#196 with Dan Held - Who Really Created Bitcoin & Other Crypto Startup Ideas

If you told me that it makes him personally thirty million dollars spread evenly over the next ten years, I wouldn't be surprised. I feel like I can rule the world, I know I can be what I want to I'm putting my all in it like no day song On the roadless travel never looking back All right, what up? Uh Sean here. We got Sam and then we got special guest Dan Held, the Dan Held from the Bitcoin space. And on Twitter, you've probably seen him around. I told my brother in law

Um That you were on the pod. He was very excited. I've told him about every guest so far, and you got one of the biggest reactions. He was a I think he's a paid subscriber to your newsletter or something like that. So he's he's very into you. And on the other hand, I think Sam has no fucking clue who you are. So I think it's a perfect mix. I know some stuff about you, Sam knows nothing about you, and I think it'll be fun for that reason. I only know that Sean It says that you're cool.

And you're in Bitcoin. I know nothing about you. Um We got an hour to figure it out. Whenever we whenever one of us proposes a guest, it's like you put that guest it's like you you have to go take the stand and have an oath that this person's gonna be good, and then you better be able to lawyer up and defend why this person's a guest. And so he'll every time anytime he mentions a name to me, I'm like, Why the fuck are we having that person on? And then he'll like defend it. And then same here. I was like, No, no, no, this is gonna be gonna be interesting.'Cause Couple I think a couple of reasons. We should talk about crypto and then we should talk about

I think like kind of like Building your personal brand because you've done a really good job of that. And so we'll we'll do both of those during this during this convo. But I want to start with like give people the like what's the one minute story of who the heck you are and yeah, and I don't know, like Give us the one minute story of Dan Held. Yeah, the elevator pitch.

Yeah, so I from Texas originally. I grew up in Dallas, twenty five years in Dallas. I studied finance in undergrad. Stumbled and bumbled my way into tech. I didn't know what I was doing when I first built my my first software product in the space. It was successful.

from there learned how to formalize some of my skills around product management and marketing. Um worked at a couple different early stage crypto companies. So I was at some of the first crypto companies I worked at, like blockchain.com. Um, I've had two exits in the crypto space, so I've sold two of my products. Uh and then I've also worked at Uber, where I was on writer growth, led by Andrew Chen, so it was one of his directs. and the growth marketing team. So

I've had big company classic uh tech experience, but also a lot of kind of that startup hustle. in early stage crypto, which early stage crypto is kind of wild west. Um Which I guess fits my my Texas attitude, so And so tell tell people the source. You got into crypto, bitcoin, uh bitcoin specifically. You're you're a bitcoin guy. I should I shouldn't keep saying crypto too much. Um Bitcoin back in I think twenty twelve or so. Bitcoin was maybe 10 buc back then. Um, what, you know, what caught your interest? How did you hear about it? What's the origin story for you?

Yeah, so I got back in twenty twelve, uh, my buddy paid me back for a beer with something called a Casaus coin. A Casaus coin are those gold coins that you see in all those news articles where they talk about Bitcoin. They were they were physical bitcoins, essentially. And that was a good time in in that twenty twelve era, Bitcoin is so new and weird and and different that that was like a good bridge from the physical Fiat paper money world to the to the digital Bitcoin world.

Uh from there. My background is in finance. I really dug the twenty one million hard cap as a solution to bad central banking policies. Uh I I mean, I was in undergrad during the two thousand and eight financial crisis studying finance, and I'm like My professors don't know shit. Right. Neither do the people on TV and neither do these books that I'm reading. And that's what kinda kinda shook my foundational uh trust and belief in the existing financial system. And that's when Bitcoin came around when I saw that. I was like, this is a good

new uh way to be rebuild the financial system without having to trust these institutions. And Sam, I don't know if you know this. Sam, do you know when uh Satoshi signed the first block, he put a m uh he put a message in there. Do you know do you have you ever heard what this is? No, but I I love that guy's stories. I mean I the the myth or if it's real I don't know what the truth is, but I love the story behind it. And Dan, I don't know if you know it off the top of your head, but but do you know what it is? Yeah, so Satoshi was a really crazy character in terms of his expertise. I mean, he understood like human game he understood game theory encryption.

all sorts of different other topics and wove this all together to build Bitcoin. Bitcoin isn't just software. It it it wraps itself around understanding human levers to press like greed of how the price cycles as the price goes up. people become more aware of it and by an expectation of the price going higher. Um, so Satoshi, you know, really understood humans intimately, and and part of this that he wove into the first block was the Genesis block message. And it said UK Chancellor on the verge of second bailout for banks. So that was the only message that Satoshi ever put into the Bitcoin blockchain.

And so it's a very clean that Bitcoin wasn't here to disrupt a visa or PayPal. Bitcoin is here to disrupt the existing financial system and central banking. Right. And so there's like a the the mission the mission was sort of like, I don't know, cleverly baked in, which I just I just love. I'm I'm like you, Sam, where I'm like The more I learn about The origins

The more this shit seems like it's out of a movie. Uh, it doesn't seem like real life. It's like, oh, this anonymous creator. It's like, how's anything anonymous nowadays, right? Like there's there's like way, you know, like the the way they caught the Silk Road guy was like his the way he was typing or whatever matched some review he left on a movie message board or so you know there's always something like that. There's always a breadcrumb trail. Actually is it still anonymous? Uh I mean obviously no one's come out well it could have been the the the guy who had ALS and died. I mean what what's what do you what do smart people who know about it. Oh the uh the everyone's got their own favorite Satoshi tale. Maybe two. So one is Halfinny, the one that you just described. He had ALS and died, I think in twenty twelve or twenty thirteen. Uh, Hellfin is a a classic favorite because he ghost wrote PGP encryption, and Bitcoin's proof of work system is based on his early reusable proof of work system that he created earlier.

Bitcoin wasn't a new innovation. It just kind of Frankensteined all these other innovations together, and that's how Satoshi built Bitcoin. Half any has the demeanor of Bitcoin. He was also the first recipient of a Bitcoin transaction, or He was sending it to himself. Right. Which is what by the way, if you ever work with developers, that's what they do. When they're testing shit out, the first thing they do is they send it to my account A to my account to Sean. Sean sends a Sean test. But the ghostwriting PGP encryption, back in that era with Phil Zimmerman, PGP encryption was considered a weapon. By the defense, uh by by the department of defense. So when he goes for a PGP, he knew that he was potentially gonna be convicted for like illegal uh arms trafficking.

Wow. So he understood what it meant to take on a government at this scale. And so he And and when you when I say ghost wrote He goes toward it because w his name isn't officially on it. So same with Bitcoin. He was one of the few people to uh that would have built Bitcoin in that fashion. uh you know, hiding behind a pseudonym of Satoshi.

And using that because I was critical that the project had no face to it, had no central weak point, because if you could find Satoshi and and he's sort of a weak point. in the governance structure and in the ownership structure. that could undermine the the the the long term success of the protocol. So yeah, Hal's a classic favorite also died around the same time that Satoshi ha stopped. doing anything. We haven't seen a a mess a flare from Satoshi since, right? That's right. Satoshi hasn't signed a message with his private key, which would concretely determine that that is Satoshi or give us a strong determination that that is Satoshi. So that timeline makes sense. That's theory one. What's theory two?

Thirty two is the NSA. So theory two is that it's the NSA. Because the NSA builds weapons. And bitcoin is a financial weapon. It could destabilize countries and destabilize their currencies. And so I the this is just a more fun, I mean totally off the wall sort of thinking, but so let's say a group of crypto cryptographers, which some of the best in the world work at the NSA.

Come up with Bitcoin because they're tasked with building a weapon. And after they build it, they go, Wait a second. Maybe we should just release this. Into the wild because we do believe that this is good for humankind. Right. And they release it as kind of like it's like a Frankenstein experiment let out of the lab. Uh so I think that one's kind of fun. I mean there's no there's no facts behind that. Where would you bet the uh lab leak hypothesis for for the pandemic, basically? That's that's what you're saying. I think one's more realistic than the other, maybe. What uh would would you bet your money on one of those, Dan?

Probably more the health anyone. I I feel that it's an individual. So so that's always the question too, is it an individual or group of people? I skew more individual. design by committee is really hard to do with something as niche and like incredible like an incredible breakthrough like Bitcoin. Right. So I think that one person just had that genius to to take all these elements and put them together to create Bitcoin versus a group of developers trying to figure out how to build this thing. And and uh what there's also the other thing, which is like it's just somebody else. So if you were gonna apply your percentages, what percent is half any NSA or other? Uh this is super tough, but maybe like fifty percent health any

Uh, thirty percent Nick Zabo and twenty percent NSA. All right. I like that. Um, okay, so you discover Bitcoin because some guy gives you a coin, uh, and you don't you're not just like, dude, what is this? Like, can I have my 10 bucks, please? And and so you go, you read about it, uh What happens that night? So you go and you you what you read the white paper, you join the forums, you just start reading about it online, and then like I guess like take us through the thought process of you going from where you were then

to like Where you are now, where Bitcoin is like, you know, a sh a pretty major part of your life. Yeah, and I can kind of weave in my early entrepreneurship like in tech. part of that too,'cause it's all kind of intertwined together. So

I start to read about it, the twenty one million hard cap in monetary policy. I see this as a huge breakthrough because if you remove the subjectivity of tur of choosing what an appropriate rate of inflation is. You've solved the problem of monetary theory. So like Satoshi solved the problem of like going, Hey, we shouldn't constantly figure out what the rate of inflation should be. We should fix it and the economy can reorient around that genius breakthrough. So that got me really hooked. Um, I worked at a small investment firm in Dallas. None nothing anyone would know. It's a really tiny one, wasn't prestigious or anything like that. They relocated me to San Francisco to open up their West Coast portfolio.

Out in San Francisco. I during the uh it was the April Bitcoin run up from ten dollars to two sixty back down to a hundred. I was going to the Bitcoin meetups in San Francisco. This is where like Brian and Fred from Coinbase were hanging out. And same with Jared Kenneth from Trade Hill and and Jesse Powell from Kraken, my comp the company work at now. I mean there's only what were those like because we were just in Miami uh when the Bitcoin conference was happening and it was kind of like a like a bunch of fools acting the fool, I thought I didn't attend, but just through what you what what was coming out on social media, I guess. And everything, every community changes from like when it's the outsiders and um, you know, just the true believers to Like you know.

Ten years later, eleven years later, what it what it looks like is is very, very different. Every community changes. All of my friend my roommate was buying I was mining an eleven and twelve and They were just hardcore devs and nerds. So yeah, what were those redeems like? So I remember I was still working at a small investment firm. So I'm rolling up in fucking business casual. To a developer to a developer. And they're like, what the hell are you doing here? Um I w there's only a dozen of us. I mean it was tiny and actually I put pictures on Twitter where you can see pictures from the old meetup.

I mean it it's just a cool it's a cooler of PRs. And a bunch of people kinda geeking out on this thing called Bitcoin. Right. Uh March, April twenty thirteen hit price goes to two sixty. Boom, you've got like VC slanging out business cards. Everyone's excited. There's 150 people that come to the meetup.

you know, there's this energy, this palpable energy, and then the May twenty thirteen conference happens, the Winklevi announced they've been h they've been they've bought Bitcoin. They're involved. The the conference had like a few hundred people, which was kinda wild. If you see Coinbase's booth. from videos from back then. They printed out like an eight ha eight and a half by eleven. that just had Coinbase on it, like they just printed it off their computer in the office or their printer printer in the office and taped it on their booth.

And Brian and Fred were the guys manning the booth. So like that's how early it was. Super, super early in the space. And During that moment, that's when I found a problem. A problem that needed to be solved. which was finding the real time price of Bitcoin on your mobile device.

At that time there was no app in the app store that gave you real time market data. Which is crazy because Bitcoin fluctuates a lot. People, you know, were constantly opening up their phone to check the price of Bitcoin. All the other developers before then just refresh the price every fifteen minutes or so. So me and a buddy put it together. Now I didn't know what I was doing. I was a finance guy

You know, trying to figure out how to make a product. And so I just became really obsessed with solving this problem. And so I knew enough in Photoshop to where I could design the app. So I just looked at apps that I liked. took elements from that to design uh Zero Block, which was his product. And designed it, and we designed it really, really simply. because I couldn't design anything more complex. Back in that day, skew morphism was the popular design aesthetic. And we did flat UI because I couldn't design bevels and stuff.

So I just became obsessed with solving this problem for myself. Turns out a lot of other people had that problem too. And that's where I kind of like stumbled my way into some product fundamentals of like it's all about solving a problem for your customer. And then I got into a tinge of growth marketing.

uh where I found how to hack my way to the number two spot for the word Bitcoin in the app store. So we got most of our installs, you know, all'd you do that? Well what was the hack? Yeah, so Apple at the time, when they really originally built the App Store, they forked it from iTunes. And so there's an old character limit.

uh that they had for titles of songs, which is two hundred and fifty five characters, but they also allowed that character limit for app titles. It was truncated after sixty words. Basically, you can't fill it in a shit ton of shit ton of words in the t the t in the core title. Old school keyword stuffing. Yeah. I learned old school growth acting technique of just keyword stuffing, but it worked. Now It was sort of a crapshoot to see if the uh app store reviewers would approve it, but one out of five would. And if you did, you could clinch that spot. Right. So that kind of started my fascination with both products and with growth marketing, kind of on the more hacky side of things. And yeah, that was my that was my initial foray into tech, and then we sold.

Cereal block at the end of the year to blockchain dot com. Uckchain to com is still around today. It's a really popular wallet. I was the first product manager there. And so kinda that's what I mean by stumbled and bumbled my way into tech isn't any formal yeah, I didn't have any formal bracket around. I just kind of was really empathetic with solving a problem for my customer. Wanted to propagate the the message of my products and that's how I learned those two skills. All right, let's talk about some ideas, Sean, shall we? Yeah. So Dan, I don't know if you know, but this is the ideas podcast where we basically say, Okay.

That like I'm interested in the past, but it to the extent that I learned cool things and then I'm like, all right, let's get to the future. What's the future look like? So so ideas. So I think there's really like I guess like let's start in the Bitcoin crypto space. What problems do you see today that you think somebody needs to solve? Like back then. There was no real time price data, that was a problem that needed solving. Sure. What are you seeing today as a problem that needs solving? Yeah, there's one idea that's particularly fascinating, but it's not very sexy. Now, there's a lot of really good intersections there where you find value in like this new idea because not a lot of people are looking at it. It's around private wealth management for crypto holders.

Imagine a current crypto billionaire walks into a family office, multifamily office, and they're like, Hey I'd like you to help manage my portfolio. And they sit down five suits in front of this guy with a hoodie. And they say, Hey, well uh First of all, we'd like to take you know, a two percent management fee of of all your holdings and they're like, Well, I s I self custody my coin.

Right. And they'd be like, I don't even know what that means. Right. How much w how much of your net worth is in crypto? And they would say Ninety percent. And then the first thing they would say is diversify. Right. The existing uh private wealth managers and multifamily offices have no idea of how to service crypto, wealthy crypts. I mean you you can't even you can I I told my guy at the bank today, let's buy some Ethereum and they were like, Oh, we we're we can't. It's ridiculous. I mean it's absolutely ridiculous. It's it's so antiquated, they just don't talk don't even talk the same language as all these crypto folks, right? Like

I'm a more Bitcoin guy. But if you go down like the Ethereum rabbit hole, there's a whole I mean there's so much complexity in and how those DeFi and and smart contracts work. To where you need like a full tax team to solve that problem, too. But these I mean, I've been in the space for almost nine years. I know more billionaires on this planet than probably anyone else.

Because of because of crypto. Because crypto has created so many and not not institutions, but individuals who have billions. to where this used to be a probably Bitcoin is probably cryp b Bitcoin plus Ethereum has probably created more individual billionaires than any other project. Right. Exactly. I think that's got to be true, which is kind of insane. Like more than Microsoft, more than Amazon, more even more than any of those projects. How many crypto billionaires do you know?

How many billionaires do you know? Um I would say off the top of my head at least At least ten. Uh. How many crypto?

How about um A hundred million on a Oh man, I mean, I would assume I at least know a hundred or so folks that probably have that much. Now look, Bitcoin people don't tell you how much they have, but but you can kind of assume based on how long they've been in this space and what companies they worked at and how much their net worth was back then and probably yeah. I mean it's a general assumption, but how much of your personal money were you putting into this before your Bitcoin started Like making sense. Like were you putting like a hundred grand into this in twenty twelve when it was like who the fuck knows if this is gonna work?'Cause a hundred grand to you at your I wish you were I wish, yeah. You were really young, that that would have been a lot of money.

Yeah, I I didn't have that much money, man. I mean, look, I was like uh twenty five, twenty six, just out of c and I was in I you know, my first job was in Dallas. I was making forty five K a year. It wasn't like a ton of money. Yeah. And then I got into tech eventually, and then of course that went up quite a bit. But that was in twenty thirteen, twenty fourteen. Now Um, my average cost basis was ten dollars to a hundred. But there's a bunch of coins I got from in the hundreds to thousands. Right.

So I think a lot of people look at like crypto OGs like myself and they assume We had like a a million dollars sitting around that we all dumped in at five dollars a bitcoin. And also I wasn't a perfect hobbler. I day trade it. I trade a lightcoin. I traded a bunch of other stuff just for fun.

I even mined Prime Coin. So I'm not, you know, on on my Bitcoin journey, I've touched a bunch of other coins as well. Um, so no one's a perfect hodler. Yeah, I don't know. Technologically are you able to buy the dip when the dip is like thirty thousand and it's like, well, my cost basis is one hundred and ninety-two, and uh, you know, or like whatever it's five, even if it's three thousand. If my cost basis is three thousand buying at thirty thous it's like by the dip, great. So are you able to psychologically do that or are you just like, hey, my position is set.

I hope the rest of you suckers by the dips so that uh you know, we keep this upper momentum. Yeah, so technically I'm over one hundred percent of my net worth in Bitcoin because I took a small levered position back when Bitcoin was seven thousand dollars at the bottom of the cycle. Uh, because I believe that Bitcoin, you know, in a bull run obviously appreciates. So I uh technically over a hundred percent of my net worth is in Bitcoin. Uh also I do something where I lend out my Bitcoin, I earn a yield.

That yield is like kind of a day to day stacking mechanism to add more SATS to add more Bitcoin. And you're using what? Like Uh Cracking BlockFi, who would you use them? So Cracking doesn't a you're at Cracking now if I I put them first, but I don't think they offer this as a service. I appreciate the shout out, but no, we don't offer that yet. Yeah, so we've got like BlockFi, Lenin, and uh Genesis trading. Genesis trading, you have to have like a minimum of twenty Bitcoin to be a customer. By the way, I bought some secondary and Kraken, so I'm I'm with you on on the Kraken train. We'll go all the way to the top. Dude, how the hell when you so Kraken, how many people at Kraken do you think Have more than

Fifteen million dollars. How do you employ people when they're all fucking rich? Like how often they tell you like And then Go fuck yourself. I'm out. And then like next week it's like Dan, I'm bored. Got a spot for me. Yeah. You know, it's a particular challenge for crypto. I mean, crypto, it's the hardest industry to build a business in. Think about it this way, too. Like, you've got monsoon sees in the bull run and you want to capture all of that revenue potential.

But if you start to spend and deploy capital through hiring and building offices and whatnot. By the time that The bull runs over. Like when do you turn off the spigot? Like when do you turn off all that cash flow going out? And then how much do you cut back?

And I think that's really, really tricky. Like how do you Predict these cycles, no one knows. If we did, we'd all be trillionaires. And so I think like that's the most difficult part of this is like how do you build a business with those fluctuations in demand? And how do you match expenses to meet that? But yeah, I mean, you know, in turn in terms of in terms of employee churn, it's super tricky. I actually put in my job descriptions for my growth marketing team, no crypto experience required.

I first find it really refreshing when folks come in and challenge language that we use in our ads. Home page, app store page, et cetera. on how we describe crypto because I'm I've been in too long. It's hard for me to zoom all the way out and see what it looks like from a newbie. Right. And so uh one, I like that perspective, and two, to the motivational issue, I think, um No, folks who are new to crypto are much hungrier uh than ones who haven't been there.

Um Okay, so let's do this private wealth manager. So what would you actually build here? Would it be a services company, would it be a software company? What would be the I how would you attack this problem? Yeah, it's a services company, and you can't take BIP on AUM. That's like an old way to do it. You'd have to figure out some sort of new model that's maybe more subscription or something like that. The first and foremost problems you're tackling. Taxes. Taxes are incredibly complicated for crypto trades, especially if you're gonna do DeFi things. Yeah.

One would be taxes, two Uh so pet taxes not only cover trade, but also covers future tax minimization strategies, for example. There's a trust called a Grat. A grad is a great way to pass on your crypto. to your

Son, daughter, et cetera. A partner without any taxable event occurring. So there's all sorts of very advanced structures that exist for very wealthy folks that most crypto people have no idea. You know that There w this wasn't institutional wealth. They didn't they didn't work at Goldman.

They were in their basement mining Bitcoin or mining Ethereum, you know, like It it's a whole different world, right? Right. And then we're gonna trust different things. In fact, I think what you did where you built your brand and you're like, Oh build a big audience. I think you have a few hundred thousand followers on Twitter for Bitcoin. I think that's what you would do if you come out and you're like, Hey, I'm the Bitcoin tax guy, and I'm gonna talk every day about how to like deal with the tax problem of Bitcoin and wealth management for wealthy bitcoiners. And I'm gonna my say Sales is all gonna happen through content. And then whoever and then you'll probably get billionaires coming inbound saying, Hey, will you manage my stuff? Um that's how you would do this.

I've known these billionaires personally for eight years. So I actually DMed a bunch of them and asked them if they used multifamily offices and none did. Right. We already know that it's a problem that they're not currently solving. Uh, they went to they went to some traditional financial folks and they talked to me about their experiences and I was like, wow, that sounds terrible. Um

So for me, I'm very happy at Kraken. I I love the team I'm working with, I love the team I've built. Um, also they acquired my company, so I'm very incentivized to stick around. But I couldn't be more excited in terms of a rocket ship in this space, Kraken's a great spot to be at. And I'm a growth guy. So it's all about that like hyper growth and cracking's like a perfect, perfect spot. But This is more for fun on the side of thinking like what We're all we're all

Tinker with stuff and think through stuff. And this is kind of my recent fascination. So Sam, do you know about the like the tether? Uh question mark. Have you heard this, Sam? No. Okay. So uh I'll I'll ask Dan to kind of explain it. So Dan, I'm gonna ask you to to do two things. One is explain what people are what some people are afraid of with tether.

And uh why that might be like, you know, people call it, oh, is this the black swan that's gonna crash all of crypto. Excera. And then how you sleep at night being a hundred percent of your net worth in Bitcoin knowing that this potential question mark exists with Tether. So so explain the the potential problem and then how you think about it. Sure. So Tether is called a stablecoin. A stable coin is a representation of a fiat currency. So tether represents US dollars.

It's called USDT. So USDT is created by company is wiring money in To a Cayman Island entity. And they wire it in there and then tethers are minted and created and those are put on the blockchains.

Uh, Tether has existed on the Bitcoin blockchain, Ethereum blockchain, and Tron blockchain. I am others, I think, as well. So what uh Tether represents is a one to one backing of a dollar. Now the company that issues these, uh, which is like Tether United, I'm like Tether Limited plus uh Bitfin X, which is an exchange. There were concerns over if they were truly backed one to one. And there were moments when it wasn't.

But They've recently reached a settlement. with I believe the New York district attorney, I think is who they I I forget exactly who they settled with. Attorney General New York Attorney General, I think. There's so many regulators, I forget who who settled with who, but um Yeah, they essentially settled and agreed to do audited. D to perform audits.

and come out with exactly how much they had in reserve. Um, so the controversy and the worry is that Tethers are c uh I so there's a couple of worries. One Is that Tethers, um, you know, first and foremost aren't backed. And that could lead to a kind of like a classic run on the bank situation where more people try to redeem tethers and that there's not enough tether, there's not enough dollars in the bank to be able to redeem to be able to be redeemed. And that would cause uh structural problems of the crypto ecosystem.

Number two, I think is like the idea that USDT Is being used in smart contracts. And DeFi. And it's completely centralized because U S D T

Like USDC, these stable coins that are centrally issued by companies like Tether and Circle. They can be reversed or or or frozen or paused and not truly decentralized. And a lot of the spa a lot of the DeFi space. I think a a lot of the contracts, for example, like MakerDow. Uh the so Maker Dow is like a uh like an algorithmic stablecoin?

Almost fifty percent of its collateral is is centralized stablecoins. So it represents a systemic risk to DeFi and centralized finance, AKA the exchange base. So so the fear is basically if the Tether people are not being on the up and up, so you have to trust people, which is like kind of the anti crypto way. Um If they're just they could just be printing tetherers. Um or

be holding not one to one dollar assets. So they could be like a bank fractionally reserving, saying, Oh, for every dollar we have, we have five tethers. Um, and basically using that to buy, and then that's being used to buy Bitcoin. So it's like artificially It's not that Bitcoin has any issue with it, but it that's what's driving up run-ups in price is there's a huge amount of Bitcoin that's bought with tether. And uh that's the question. Now, how legitimate is the concern? So if we dig into it, and I wrote about this uh in the Help Report, my my newsletter. If you dig into this, there it isn't as bad as people say. Um, there's all sorts of moments when to tether wasn't fully collateralized, as in there wasn't enough tether to be redeemed to dollars. And the industry was fine.

Um Also we're talking about Exchanges don't hold tethers, the users hold tethers. So Tether is just like any other crypto asset. So there's been tons of times when multi billion dollar crypassets have gone to zero.

And the structural problems in the space have been okay. We've also suffered much more egregious moments in the crypto space like Mt. Gox. Mt. Gox represented ninety percent of trading volume. This would be like Binance, Coinbase, and Kraken all going down at the same time. You know, these are hugely stressful moments for the um for the marketplace.

And so Bitcoin has been through a lot worse. Bitcoin inherently doesn't need Tether. Tether's being used to buy Bitcoin and other cryptocurrencies, but For example, like um different other government fiat currencies are used to buy Bitcoin, but that doesn't mean that Bitcoin is dependent on the dollar.

It's not dependent on USDT. And then I think, you know, another concern that I forgot to bring up earlier. people hypothesise like tether is being used to pump bitcoin. I think that's completely unfounded. It was based on a University of Texas research report. Which I don't even know if you could call it fucking research, but it was like a research report where they basically said that correlation is causation.

Right. Which is absurd. It's like saying that like, you know, uh umbrellas cause rain because they're correlated. So it was really ridiculous. That's where the core root of of some of the concerns that like O'Teher's being used to pump Bitcoin come from. Completely unfounded. There's no data that supports that. And also there's moments when tetherers are printed when Bitcoin goes down. But of course, the people who buy into this will theory ignore those moments. Right.

And uh Okay, so so that's a great answer. So you um I wanna switch to basically Talking about Uh

other Bitcoin or other other let's say crypto ideas that you see that Uh, the average person is either not knowing about you know, it's interesting idea that you're not That that's not as well known yet, or you see the opportunity for somebody to go build. Do you see any other opportunities besides the private wealth management space? The private wealth management one for me is one that's just really sticky. Um that one's like super interesting. Other ones it would be good as well. Um

I just think simplicity is the ultimate way to go build product. It means that folks find value in your product much more quickly. You can convey the value prop, people discover the value prop, they get activate it at a higher rate. So I think like simplest uh a very, very simple Very, very simple mobile experience for wallets. I think is still like very underappreciated. I think the wallet spaces still has horrid user experience. Like

For example, let's say when you send a Bitcoin transaction. Bitcoin transactions have two states, unconfirmed and confirmed. And to a lame a lay person, like what does that even mean? Yeah. You know, and all wallets default to this language. And I would disagree that they should even default to that language. I mean we should add a a layer in the layer above that in the GUI of something much more understandable.

Wallets are kind of fundamental to the core ethos of the system. And there's a lot of things you can do now. where you layer in uh trading capabilities built in there, et cetera. So I think the wall the space still doesn't have great great to use wallets. I think like Exodus wallet is really good. But other than them, I haven't seen like an experience around the core experience of holding your crypto. That was just mind blowingly amazing. Do you have a security team? Like a physical security team?

Do we? Like buy cards and shit No, you. Um Well, I'm in Texas, so obviously I own a few guns. Um So it's a come and take it sort of attitude. At conferences I do have security. Who do you hire? Um it's it's uh

You know, provided to me by That's the company. How much do they spend each year on on these secur on security guards, you know? I'm not sure, but uh But Kraken is

constantly focused about security. They're they're kind of nuts when it comes to security at Kraken. It's uh in terms of like how you control like where your laptop is and everything else. They're an exchange, right? Kraken's been around for 10 years. And has never been hacked. So for us, like they're constantly paranoid about that in the human attack vector. is the weak point in any tech system. So they're very conscious about like different executives and high profile individuals, like where they are.

Um, you know, if they're at events with a lot of people, they gotta think about physical security. So it's something that they think they think about all the time. I have no idea how much that costs, though. I would be curious to hear about that. Because whenever I see I mean I I don't have I I'm I'm in a different friend group as you. Maybe I've got a few friends that have tens of millions of Bitcoin. But um

I am always curious as to how like the the actual security'cause I would think that when it comes to hacking, I would think it would be just like stealing like kidnapping someone, stealing stealing the person as opposed to trying to like break into the thing. Totally. Yeah. And that's actually classically called the wrench attack in the Bitcoin world is that someone could come to you and just clack you over the head with a wrench, right? Now at the same time You know, Sam, you've done very well and and Sam, like you guys have both done very well, and we see

You guys know billionaires that walk around the streets of San Francisco. Mm-hmm. And they're not getting mugged. Yeah, and and kidnapped. For ransom. So in in with Bitcoin, yeah, Bitcoin is easily transferable.

But let's say that let's say this person is not into Bitcoin at all. They can easily take their liquid assets, buy Bitcoin, and then transfer it to the kidnapper. So Whether or not you hold Bitcoin if that makes you more or less susceptible to getting attacked, I don't think it does. Well, that doesn't necessarily seem fair. Like But that said, I'm not Uh

I'm not entirely educated on it. So I'm not sta sticking by this quite hardly. Or qu uh I'm not sticking to this entirely. But Like When I

uh when I have money in a variety of different places, there's a s a a pretty large amount of checks and balances that go into transferring it. So I just try to transfer money to a another bank today and there was like a hard cut off. Whereas with a lot of crypto stuff, you can literally have it in a Uh in like a store Like some type of sore like physical. I could I could fat finger the number I'm putting in and I could transfer, you know, instead of five, I could transfer five thousand. You know, and there's no getting it back. And like credit cards do a pretty good job of doing fraud protection. Um

Um Usually is it what's it called the what's the the two hundred fifty thousand dollars of checking accounts are uh our insurrect. Yeah, FDA. So uh so I think there's a startup opportunity here too, which is how what happens to your Bitcoin when you die? And um and and and how do you how do you manage that? So on one hand, you can leave instructions to your spouse or whatever, which is like hey To get all to get access to all of our private keys, here's what you do. But now you have instructions to get all your private keys. That's You know, somewhere.

Uh you have to protect that. And so you have to have like multiple layers. You're starting to go down the rabbit hole. You're starting to yeah, you get you kind of get in the circular logic loop of like, Well, I can't trust anyone else with my money. So I need to manage my private key. And then it's like, Well, if I want to pass it on, I have to trust with them. Yeah, exactly. And and then And then you also have the like I the problem of like actually like property uh you know property transfer when you die is like it goes through either probate or you have a will. And I just think that there's probably a lot there that If you if you look at this group of crypto wealthy as just a new customer that exists, and they're gonna it's I have this framework that's two by two, which is like, you know, um is it an old problem or a new problem? And then is there an old solution or a new solution, right? And so this is a case where it's it's a bunch of old problems, but we need a new solution because it's a new type of customer. Goes back to the private wealth management idea. Exactly. There's actually a way to solve this, too. It's called multi-signature, which means that your Bitcoin isn't controlled by one key that opens up the vault. There's three keys, and you need two out of three keys to open up the vault.

And there's all sorts of like there's three out of five key structures. So Those would be how you do this through time is you give like your your your CPA one, your wife wife or husband one You'll keep that one. Yeah. And then you give the other two to whom whomever else, or you keep three on your own. So there there's a lot of elegant ways to do that. Multi sig, I think is the only way that's like But the thing is now you have to educate your there's no CPA in the world that knows private key management well. Right.

That's where this entity would, for example, be one of the key holders. They would know very good private key management practices and only sign as uh for under certain certain conditions, which would also help against the kidnapping vector. And where they would have like a velocity limit. You've DM me before about stuff that's in the creator kind of like audience space. Um I don't know where you want to go with that. I'll I'll kind of leave it open, but uh

You seem to have like a theory or a framework of like where the puck is going when it comes to this creator thing, or like, I don't know, you've successfully built your personal brand and you know, like I don't know how many years ago nobody knew who the fuck Dan Held is, and today you're known by a bunch of You know, crypto nerds. So like what is the what is you you give me your thoughts around e either one of those two, like generally where it's going, or for you specifically how you think about it. Yeah, so I'm like a I'm a growth product growth marketing guy. So when I find like a vein of gold where I find like engagement or I find user acquisition, it just fascinates me, right? So The creator economy is about, you know, for the I th or most folks on the show I'd say up to speed with creator comedy stuff.

Okay, cool. So um You know, I built an audience in the crypto in the Bitcoin space. My my main message is just Bitcoin, though. So I'm I'm straight to the Bitcoin ethos. I've been in a long time. So and my last name is a pun on the favorite meme, Hoddle. So my last name actually is real, though. My last name truly is Hel. It's actually a German last name. Um

And so uh with that, I decided to lean into that and I just started to write. I wrote long form articles, I started to tweet. And thou those got got traction and I found over time that there's a certain way that these gain traction. It's it's not it's not by random circumstance. There are ways to understand the engagement algorithm. And use that to propagate your message. For me, I really love Bitcoin material. Well, it's an example of uh of something you saw that that was working.

Sure. Well, you can do Twitter Advanced Search and search for m the most popular tweets from any account. Filter though by filter those by the most popular and then actually take a format of what they've tweeted and just take an iteration of that. Right. You already know it's probably gonna work. And you just take a small tweak and that's that almost always works. Yep. You can also do a quote tweet. We're like let's say Let's say like a Nevol tweet.

You can just copy paste Naval's quote with quotes and tag Naval and you'll get almost as much engagement as Naval does. Yeah even if you're a really tiny account. So little things like that. There's a whole bunch of those that are discovered. Um because yeah, again, I'm a growth marketing guy, so I'm digging in and I'm like, oh man, this this engagement tactic really worked. I've done some things like if you see auto playing videos. You can build those in the media center. uh in Twitter, which you have to have an ads account to do those, but they're not an ad.

Organic. So little little tips and tricks like that. Um consistency, I think is the number one. The thing that people forget. I have not missed tweeting a day in three years. If you do, you lose Your spot in the relevancy engine with Twitter.

So Twitter every day, uh, there's there's like ninety percent of consumers and ten percent of us creators. Well, the creators create content for the board consumers, the consumer session in the product, and Twitter needs to figure out how to hook them immediately. And so Twitter goes to all their previous engaged content and they go, Well Who do they engage with every day? And if they've built up

and habit of engaging with myself. And they're like, Well let's give'em a Dan Hell tweet. But if I don't tweet that day. Then there may be like oh let's give them a Chris tweet or someone else's tweet. Uh because they need to go hook them immediately.

And then if that engagement loop gets built with them over time. then also slowly start to lose relevancy with them. So con consistency is absolutely the most important thing on Twitter and most of these channels. I think that was like the really big breakthroughs for me. It's just not Quality is quantity.

It's about always having content there for them to consume and building that habit. And then you over time you focus on quality, where I think I've gotten a little bit more high quality over time, especially like I start up a YouTube channel, I've got twenty five thousand subs in in six months. And I just shoot one continuous shot. I don't I don't even edit it. I just do one continuous shot, even if I like sneeze or something, I just kinda like keep going. uh because I don't have enough time to spend in post production and doing cuts. And you guys have great video content. I just don't have time to go do that.

Does my audience like will they engage with the content? Well, it's an MVP, right? It's an MVP if people like it. Then you go spend time, you you pay for an editor or something to go help out. Um but yeah, it's been a it's been an incredible journey going down this rabbit hole. And then you know, monetization wise too, just seeing all the different ways that folks, you know, tipping on on Twitch, you've got like tipping on Twitter now, you've got subscription products, you've got swag. So let's fast forward three years from now, audience keeps growing and the monet the monetization things get bit more baked out for you.

How much do you think an individual creator in your niche like how much do you think you can make three years from now just on the personal brand side of things? Forget the job and investing and other stuff. Have you guys talked to Pomp yet? Yeah, we've a couple of times, yeah. And we both know him well. I don't But

I mean I mean ask him that, but that question. Yeah, but if I if I had we I can but we can guess. I would guess before. How about we all guess? Okay, so I'll not let's not include investment. revenue, which I think investment revenue in the next uh we're talking about like Paid newsletter, sponsorships, uh recurring reports. Courses now. Courses. his investment revenue if you told me that it makes him personally thirty million dollars spread evenly over the next ten years, I wouldn't be surprised.

Is that crazy Sean? Or you're talking about thirty total? Sorry, thirty total spread out evenly over ten years. Yeah, I don't know how big his fund is, so I'm just gonna take that out for a second. I think just a personal branch out, which is two and a half. Two and a I would say three and a half. What would you have guessed, Dan? Two to four million is my best guess as of how much revenue he's making and and that's based on like my best knowledge. Maybe five people on staff, so maybe half a million in costs. Yeah. Yeah, very, very little overhead, so very high margins. Right. Um, these are all value of creative too.

Like if someone gets gets a job through Pomp, they might be really inclined to sign up to his newsletter. But these aren't like mutually exclusive sales. Right. Um, but by far I think like so He's got the so Pop is the biggest. Pomp is is so this is our upper bound limit, and that's why I chose Pomp, right? Is Pomp the biggest what about uh in the Bitcoin in the crypto space you're talking about. What about uh my guy uh Rao Powell?

Or is that a same Rao Paul? Yeah, Ral Powell. He's more of like uh macro. I mean, I guess we could call him crypto now because he's like, Well, like there are these even though like let's say like a guy who's kind of a troll, even though I love him, like a James Alta like a James Altecher, I bet you makes Thirty million dollars a year in crypto newsletters. Dude, I I don't I don't think James Altutra guys from like twenty seventeen era. He's a friend of mine, dude. He sold his new letter new his crypto newsletter for sixty million dollars. Wow.

Wow. Yes. Holy shit, I didn't even know that. Do you Motley Fool? Yeah. Motley Fool does close to a hundred million a month in revenue. Um so I I think that

Pomp is the popular poppy one. But I think there are I bet you I I'll guarantee you there's guys who have newsletters that they charge twenty thousand a year. Well you guys have uh you guys did the breakdown of Agora. Right. That like crazy newsletter thing. They bought James. Yeah, oh okay, yeah, I mean

I got the I got the you know, after you guys did the breakdown of it, I actually talked to someone who worked there. Yeah. You got the breakdown. So like That back end newsletter, the one that's a really high markup. Like the thousand dollars a month, that's where they make all the money. Yeah. It's like you got your twenty, thirty dollar a month up front one and you got the thousand dollar back end one.

I couldn't personally do it. I just feel kinda weird doing it personally. Were we wrong, by the way? Were we wrong on our guesses for Agora? In terms of like uh the revenue I I didn't do any revenue back at the envelope revenue stuff. I just want to know tactically. Like how do they think about it? I'm with you, Dan. There there is something to that like, oh, this like weird slippery slope where you end up with these like you know, this small one percent of these like whales who you've just milked their whole life savings because they think they're getting this thing. Um, no thanks. Uh I'd rather build longer term value to like deliver something that I think is truly worth that amount of money. Yeah, that's where I've experimented with courses.

So I've got my newsletter. I've got my newsletter. I've got ads. Uh, which one's the best? The best combination of like effort, fun, and money. Like if you combine those, right? You want a low effort, high fun, high money, like what is the best one so far you've experimented as a as a creator of These tools in your tool belt. Probably YouTube, because I it's kind of fun shilling a product that you really like. So I only represent products that I personally use. It's an ethical standard that I have for myself. So which means that I have eliminated a lot of the potential advertisers that would pay me a lot more. But uh for me is the only way that I feel like it'd be appropriate for me to, you know, represent this product. Um Then the YouTube is fun'cause I gotta like have like a little skip.

with it, where like I bring it up, I talk about it. I represent it. The newsletter It's a lot of work. Um, that I mean writing an article a week doesn't sound like a lot. Yeah. It's a lot. It's a lot. It's it's a ton of work and you take pride in it. Especially when it's paid. There's a bar of these people paid for this information. So it's the information that better be different and unique and awesome every week. I know. I'm a I'm a

you know, classic growth guy. So I have a survey at the end of each one to get like a raw MPS score. I get feedback on what the next article they want written. That way I write the best, most relevant content, which means that they're satisfied. But it's tough, you know, like It it it's really hard to wear. I I don't know how Pomp does it daily. I must have a I think he's got a guy. I I would bet that he's got about two young guys who he says he does it. He says he sits down, he writes it in one take. Um I I went out to me and my wife and him and his wife all went out to lunch one day and just hung out and uh Paulina, his wife, would was teasing him like Like she was like it takes me forever to wipe write my weekly thing. He just sits down and he does it in fifteen minutes and he's done. I mean, I've I've had some that have like cruised through like a straight like stream of consciousness, but it's tough. Some of them I do a lot of research for. Like I wrote one on Bitcoin DeFi.

And that was a ton of like actually I try to try out a couple of different apps. It was a lot of work. So fun and ROI would be YouTube channel. where like I do these pre roll mid roll ads, they're kinda fun to do. I can visually show off the product in a more fun compelling way.

like the products I'm representing, uh, versus like the newsletter, which I have to sit down, really think through hard. And it's something that No, I don't I want to make sure I represent really, really well. By the way, you're a growth guy, um, I've said that this Bitcoin laser eyes thing is one of the most genius. kind of like decentralized marketing tactics I've ever seen. Um what is the origin story? Is there an original behind it? No, no, I I don't know if you invent it. I'm saying do you know he knows more people than I do. Where did this come from and who are the geniuses that came up with this? Yeah. So I wrote about Bitcoin's decentralized marketing team before, where like Bitcoin has no central marketing org. There's no propaganda arm of Bitcoin. It's like me and Pomp and and everyone else who talks about Bitcoin. I don't know who originated it. It's like the origin of memes. I mean

Sometimes you can find where a meme came from, but sometimes it's just kind of like it came from nowhere. I'm not sure who the first person was and no one I know has claimed it. Which is insane because it's somebody should and uh and you could you could be the first person who did this, right? That's not like uh That's not like a wild thing. And

But it's genius. It is like Bitcoin in so many ways is a religion and um And this is just yet another like, you know, religious, basically, you know, this is the yamaka. This is this is the thing you wear that that says, hey, I'm a part of this religion. And um, you know, putting it in the profile picture, having it be slightly mysterious so people don't know what it's for, and then they ask. And then making it memeable where we can all do it, uh I think is it was just Brilliant, brilliant, brilliant, brilliant. Yeah, it the space is f I mean, memes are such an incredible part of how stuff is communicated nowadays, right? Like

I mean we saw like elections like can can people can be elected based on memes like Memes aren't just these funny things on like Fortune or Reddit anymore. Like memes are F the memes are like the main trend. Like my mom uses memes. Now she does it on my Facebook, but you know, it's it's crazy. Like it's narrative compression at its finest. It's taking a whole narrative and compressing it into one image. And I think that's why it's so powerful as a transmission method. It's the most shareable viral thing you can do, right? On the internet. And so it's like what you know, memes are the packaging for ideas. If you want to most efficiently package an idea, a meme is the best way. So I've joked about c uh we saw this thing called Uh I think it was called like

meme university or L O L University or something like that. And it basically they took the website of Lambda School and they just remade it. For Of a school that would teach you how to do memes. And it was it was a joke website. There was not like a real course behind it. But I was like, you know, if there really should be a course that somebody should take, this is it. Um people But people the if you could learn this, it's learning, you know, the native tongue of the internet. Um, and and you know, it's pretty important to be fluent in internet nowadays. And so I think I think that's one where I'm like, somebody really should create this. I have this Slack channel uh that me and Ben do where we basically put out a challenge where we said every day for fifty days we're gonna make a new meme. Um, because you know, it's easy to spread these, but it's in a

the the act of actually making one is hard. It's telling a, you know, telling a story or telling a joke in the most efficient form. And it's been so challenging to just do this every day for 50 days. Well, what's kind of fun is um my buddies over at eToro, Brad Mitchelson, really really smart marketing guy. Him and I are buddies, and what they did is they started to create gifts. On so on Giffy. And Giffy, like that, that's good. That gets pulled into like Facebook Messenger, search engines, Twitter GIFs. So I started to make I I saw their strategy for e Toro and I made that for myself.

So I took like the most popular Bitcoin memes and then wrapped it in my own black and white design. To where we could search like Dan Held and you'd see a bunch of black and white gifts. And have my o my logo watermarked on there. So like You can kind of create meme factories is what I learned from that. Like you can create like a meme factory to use that to propagate content.

And Giffy was a really great way of doing it because it's plugged into so many different platforms. versus like if you you know, each one individually, like trying to create like an emoji. With each social platform would be tough, but like Giffy, you get to pull into all of them. Yeah, that's smart. I like that. All right, we're about at the top of the hour.

Um do we want to go over one more idea or what, Sean? Um I don't know. If you have s if you have one that's burning, you could do it. Otherwise I think we should uh wrap it up. Cool. Well, Yeah, I mean just my I think like closing thought on like the creator economy stuff. Um

I've been in Bitcoin for nine years and that has been a huge fascination for me. I would say the creator economy Is Not an equal fascination, but quickly becoming something very interesting. Um

I think about it as like the monetization of all inf human information. Right, like Creators are just taking whatever knowledge they have locally, putting that on the internet, distributing it, and then monetizing that. And what is the value of all of that combined? I mean, it's tens of trillions. A hundred trillion. I don't know what it's worth, but like

For me, I just kind of see this huge. I mean, there's so many niche things that someone could write about. Like There's a million things and it's very low uh very low effort to find your MVP. versus before you had to go buy a warehouse and start producing things. You just produce content.

And if their content resonates and people click and wanna figure out what products you'd recommend for them. Then you can go build your own products. So I see kind of like a whole the economy kind of reorienting around content marketing. And that being the top of funnel in in like idea generation for all future products. Great. Well

What do you think, Sean? Yeah, let's wrap it up. I I like that one. That that's Uh I like the way you explain that because I think it It aligns with

Something I believe which is When When there's never been more information, it's all about who actually has attention. And the person who's gonna have attention is whoever is putting out great content consistently. So great content once will get your attention once. And then great content consistently will build trust, which just says, Look, it's too noisy. I'm just gonna go to my sources I like. And um and then those people then hold the keys. And you know, up till now that's been captured by the platforms. So that's been true, but YouTube still captured way more value and Twitch captured way more value and Twitter captured way more value than the people on it. And that seems to be flipping, uh, where where

Either new platforms are gonna come out where the creators own it, or the the value is gonna accrue off platform in a bigger way than it did originally when it was like I think the value accrued like 99 one, um, 99% to the platform, one percent to the creators. And I think that's that's gonna flip uh closer to fifty fifty over time. I think Twitter is recognized this, right? With the super follows, where you can have like subscription followers where people subscribe to like a premium set of tweets you have. I mean, Twitter I think sees this coming, they see the exodus of folks building an audience on Twitter. And then the exodus of all that monetization going to to Substack. Yeah, I think that's sort of just trading one master for another, though, in a in a way where it's like as long as Twitter will put superfollows there and then they'll take the cut they want. And then as long as they're that they're the button to pay for stuff, they get they'll just inch that cut from 10% to 15% to 20% to 50% over time.

And um And so I think you know the real answer here is is how do you build this independently? And it I think basically That that's the part of crypto I'm most excited about is People who are building Uh, you know, a social network that is open source, um, that if it can get adoption, and this is why I was interested in BitCloud, is if it can get adoption, then

uh that ratio will flip. The the all the value will accrue to the creators and not to the core platform or protocol underneath. Um So so that's what I'm excited about is like that's the real disruption there. Well, we appreciate you coming on, Dan. Um It's uh I've been following you on Twitter now for a couple of weeks since uh Uh Sean's been talking about you and he's been saying that you are the guy to speak to and and we appreciate it.

Yeah, so go give him a follow. He's at at Dan Held on Twitter. And uh Yeah. All right. We'll see you later. Uh-huh. I feel like I can rule the world, I know I can be what I want to

I put my law in it like my day song On the road less travel never looking back

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