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Welcome to this week's edition of crypto China stole the world's only televised cryptocurrency investment show this week
We're coming to you live from our Johannesburg studios. Where we've got a live studio audience with us
These are the guy from the Johannesburg chapter of the YPO organization these are the wipie our crypto gasps gasps welcome to our studio
Great to have you and please feel free not to interrupt me at any time
So speaking of crypto we had a manic week on the crypto markets
We had a metallic pewter and tweeting about heroin and child porn in the same tweet
We had the alt market cap running to an all-time high we had Bitcoin and Bitcoin cash
Running against each other this week
And we had the feud between Bitcoin and Bitcoin cash also running at an all-time high this week, Brian Kelly
Are you a Bitcoin man, or you have Bitcoin cash, man? I intend to look at Bitcoin at this point as the monetary base?
currency background so to me Bitcoin is the monetary base and Bitcoin cash is something like m1 or the
Transactional currency so no reason for the big a feud at all sir Brian
Why do you think there is a feud with all that's it? This is not just a monetary revolution?
This is a social revolution so people have a lot of emotions around this a lot of people have put a lot of
Volunteer hours to get these currencies to where they are and they're very attached and that's and that's a good thing um
So I think that the human element is coming into it
But if we take a step back from that and just say okay, you know
What are the use cases for all of these crypto currencies and you see you know what there is a role for each of these
Currencies from corn cache Circuit Court Bryan the ultimate is at all-time highs a year
Do you feel like the alt market is at all-time highs?
No, you know. It's funny
You mention that read because it does not feel like that at all
Look even some of what I would call it the big cap alt something like a Z hash
Something like that
You know it's still below its all-time highs so I think a part of that is I believe
The way they're calculating it has something to do with Bitcoin cash is considered part of the alt market and that
Expansion and market cap is out
But it certainly does not feel like
An etherium as well right etherium is not at all time highs either
That's basically traded sideways for the last six months
So it was gonna take those kind of big cat balls to get going before we feel like we're in a bull market for alts
So speaking of big big cap oats. What are your favorite big cap oats at the moment?
Ah so right now single favorites on the privacy corn so Manero. See cache - to some extent although
That's had a bit of a run here so to me
I think those are the big ones for the next month or so. I you know they're again
There are use cases for these do if you're a major financial organization, and you want to send money
Do you really want the whole world to see how much you're sending and to where you're sending it
So I think there is a case-to-case for these privacy coins in this ecosystem
Brian there were stories that came out yesterday that China may be with or increasing the power
Costs to the Chinese Bitcoin miners. What's your feeling on the others rumors confirmed?
It's hard to get an actual confirmation when you're talking about news from China
Ah, but it does sound like there's going to be some kind of
crackdown might be too strong of a word, but effectively that Chinese miners have been getting a
Essentially free energy a very low-cost energy, which is the excess energy that the the energy company in the Sichuan?
Province didn't need
It looks like that might be coming to an end
So maybe crackdown is that the right word maybe ban isn't the right word, but certainly a squeeze on the profits coming from China?
But in general you know listen. I'm all for a more centralized mining a big
So I think in the long run. It's healthy perfect coin to have it diversified across the globe Brian
I cos a little bit out of favor at the moment. Are you looking at any icy O's that are coming up?
Oh the one that I did last year that is going to be coming out in December as cosmos and to me
That's a really exciting one because not only do you have the ability to create smart contracts like you do with aetherium?
But they have their inter blockchain protocol, which basically effectively makes any blockchain infinitely scalable
So anybody can spin up a hub on the cosmos
Blockchain and that hub can represent any coin in the ecosystem so to me
This is an essential building block for the digital economy, so cosmos is the one where the guy's paid much earlier this year
And it's only actually listening towards the end of this year Brian your fund the fund that you manage. How's your fund? That's
It's been a good year. We're up a little over 2000 percent for the year
So we picked a pretty good year to start a crypto hot billionaires buying Bitcoin yep
I was looking for billionaires
Who are out there buying Bitcoin and I bumped into Sir Richard Branson who agreed to give me an interview on the world's first televised
Cryptocurrency investment show here's what he said
So the blockchain has given rise to a whole new wave of entrepreneurs in fact
It's like a whole new way of doing business, and it's a place for Mavericks
So who better to speak to about this kind of entrepreneurship than Sir Richard Branson so Richard Branson we met earlier
And I couldn't shake your hand, but I will shake your head now
You've obviously heard of crypto trade it's the world's first cryptocurrency investment sure it's an honor to have you on
You're a big believer in the blockchain and TOD the blockchain is gonna change the world
Can you give us some insight as to what it is about the blockchain that that attracts you to it. Well I think blockchain is
very smart
I
Have to admit that I invested in early on
and
And the reason I invested in it was the amount of different uses that could be put to
I bred
Hernando de Soto's books Ananda DeSoto argues that
Unless you can actually have you interest in your home
it's very difficult for you to start a business or or create or have any wealth created blockchain have gone to
presidents of Egypt and other countries and said
you know we could we could register every single house in your country the
90% of your the houses that the people don't actually own they just built the houses on
random bits of land we can give them home ownership, and you can then create a a
revolution of
Businesses and people being able to start businesses from scratch
So when you look at blockchain blockchain actually gives rise to doing business in a very decentralized way
I think for the first time in history
We can really big big businesses in a collaborative way with people that maybe never even meet each other
Now you're all about business and having fun and letting people wear what they want to work
How do you think that businesses will work when sometimes the the operators of the business never meet face to face?
I think it'll make businesses more efficient
fortunately, I think airlines are still going to be needed and
People are going to need to sort of jump jump on a plane and actually come and socialize with each other
as well
so, but at least they know in the background that the
Blockchain is doing doing the job in
An efficient way that you guys investigating the blockchain and trying to apply it in your businesses
I think different virgin businesses are
Looking at it in different ways and and so they should be
You know we have Virgin Money. Which is a bank in the UK?
They're definitely looking at blockchain and in discussions to see how they can use it
But we also you know we we also invest in
in cyber currencies as well so
You know so you know
We're investors in Bitcoin and aetherium and some of some of those other currencies
So you were interviewed on Bloomberg a while back?
And you at the time you spoke about how positive you were about Bitcoin, and how well it's working
Do you believe that Bitcoin is working as a currency or do you believe Bitcoin is more a store of value?
I think I think for some people
Bitcoins used as a currency for other for others. It's
Just a place where they can
You know tuck tuck away some of their network
In the same way they might talk to tuck it away in gold or silver in
The last few years, they would have done a lot better to attacted away in Bitcoin
But we'll have to see what happens in the years to come
What is your prediction about what happens in these crypto in this Bitcoin in a theory or market at the moment?
They're not regulated and so most governments. Don't recognize them as currencies and commodities
Do you think that you know you've threatened big corporations before but do you think that?
Bitcoin in etherium certain governments, and and how do you think governments are going to respond? I?
don't think Bitcoin and etherium threaten governments any more than than cash threatens governments or
Or credit cards certain governments. I mean. It's just it's a different form of currency
and
I think sensible governments should welcome it
And sensible governments. I think do welcome it. I mean you know when
when when America confiscated some bitcoins from somebody and
You know they they immediately cashed them in and took the cash they didn't confiscate them and and destroy them
So I think you know I think I think these currencies have now generally been accepted by governments
They probably should have held on to the bitcoins and not and not sold them so quickly that probably made with a lot more in
The same way that Gordon Brown when he sold Britain's gold should have held on to that as well so
Yeah, I think but you're right the American government lost a lot of money by cashing it in and not holding on to it
So you spoke earlier about entrepreneurship, and you spoken if earlier about giving people loans?
Maybe the best start to start entrepreneurships now no doubt you're familiar with the ico mechanism or the crowd funding mechanism for for raising capital
Do you not think that's maybe a better way of raising capital than?
Asking for loans or asking governments to create loans you've opened yourself up to a whole world of potential investors
through issuing tokens on your business
Yeah, I think it's an it's an excellent idea an excellent way of people getting loans if they can
You know persuade boosts why the crowd to
invest in whatever they're doing and
And I think should be encouraged and obviously yeah
people who put money into these things have to accept that they may lose it as well as you know makes the money, but
You know, but I think you know I think I think it's already really good a really good way forward
Are you investing in any other cryptocurrencies as a group or any other blockchain related ventures?
The thing with virgin is it's involved in so many different businesses not quite sure what everybody's doing these days
But but all I can say within the big picture of things
is I'm a great believer in blockchain and
and
And actually Bitcoin, and you know I think there are absolute geniuses behind
These you know these products
and
I wish the real guy that you know invented Bitcoin would step forward, and you know be interviewed. I mean or
anyway, I would urge him when it well in his deathbed to at least leave behind a book about how his brain works because
He's an absolute genius and well now that I've interviewed Richard Branson. I mean if it only makes sense that he comes next because
wherever you are whoever you are come along and be interviewed but
Yeah, it's just it's just mind-boggling what he achieved and when did you discover Bitcoin?
When was the first time you heard about it?
And I'm very lucky because I live on an island in the Caribbean and I and some of the most interesting people in the world
Come and visit and they teach me
And so it's almost definitely
Propping up the bar on Necker Island that I first discovered Bitcoin
Makiura hedge fund manager turned into crypto man. Tell me how that happened when I was at fortress
one of my partners called me and asked me to look into this thing called Bitcoin and
Having spent my life as a speculator really trading currencies and commodities and equity indices. I I quickly looked and and
Figured you know what this is an amazing
technology that there were a lot of
anarchists and anti-government people
libertarians
that it was going to appeal to originally and
That the Chinese were starting to buy it and so it was literally just those simple three ideas
That I said hey this thing is gonna go higher
And so when we first bought it back in
2013
Was trading around 103 or $95 we bought Bitcoin, and it was a little bit of a lark
I said we'll buy it we think it'll go up. We think it's pretty interesting
and
I quickly called a friend who was unemployed at the time
or underemployed I should say and
Asked him to look into it in two weeks later
He called me back, and he said this is gonna change the world and so because of his enthusiasm
We bought more. It was still roughly a hundred dollars
and started digging in and
You know like a lot of things in life once you start making money at something
you start looking closer at more closely at at looking deeper into it and and
To be fair it was a very exciting time went right from a hundred to a thousand
And I said that was said it's gonna go back down
And they kind of drifted back down
And kind of went dead for two years you remember
You know up until fifteen Bitcoin it kind of sideways the theory mining is started
and
it was a little bit of just good luck that I left fortress or I
Sometimes like to say fortress left me
I met a guy one of my college roommates was one of the founders of aetherium I went over to his office
I was allowed by the energy in it and so I plunged myself
Full bore into it ever since Michael. You're a Bitcoin man, or a Bitcoin cash, man. I'm a Bitcoin man
coin
literally has the mantra and the
Use case of storoe value and right now
People are buying this as an alternative to gold as a starting point you think about each of these coins
As its own decentralized ecosystem with the sentient decentralized use case
The Bitcoin use cases store a value or money
I don't think Bitcoin will be used as money anytime real soon in developing the developed world a lipe works really good in China
Apple pay and other payment systems work fine demo here in the US
but as a store of value where
This unbelievable networking effect is taking place
I think it's gonna be very powerful so Mike you did a talk at the ethereal conference in San Francisco
And you spoke about the fact that the herd is coming in other words
I think what you mean to say was it the institutions and all the money is gonna start flowing into crypto
What gives you that idea? We're somewhat uniquely positioned in between
a 25 year institutional career
and this really dynamic young
Exciting crypto community and so here at galaxy
That's what we're trying to position ourselves at I know a lot of people in the big institutions. I mean this week
I was at one of the biggest banks in the world and I spoke to their 15 most senior people
Giving them a tutorial on on crypto and Bitcoin
They're all looking at how they get involved just last night Square
Which is one of the big payment systems here in the US and globally?
Announced that they're gonna allow people to buy and sell Bitcoin on the square platform, which is a monster deal?
And so I think you're gonna see PayPal and venmo follow
and as more more institutions make
access to the crypto ecosystem easier
You know the the viral effects continue to happen
So today we hit a new all-time high of two hundred and twenty billion dollars in crypto if I were to ask you to speculate
Because you're a speculator at heart
Speculate from you on the number at the end of 2018
You know 800 billion a trillion
so you think there's still 5x in the the crypto market between on in AI have a
More than 20% of my net worth invested in crypto across various assets B. We're building out
What we hope to be you know one of the largest institutional merchant banks in the space
We're doing a hedge fund
That's gonna trade the liquid part of it an advisory business and ICO business a venture business a hard money lending business
And so we literally are hiring two to three people a week right now
Taking a real bet that the market cap goes up
And I told the guys on the team I said listen if in two years the market cap is here or lower
We're gonna look foolish, and if the market cap is a trillion or two trillion or five trillion. We're gonna look really smart
Remember in 1999 the Nasdaq market cap got to six trillion before we had a correction
The battle between Bitcoin cash and Bitcoin and have no doubt. It's a huge battle if you post something on Twitter
That's for Bitcoin cash boy-oh-boy will those Bitcoin guys come and get you so vortex
Why do you guys feel that it's a battle between Bitcoin and Bitcoin cash, what's the drive? Yeah? It's kind of crazy, right?
It's really interesting
You know a lot of people are actually calling big Bitcoin cash and attack and you know there are reasons for that while it may
Not have been created as an attack of course
It would definitely was like a tool used as an attack against Bitcoin
And there is you know a number of reasons for that right they seem to have taken the name the logo the website
They've taken some of the hash power away
and no
It's really interesting even if Peter are risen right the chief scientist
That was a Bitcoin unlimited presumably Bitcoin cash
That says one of their main objectives was to take cash power away from Bitcoin to drive off the network congestion
So it's uh
Yeah, it's a bit of a battle out there
But I don't understand something and maybe you can give me clarity once and for all
So if you look at blockchain blockchain gives you the option to follow a chain
until you're not so happy with what the chain is doing and then what you do is you split the chain and you take your
Supporters with you, but in the process nobody actually loses because we all got one for one Bitcoin cash for our Bitcoin
So shouldn't you?
Bitcoin cash to succeed because then you'll have a Bitcoin that's valued at seven thousand US dollars today
And then you'll have a Bitcoin cash that's valued at one thousand three hundred dollars
Which is a lot better off than where you were a week ago?
Sure, right
And so I definitely encourage people who don't want to gamble right people who don't want the least amount of risk to just keep all
The forks right we want to just keep them all and so that that definitely is an interesting
dynamic for for investors to be able to say that they're going to have
Crypto dividends right coming coming to them so that is a definitely an interesting prospect
However like I say Vic
When cash is a tool right and so Bitcoin cash are was used as a weapon of attack against Bitcoin?
for a little while there again trying to steal the hash power away trying to steal the name the logo and the brand and I'm
all for innovation I love innovation
I hope that everybody creates a bunch of forks right and who doesn't love free money
But the problem of course is when the fork is not friendly right when it is used to attack the original chain
And that's where things are I start having problems stop. Why do you say the fork was not friendly? I don't get it
Just just explain to me the non friendly part of the fork, so just briefly um
Essentially what was happening here is that they installed something called an EDA
Which is that which allow us the the actual?
Difficulty adjustment of the the chain itself to to to very and what happens was they essentially gained it so then it would be more
profitable
Will so they pump the price right in addition to this they pump the price to make the miners come over to the Bitcoin cash
chain to incentivize them to do that because the miners will just go wherever is most profitable and
So in that regard they actually ended up taking around thirty percent of the hash power from Bitcoin
while simultaneously running a really huge internet wide social media defamation campaign against Bitcoin
That you're using a lot of terms yet, so first of all if you look at the first part of your statement
That's competition my friend. You know as a business you God, and you recruit suppliers
Which are the miners and you do that by giving them high incentives to join your network which is by giving them more Bitcoin cash?
What's wrong with it?
But you don't go and take their name in their logo and their website and then run huge defamation campaigns against them, right
Okay, now. I'm gonna talk to you about defamation okay
How do you feel that the Bitcoin cash guys have defined Bitcoin the biggest thing really is the the social media campaign?
That's kind of going around internet the internet and Twitter slack
Telegram I'm seeing reports of pretty much every single social media platform at this point being used by various paid
individuals to actually
Try to convince people that Bitcoin cash is the only Bitcoin is the original Bitcoin and that of course is?
You got Bitcoin Bitcoin has the name Bitcoin and Bitcoin cash has a different name Bitcoin cash
It's like Lara and Lara Lee you know it's like a different name
I mean, I mean it just sounds ludicrous, but what's it? You don't have much more time. I want to ask you another question
What's wrong with eight megabyte blocks? Why not let's let's let's scale Bitcoin
Let's have eight megabyte blocks
And then you know what we can do we can put lightning or off chain solutions on to eight megabyte blocks
And then we can really have this monster
What's wrong with it and there has been a?
Large amount of research done on larger blocks and basically what the research comes out to is that when we go over four megabytes size
We start to see nodes
Drop off across the world due to bandwidth issues due to latency issues so that the blocks can't actually propagate fast enough across the planet
And what this does is it ends up further?
Centralizing the currency and that's the whole point of Bitcoin right as a decentralized censorship resistant money
that is not in control of any government or
corporation and so when you start taking away the chipping away at those properties it starts to the
Original audience here that there really wants the censorship resistant money starts
Starts attacking you and so really that's the biggest thing is that these these blocks. There's no actual proof that
Increasing the block size is actually good for the Bitcoin or even safe and so there are much more
Better ways much more clever and better ways to optimize that we want to do instead of a big heavy-handed approach by only
Sticking only changing one number in a hard fork if we're gonna do a hard fork
We are going to do some amazing things
We want to put all sorts of stuff in there and not just increase a number be honest with me my friend
Are you still holding the Bitcoin cash that you got when when when the folks split?
But be honest no now. I'll be honest with you ran absolutely no. I am remember
I really believe that crypto that I really believe in speech
I believe that money is speech and I believe that crypto is free speech and so you really have to execute on your beliefs you
Have to take a stand and really uh you know
Otherwise you're just gonna be on the sidelines and for me
Taking a stand was selling my be cash as soon as I humanly possibly could
The battle between Bitcoin and Bitcoin cash we heard the Bitcoin side of the of the coin
And now I've got someone who's wearing a bit, bch. Please shirt. I can see trouble happening Roger Jake
Thanks for joining us all the way from Tokyo nice shirt
So the Bitcoin clan say that Bitcoin cash has hijacked
Bitcoin by using the name how do you respond to it?
I don't think anyone owns the name dick winch it's a free market process
And I think the coin cash is just as much a claim
To being Bitcoin as outlining Satoshi nakamoto's white paper as Bitcoin core does what's the big issue with increasing block sizes?
I have no idea really it's quite baffling. I think ultimately it comes down to control over the protocol
Soon some more of the reasons might sound more tinfoil hat territory
People talk about block stream and their sidechain products so explain to me
What happened this weekend the price of Bitcoin cash went from?
$600 before the weekend to the high of somewhere around two thousand seven hundred dollars and then came back down to one thousand two hundred
Dollars and that happened in about 48 hours. It was money heading for the exits out of Bitcoin
For the first couple months that Bitcoin cash existed you could see
There wasn't much of a correlation between the two prices
They kind of tracked each other right, but this past weekend you saw that money was bleeding out of BTC
Directly in the Bitcoin cash. They were inversely correlated
I think people were panicking they were realizing the problems the Bitcoin chain is facing and
Bitcoin cash is looking like a good safe alternative right now
So I agree with you about the process being inversely proportional on the weekend
But if I look now the Bitcoin cash price is stable at around
$1,300 and the Bitcoin price is back up over $7,000
Don't we all win because I've still got my Bitcoin enough to love my pet corn cash
So don't we all win when this happens? Yeah? That's great?
It doesn't have to be a perpetual battle between the Bitcoin core folks and the Bitcoin cash folks
so the Bitcoin guys who on the show a bit earlier said that you guys are cursing miners by giving miners an
Unfair or a very high reward for mining your product, and then it's artificial. How do you respond? There's nothing unfair about it?
We actually do pay higher than the base block reward
But all of that money comes from the insanely high transaction fees that the users are paying
So really it's the users. Who are unfairly subsidizing the miners and
Actually as a mining pool. We keep some portion of the mining fees for ourselves
We make profit. We're not paying people off. We're running a business
Okay, last question for you my friend like the the claims that the Bitcoin guys have against the Bitcoin cash guys is that Bitcoin cash?
Is actually centralized they claim that you have a CEO and that you're not in the true spirit of blockchain or Bitcoin a truly?
Decentralized organization the two systems are virtually identical I mean if Bitcoin cash worked from the same codebase as Bitcoin did
As for the CEO claim, I don't know if you read Rick balcony's documents, but it was total satire and a lot of the people
Bashing it very obviously did not read it
If they say it's centralized I would like to see them point out by what metric they're saying that
Okay, you know what I'm gonna. Do I'm gonna buy a set of boxing gloves, and I'm gonna invite you into the studio
And I'm gonna have a Bitcoin guy here, and I'm gonna have a Bitcoin cash guy here
And I'm gonna let you guys box it out in the studio in the coming future Jake
Thanks for joining me look forward to seeing you again soon my friend
that's all we have time for here today a big round of applause to our in-studio guests from the
johannesburg chapter of the young presidents organization
I
Hope I've been able to answer all your crypto related questions if you do have crypto related questions
No matter where you are in the world
You can get me on twitter at crypto Mandarin, and I'll be available to answer all your crypto related questions
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until next week my friends trade
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