[00:00:00] Luke: From privacy concerns to limitless potential, AI is rapidly impacting our evolving society. In this new season of the Brave Technologist podcast, we’re demystifying artificial intelligence, challenging the status quo, and empowering everyday people to embrace the digital revolution. I’m your host, Luke Malks, VP of Business Operations at Brave Software, makers of the privacy respecting Brave browser and search engine, now powering AI with the Brave Search API.

[00:00:29] You’re listening to a new episode of the Brave Technologist. And this one features Austin Campbell, who is a founder of Zero Knowledge Consulting and a professor at Columbia Business School. Previously, he ran the Stablecoin platform and portfolio management at Paxos and acted as their chief risk officer.

[00:00:44] He’s also managed fixed income trading desks at J. P. Morgan and Citi, covering over 100 billion of cash derivatives. In this episode, we discussed opportunities for crypto and AI to work together, specifically how blockchain can help mitigate some of the risks with generative AI, [00:01:00] how blockchains provide an upgrade and transparency to the opaque financial system, the current state and issues with regulation in the crypto space, and how to get started in the, in the crypto space and mistakes to avoid.

[00:01:11] And now for this week’s episode of the brave technologist. Hey, Austin, welcome to the Bray technologist podcast. How you doing?

[00:01:19] Austin: I’m doing quite well. Thank you for having

[00:01:21] Luke: me. Awesome. Well, I appreciate you joining today. And I think, um, you know, we’ll give a whole bunch of bio, but, you know, I, I came into knowing Austin through Twitter X, whatever we’re calling it these days, you know, the, the Battleground of battlegrounds.

[00:01:34] But I think, you know, you talk a lot about blockchain and crypto tech, but one of the things I found super interesting is you have this really kind of like a developed background in this space. So how about you share a little bit about how you kind of landed into, into the blockchain space and a little bit of

[00:01:48] Austin: background.

[00:01:49] Yeah, it was definitely a winding road. As I joke with some of my friends in the space, I almost feel sometimes as if the space came to me, so to speak. Which is to say, I started way back in the day in [00:02:00] reinsurance studying exotic perils. So at the time, this was in the very early 2000s, terrorism risk was quite topical, pandemics, things that have come back around in some ways.

[00:02:10] Got into that in hurricane, earthquake, natural catastrophe risk, which eventually led to a lot of thinking about balance sheets, credit and counterparty credit risk. So after the financial crisis and after a quick jag through business school on my part, I ended up at JP Morgan where for about a decade I was part of, and then running insurance like trading.

[00:02:30] And one of the main products we own there was something that. Crypto people, this will sound familiar to you, was an instrument that had a massive portfolio of underlying bonds that was only supposed to trade at a stable value that participants could trust and get in and out of and not break the peg, right?

[00:02:47] So, as I joke with many people, I did stable coins before they were on a blockchain. What I was specifically doing is something called stable value. If you look in your 401k It’s usually in there. It’s the replacement for a money [00:03:00] market fund. After that, I ended up at a firm called Stone Ridge, which is the parent of NYDIG if anybody’s heard of them in the crypto space.

[00:03:08] And that’s really when I went from an academic interest in blockchain to doing it with my hands. There was a Bitcoin custodian there. We were thinking about lending agreements back to counterparty credit risk. How do you do these things safely in a way where many of the assets are on blockchains and from there to city and digital assets for a short while.

[00:03:26] And then at Paxos, where I was the head of portfolio management, the chief risk officer of one of our entities. So there, I literally started doing staple coins. I ran BUSD, USDP, and some other things for a while. Now I teach and basically advise people in the space. Yeah, I

[00:03:41] Luke: mean, I think we can step back a bit to, I think, like, you know, being a JP Morgan post financial crisis, right?

[00:03:48] Like, I think, like, if we look in, and there’s just this kind of ongoing dialogue in, in the crypto space around or, or from the critics of the crypto space around, like, Oh, well, like, [00:04:00] what’s the purpose? What do you even need a blockchain for? Let me put this question to you. Like, you know, had we had this technology, Okay.

[00:04:06] Yeah. And it’d be somewhat as accessible as today back when we had that financial crisis in 2008, 7, wherever you want to frame it. Do you think it would have saved us pain? Do you think that it would have changed the dynamic in a substantial way? I mean, I think this is one of those things where when I personally look at this, it seems like I just know from seeing how people look at the data, like all these sleuths, right?

[00:04:26] Like when something smells funny, you have a bunch of different independent people calling the smell out. Like how much do you think that this technology would help? Avoid future financial crisis is like the one we had in two thousand seven eight

[00:04:40] Austin: certainly. I think it would help avoid issues of that magnitude.

[00:04:44] I think one of the things to understand about blockchains is that they bring a couple of benefits compared to traditional financial systems. What is transparency like? Traditional financial systems are fragmented and often quite opaque. One of [00:05:00] the problems we had in 2008 was, for instance, nobody really knew until after the fact how much CDS AIG had been selling.

[00:05:06] And when it turned out that the answer was like, actually pretty much all of it. Now it becomes a huge and critical issue if AIG itself fails, because that’s going to cause this cascading chain of exposures across the space. With something like a blockchain, even if you did not know specifically that it was AIG, knowing that, hey, wait a minute, somebody out there is selling a tremendous amount of this stuff and concentrating risk is something that counterparties could have reacted to, that regulators could have reacted to preemptively.

[00:05:35] Two, I think the ability to have Instant settlement with finality is really underestimated both in like the traditional financial world and by in some ways proponents of blockchain technology. Like there are many problems in traditional finance, like all the way back to like the failure of Herstat that Leave people exposed to things like overnight risk.

[00:05:57] So what that means is, Luke, if I make a trade with you at the end of the [00:06:00] day, you’ve got another leg of that trade that’s settling the next day and you fail in the middle of the night as an institution before the other leg settles. Now what? That’s just extremely messy to unwind when you have.

[00:06:12] Instantaneous atomic settlement with no counterparty credit risk as blockchains can bring, that is another strict, like, structural upgrade for the financial system that would have helped. So my thesis on that is basically, I don’t think blockchains prevent failure, I think what they will actually do is likely make Smaller failures that are less damaging, more frequent, but large failures that are extremely damaging, less frequent.

[00:06:39] So what it ends up with is by having a little bit of volatility, the system gets stronger and more resilient. Whereas when you hide it for 20 years and then it all shows up at once, everything breaks spectacularly. And I think bringing the transparency will help us have Call it more sustainable behavior in the world.

[00:06:57] Luke: And so you see this as something is not only [00:07:00] everyday consumers and users use, but also something is financial decisions we use. Like in, in, I mean, to a degree, we’re kind of seeing that in practice now, right? When you look at what’s out there now, what gets you most excited? I think, uh, in the, in this blockchain crypto space, you know, somebody from your background.

[00:07:15] Austin: Yeah, I would say for one, I, I would actually tell you, I think more institutions want to use it than are allowed to. In some ways, the foot dragging is from the regulators who I think don’t fully get the punchline right now because if they deeply understood what the technology could do, they should probably be mandating that people use it as opposed to trying to slow it down because it solves a lot of their key problems.

[00:07:36] In terms of what I am excited about, Okay. I think there’s three different vectors that I would talk about. One is just the democratization of access to a financial system. And I don’t mean that just in the traditional sense of like, Oh, let’s get bank accounts to the unbanked, but actually sort of stepping, you know, one level up the chain and saying the current system is.

[00:07:57] Difficult because it’s very closed, right? Like if I [00:08:00] have a great idea for how I want to build something, but that would need to rely upon the JP Morgan chase app in the current app store, you’re just dead on arrival, right? Whereas an open source like system where you can use things as money. Legos gives people the ability to plug in, to build, to experiment, and to join in a way that the current system closes them out, it breaks down the oligopoly, so to speak.

[00:08:22] So I I’m actually very excited about the implications of that. To exactly what I was just talking about, which is instant settlement without counterparty credit risk. I think that’s not really well understood as to how powerful it is to have 24, seven real time transfers. But when that gets going, I think many of the structural issues that we have right now with payments can be sort of fixed.

[00:08:45] If it You know, we’re to be thought of that way. Three, the concept in general of self custody is extremely powerful to me as somebody who worked at one of the largest banks in the world. The reality is most people, you know, you have this [00:09:00] mental model. If it’s really simplistic of, Oh, I give the bank a dollar and they like, take it in back and throw it in a vault.

[00:09:05] Definitely not how banks work when you give them a dollar. They take that dollar and go loan it to like a billionaire building commercial real estate. So like I, I asked this question sometimes to reveal the value of crypto to people in the institutional space, which is, do you think you should have to lend a billionaire money to buy a coffee?

[00:09:25] Right. And the reality is, in the current system, you have to do that. That’s how banks work. Like, that’s what your bank is doing, and to use the system, you have to use a bank. So I think getting to a model of self custody, where people have more control over what’s done with their own money, will structurally sort of start.

[00:09:43] Call it reducing the incentives for really large scale borrowers, billionaires, giant companies to be subsidized and giving the power back to the people using the system for pay.

[00:09:53] Luke: One super interesting thing I think people really don’t understand either is, you know, when you make that wire transfer, all [00:10:00] the convoluted kind of process that’s involved, right?

[00:10:02] Like, and, and, you know, it’s not as a straight line from like, Bank a to bank B, right? Like, I don’t know, can you shed a little light on that for folks and give them a sense of kind of how some of that works? Because I think it’s one of those things, like you were saying, it’s super powerful about this technology, but it’s not very well understood.

[00:10:18] Austin: Yeah. I mean, even where are you sending a wire from? So like maybe a great example of this. I have a friend named Obeid Malekhan, he’s another professor up at Columbia. And at one point he was tracking the journey of an international wire that he attempted to send, right? Where, what happens is he goes to his bank, he fills out the paperwork, he gives them the instructions.

[00:10:36] for his account and the receiving account. And then it vanishes into a black box. And what’s going on behind the scenes is it’s gone from his bank to a large correspondent bank. That’s going to send it to another large correspondent bank. That’s going to send it to the local bank on the other side of things like that is a four like hop journey that you’re taking just to send an international wire.

[00:10:57] But here’s the crazy part. None of them [00:11:00] can tell him at the time where they are in the process. Like, the parts of the system don’t talk to each other. So here’s what happens with OBI. He sends it, there’s silence. And like four business days later, it magically appears. But every now and again, like five business days later, it’s just gone and nobody knows what happens.

[00:11:17] And it’s going to take you three months to find your money because somebody screwed up, right? Or God forbid, thanks to our current regime, somebody like, Oh, I identified like a BSA AML concern. That’s not real. And now your money is like held up at some compliance process until 2088. Right. And so the reality is the system is so opaque.

[00:11:37] And the part that concerns me that blockchains really help with is even internal to the system. They don’t talk to each other. Well, right. It’s not like it’s opaque to you as the consumer, but there’s perfect synergy on the backend. It is quite the reverse. Like this really is held together with like.

[00:11:51] Bubble gum and duct tape in many ways. Yeah.

[00:11:54] Luke: No. And I think that’s one of the things that’s really not well understood. Like people kind of assume, Oh, it’s gotta be this. It’s probably [00:12:00] this like perfectly kind of, you know, traceable thing. And, and everybody knows everybody inside these systems and it’s

[00:12:05] Austin: totally not.

[00:12:06] Unwinding the bankruptcy of Lehman brothers. They were people who spent months trying to figure out what the heck had happened with specific trades. Cause like you’ll have had a bond and you’ll have like repoed it, which is overnight lending through Lehman. And you would go to Lehman and be like, where’s my bond?

[00:12:22] And they’d be like, well, we repoed it onwards. And it’s like, okay, now I got to find that person. And then the person they repoed it to, repoed it to. And you’re like unwinding this giant chain, all of which would have taken like five minutes with a block explorer. It’s

[00:12:36] Luke: just wild about it. I mean, I think, and that’s, that’s kind of the, you touched on this earlier too, kind of with the, with the regulatory regime, right?

[00:12:42] These were all very compliant, top rated instruments that collapsed, right? Like, and, and I think that’s kind of one of the things, the technology behind blockchain technologies is so powerful in that you get all this transparency included as part of the tech, you’re not having to rely on all these different parties, [00:13:00] whether they’re, you know, a banker or not, it just works.

[00:13:03] What do you see is kind of like, is it a lack of education by the regulators? Is it, do you think it’s something bigger than that? Like what, what is, when you look at what’s happened, let’s just focus on the US, right? Because it’s kind of where a lot of attention is like, what, what do you think the big snag is with regulation and crypto in the US from your

[00:13:19] Austin: point of view?

[00:13:20] So I think there’s a couple of problems that crypto has helpfully kind of brought all of them to a head simultaneously in the United States. So I’ll start with the one and like, one of the things I often urge people in the crypto space to do is like zoom out, right? Rather than assuming it’s all about crypto, like zoom out a little, let’s see what’s going on.

[00:13:37] So U. S. banking regulators and U. S. securities regulators kind of face two problems with technology in general. One is that they are super underpaid. Which means retaining talent who understands this stuff is nearly impossible. So I will tell you the salaries of every single person at the CFTC and SEC are public.

[00:13:56] You can go find them. You can look them up. I made more as an [00:14:00] associate at JP Morgan than the highest paid person at either of those agencies, which is scandalous. Right in terms of what we’re doing to sort of the quality of public sector servants as a result of that. So one I would tell you they’re generally not ours.

[00:14:14] Because if you’re an A plus technologist, you’re not working at one of these places. Like, maybe people will take a 20 30 percent pay cut to go to government, but 90? Like, it’s just too much. So, that’s problem number one. Problem number two, regulators get judged on and blamed for the appearance of risk, not the actuality of risk, which is important to understand.

[00:14:34] That is to say, nobody has ever gone to a regulator and said, Hey, good work heading off all these things that never happened. You guys deserve huge raises. That’s right. News article is about how your heroes, like none of that. So like there was an extraordinary effort post crisis between the federal reserve and several other people around money market reform.

[00:14:54] It’s probably solved a huge amount of problems that have, as a result never occurred. Almost nobody knows it happened. [00:15:00] Right. So they don’t get credit for the good things, but when things go wrong, they definitely get blamed and they get blamed loudly. And in the most. uninformed ways possible. If you don’t believe me, just go read Twitter, right?

[00:15:11] Or whatever we’re calling it now. And so if you’re sitting somewhere like the OCC or the Fed, you only own the downside. And so what you’re trying to do is furiously avoid the appearance of risk, not the actuality, the appearance of risk, because you’re going to get blamed either way. And then I think the third part is there is a strain of technophobia within many of these US regulators, like somehow this sense that if there’s like paper tickets and we can expect them somehow that’s better.

[00:15:38] Like when it’s in the computer, it’s some sort of magic. Like I can’t look at it with my own two eyes. And for people who often are like investigators or come from, you know, a background of thinking about like linear sorts of things and people problems, the technological aspects of this are just. Often distrusted, but I think unfairly so.[00:16:00]

[00:16:00] And so all of those things come together when you hit crypto, it’s hard to understand, even for experts, it’s very fast moving, there is a lot of risk in the space. And like, let’s be honest, as much as I’m a believer in the technology, there have been a lot of scam artists, bad actors, et cetera, in the space.

[00:16:17] And then these people are technophobic to begin with, like FinTech in general is still distrusted, like PayPal. It’s still a thing that some of these people are like, I don’t know about that thing. Right. Come on, PayPal’s fine. And when all of that comes together in crypto, you get this incredible negative reaction like we’ve had in the United States.

[00:16:37] Luke: Yeah, no, I think that makes a lot of sense. There’s also a lot of experimentation going on, like with some of the adoption of this technology, right? You’re starting to see kind of pilots for central bank digital currencies or CBDCs as people on Twitter will see people talking about them, like Do you see, like Cbdc is working with crypto, like you, what is your take on cbdc is like, as somebody who studied the space and, and [00:17:00] studied economics right.

[00:17:01] In general, like is it something that you are looking forward to or something that like, I I, because I think there’s some assumptions out there that banks really want this, or, or the government really wants this. What’s your take on, on those positions?

[00:17:14] Austin: I would say, I think CBDCs are a really profoundly misunderstood topic, especially by many of the proponents of CBDCs.

[00:17:21] So number one that I ask people is, when you say CBDC, it has basically no specificity whatsoever, because people use that to mean many different things on the spectrum of money. So question number one is, what exactly do you mean, and who do you think is going to use it? I would say as a general statement, one of the advantages of paper money is that like crypto, it is self custodial, right?

[00:17:45] The dollars in your wallet are held by you. They are dollars in the wallet. It’s non revocable and it’s fungible, right? Like all of these things could be easily traded for other things. I think if you were to make a CBDC that essentially was exactly [00:18:00] that, but digital, It’s likely a huge upgrade because like dollars are stolen, like physical dollars are still far and away the best tool for crime.

[00:18:08] If you’re going to commit crime, like not financial advice, but if you’re committing a crime, don’t use a blockchain use physical cash. It’s way harder to trace. And Right, so, and then there’s theft, there’s destruction, like, just damaging currency, loss, like, all of these could probably be ameliorated to some extent with, like, call it the CBDC digital equivalent of a dollar.

[00:18:30] On the other hand, all the way at the other spectrum, Is people who imagine things like programmable money that is completely controlled and traced by the government and like you can set the interest rate, you can let people only spend it on certain things or take it out of people’s wallets if you want to, I would tell you as a general statement that will not be perceived by people as money.

[00:18:52] That is some sort of contingent claim against the government upon the whims of whatever is going on with the system. It is [00:19:00] not the same as essentially permissionless self custodial cash. And so, in a strange way, if you’re thinking of this in economic terms, your programmable CBDC should trade at a discount.

[00:19:11] to your non programmable self custodial CBDC. They are not the same thing. And so as a result of that, I think my answer on CBDCs is, what exactly do we mean? I think there’s very good implementations that can be incredibly helpful that would be good for everybody. And I think there’s very broken implementations that could do terrible things to the economy.

[00:19:29] And then there’s a lot of confused things in the middle that kind of appear to be of like science experiments without an actual purpose. So it, I was going to say, I know that’s an economist answer that will satisfy no, no, I

[00:19:41] Luke: think it’s great because I think kind of, it helps me kind of segue to this where it’s like, okay, you know, a lot of the great things about crypto around, you know, having something that auditable and transparent, right?

[00:19:51] Like by the public is, is just those properties are awesome. But like, if we want to move towards something that’s more like, Okay. A digital dollar or, [00:20:00] or digital fungible kind of currency that you can transact on privacy is going to have to be a part of that. Right. Because, you know, when you give up that cash for something online and if it’s trackable through blockchain, like if you don’t protect the privacy of the people that are using it, then.

[00:20:16] It’s like giving over everything right like you’re you’re not only I mean only like it and we see this as being a privacy browser privacy company in general right where the amount of your data online that you’re giving out to everybody whether you know it or not is like massive but if you couple that with all the financial things especially things that you might don’t cash like that’s.

[00:20:34] Really the whole playbook, right? Like, so are you seeing interesting movement around privacy with, with crypto, like what’s your take on this? I mean, part of how we got introduced is cause you’re also a privacy nut too. So I’m just going to kind of let the folks know about that, but are you seeing these things as kind of hand in glove, what’s your take on where things are at with privacy and, and cryptocurrency?

[00:20:53] Austin: I was going to say, it’s a pretty fractured space. I think one, because there were some fundamental misunderstandings at the [00:21:00] start of, Call it the crypto evolution about what privacy really is like people assumed. Well, this is my wallet. Nobody knows what my address is. Therefore, all my transactions are private.

[00:21:12] As it turns out, that’s not how things work, right? Once you start interacting with people who made themselves be known, or you go through some sort of custodial solution like an exchange that has to KYC you like I will tell you right now, well over 95 percent of all wallets are doxed things that you definitely don’t think people know are yours.

[00:21:30] They certainly know where you are. So pseudonymous like privacy is not enough. And I think there is a growing realization of that, especially with the work of firms like, you know, the forensics companies and like Chainalysis, TRM, people like that. Or, you know, God forbid, the intelligence companies like Inca Digital.

[00:21:48] The amount they know about people is shocking. And I would tell you, I think we are at the tip of the iceberg with people in crypto slowly starting to chew through that problem and realize, wait a minute. [00:22:00] The public blockchain has some very good properties for traceability and transactions. But we really underestimated that public part of the public blockchain.

[00:22:10] We need some privacy enhancing solutions in the long run that prevent everybody from being able to unravel your entire and complete financial history ever. Right. Which if you put it all on a blockchain using something like a CBDC is how it would currently work. Zero knowledge proofs are an important part of that.

[00:22:28] Like here’s a good example. Being able to use something like a mixer, I think is incredibly important for privacy reasons. The problem is not the technology of a mixer, the problem in the case of something like Tornado Cache is specific backers using it. And so one of the things, and this is a push pull in privacy in general, Is we need to separate the technology from the actors and understand there are legitimate concerns on both sides and we’re sort of Satisfying for a solution that is as much privacy preserving as we can while interdicting as much genuinely bad [00:23:00] activity as we can With like definitional problems on defining what those two things even mean Crypto right now is only just starting to address that I think you’re seeing work in like the zk login space things of that sort that will be helpful.

[00:23:14] But again Financial ecosystems are extremely complicated and anything where you’re going through centralized intermediaries at some point, there will be a point to figure out where things went and what they are.

[00:23:25] Luke: Yeah, that’s a great, great point. How much do you see crypto and AI having a future together?

[00:23:31] Right? Like while we’re hitting all these big, you know, big flag waving topics, but you know, like, do you see a coupling there or or some some useful usefulness with the blockchain with the AI space?

[00:23:42] Austin: I do. And I think it comes in a way that maybe people don’t always expect. So, you know, I’m not like a, call it, Oh, what’s the right way to say this?

[00:23:50] I make everybody angry because I’m like an AI moderate, which is to say, I don’t believe the majority of the promises of AI are like imminent to the near [00:24:00] future. But I also don’t believe the hysterics and all the doomerism. It’s just a tech, right? If you look at the history of any technology, it’s massively overinflated promises followed by some realization followed by a bust followed by building and realizing some but not all of the original promised benefits, right?

[00:24:16] Like that story genericizes to any technology. AI will be the same. I think the main problem AI will create is the ability to mimic writing and communication styles and appearances decently, convincingly, because there will be tools to detect these things, because, you know, it’s a cat and mouse game, both sides improve.

[00:24:36] But like to the average person, you could get a phone call from, quote unquote, Your dad saying that he’s had some kind of emergency and needs money. It’s not actually your dad It’s an ai generated voice The whole thing is fake and the ability to determine whether things are true or not Cryptography definitely provides a way to do that blockchains can be part of the solution with regard to id Identifying [00:25:00] unique persons and having some sort of cryptographic indicator that they’re real.

[00:25:04] There’s also another element to AI, though, which is that one of the things that’s going to be true about AI is it’s really, really, really good at generating spam and potentially relatively convincing spam. And a blockchain model where you have to pay some Maybe even de minimis but non zero amount to use it can also be very effective for fighting that because it prevents you from creating systems where the cost of messaging is either zero or borne by the recipient and those are going to be a real problem in the AI world as well.

[00:25:32] Yeah, it makes

[00:25:33] Luke: sense. Makes sense. Where do you see, like with crypto, you know, I won’t say five to 10 years because that’s crazy, like, you know, six months feels like three years in the space, but I think like, let’s just back this to 2024, right? Like where, where do you see, you know, biggest developments in the space happening in the next 12 months or even six, any kind of predictions on that front?

[00:25:53] Austin: So one is that I think real world payments in crypto are going to start to become a thing. We have now built enough of the [00:26:00] primitives there that we’re getting into the realm of these being feasible. So previously they were too slow, too expensive, not ubiquitous enough with instruments that you’d actually want to use to pay people.

[00:26:14] And then the last part is, even if you solved all of that, the user interface was hot garbage, so people aren’t actually going to use it. Right, so like, you know, and like, you know this as a browser company, like, a shocking amount of this is just user stickiness and the user journey of getting people to use things, almost many times more than the quality of the underlying thing itself, right?

[00:26:35] Right, right. I think these forces are all coming together in a way where we’ve now got high speed blockchains that have been reliable with decent uptime that have been used for a long time. Like say, Solana. We have stable coins that are now properly regulated and designed in a way that institutions will start trusting them to take payments.

[00:26:53] A great example there is P-Y-U-S-D, right? If you will take PayPal as a payment option, you will probably be willing to [00:27:00] take P-Y-U-S-D. In fact, P-Y-U-S-D is probably safer. PayPal itself because of how it’s held on the ballot sheet. Right? So this is actually an upgrade and, and that’s good. But the other part I’m starting to see now is usability of these things coming in a wave of apps that just feel to people like normal apps, right?

[00:27:20] Like they’re abstracting away the fact that you have to be using crypto to use them, which I think is very important. So if you’re looking at projects in the space, things like. The folks at Mistin Labs, right, they spun largely out of meta understanding things like ZK login, where like, I want to be able to log into my crypto wallet just with like my Google account.

[00:27:40] I don’t want to have to memorize this like secret phrase and like write it down and put one word in 24 geographic locations. Like, no, and by the way, if Google gets compromised, we’re all fucked anyways. So the reality is, right, like. Let’s just use that. And then it feels to people like using a normal thing, again, with something like PayPal, a mobile [00:28:00] payments app, or like, if you look at the guys doing Cinco down in the Bahamas, that’s the largest mobile payments company in the Bahamas that has launched a thing to just use stable coins to do end to end payments, things like that are coming and feel like the sorts of things that my mom could use, and I think that is essential for adoption into payments.

[00:28:17] And we’re. Finally, just starting to breach into that. Now, one caution I’ll give people is financial markets transformation is slow, way slower than people think. It takes many, many years, potentially decades. But the flip side of the coin is the eventual scale of the changes are probably larger than you expect as well.

[00:28:36] So, like, the human brain is bad at both sides of understanding.

[00:28:41] Luke: Yeah, no, I think I think it’s well put to and it definitely seems like we’re kind of hitting this new phase where, you know, okay, one thing the crypto space is great at doing is kind of like, uh, playing incentives and getting you to try something right like and that can have some bad qualities to write like, you know, people getting scammed and all those types of things, but it definitely feels [00:29:00] like in the space right now we’re hitting a new phase where it’s like, look, without usability.

[00:29:05] This is all just a big science experiment, right? Like we’re not going to get anywhere just catering to, you know, a small cohort of really, really early tech adopters. And with something this powerful, like that would be the biggest shame from my point of view, as if we didn’t get to that next phase, because the, for every reason you just explained around transparency and how this is such a upgrade to the system.

[00:29:26] So I think, yeah, I think the space too, right. Needs to mature a bit, a little bit. Like, I think some of your tweets are helpful on that front too. I mean, like, do you think we can get out of that bubble in the next couple of years? Or what’s your take on that? I mean, from, from your point of view?

[00:29:41] Austin: I do think so.

[00:29:42] And I’m seeing a couple of things that are making me increasingly optimistic there because To start with the vision, like take a project that’s near and dear to your heart, if that could somehow be connected to PayPal, where what happens is people using Brave to browse, earn BAT for watching ads, and then it just magically shows [00:30:00] up in PayPal and you can pay with it.

[00:30:01] You never need to think about it. Like an end to end integration. Even if what’s going on in the background is you have your own private self custodial wallet. That wallet is attached to your browser. You’re earning things. There goes through a backend. When you want to use it to pay for it into like a PayPal wallet that then converts it into dollars and pays somebody fine, that’s the backend.

[00:30:20] People don’t want to think about that. They just want to tap their phone and pay for something that takes a lot of responsible actors along the way. But what we’re seeing now is two things that make me very optimistic one. A cohort of regulators who are actually understanding this problem and approaching it, well, they’re largely in Asia.

[00:30:36] But if you look at the efforts of like, to pick three who I know and think very highly of, the MAS, the Hong Kong Monetary Authority, and the JFSA in Japan, they are all now getting to the point where they’re like, Oh, this is here. This is here to stay. People are going to use it. We need to think about rules for them to use it productively.

[00:30:53] What that means is then what I will call adult companies like the Braves of the world, like the PayPal’s of the world can get in the [00:31:00] pool and start doing things because you know when you’re there now you’re doing it in a way that is like fair and reasonable, you’re treating people the right way and you’re compliant with the laws and the laws make sense.

[00:31:10] It’s not things written in 1940 for paper tickets and so you’re in a world where, okay, we can do these things responsibly and people want us to and we can build real products and. I would tell you these ships have not really come together until the end of 2023. I think the one helpful thing about 2022 is by flushing a lot of the bad actors out and revealing a lot of the risks it’s caused people to ask some deep questions.

[00:31:36] And I think we’ll see a higher level of responsibility going forward in the space and to some extent legally enforced to some extent community enforced.

[00:31:45] Luke: Makes sense. Makes sense. And there were enough folks that churned on this last, this last bull run where it was just, that was the most painful thing for me as somebody working in the software space is just seeing, gosh, it’s such a hurdle to get somebody into the wallet, doing something.

[00:31:58] And then all of a sudden they don’t [00:32:00] realize that just the cost of doing the thing is too much for them to be able to do anything. Right. So, so, um, yeah, I think I totally agree. I think we’re, we’re kind of at that phase. Folks might be kind of new to crypto or, or might be tech forward or maybe on the economic side, they’re familiar with that, but aren’t really too familiar with, with resources or things like that.

[00:32:17] Are there any that kind of come to mind for somebody that is coming into the space that you’d recommend that they check out or any, uh, you know, websites or people to follow on X or whatever?

[00:32:28] Austin: So, that is a much harder question than it should be, which is one of my complaints about the space. In terms of good resources from an ideological and like thought leadership standpoint, I would actually follow my friend Omid Malikhan.

[00:32:43] He’s written a book called Re Architecting Trust that explains why he thinks this system matters. And what is important about it? I would tell people, I don’t agree with a hundred percent of what he says. We’re both college professors. If you put the two of us in a room, we have four opinions, but as a general statement, I [00:33:00] think his book is a good underlying framework and like ideology for how to think about decentralization and what’s important about it.

[00:33:08] So I do like what he has done. There’s an effort currently out of the folks over an avalanche called owl explains where they’re trying to just get better at explaining some of the things in this space. I think that’s a very. Ever I would tell you Coinbase Institute continues to work on things. I find them very ideologically like reasonable and sane in terms of Twitter.

[00:33:30] Just honestly go look at the people I follow. Basically you should probably just follow the majority of them. And I don’t mean that in some like self aggrandizing way. I mean that at heart, Pretty low tolerance for BS. So most of the people I’m following probably have relatively informed and coherent takes.

[00:33:48] I do not like people who are either call it just promoting things without being fair about risk and downside, or people who are just like, everything is terrible. Crypto is a scam because neither [00:34:00] of those are true. So you’re going to get a very medium Twitter feed. If you follow the people I follow.

[00:34:06] Luke: Makes sense, makes sense. Is there anything, uh, you want to cover that we might not have touched here? Anything interesting you’re working on or stuff people could check out?

[00:34:14] Austin: So, one of the things that I do think is important for people that I would like to express here is, one of the beautiful parts about crypto is that, It is easy to do some of these things with your hands if you’re willing to like experiment, spend some time on it.

[00:34:30] I think not enough people who are looking at the space from the outside are willing to take small amounts of money. I want to be clear. Don’t do this as an investment. This is me telling you spend a little money to experiment, but go put like 50 bucks in your Coinbase account, buy some Solana, go create a wallet for yourself.

[00:34:48] Try to use decentralized applications. See how these things work. And I’ve specifically referenced something like Solana here because like transactions are less than a penny. It’s fine. You can play around. I would say to people [00:35:00] as a general ethos, Crypto is a pretty open community. You will find people to talk to you about it online.

[00:35:06] You will find some shockingly senior people who will like tweet back at you or answer questions or talk about things Just go start doing it And the reason for that is it’s going to demystify a lot of things for you Now some of these things you may not like as you go use it. That’s fine. Some of them you will like but To me, the biggest mistake you can make in 2024 is talking or thinking about crypto without having used it yourself.

[00:35:31] Like we’re at the point where it’s accessible and cheap enough. Just go try it and see what it’s about. And if you don’t like it, that’s fine. Now you have an informed opinion. If you do like it, you’ll learn some of the things we enjoy about it. But my point is there’s no real excuse for ignorance at this point.

[00:35:47] It’s no longer a hundred dollars to send a transaction on blockchains. Awesome.

[00:35:52] Luke: Awesome. Well, thanks Austin. I mean, I really appreciate you coming on and love to have you back to like maybe a checkpoint in mid year or something [00:36:00] and kind of see how some of this is playing out. Where can people find you online?

[00:36:03] Austin: Yeah, so I would say the really only place you can find me online is Twitter. I am, uh, a long term social media skeptic who got dragged onto Twitter because several of my friends just consistently asked me to start posting things when I was constantly talking about risk and crypto. So I am at Campbell J.

[00:36:22] Austin there, spelled just like the soup and then the city in Texas. Feel free to follow me there. I do actually try to like post a decent about it, respond to people. So. You know, that, that’s the best place. Anything else, I’m just going to be real. I’m probably not auditor. I won’t check

[00:36:36] Luke: it. Awesome. Well, thanks again, Austin.

[00:36:39] We’ll, we’ll be sure to have you back too and, and checking on how some of these things are going and, uh, really appreciate you taking out the time and we’ll make sure we link to that info in the bio, thanks for joining. Thank you very

[00:36:48] Austin: much for having me. Really enjoyed it. All right. Thanks.

[00:36:53] Luke: Thanks for listening to the Brave Technologies podcast.

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