I'll give you another example of things that we haven't yet factored very well. What's the time where you are right now?
Laura Shin:
11 AM.
Ran Neuner:
Okay, where I am, it's 5 PM. What date are you also 24th of September? You are at? But very soon I'm going to be on the 25th and you're going to be on the 24th?
Laura Shin:
Yep.
Ran Neuner:
Okay. That's how humans account for time. AI agents are going to need a different way to account for time and they don't need it to repeat. They don't need a morning, 8 o'clock every morning. They don't need to be reminded to wake up every morning when the sun rises.
I actually believe that AI agents are going to use blockchain blocks as settlement as time. I think when we talk about AI agents, we're not going to talk about what date and what time. We're just going to say it's block 16742. That's a good block. And when is the loan repayable? The loan is repayable in block 9,009 billion, 9 trillion, whatever the block is. And...
Laura Shin:
Yeah, I mean this is how CryptoDevs figure out Ethereum devs, that's how they figure out when they'll do upgrades.
Ran Neuner:
Yeah, I also think to be honest, there's going to be... I don't know who it is but there's going to be a blockchain that actually becomes the time blockchain. And why I say that is because if you think about finance and you think about a transaction that involves Bitcoin collateral trading on the Solana network but settling on SUI somehow or Ethereum or whatever, every one of those has got a different block time.
And so I think, I don't know how it's going to work. It's too far ahead for me. But I think what's going to happen is we're going to find a blockchain that basically says, I'm the time blockchain and all I do is I sell time to all the other blockchains. And again, it's an idea. I don't think anyone, I haven't seen anyone actually really exploring it but instinctively, I just think that AI agents aren't going to use secular clocks. I think they're going to use blockchain. So I kind of...
Laura Shin:
It would need to be a chain that has the smallest block time.
Ran Neuner:
Yeah, exactly. So yeah, I mean, again these are all ideas but I think the one thing I know for sure is that we found product market fit. Our applications are actually making money. They're being used and they're actually making money and they're fun. It's the first time this cycle, it's the first time that I've had fun on crypto rails. When I use Venus, I get the answers from my LLM model and I know I'm not giving my data to the big boys. And I've got my privacy. For me, that's fun.
When I trade on Hyperliquid and I'm in that dopamine casino of trading perpetuals on real world assets over the weekend, it's fun. And it works. And it's the first time that I felt this way about crypto. Yes, in the previous cycles, we could trade things on Uniswap but that wasn't fun. Swapping ETH for Compound or something like that or for Aave on the Uniswap network was not fun. It was just a...
Laura Shin:
Yeah. I mean, I'm sure my audience knows I'm not a trader and obviously I've just been covering this as a journalist but whenever I tried to use crypto in the past it was really challenging for me. And nowadays it's just night and day. So actually I wanted to go back to something earlier on that you were talking about.
So I just want to tie it back to the beginning. Essentially one of the main theories that's been powering interest in crypto for so long has been this debasement hedge thesis. But it almost feels like you are saying that you feel like real-world adoption is going to just outperform the debasement hedge thesis. Is that what you're saying?
Ran Neuner:
The debasement hedge thesis validates our technology. The technology is that you can transfer, that you can create a scarce asset and you can transfer it at the speed of data across networks. That was Bitcoin. That was the debasement. We've got that asset and that asset is Bitcoin.
Okay, but there's also an entirely new world of assets that can happen when you make that programmable or when you make versions of that programmable, when you combine the smart contracts and to be honest, they haven't been interesting for a long time because the smart contracts didn't work and we couldn't find a product market fit.
Now we found two product market fits in the same cycle for those smart contracts. The first one is, like I say, tokenize everything and make it social. And the second one is letting the AI agents... without this technology, the AI agents are pretty screwed because they can't transact. They can transact with each other but it's just slow and monotonous. And the contracts, how are you going to define the contracts between two agents that don't know each other? You need a smart contract. If you pay me 0.01 ETH or 0.0001 ETH, and I make an API call and you return the API call, then the funds will settle immediately.
Now, I suppose you could give every agent a prepaid PayPal debit card or something like that, except when a Chinese agent meets a, I don't know, Indian agent or US agents, I think it becomes a little bit messy because they start going, sorry, I don't accept your money and you don't accept my money. Or they could just accept blockchain money, go to Uniswap and swap whatever money they just received for whatever money their owner wants them to bank. And that takes less than a split second.
And so it becomes so exciting because I don't think the rest of the world sees this. Or at least I didn't until BlackRock actually published a report yesterday and said, well the old rails are dead and the new rails are crypto rails and agents are going to use crypto rails.
And then you realize, I don't know for me it was such an aha moment because I've been here for so many years and I always sold myself the dream of Bitcoin and how it's a scarce asset. And there were periods where gold outperformed and Bitcoin didn't perform and the NASDAQ outperformed and Bitcoin didn't perform. And it was so tempting to lose faith in the thesis.
And then you eventually, after being here for, I don't know, 12 years, 13 years. And fighting for A, acceptance but B, also just fighting rug pulls and ideas and VC scams and sometimes not VC scams but sometimes VC projects that had best intentions but couldn't find product market fit.
And then just finally finding the product market fit and realizing that the product market fit that we found is the biggest product market fit so far of all time in the world. You'd say that AI is the culmination of everything that the world's gone through for. It's intelligence. It's creating intelligence out of nothing, out of electricity. It's the biggest prize in the world.
And to think that the rails for all the transactions are probably going to be on this blockchain technology that we've been fighting for ever since we were like rats crawling around conferences in dark places because we weren't really supposed to be talking about it, you know what I mean? It's just so cool to finally get vindicated like that.
Laura Shin:
Yeah. Well, okay, so I do have one last question because you keep talking about AI, and obviously I do agree with you that AI is what supercharges the crypto thesis. But just in the short term, obviously we have these big AI IPOs that are coming up. So just like from a markets perspective, how do you think those AI IPOs will affect interest in crypto and the crypto markets generally?
Ran Neuner:
So I think that there's two theories about it. One of them is they're going to suck out all the liquidity from the markets and that the rest of the markets are going to crash. I don't really think that's going to happen. I think the AI IPOs are going to be pretty successful. Let's just say that one of the frontier labs isn't that successful. I don't know whether it's OpenAI or Anthropic, even though it seems they are going to be pretty good but let's just say they're not. There's so much demand for AI.
Now, I want to say that I was around for the dot-com bubble, and I would say that the dot-com bubble wasn't really an internet bull run because there was no real demand for the internet, hardly even worked. It was a bull run like the 2017 crypto bull market where it was on the promise of what this technology may one day achieve.
The difference between that and AI is that AI is actually achieving today. So in 2001, I think I could live without pets.com in 2001. I could live without it because it wasn't working. It never delivered one pet or one pet food to my house ever. It didn't work.
I don't know if I could go back to the time of living without AI. Everything I do, all my research is done on AI, all my accounts are done on AI, tax returns are done on AI. I don't really know how to go back. And so the difference is that there's so much demand for the actual service that even if the Frontier Labs don't do well, the open source models will just consume all the power, all the electricity, all the credits, everything else.
There's just, we don't have enough energy. It's simple. We just don't have enough energy to power the supply of this AI, we just don't. And that's before AI agents start their own businesses without us. I mean there's going to be a world very soon where an AI agent has an idea, it's going to start a business, it's going to go and raise funding, it's going to use that funding itself and it's going to build a business.
I don't think we've factored in for that yet because I think we're too busy asking ChatGPT what time the football match is later tonight and when your tax returns are due. And I don't think we've factored in a world where these AI agents go. Hold on I'm busy, I'm starting a business and I'll let you know when I'm revenue positive.
Laura Shin:
Yeah. Ran, this has been amazing. I'm so glad that you reached out and you were so prepared with all your charts and everything. Yeah, I just loved hearing your thesis and I agree on so many levels. I guess I just never thought to put it into something that was presentable like that but I guess like I said, the only thing that I'm wondering about is just the privacy thing. But maybe privacy will exist at the same time we have social trading. Social trading will exist for certain assets and then...
Ran Neuner:
Yeah, I think also sometimes you're going to show some of your trades, not all of your trades. I think you're also going to have some money that you show and some money that you don't show. I think that there's two different streams and both of them have a use case.
Trading RWAs transparently online has one use case. And storing private transactions has another use case. I've invested in both. I've got Zcash bags and I've got Canton bags and I've got ETH bags. So I'd like to invest in all of them.
I do say one thing, I'm watching Zcash and it reminds me so much of Bitcoin back in 2016 and '17. It's the same people, it's the same movement, it's the same price moves. I remember when Bitcoin went above $1,000 how quickly it went to $1,500. And that's exactly what happened with Zcash. It does, it's $600 and it's like $700 and then like $800 and then it went through $1,000, and then within 2 weeks it was at $1,500.
And it's déjà vu because I remember the old Bitcoin days and I'm just waiting for it to go back down to $700 and everyone to get scared and then it'll just go back up to $2,000 because that's what Bitcoin did to us in the old days. And it had the same faces. I saw the Winklevoss brothers speaking at TOKEN2049, and they're speaking about Zcash. I was like, wow, I swear I've got a similar leaflet from 2016 or 2015 or whenever it was them speaking about Bitcoin at some conference.
And so for me, Zcash and the whole privacy around Zcash is super, super, super interesting. I think it's more useful than Bitcoin. I know you're not supposed to say that because Bitcoin is the king of coins but there's a better use case for Zcash than there is for Bitcoin.
Private money is much more valuable than public, than transparent money that everyone can see transaction history. So I know you're not supposed to say that Zcash is maybe a little bit more interesting than Bitcoin but just can't help thinking about it.
Laura Shin:
Yeah no, that makes sense. But Bitcoin being the OG, it will always have a very special place in my heart.
Ran Neuner:
Mine too, which is why I can never sell Bitcoin to buy Zcash. But it's such an emotional thing because on a logical level, if someone said to you, hold on, you got the two technologies are pretty similar. I mean, obviously the one has much bigger network effects because it's much older but the one has privacy and the one doesn't. Even if you want it, you're like, yeah if the one gives you the option and the other one doesn't and you know, it's the same 21 million coins, it's quite hard to not want to take some of your Bitcoin and put them into Zcash.
Laura Shin:
Yeah, I mean, there's been so much chatter about Bitcoin getting privacy. I wonder what will happen with that. I know the community doesn't move quickly when it comes to change, and so we'll see how they handle both the quantum issue but also now the fact that Zcash is essentially Bitcoin with added features.
Ran Neuner:
It's quantum resistant or it will be with the next upgrade and it's private. And I think that those are two of Bitcoin's biggest challenges. The quantum threat around Bitcoin is... I mean, if quantum is real then the quantum threat is pretty real.
And I think quantum is real but the question is, it's real but is it real in 2030 or 2040? That's, I think, what the question is and whether that... but I've seen firsthand how difficult it is to mobilize the devs. There was that recent Bitcoin debacle with Luke Dashjr trying to split the blocks. BIP-110, I think it was called something like that.
Laura Shin:
Yeah, 110.
Ran Neuner:
BIP-110. And that showed you how slow and difficult it is to move Bitcoin. Now, don't get me wrong, that is one of its biggest features the fact that the Earth rotates around the Sun exactly the same every single year or with minimal movement is one of the biggest features, except when an asteroid is heading for the Earth and then you want the Earth to be able to move slightly.
And the problem with Bitcoin is that I don't see panic. Okay, maybe we shouldn't be panicking but we should be on high alert about the fact that quantum is a real thing because it actually is a real threat. It's a question, it's not if, it's when is it going to be 2030, 2040, 2035?
Laura Shin:
So yeah, I wouldn't even say that. I would say it's definitely going to happen. So it doesn't matter when, just work on it now. But one other thing is I don't agree about the BIP-110 because to my mind he just wanted to introduce censorship to the network. And there's something so antithetical to the Bitcoin ethos about that.
So I actually feel the fact that the community didn't move is just a reflection that what he was trying to do was out of alignment with the Bitcoin ethos. But I view the quantum thing as totally different.
I view it as this is real, it's going to happen, it doesn't matter when, we should work on it now. Because there's a lot of decisions that have to be made before we can actually implement a change that will protect Bitcoin. And so you need to bake in the time for all those decisions and look at all the options and the community deciding and blah blah blah. And so yeah I view it like super different from 110 because I just don't think that was ever going to be in alignment with the community.
Ran Neuner:
I agree or you can just invest in Zcash, which is quantum resistant and private, and not have to worry about it. And I mean I say that my biggest bag is Bitcoin, just for the record. So my biggest bag is Bitcoin, Zcash is my second biggest bag.
And every time I look at the two, I'm like I know I should hold more Zcash than Bitcoin but I just can't because Bitcoin is the king and it's got a special place in my heart. And I fought so hard, I was part of the movement to get it here and it's got amazing network effects. And then I'm like but Zcash is so much better. It's just so much better. It's cheaper, it's quantum resistant, it's private.
Laura Shin:
I mean, okay. Yeah but what about the issue, the security issue? You know, what happened with the Orchard Pool. Do you feel sufficient? I mean, the likelihood is that nothing, it wasn't exploited.
Ran Neuner:
It doesn't matter now, and I'll tell you why. Because number one, they fixed it. For number one, we've got to assume that they caught it. We can assume that they caught it before anything happened.
Laura Shin:
I mean, yeah, it seems likely but it's impossible to be 100% sure.
Ran Neuner:
Let's say that people have had the time to remove their shielded Zcash from the Orchard Pool to the new pool. And they moved it out in an orderly way. And it doesn't feel like there's a scramble for the doors where there's a whole lot of extra minted Zcash.
And in the new pool and with the new upgrade, that can never happen again. So we now know exactly how many are in the shielded pool at all times because they're using ZK, they're using zero-knowledge proofs to actually show us how many are in the pool. So that was a patch that fixed that bug forever.
So even if the Orchard Pool had extra minted Zcash, they can never come out of the Orchard Pool because only the amount that went in can actually come out. So it can never happen. And the new technology actually tells you exactly how many there are. So that can't happen again. Now, can something else happen again? Maybe. And that's the only thing stopping me from putting all my Bitcoin into Zcash.
Laura Shin:
Okay, interesting. Alright. Well, Ran it's been so great catching up with you. I loved hearing your thesis. I agree with a lot of it. So yeah, thank you so much for sharing it with Unchained.
Ran Neuner:
Great. Let's do it again soon.
Laura Shin:
Yes. Alright everyone, thanks for joining this livestream. We will catch you next week. Bye now.
Nothing you hear on Unchained is investment advice. This show is for informational and entertainment purposes only and my guests and I may hold assets discussed on the show. For more disclosures, visit unchainedcrypto.com.
This transcript may contain errors. We apologize for any inaccuracies.
