How Raoul Pal 10X-ed His Money with Crypto and Retired to the Beach

but my big discovery and why i really started loading up on ethereum was another chart which was a understanding that met craft law was the primary driver of all crypto markets and in fact almost all of the tech stocks that we've known today right and once you realize that these are basically networks and once you realize that crypto are networks where you actually own the networks so facebook is great network stock and it works perfectly on the log chart is an exponential there's all the things as you imagine you can value in met law terms but the fundamental differences shareholders and network users are not aligned the shareholders make the money the network users get the utility along comes crypto you marry the the network user with the owner okay now you've got network pep upon network effects this is like behavioral economics right man religion meets met met mc castle law right it's like yeah it's it's really now i'm about the thing it's religion meets capitalism it's basically what it is right so that is incredibly powerful so for those who don't know you basically you're were at goldman you started your own hedge fund and then similarly you you retired correct you retired pretty young you retired at thirty six but i mean now you're you have a company now so you're not in a fully retired and kicked back but no i've got four all jobs i'm doing right now so right but you did have a break in between correct like i think it was two thousand four when do you would you sort of retired from the hedge fund and it was like two thousand fourteen or something when you launched you know real vision so what was going on in were you doing nothing or you were doing other projects i don't i was writing global investor but that is a monthly publication so i don't know why all of you guys do weekly newsletters or daily newsletter it's hard work so i yeah i monthly but it's big it's like well it starts off at about thirty five pages a month and then due to inflation it gets to about a hundred and thirty pages a month now but i write it in a weekend so wow and i was living in spain right one weekend a month sure i needs to monitor markets and talks people but it was a part time job so really what i've done is kind of opted out at the rat race moved to the med mediterranean coast of spain i was growing fruit and vegetables in my garden and almonds and olives and all of that stuff living the beach life in spain in the middle of a on the side of a mountain in the middle of national park having a great life in the end you must start missing intellectual capital pick the people around you because most of the people most of the year round in a beach challenge in spain working a bar a restaurant or they or they're in real estate which is fine but you feel very isolated when your world is global macro totally so so describe the moment because i think a lot of people listening to this so just so i don't know how much you know about the podcast but basically the podcast is usually me and sam who he's not here because he's traveling he's actually in portugal right now we just sorta usually spit we're both founders we both recently sold our companies in the last two years we started the podcast went after we sold because that's when you have a bunch of time on your hands and and it's usually just spit balling different kinda like business opportunities market opportunities and so just stuff that we see that we think could work or is interesting but we're not gonna go do it ourselves so this became more outlet to do that and and so you get like we have like i don't know like over a million downloads a month and those people what what the people who listen what they're doing is they typically are either like they wanna start a business but they don't there they have like a good paying job and they're looking at thinking about making leap or they have they have their own business and this is like they're doing this while they're you know doing their chores and it's like i to hang out with my buddies who are shooting the shit about business because like you know we talk about stuff that they wanna talk about they just don't maybe have the friends around them that wanna talk nerd out about business all the time and so we kind of had that same thing where you needed that intellectual spa to to feel good but the the thing you mentioned which was like you know you sort of one one game you're doing well in one game but you decided to exit the rat race what was that did you have like a cut come jesus moment or did you have like a was that a long time coming how did that happen my meta narrative is the game is life itself the game is not money the game is quality of life and how you live it so that was always my objective so when i was on the tube in london of five fifteen in the morning to get my get to my desk at goldman before six the reason i did it is because i knew that the next thing i wanted to do was go and live in the mediterranean and wants to have that quality of life you know for me a lot of people think of money as the primary objective i actually like houses as you can tell from the house behind me right because this is where i live this is the quality of life this is my bank this is everything and so i like where i live and how i live that's why i live in the cayman islands that's why i lived in spain they're beautiful places and i live a quality of life so that has always been my journey but what i want to do is i always take step towards in game i kinda live in the future always in everything that i do so i always have a vision of my future self or whether that's future state of financial markets where i think it's going whenever it may be i'm always well ahead and so i then can look it's much easier to live in the future and look back and say how do i get here then stand here today and go i wanna go forward it's kind of weird it's a psychology thing and so right i had realized that the mediterranean was this life and i was my ex girlfriend when i was at university her mother lived in my york in spain and i was there in new york one point and we're were on the small beach eating grilled sardines so says this perfect mediterranean scene right grilled sardines somebody's making a big oil drum on the beach right you've got a cold beer some grill sardines and on this little mini peninsula there's a bunch of pine trees and palm trees and there's this long table of like thirty people twenty five people of different age groups parents kids grandparents eating pay the spanish national dish on this sunday drinking wine laughing i'm like that is quality of life and so i kept that in my mind and so i kind of facilitated it to happen that i would move to spain right and i did it in steps as well so i did it in the step that i was speaking to my father i was having dinner with him and he's like and i i was just chatting everything glass away and i was like you i'd love to buy a house in spain at some point and he said i've got a friends selling a house in spain a random thing so i said sure well let me know so he sent he he this isn't in the day of fax is is like nineteen ninety eight or something he sends me a facts of this six bedroom house on a hillside in spain i'm not that's great dad how the hell am i supposed to afford it he's like i was thirty years old as was working at goldman he's like why don't know how much it is so he came back and said it was a hundred and fifty thousand pounds which at the time was like two hundred and fifty thousand us two hundred thousand us and i just had a bonus and i thought i actually buy that in cash and i did right and it was game changing out a mortgage in london and everything else was game changing because now i've won the entire game i've got a six bedroom house on a hillside in spain overlooking orange groves ten minutes to the beach and i could lose my job i could still have that and i could work in a bar and i could live there i'm done right my game of life was one so that that was the marker stone to allow me to take more risk to do the next thing and so that's how i've always done these things and how do you get that vision so so i'm the same way but i what i've noticed about myself is like every i call them like these chapters so it's like every sort of like five years is like a new chapter and what what i've noticed if i go look back at the kinda of last three chapters so i'm i'm thirty about to three thirty four so basically you know three chapters i i've done three chapters now and each time it was sort of this like fort two bounce where i get in touch with somebody they show me a glimpse into this lifestyle or this kind of like mode that they're in and then i just can't un see it i'm like what the hell am i not doing that it's your version of seeing people eating pay a drink it wine at a thirty person table just enjoying life on the by the water and you're like that's the glance that that's the glimpse i needed to do it so is that how you also got your vision for the next for the next kind of like chapter for you and so the next thing was not so i've been in spain and i realized thing i was missing was intellectual capital even though my clients were the world's my famous hedge fund managers you know all of these super smart guys but they went around me they're all around the world and it was not as easy to get in touch twitter wasn't really around you know there was less ways to be social online didn't really exist right so and then i think probably discovered tim ferris and another friend of my mark hart have gone down this journey of looking at silicon valley and entrepreneurship mh and that was the thing that i thought okay this is the next thing for me how can i how can i take the entrepreneurial journey outside of know setting up my own research business which was a one man band essentially i wanted to take the entrepreneurs journey and push myself i wanted to see what was capable of so that was the next that was the next thing and get people sense so you're at goldman that's a good job what what are you making back back then you know basically like what what was your kind of like because i think for a lot of people they're like okay some people feel trapped when they're when they're making a high salary and a nice company they feel trapped they don't they don't take those leaps and other people they'll look at this and say well it's easy for you you probably are making a bunch of money at the time you know so yeah you could take these leaps of faith because you had kind of a a safety net so but wait wind the clock back we're we're we're talking almost twenty years ago or something like that you know how are you doing financially then versus you you know at at those two steps kinda look german goldman i've been really lucky you know i worked in the banking industry selling derivatives to hedge funds right so these are the mega trend of finance the mega trend of derivative and the mega trend of hedge funds so i you know i was doing pretty well you know the thirty years old i was earning earning more than million dollars a year so but you managed to walk away from that which is pretty impressive yeah and i i first went to a hedge fund don't forget so i left goldman went to hedge fund i took a risk yep but i i used to argue with my boss every time he used to give me share options and restricted stock i'm like thank you it's worthless i'd rather have cash because how dare you you should be proud to have equity in goldman and that's why we can give you so much more compensation i said it's worthless he said why do you say that because it's not money i can spend so he got really pissed off with me and then when i finally quit to go to my biggest customer and the biggest customer of goldman equity derivative at equity desk entire equity floor in europe gl partners he then called me into his office and goes ralph you were dead right it was worthless he said so i lost all i'm under cash in some of it but i lost millions of dollars to make that move but i wanted to make that move because i wanted to see whether i could if i could run money myself and be a macro investor because it was another chapter that i wanted to pursue for my own goals and then let's kinda of fast forward till today so you came on my radar i think i had seen real vision a few times but i hadn't i'm not from the finance i'm from the silicon valley tech world and you know so we all kinda have our like media sources that we learned from based on whatever industry you care about right and so i had seen it but i hadn't really paid too much attention but i saw you started talking about crypto and this was you i didn't realize that you had actually started talking about crypto back end i don't know twenty thirteen twenty fourteen and i went back and i kind of like memos and the know stuff that you have you know put up screenshots about so you know like you said ahead of the curve i and you have the receipts to prove it but i think it was twenty nineteen or twenty twenty where you becoming very vocal and then you made the big splash where you were like i've moved some ridiculous part of your liquid net worth i think it was i think you might have said fifty at one point i thought i thought you heard heard just say ninety percent into crypto yeah hundred percent into crypto and so that caught my attention and the attention of a bunch of other people and so you know i know you've talked about this before but this a new audience and so give you've kind of the origin story of how the mind virus of crypto kind of like what were the steps where you went from like curious to convince what what was that journey life for you where you put in ninety percent or a hundred years my job is to live in the future so i had got i i had lived through the financial crisis and predicted it i had also lived through the european crisis and predicted it and have been in europe and had to buy a generator and food and get cash out of the bank and keep it at home right that's how close we were in spain to losing our entire banking system and as a macro guy i knew the issue was leverage and leverage had meant that we had a unique problem which was there's a layer of collateral and all of this debt is against the collateral and usually you've got like thirty claims on the same piece of collateral in fact the average us treasury has thirty two claims on it it did dent may have more now so therefore who owns what in an unraveling yeah who's gonna get screwed and the so the the leverage was you're talking about a government or corporate or where where did you see this stockpile of entire i look at total leverage financial system leverage government leverage the household leverage and private sector leverage right so we're at four hundred and eighty percent of gdp now whatever the stupid number is right it's ridiculous but the problem is is that's a lot of claims on the collateral mh so because not everything is collateral in the system only something uses as collateral anyway so when le went bust right everyone's scrambling to find who owns what and you know but that happens all the time so i started trying to start the world's safest bank with a bunch of family offices i thought you know we could say a bank that doesn't use leverage so then people can put assets there their savings there and realize they're safe because it wasn't safe people and cyprus had all of their money taken out by the government so i'm like okay i to do something about this and i can do something about it so i started that journey and a friend of mine called a emile woods who was a subscriber to globe micro investor who running a hedge fund at the time and next golden guy he said you need to look a bitcoin and i'd read a bit about bitcoin bitcoins it's probably two thousand twelve and i wrote the first macro piece on bitcoin which is i think the thing you referred to yeah which was two thousand thirteen i just like i saw it and feel okay so we've got two things here one is this asset bitcoin and that's a scarce asset in the digital world so that's probably interesting and secondly we got blockchain which is a recorded ownership of everything okay well that solves the entire our financial system and this could be something useful for the financial system in itself as a new version of gold so i backed out that the fair value of bitcoin with gold at thirteen hundred using the kind of supply you know stock to flow ratio done badly you know i'm know you know statistician or econ expert but i kinda back to that though so it's probably worth a million bucks and then how i like to look at things is okay what what's the price now two hundred dollars let's assume probably rightly that rahul is a totally idiot so let's assume he's wrong by ninety percent so it's worth a hundred thousand dollars and it's at two hundred dollars that is the best single bet i've ever seen in my entire life so i bought it and i wrote about it and held it all the way through till and when you say you bought it that's like a like the first time i bought bitcoin i bought like i don't know a thousand dollars a bitcoin right so i bought it it means what like you bought a tiny bit you bought a medium amount or you went like you put a significant stake for yourself into it a decent a decent enough amount and i sold it after a ten x so i've done well from it sadly i got divorced in the process so i halved that so there was my tax that i don't pay in the i cayman ireland i i i chose a voluntary fifty percent tax so you know it wasn't a life changing bet but it was a it was good bet now had i held it onto to twenty thousand when it peaked yeah it would have been life changing so okay so i've been in it i got out i was nervous about all of these fork wars and everything going on i'm like don't understand this let's wait and see and then i had talked about it a lot analyzed it been involved in it but hadn't been investing it again until two thousand and nineteen started to stick my toes in again because the the mark have been selling off i was starting to get comfortable that yes that we got a recession coming this is gonna be a useful tool and then twenty twenty comes along and i was already positioned for a recession but you know this opportunity was like okay the central banks are gonna print like crazy then that's the opportunity so i bought a lot of bitcoin at own at that point i was long bonds gold dollars bitcoin and then over time i started chart bitcoin versus other assets and i realized it's dominance in performance was so extreme that it made no sense to own other assets even with the fact that bitcoin can be very volatile and have periods like now or it's down fifty percent it's like it makes no sense to own anything else now i probably will take other bets here and there but i think my core strategic so i was bitcoin first then i started doing the work i was on twitter a lot and people if i were to ask anything about ethereum people will pile on to me that makes me wanna know more so i stopped digging in has the opposite reaction and i i knew what about ethereum and you know but i started properly digging in and i you know this is really bloody interest the chart looks incredible chart versus bitcoin looks incredible this makes sense to me so i started switching into ethereum and when you say the chart looks incredible so tell me what that means so i've like i said come from the tech world we look at charts all the time but they're always like users revenue things that sort of like are not based on you know any kind of like speculation or human swims yeah human emotion exactly so you know charts don't lie or you know they they they they do if you but almost unless unless you know what you're looking at so when you're talk about charts i've seen pete you i see people like do this all the time on twitter where they're like you know was voodoo magic they see a chart then they draw this like crazy shape oh clearly this is doing a reverse cyclone pattern and it's gonna go all the way up and so are you one of those guys where you actually do the technical analysis and you the price chart is what i'm looking at or are you looking at other charts both so and i'll come onto to that so price chart i think is the best guide of what the asset is doing what it's trend is how it how people are perceiving it and where it is versus what you might perceive as fair value so okay you know you you notice certain characteristics like crypto tends to be exponential in price so you put it on the log chart it starts to make sense you know you look at things like copper and lumber they tend to be mean reverting assets because you they get met by excess supply with high high prices need to excess supply so right now with oil at a hundred bucks everybody wants to make as much oil as possible the price comes down over time it doesn't happen with crypto you can't right so you you need to understand the structure of markets where the sentiment is is it overly bearish like a day like today it got overly bearish and so suddenly you start to see a reversal so these kind of things are interesting but my big discovery and why i really started loading up on ethereum was another chart which was a understanding that met craft law was the primary driver of all crypto markets and in fact almost all of the tech stocks that we've known today right and once you realize that these are basically networks and once you realize that crypto are networks where you actually own the networks so facebook is a great network stock and it works perfectly in the log chart is an exponential does all the things as you imagine you can value in met law terms but the fundamental differences shareholders and network users are not aligned the shareholders make the money the network users get the utility along comes crypto you map marry the the network user with the owner okay now you've got network upon network effects this is like behavioral economics right man think religion meets met mc castle law right it's like yeah it's no it's really now i'm trying about the thing it's religion meets capitalism it's basically what it is right so that is incredibly powerful so i start looking at the fact that bitcoin and ethereum charts just at different points when they at the same point in the obstacle cycle were remarkably similar and then it dawned me they're all the bloody same thing that ball about adoption so then so so if you look at it and if you're honest with yourself ethereum if you think about met law it's about the number of users and then the kind of connections between the users and the applications built to create those connections well bitcoin cannibal one side one which is a bunch of people own it is a store of value like gold nothing wrong with that but there's not many applications built in it when you look at a ethereum it's like holy shit i mean this is like the internet right that moment is like okay this is far superior beds and so that's why i took that bet and then i eventually shifted majority into ethereum and then took other bets in the space to express macro views yeah it's funny i i have one tenth of the intelligence of you but i did the exact same pattern so you know i heard about it in until twenty thirteen bought a little bit dabble sold during when you know i when i went to a wedding and my aunt was telling me about how great bitcoin three i was was a bubble twenty seventeen twenty eighteen sold for a nice profit was patti myself on the back you know in retrospect worst trade i ever made they should've have just held everything you know started buying back in in twenty twenty twenty nineteen or twenty twenty i kind of announced that i've i'd had moved twenty five percent of all of my liquid net worth into the thing but that was right before you know another another run up and so that became quickly fifty sixty percent and and you know pit peers and some people are telling you you're crazy i'm sure you had the same and same thing you know why are you betting on this are you just kinda speculating and i said no like basically i spent my whole career studying the power of network effects right i'm trying to build marketplaces and social networks in silicon valley because i know that a network effect is the most powerful force imaginable and and then i see this chart this adoption chart of this new money network i was like well if this if the if the social network was worth x and the information network was worth why and then the you know the merchant network which is like you know basically amazon what it was worth you know z then then this thing is gonna be the money network is gonna be worth a lot i can tell you that and so i i didn't know much more than that but i just knew if you can bet early in a in a network effect that's still going through it's kind of like excellent you know adoption curve you know you'll do pretty well and so that was kind of my my my bet coming from a you know sort of a different different take but ended up at sort of the same conclusion and i remember being impressed that you were talking about network effects i didn't really see a lot of people in kind of traditional finance talking about that at all and i was like they're missing in the point you know really one of the first people to really start saying unless you understand network effects you understand what this is at all because everyone weird companies because people people are listening maybe don't know no network so so to to define it network effects just describes this phenomenon where let's just take you know a language if i'm the only person who speaks english english is not very useful same thing with the telephone system if i'm the only person with the telephone is not that useful but now another person gets a telephone or learns english well english just got more valuable and then the more people that learn english the more valuable english is as a language and so it's describes as phenomenon that every participant that joins the network makes the whole network more valuable so it's like the opposite of like a popular nightclub where everybody who joins makes the thing sort of you know diminishes the popularity over time network effects typically describe that they it gets more valuable at it square basically as a exponential not linear and then if you think about it in other terms is let's say let's say let's look at web three as a network and a network of engineers engineering talent right this is where where it gets really interesting why is it exponential is because there are parts when everybody's trying to hire web three talent right we are every single person i know is right and the actual pool of people are capable of doing it's probably like a thousand right and there also no multimillion millionaires who don't want jobs that's the point is their salaries and the demand for them is exponential the demand for the network of those guys becomes exponential over time there'll be millions of trained people and it becomes the network effects the overall space is very valuable but the opportunity that ramp that's the single most important interesting part of network effects right but and the fact that you can own a share of the network so even when the network flattens out and is now worth i think two hundred trillion dollars for the digital asset space it's currently two trillion dollars that's a hundred x in market cap that's huge we've never had anything like this before right like when the when the first when the information network was getting built out which is just the internet and it was pretty clear like sal but surely people were adopting they were getting online and then stuff was getting built stuff to do and then everybody who was online made made being online better because you could communicate with them or they might write a blog or whatever the whole internet was getting better the more people that joined right that was a network effect but you couldn't invest in the internet like you couldn't just invest it generically the internet and so you had to pick you know certain platforms and even then how how do you become an let's say you believed in amazon or ebay or whatever you're only getting a slice of the total internet and even then they don't want you know the average person could not invest and that's to me it feels like nxt right now we wanna it all get involved in nxt you have more no idea what's gonna win right i mean i mean you don't have the ability to go on every discord so it's bandwidth constraint we all are in this space we know it's huge we all know it's huge we also know it's a bubble we also know tons this is going to zero that's fit what's interesting only eve gives you that gives you the action of of entities the kind of you know that that kinda makes sense like owning oracle did a pretty good job of capturing the internet right and so you've been now kinda of following this and so what what what is what is a viewpoint you had about crypto that you changed your mind on or you you what you believe before now you realize is sort of wrong and you you think about it in different ways or any has there been anything is this kind of you know it's kind of like this rapidly evolving thing you're sort of like def fogging this like brand new world you know so you know maybe some mental pivot picture you some mental framework you had before hasn't really held up and maybe something different has happened can you think of an example of that well my views some bitcoin changed significantly i don't think you know no less of it as an asset but i thought about it in network terms and the community and i thought the community is not attracting new people and the job of a network is to attract new participants and if the network was actively rejecting people thought it's was gonna under perform which was surprising to me because i was very bullish and bitcoin first because i thought look it's gonna have a larger place and what's happened is almost immediately and it made me change my mind is the institution cycling well i actually don't like this space and they started buying eth and that was a so that's that's new i haven't really heard that so tell me about because you're connected to all these folks right like you know they just fun guys cios whatever you know a bunch of different people in that world people own an asset wherever everyone's shouting have fun stay poor at each other and putting laser eyes right make them look fucking stupid and irresponsible with their money well eth feels like it's a technology player yes it's amusing because everyone's saying gm to each other and all of this stuff but it's not at war well bitcoin was a war with every other network because you know that's what networks do you know religions go to war with each other for the same reason right they're exactly the same principles so you know it's the same reason russia and nato it's they're all they're all networks fighting each other for the robustness of their own network i get it so that but that whole process of seeing institutions getting turned out off by it was a was a big deal to me i just thought yeah i don't like this either so that was one thing i'm trying to think well point you've even seen a lot of news about institutions buying bitcoin whether it's tesla or micro strategy or square or you know some like you know random insurance company buys a hundred million dollars worth a bitcoin so we've kind of heard those we hear less of that with eth is it just going on under the radar is it coming what what's your sense of that because i haven't i i'm in this heard a ton it's happening below the radar because people keep coming to me saying when's this wall of money i'm like it doesn't come as a tidal wave it comes as a flow right you don't steer it until you look back and go wow so i mean i literally every other day speaking to the world's largest financial institutions who put me in front of the investment committees and to talk them through crypto and how to invest and the narrative change really surprised me it was always bitcoin you know can we put bitcoin our balance sheet how to invest bitcoin what's the diversification move very quick to look ethereum feels like it's a technology play that makes sense with the applications we can't we're interested in d defy etcetera then it very quickly became oh shit how do we get involved in web three so it moved very fast which is why in the vc got most of the money because they saw the broader opportunity they all came through the the twenty twenty lens of bitcoin is the asset and you know the the michael sailor route and even me you know in the earlier part of twenty twenty a lot of people came in that and then like all of us they kinda go oh wow okay this is much bigger so you know i've started a fund of hedge funds which is invest in in crypto hedge funds to allow institutions another way into the market because they don't really wanna buy just eth bitcoin they want exposure to this two trillion dollar asset class is gonna go to two hundred trillion pounds over the next ten twelve fifteen years whatever the number is so hedge funds are pretty good for that because their their job is to manage the exposure and and to capture the to capture this big move so you know that's another way that it's coming in that people don't see you know people it's not all about the bitcoin etf i don't think that's gonna move the needle as much it'll be positive only in a positive market yeah yeah the the the way you describe it is like it's not one giant wall of money and like most things it's not you know a single moment in time where it just goes from from not here to hear it's like a it's it's more like a cascade of domino's and every day you hear something it's a that's another domino that's tipping the next domino or each one influences the next one and then you sort of once you tip it off it which has already happened it just takes a matter of time until the whole domino's set runs through and it's all it's all it's all and i i'm seeing institutions using this weakness and not being frightened but so that look this is fantastic opportunity i need to use this i get it to volatile health space they they understand the people who are trying to put capital work understand but once the price starts going up again then you'll see the stampede right you know you know if bitcoin at sixty five thousand or seventy thousand then people say okay we've had a year long correction it's now going up next phase is gonna go to and rental work right and they'll be in and they'll be in and there'll be a mad panic because they've all been doing the work over the last year and a half so they'll be like we got get in now gotta get in now because if they don't they miss the outperform of their peers who've got it and what do you do with your if do you like let put it into def defy or your interest or your yields for you you put it in in a away they don't touch it do you remember that story of the house in spain once you win something you don't let somebody else take it away from you it's as simple as that because if i was staking i get what five percent yield or if i'm really clever and i'm mess around in deep defy i'm getting like a fifteen percent yield and then i get rug yeah or something goes wrong or it's on an exchange that gets hacked i just that's not the risk i want to take it's not worth it if my expected future return is you know ten x why take why get a five percent yield it's nonsensical so i just don't it why take exactly basically why take a even if it's a small chance of multi applying the whole thing by zero you know that's that's not really the the bet to make what i do is i take a very small percentage i say this is my learning budget like because i you know basically if i had done that with bitcoin i would have just sort of sat on my bitcoin never touched anything else and i said well no actually it was quite useful to start playing an ethereum fairly early on and similarly now playing in d defy or n entities you take a learning budget and you say look this isn't the principle this isn't the one that's gonna make all the money but this is also where i could you know continue to play the game and understand how this whole thing unfolds yeah and i've i've never been interested in yield even in financial markets all yield stuff is boring to me i'm a i'm a guy who likes the capital game yeah and different people right there's a whole bunch of people who love yield cat it's called carry and financial markets they wanna get carry and others wanna go for performance and there two different occasions and the carry guys do really really well until they blow up and the the guys like me tends to do mediocre mediocre and then make huge things they're just different ways of skin in the cat right so i spent my time because we don't have enough mental ability to focus on all the things in the space so i started going down a different rabbit hole i saw n nxt i understood it mainly not all of it understood the you the the the the macro view of what these things are and how big this is i wasn't really that interested in these communities don't give the give the here's my understanding of because i think like you know the the third most google question is like what is an n so so you know even people who like hear about it maybe even own a couple but they don't have a great frame and i think you're very good at framing things and so give give us your current frame of entities so ethereum introduced a piece of magic in a smart contract a smart contract attached to a blockchain means that any contract in existence can now be attached to a blockchain and smart contracts allowed an algorithm or a calculation to be made automatically verified on the chain so that could be your insurance contract for your house it could be any of the contracts i mean if you look around you almost everything that we have in life is a contract mh whether it's a spoken contract written at me appearing on this together with you is a form of contract right so all of these things are contractual relationships they're everywhere what this was saying is we can record all of them and verify all of them okay so that's a really big concept beyond which most people understand and you can understand that okay that's the case then a house can go blockchain yes because the deeds and then you don't need a notary and then you don't need lawyers that this all of this stuff most legal stuff can actually go this and then the breakthrough is that okay we've got another thing that's going on in digital world which needs solving so this contract thing's is a big deal we don't even know what this means yet right when we talk in ten years time we'll go oh my god we need to see that coming right so that's all happening and defy is that there's contractual obligations between borrowers and lenders it's all happening on chain but what the what the the the average person is seeing is a different breakthrough that came out of this whole concept is in digital world everything that gets digitized goes to zero in value or cost everything right the price of data the price of everything is zero over time so that's a big problem if you're living in an increasingly digital world so how do you cement digital value is you have to introduce a system of scarcity and an n nxt allows a digital asset to have scarcity okay breakthrough now it could have come from the music industry could have come from a number of different places it ended up being the art market mh okay and where you can say this stuff that was now was basically worthless online i getty had bought a bunch of image rights but to police it is really bloody hard as well so okay now we can create a one of one of value or a number and do that so that becomes the value of an n nxt the next part of an n nxt that you say okay well if we give a bunch of people these we can now identify a community and then these people can be like minded communities because they coalesce lesser random idea which is this piece of art and this community which is bored a yacht club or crimson punk so that becomes incredibly valid a membership to a club and it's your identification is showing your rolex and you know it's all of that stupid identifying tribal stuff that humans do endlessly and always have always will so that's going on and it allows us to forget the internet had taken us from our towns villages families which is our social structure and thrown us into a big shouting room from people all around the world with different views right it's quite exhausting and we all wanted a place and what this is giving us is these little digital communities sovereign states villages towns cities where we can now operate with civic minded people within that and these tokens are the identified social tokens are the big thick they're they're not a cup they've only just started that's much bigger i think than even n entities are but let's start with this because this is a way of coal humans because humans like these kind of identification system of shared values that kind of stuff so entities are a lot of things that's why they're so big and again that's just scratching the surface of what this is it's it can also and will also be your digital identity online right and you said something about music and i saw you tweeting about music and kind of the future of music royalties or like how anybody can become an and r you know person now describe what you kind of what what you're thinking there because i think that'll be fascinating to a lot of people because music of the music like art is a great entry point for a lot of people whereas you know macro investing is deeper in correct so what is the world's most vibrant communities it's sports and it's culture that's fashion brands fashion brands more than any others it's music it's art it's these things right culture the big unlock here is if you can token communities which is now the network owner is the same as the network user remember that facebook example right so now we've got pop star and token holder they're all now joined in the same network so now every is incentivized to grow the value of that network you've now made culture and investment this was not possible you could take a cultural marker like an added adidas sneaker but you weren't making money from ada adidas you had to buy the shares and there was no connection between the consumers there was no network of adidas users now you're about to create networks amongst these people so what is the value of l the fashion company mh right with all of its kinda of mega brands that people are passionate about that are status symbols that humans like we've just talked about love these things so the same with music right we're all traveling in music we love different music we like different bands so to be part of that network i could now be a sixteen year old kid and never have to have a job because i happen to get involved in the right and good at binding the next pop star but if i buy their social tokens mh or i invest in their song ip on n t's right i'm in business so what this is creating is a system i think is universal basic equity where culture is the investment they're not living in your and i world where they're building businesses and having to sell them and go through the entrepreneurs miserable journey they don't have to do that they do a different way which is by using their human instincts about the communities they wanna be part of and which networks are gonna thrive and music is so powerful because it's human emotion and people and it's it's a place in time that i remember i'm a huge music fan you know i identify music by it's year what i was doing what it smelled like what i heard who i was hanging out with i mean everything right music is is one of those anchoring things so just the ability for musicians to now sell directly and have a direct relationship with their fans via social tokens and n t's is literally a game changer i mean there is no way on earth snoop dogg would have been able to sell something in small numbers and make fifty million dollars it's just not that bigger a star because record labels because eighty percent of all the economics of selling music gets taken by middle so he yeah he'd have to sell a huge sum to do that or he'd have to go on tour and to make fifty million dollars that's a big exhausting tour you know he's no to bring chicken anymore these things are you know it the music industry economics got destroyed by middle men and it made the artist have to work harder take more risk with capital which is like i have to go a massive tour have to rent arenas and take these trucks this changes all of that dynamic and the meta us changes at one stage further yeah like the artist had to create scarcity which was basically come to my concert there's only x tickets and that's how you can see me and then they also created status which was take photos of yourself with this concert post that online and that's a big part of the value that you're gonna get out of out of coming to this thing and then now we have a digital version of that images and and so when all these people spoke to each other the fans they'd have to go on a facebook group and facebook monetize them right right and if they wanna go on tour they need to go on facebook and google and pay everybody but when you've got millions of token holders you've sold out fifty percent at all you've der risked everything in minutes it's just it it it stops you having to use middle middle time and you talked about two different things there's like the sort of like almost like the thousand true fans you know concept where basically an artist can drop something that's rare and exclusive or access to them or their commit their fan club and the it gives the whales you know something to go by that they would you know that they're they're actually willing to buy more than just a t shirt now you give them something worth buying and so that's that's one thing that you could do with it but the other one is we're about buying a stream a a part of the royalty right the part the royalty stream and so that's where you know i remember i don't know i i remember finding mack more the the artist when he had like you know whatever two thousand fans and i was like this guy's is great and like if i had actually be able to bet that this guy's is great and therefore be a part of his community he views me as back and true believer and i did i remember i kinda did a kick kickstarter with him or whatever he he pre sold his album and i just gave him you know thirty bucks because yeah go use this to help make your album pay for some studio time but he didn't know me i didn't have relationship and had nothing to show for being right and and so now in this in a world like this where the sixteen year old kid can say i think these guys are gonna be great their price is cheap right now and i could buy you know some of their future that's even is even more magic because that sixteen year old kid because he's now financially incentivized to grow the network and make that song success right it sounds like hundred tiktok videos yeah exactly right and if you multiply that by all of the token holders of those those ip rights they're all marketing free for you because they get paid in the upside it's genius so i mean think about it like you know if you doubt what you just said just think about who who's bitcoin cmo who's who's the chief marketing officer there how what's their ad budget and then how much publicity do they who's our p person how much publicity do they get how much chatter how much you know the ticker that's sitting on cnbc all day showing the bitcoin price right like all of this happened because you had a network of people incentivized to go shout to the world how great this thing is you know and and people hate that about crypto oh there's just people shi their thing yes and that does get annoying and you know you have to filter you know signal from noise but at the same time you have to appreciate what that does it turns every every believer into a every everybody every society is the same so if we think of everything is the same so let's assume bitcoin is a social token if theorem is a social token let's assume the us dollars is a social token and let's assume that religion is a social status token essentially so everybody goes the same way to increase the value of that thing so the us is like we've got military might and we're the greatest nation this is the free place and everybody can become a president right that's their narrative right every country is a different narrative to drive its value system for its network because they all require incoming capital to support the network including the church which couldn't have survived without incoming capital so they get all these people out to go enter the word of god they then spread the the dish around take money in it builds the church it grows the network they're all the same that's humans the the books sapiens kinda goes through this a lot about how humans need to self organize yes i well said i think that's a that's a perfect zoom out we can kind of even even pause or stop there so raul where where should people so follow you on twitter your raul gm you also have real vision and people should go sign up for that i mean look if people are interested crypto really easy have celebrating entire free crypto channel which is real vision crypto dot com it's all the great and the good of the entire industry everybody every week i interview like who i think are the people i really wanna pick the brains of and i go down all these journeys of social tokens and music and macro and all of this stuff so there's so much there at it's free dot com awesome alright thank you for coming on appreciate it i really enjoy it thank you