By Shaan Puri & Ben Levyā ā¢
GM. This is the Milk Road, we cut the crypto sandwich into triangles, just the way you like it.
Today's estimated read time: 4 minutes & 7 seconds
Weāre skipping price action today, because we have a LOT of juicy stuff to go over.
Juicy? What happened?
Day 2 of The Bitcoin Conference was fire, so I watched all the talks and summarized all the important stuff for you.
What happened:
Peter Thiel (coāfounder of Paypal, and first investor in Facebook) got on stage and gave a crazy talk.
I kept a running diary of my thoughts during his talk:
0:00 - Wow, they got Peter Thiel to talk. *gets pen & notepad out*
0:04 - They start by playing a video clip of Peter talking at a conference in 1999. Heās making 2 predictions:
2:40 - OK, the real Peter is on stage now. Crowd cheers. They sound a little tipsy even though itās 11am.. Nice. This is why we do conferences in Miami.
He starts off with a bold move. Heās waving a stack of $100 bills in the air.
He asks: āwhat is money?,ā āthis always gets people's attention,ā āitās not good as toilet paper. Itās not wallpaper. But people want it. Do you want it? Come get it!ā
3:16 - He throws the wad of cash at someone in the crowd then laughs as they fight over it: āI thought you guys were supposed to be Bitcon maximalists.ā The joke lands.
3:30 - He talks about the early days of PayPal. Shows a picture of him and Elon Musk (they were both CEOs of Paypal early on). Pretty wild to think about how much talent was in 1 startup.
Hereās who worked at Paypal:
This is called the PayPal mafia^. What a killer roster of talent. OK, back to Peterās talk:
3:55 - He shows a slide from the first pitch deck of PayPal. The initial idea was a lot like Bitcoin. A currency that lived outside of the banking system. He said āwe didnāt know anythingā back then, but they had big ambitions.
4:12 - But that was really hard. So within a couple years, they had created PayPal. Which worked with the banking system instead of replacing it. This was more practical, but less ambitious. It was just a payment system, not a new kind of money.
6:49 - Payment system vs. Money. Why does it matter?
Peter points out an important thing about money. Velocity.
The simple idea is that people will spend their āless valuableā money first. Back in the day, people would hoard gold, and spend silver.
Today, people will save Bitcoin, and spend dollars.
This means some money moves āfastā throughout the economy (hopping from person to person). To most people, that makes a currency more valuable! Itās being used! Must be more valuable, right?
The velocity theory says thatās wrong. The slower moving money will end up being higher priced. Nobody is āholdingā the fast money, so it doesnāt go up in price (sellers willing to sell).
For a deep dive on this, read this Velocity of Money post.
Anyways, Peterās belief is that Bitcoin is āslow moneyā and therefore, itās valuable money. He says Ethereum is a payments network, high velocity, and lower value.
If Peterās right, Bitcoin will end up a lot more valuable than ETH over time. (Editorās note: I totally disagree. I think heās wrong in thinking ETH is a payments network)
7:36 - OK, this is where the talk starts getting aggressive.
He puts up this slide. The crowd goes wild. Crypto is so tribal.
He is trying to talk but you can barely hear him, because the red-blooded-american crowd is going wild for no reason.
8:13 - He says Bitcoin is like gold (a store of value). And ETH is like Visa (a payments network).
He points out that Gold has a total market value of $12T, and the biggest payment network (Visa) is worth 26x less.
If Peter is right, Bitcoin has more upside than ETH (again, I disagree,but letās let Peter talk. Heās the billionaire chess grandmaster. Iām just a hairy dude with a free newsletter)
11:26 - He puts up this slide showing that back in the day (1980) Gold was equal to the total value of all stocks. (Both were $2.5T)
Fast forward to today, and stocks are worth 10x the total value of gold.
His point is that thinking of Bitcoin as ādigital goldā is underselling how big it can be. Perhaps it will be on par with the S&P 500 (which today is a way that people store their wealth).
12:49 - Bitcoin is $43k today, where does it go?
āBitcoin is the most honest market in the world. It went from $5k to $50K in the last 2 years, showing us that inflation was real, and the central banks are bankrupt. This is the end of the fiat money regime.ā
āMr. Powell should be extremely grateful to Bitcoin. Itās the last warning they are going to get. They have chosen to ignore it, and will pay the consequences for it in the years aheadā
14:00 - Who are the enemies of Bitcoin? Who is holding it back from a 10x or 100x rise?
Bitcoin has 3 enemy types:
Enemy #1 - The Sociopathic Grandpa from Omaha
Heās honest about his hate for Bitcoin. Heās incentivized to hate Bitcoin for 2 reasons:
Enemy #2 - The NYC Bankers
Like Jamie Dimon from JP Morgan.
For years they called crypto āworthless.ā Now it is undeniable, and they are losing customers, so theyāre pivoting to offering crypto assets.
Now you go to GoldmanSachs.com and see stuff like this:
Enemy #3 - Nameless, Faceless Bureaucrats
These people hide behind a more passive-aggressive tone. They say things like āI see huge opportunity in blockchainā
Anyone who says they are āpro-blockchainā is actually āanti-bitcoinā according to Peter.
20:36- The Grand Finale
He ended with this hilarious slide design. He calls these enemies the āgerontocracyā (aka old rich). I gotta say, whoever photoshopped this slide is my hero. Pure art. Genius. Like Picasso in his prime.
He says itās OLD vs. YOUTH. And calls bitcoin a revolutionary youth movement. His final line: āWe have to leave this conference and take over the world.ā
*adds take-over-the-world to my to-do list*
The Milk Roadās Take:
Iāve listened to Peter Thiel for over a decade. The guy is super smart and loves to go against the grain. Heās great at doing this, painting an enemy, and getting peopleās attention with bold claims.
On one hand, I love the conviction he has for Bitcoin, and think that itās cool heās been predicting this since 1999.
On the other hand, I think heās wrong about Ethereum, and I find the whole tribal / āus against the worldā thing from the conference to be a turnoff. The macho attitude just feels very forced when nerds do it.
I mean look at this. Michael Saylor came out for his talk and hit the crowd with the 1999 āRaise the Roofā move š¤£
That wasnāt all for Day 2ā¦
Jack Mallers, the founder of Strike, announced they have partnered with the POS companies that power huge stores like Starbucks, McDonalds, Walmart & Walgreens to allow anyone to pay in-store with Bitcoin over the lightning network. Every credit card swipe has a 3% fee and is slow to settle. Lightning is essentially free (~0% fee) and settles instantly.
Cash App announces their new crypto services that will 1) let users auto-invest a percent of their paychecks into bitcoin and 2) round payments up to the nearest dollar to buy bitcoin with the difference (kinda like Acorns).
Robinhood announced theyāre rolling out their new crypto wallet to 2M users.
Ricardo Salinas, a Mexican billionaire, says his liquid portfolio is 60% Bitcoin. In 2020, Bitcoin only made up about 10% of his portfolio. Thatās what we call growth, baby!
When it comes to taxes, there are two types of people.
With less than 2 weeks left to file taxes, weāve partnered with Cryptotrader.tax (soon to be CoinLedger) to make sure you got everything you need.
A common misconception:
āI donāt get taxed until I cash out to fiatā.
We hate to be the bearer of bad news, but you do in fact realize taxable events and capital gains when trading crypto > crypto.
It sucks, but that's the law for ya.
Over $700M was raised in Web3 companies and funds this week! Who got the bread this time?
Dank Bank got $4.2M to let people buy & sell Memes as NFTs. Sounds silly, butā¦Memeās are a part of culture. They are globally recognizable. Maybe memes will be collected as other works of culture & art?
Fractal got $35M to build a new NFT gaming marketplace. This is Justin Kanās new startup (previously JustinTV, Twitch). Worth keeping an eye on
Leap got $10.2M to build out a āsuperā wallet for the Terra ecosystem that can show off your NFTs, track the value of your wallet, and integrate with the most popular Terra protocols
GOALS got $15M to build the āFIFA of Web3ā utilizing NFTs. The cool thing here is youāll own all the assets in the game - from the players to the cleats they wear - and it can all be sold or traded. They still need to build an awesome game though..
Hivemapper got $18M to build a decentralized Google Maps by giving drivers digital tokens to put dashcams in their cars. You know we love easy ways to make money. (Theyāre leading the wave of IRL ā tokens that we talked about here).
Dive into our full database of companies that have fundraised here!
Send a video of you drinking a Vitalik cocktail to @milkroaddaily on Twitter and weāll retweet it!
See ya Monday!
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