Sir Gene Speaks

0052 Sir Gene Speaks Special - Interview Shelly Palmer

June 25, 2021 Gene Naftulyev Season 1 Episode 52
Sir Gene Speaks
0052 Sir Gene Speaks Special - Interview Shelly Palmer
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I recommend listening at 1.25X

Shelly's Book https://www.amazon.com/gp/product/B095C3GW6X/
Video links https://www.shellypalmer.com/category/video/

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Gene:

Do they have got a very special interview with Shelly Palmer? Now, if you guys haven't heard of. You'll definitely want to look them up on the internet after this episode. Shelly is somebody that has a very good understanding of the tech involved in doing video and audio and where I ran across him is in talking about crypto. And so I thought, Hmm, maybe here is one more person that can help demystify crypto for people that are just sort of getting into it due to podcasting 2.0 how are you doing today, Shelly?

Shelly:

I'm doing great. Thanks for that.

Gene:

Yeah, it's my pleasure. I enjoyed watching you last week. I think it was on a Thursday or Friday. And definitely hearing how you described some of the or how you answered some of the questions. I just. It made me think you would be a very good person to add to the stack of crypto type podcasts interviews that I've had lately, because they've been all over the board and there's plenty of discussion and disagreements amongst people that I've interviewed as well. So just to give people a little bit more background, if they haven't heard of you or seen you can you run down sort of, what's been the high points of your life or career or whatever you're interested in, whatever makes you a interesting person.

Shelly:

Yeah. Well, I'll leave whether I'm interested or not to other people, but I've,

Gene:

I'll definitely interesting

Shelly:

in it. I've been in the I've been in the technology media and marketing space for a very long time. And I started my career as a composer producer, and a lot of the people who know me in the business know me as a composer of commercial music, I've done quite a bit of that. And then about 30 years ago, we started to just do a lot more tech consulting based on the digital recording tools we had built. And some of the things we'd done to be a little more efficient in the advertising business. And I've got a bunch of patents and a bunch of stuff. I'm kind of a interesting, I don't know, mix of a creative business guy and the tech guy. So, that's what our company's about. It's called the Palmer group. You can learn about it@shellypalmer.com. I really don't like to talk about myself, so I'm not going to do it, but I would love to talk about blockchain cryptocurrency NFT is a smart contract. That's actually the title of my newest book, which has been number one on Amazon in three different categories for quite a few weeks now. And in fact, it's an ebook very shortly a book this week. It's going to be turned into a regular paperback as well, which I didn't expect as I just didn't expect. But a lot of people who are interested in blockchain and cryptocurrency apparently don't have Kindles, which is interesting. So, yeah, that's the subject that I'm most interested in right now. We spend a lot of time in the world of defy and a lot of time working on projects that have to do with digital transformation in our tech consulting practice. Most of our companies that we work for are fortune 500 companies. The logo wall kind of speaks for itself, but we generally work with very large multinationals and always on the subject of digital transformation. And what that means ordinarily is taking businesses that may have an awful lot of legacy infrastructure and unlocking value by turning data into action. And if that sounds astoundingly boring, trust me, it isn't where we get into crypto just to bring you up to speed. So after Satoshi Nakamoto wrote his paper in 2008 it landed on my desk sometime just shortly afterwards. And I was absolutely smitten by the idea done. A lot of work with distributed ledger has done a lot of work with cryptography and cryptographic hashes and RSA security tokens. And what have you, and the idea of putting all of this together, the way that, that paper outlined, it was just such a, a brilliant insight. So the first thing I did was. A couple of Linux computers basically took some old windows computers since spun up some Linux instances and started mining Bitcoin probably early 2009. Maybe, maybe as late as, maybe as late as the end of 2009, early 2010. It was really fascinating to me that did it for awhile. I wish I had all those Bitcoins back because back then 50 Bitcoin slice of pizza was 50 Bitcoins.

Gene:

Do them. I'm right there with you. It was right around 2010 or so, and I got excited set up a computer and realized after a month of churning that I had like three Bitcoin, I thought Jesus Christ. I'm spending more in electricity through this stuff.

Shelly:

Yeah, I think at the time I live in Manhattan, so, at like basically even back then something between 21 and 24 cent kilowatt hours. So the algorithm wasn't quite as hard back then and. Require quite as much number crunching as it does now or anywhere near as much to be fair, but it was still, I think, more in electricity. I wasn't doing it for any of that. I was really interested personally interested in this idea of uniquely identified, secure digital things. Because as I told you, I started my career as a composer producer. And the way you get paid is twofold. You either get a creative fee for doing the work when it happens, or you get some kind of ongoing royalty stream through the performing rights societies. And sometimes a combination of both you may have heard of ASCAP or BMI or see SAC. And those organizations represent non exclusively, every composer that wants to be represented. And so the way they do that, Is, they take a survey of all the music that's played at the places they charge money. So the television stations, the radio stations, nightclubs girl Scouts of America famously at their summer camps. And they decide which songs are being played in a survey by. And they rank them in order. And then they distribute whatever they collect less their administrative fees to all the composers authors and publishers. And I fought the first time. I saw a real solid concept of a smart contract that you could it now they're called NFTs. But back then, and we're talking just a few years back, it was considered or called tokenized content.

Gene:

Hmm.

Shelly:

So most of my work in and around crypto really wasn't about crypto at all. It was really about blockchain or distributed ledgers and the ability to tokenize content for musicians and for videographers. But for video content owners. So, some of the songs that I have done in my life are very popular with people who like to match stuff up. And when stuff gets mashed up, it's the burden is on you to figure out that your music or your video has been used and then notify YouTube or notify Spotify. And then they will either take it down or do whatever is appropriate to, to get you paid. It's kind of a, a whack-a-mole, especially the more popular your stuff is the less possible it is to actually do that kind of policing. So the idea of being able to create a token and use DRM digital rights management, not to restrict people from listening or using your songs or your videos, but in order to let the videos and the songs, phone home, so that you could fingerprint and watermark them, use the DRM. Now. Assign a smart contract to do the policing of the dollars. And then we're going to either mint a coin or mine coins based on the, we had really thought through how we were going to deal with the blockchain at the time, it was going to be either proof of presence or proof of stake in order to make this quick. And we were also not worried so much about decentralization as we were about speed of transactions. So transactions speed per second TPS was a much more important metric than the decentralization because we kind of knew all of the players. We didn't know the people that were using the music, but we knew all the people that were supposed to get royalties. And we knew all the people that we technically collect the royalties from. So that was, back then fast forward a couple of years to COVID and. All of that sort of went away. But last summer was the summer of NFTs and inventive. T's just a smart contract and smart contracts or in this case or an NFT in this case, it's just tokenized content, the way we look at it. So we got very popular with all our friends

Gene:

From, from a technology standpoint or like, what the hell is this stuff? Shelly, Stan.

Shelly:

I th I think, well, we do a lot of, we do lot of work technologically for our clients. We do a lot of engineering. We build a lot of, we build a lot of tools. We do a lot of end to end solutions, but we also do a fair amount of just straight up consulting where it is, what the hell is this, and, executive education and leadership training. So we have a fair amount of both, and it was all done on online video meetings for the last 12 months. It's just starting to get, back to being in person. Now, although I'd say 85, 90% of what we're doing is still online. Full-time it's I'm looking forward to getting back into the work. Yeah. I had a few business lunches. I'm excited about that, but yeah, it's, everybody's vaccinated and everybody's just getting ready to just get back. But at the end of the day, it's been a very exciting, super exciting time in the world of crypto. And I think the market is overzealous right now. I think anybody who is paying any attention is realizing that the prices have been fluctuating wildly. And the reason they're fluctuating wildly is that this is this is a time when a lot of people, and of course we must say, we're not giving financial advice. If you need financial

Gene:

I have that disclaimer at the end of every show.

Shelly:

professional, a financial advisor. But if you don't know what cryptocurrency is, what it isn't is a get rich quick scheme and you should be incredibly careful and because nothing good is going to happen to you if that's how you approach this particular subject, but that's not financial.

Gene:

No,

Shelly:

That's just, that's just good sound, pump opinion. Stay. you don't want to lose your, you only lose

Gene:

you a couple of questions. You've said an awful lot there. You said you started off imposing music, so, and this would have been like commercial music for use and ads and any movies or anything, or.

Shelly:

Yeah. So I wrote a lot of stuff. You guys did all the music for the television show, spin city. Kelly and Ryan is a theme I wrote years ago. It I've written since it was Regis and Kelly I've written everything for that show. I've got the AP news, literally hundreds of, of television show themes and thousands of television commercials. You might be familiar with the CBS news but that, that, that I that's one of my, I've literally so much stuff on TV. That and radio, it's kind of crazy. It just, I've been in the music business a very, very, very long time. And so, and I've also been writing and producing commercials as well as advertising not just advertisements, but television shows and video presentations and stage shows for a very long time. So I've been in the entertainment business, been in the marketing business, been in, on all sides of the content creation, business, audio and video.

Gene:

No. That's very cool. So I'm definitely gonna do more research on that after I think after we finish up here, because what attracted me to getting you on the show was really what I heard you talking about specifically with crypto. And I had no idea that you had this, this very fascinating background as well. That's very cool.

Shelly:

No. Thank you. Now, mom and dad met at Julliard and they own music stores. And I grew up in a very musical household and my composing career, my performing career with respect to music was predestined. That probably started in the womb. Yeah. I had no choices in my life. Early on. I was just, I was going to play music and write music and I started composing extremely early and I started playing well extremely early and it's for other people to decide whether I'm good at it or bad at it. But but it has been a, it was a long, it's been a long career. I. Really just spending most of my time, not doing super interesting projects in and around marketing and media. And I guess what people would call new media, but it's not new media. That's not digital media. It's just the media, it's just stuff, right. We're just making content and trying to have a good time and trying to communicate the things that we feel to other people and get them to feel the same thing. Or let them interpret it in a way that they want to. That's really the job. And it's been the job for a long time. There's so many technological tools now that are available to help you do that. And they, they weren't available when I was younger. They are available now and they're plentiful and it would be amazing. I've mazing to be born into this world. I I don't envy the children, their youth, but I envy them. The technology that they are gifted with when they arrive, because there's so much cool stuff to play with

Gene:

Yeah, I think it's a two-edged sword though, because I, I think you and I are a little closer to the same age than some of the people listening perhaps. And, I don't know if I would trade all that time, playing outdoors and running around and riding my bike for, five, six hours a day. And my parents not caring or trusting me to do it for the way that the kids are growing up right now, where they're stuck with a phone or a pad in front of them. And they can't get more than 20 feet away from it.

Shelly:

Yeah. I, I think there's a lot to be said and a lot to be discussed. I'm a father of three and a grandfather of three. And so I, I definitely have my own opinions about that, which I'll keep to myself. I think that everybody finds their own path, but I will say that the, the tools that are available today to make music, to express yourself, to get other people, to understand the world, as you see, are really remarkable and the ways that. You can access distribution are spectacular. And honestly, this is what excites me about decentralized finance. As much as the personal computer has done for content creators over the years, what we're doing now as a podcast is really only possible because of digital audio workstations, which I helped pioneer in the eighties and nineties. We put the very first ever tapeless recording studio online, fully tapeless in 1986 in April of 86. And it took us 11 years to build the studio that would a tool set that would do that. And the digital audio workstations that then we were running 16 bit mini computers, $11 million into the first version of what you would, what you would call the prototype or the. Predecessor of pro tools. So, and it took years to figure out how to get it done. Now, this is ships free. When you pick up a phone, it's got a, there's a lot of your workstation built into it and you can, you can podcast from anywhere, but all of that, all of that is available to everybody. So not only do these amazing tools to create with, but you have these amazing tools to distribute with what fascinates me about defy and where I think this becomes magic is that the missing link has always been that it's very hard to finance your creative projects. It's very, I've been incredibly lucky, but a lot of the people are less either capable of doing the business associated with the music business or the video business, or they just don't have the initial funds required to get the work done in a world of decentralized finance, where you can create value and other people can be attracted to that value in your community. Or you can build a community around yourself. Like so many of these young, spectacular YouTubers are doing. Some of the kids on Tik talk with, a million followers. If you can build a community like that, through the tools available with decentralized finance, you can fund your projects. And I think we're about to see finances democratized and unleashed the same way information was democratized and unleashed. When we got our hands on the internet and personal computers, I, it's pretty obvious that this is the next wave of innovation that it's going to be financial innovation. I think a lot of things that we take for granted the forms of government, we have the forms of taxation. We have the forms of payment that we tend to think about. What does it mean to be an apprentice versus a master? What is it to be a worker versus a boss? What is like all of those things, it gets turned on their head. If I can directly exchange value without having a government or a bank or. A protector of my wealth involved. If I am my security guard, if I am my bank and if I am my storage facility and I am the keeper of my own value, and I get to exchange that freely with other people, for what I believe they have a value it's never been possible in history, never it just as never happened. And so we're on the cusp of that. And that to me is wildly.

Gene:

Why I love that transition because you steered us right into podcasting 2.0 with the value for value model, which allows listeners to directly send money in the form of Satoshis at, at least at this point to the creators and whether it's video or audio in either scenario, it allows people to have that immediate connection back to the creator and in a manner now, which is becoming standardized with the the new 2.0 standard encompassing, the the, what would you call them? I guess they're the. Elements elements within the RSS, that would be the proper way to describe them. So now I, I previously asked you if you'd if you're familiar with Pakistan 2.0, and you said you're not at this point, right?

Shelly:

Nope. Haven't, haven't heard much about it. If I haven't heard anything about it, nor have I heard anything about the the method that you're using, but it sounds like, it sounds like, again, it's a perfect example of the way I see the future, right? You're gonna, whether you're taking SATs or whether you're taking away or whether you're taking any other kinds of crypto it doesn't really matter if you were, it doesn't matter. The good news is you're able to take it and people are able to, there's a, there's a Fiat currency version of that, which has Patrion. There are several different ways to approach supporting the creators you love the most. So this sounds like a good way to, and using crypto is a pretty good tool whistle though today. I think you'd have trouble justifying sending your Bitcoins. Yeah.

Gene:

Yeah.

Shelly:

Because they're not worth quite what they were unless you got in really early.

Gene:

Yeah, but the way Bitcoin's been going up and down it's just as likely that when somebody is listening to this episode, Bitcoin's going to be hitting an all time high and they're going to be

Shelly:

Yeah. you don't know.

Gene:

about? Bitcoin's really high right now. So it it's, it's, it's very hard to predict and that I think is part of the reason that it's not a great medium of of, well, I guess it's not even an exchange, but it's not, it's not a great medium, if you want something to hold value. If you're using it purely for a transactional instrument where it's in and out in the matter of seconds, it it's fine. It's not a problem there. And if you're going to just hold onto it for virtually forever, certainly for a long time, Then all these little ripples that are happening are not a problem. In fact, provide opportunities to buy when the price is low,

Shelly:

I'm not sure. I agree with that. I don't mean to push back, but, but, but I have to really push back a little bit on that because there were some people who believe that Bitcoin is a store of economic value. I've heard it called digital gold. I've heard it called all kinds of stuff. For something to store value, it needs it, it, it needs to meet a set of criteria that that economists understand pretty well. And so to people who are professional money managers and Bitcoin under certain circumstances might meet some of those criteria. If you pick up a cup off your debt or a bottle of soda or, or bottled water what's stored in that bottle of water on your desk. Well, whatever it costs to manufacture the bottle and the cap, whatever the label cost, whatever it costs to get the water out of the ground and filtered whatever it costs to get that filtered water, to approve, get it in a package, get it on a truck by the gasoline. Get, get that to a distribution center, have some sales reps, sell it, buy some advertising to get consumer demand up. You could go down the value chain all the way down the value chain, and you can. A very simple calculation to the amount of value that's stored in the bottle of commercially available water that is on your desk and what we are, you'd easily be able to trade those for any other bottles of water or a lots of other things to be fair because you there's a dollar value stored in, in the United States. There's a, or there's a Fiat value of Viet currency value stored in that bottle of water. That's not necessarily true of a Bitcoin. Yes. It's a deflationary currency. Yes. There are only ever going to be 21 million of them. Yes. 20% of them have already been burned. Yes. The price fluctuates. People are speculating yet. Blah, blah, blah, blah, blah. I hear all that. Is it transactable I would never given a choice to a transaction today with my Bitcoin because Bitcoin is down in the $32,000 range too. And my dollar cost average on Bitcoin is lower than that, but I'm not getting the spread. I would have gotten two weeks ago. So unlike a us dollar, which loses value every single day loses purchasing power every single day, but it does it at a snail's pace. And so you just, it, it gently eats away at the value of what your bank account would look like unless you can invest or earn over and above the rate of inflation and gross domestic product should balance that in some way, but it, it doesn't. And so at the end of the day, inflation is going to win especially now. And, but you won't feel it a dollar today you'll buy pretty much what a dollar bought yesterday and pretty much what a dollar will buy tomorrow. And so will a stable coin plus, or minus a penny or two, but a Bitcoin tomorrow may buy a lot. Or a lot less than a bot today. So closing a transaction in Bitcoin at this minute with a market, this volatile, I don't know if that makes any sense, but if you look at, if you look at the future of, of cryptocurrency, you could imagine, and again, you'd have to imagine now what a world of coins that were relatively stable and not as speculative as the cryptocurrency markets are today. And until those markets are relatively stabilized, I don't know that people are going to transact in because it's hard. It's, it's one thing if it's plus or minus a point or two, the way it is when you go to Europe and you buy something with your Amex card and they hit you for the hit you for the transaction fee, they hit you for the exchange rate. But the exchange rate is plus or minus a point, right? You had a 30 point swing on a given day, how would you know how much money you had? How would you know how much value you had stored up? It's real, it's tough. So I'm not sure that that Bitcoin is, is ready to be transacted in. Is it ready to be speculated in clearly it's being speculated in which is causing the incredible price fluctuations and will that ever calm down? I don't know the answer to that. That's for other people to weigh in on, from my perspective, we need to have some currencies to transact in that do store value in a predictable way and are not as vulnerable to the remarkable swings in their relationship to Fiat currencies. And that will happen when they are widely adopted. And also there is a large amount of liquidity right now. We'll look at the liquidity pools that are out there. Ethereum is very liquid. You can move in an Eve with no issue right now. You go to Coinbase. Coinbase pro or crack in or finance or wherever you can trade, you have no trouble moving anyth. There's always somebody ready to buy. There's always somebody ready to sell. Say, they're a Bitcoin. It's always somebody ready to buy and sell. But some of the more obscure, either the meme coins or the utility tokens that are out there, you can wait a while to to get those sold. You get at a price. You could have that you have an order out there for a couple of days. There's just no one to do it. And ultimately some of them just go away because there's no one to do it. So someone's got to make the markets and that happens

Gene:

and I think there needs to be a justification for their existence to begin with, because I think an awful lot of these new coins in tokens were created purely out of the me too syndrome. Not because there's any huge technological advantage or difference or need. Certainly. Some of them, I think just simply take advantage of that technology to create something that's slightly different. Like the, I think there's several now coins that are tied to various currencies around the world.

Shelly:

Every central bank, every central bank has an experiment going the CB DCS, a central bank, digital currencies are, are all in various states of deployment. China has the digital Yuan already. There are plenty every country, I think all all but 15 countries that are part of the world banking system have some version of a stable coin ready to go which is a digital representation in the United States. Oddly enough, there's I think three or four of them that you can, that are, that are pretty. They're, they're not us government issued, but they're pretty stable. You've got tether, right? USD, T you've got USBC and a few others. And they will generally trade within a few pennies of a full dollar and most of the exchanges don't charge any fees to move them back and forth. So, most so, yeah, we have stable currency. We have stable coins in the w on the U S dollar and there's, there are others around the world. I, I think those are going to be super dangerous to play with at a certain point right now they're not, but the ones that are officially issued each one has its, your dollars have serial numbers on them. Now they don't know who's holding each dollar with a serial number, a us, a us dollar from the U S government they'll know who you are and they'll know that you have it. And that's exactly the opposite of decentralized finance. When all of mainland China is is under the thumb of. Digital Yuan. In other words, when they outlaw paper money and probably five or 10 years, that's going to make George Orwell seem like a walk-in Disney world.

Gene:

Well that in, and of course they already have the the credit scores or the people's scores really based

Shelly:

Yeah. Add, so add this in and this end, they can cancel you in an afternoon. They'll just take all your money. And because it's yours, they know exactly how much you have. That's a horrible thought. The idea that a central authority would have that information. I think this is the danger of the cryptocurrency marketplace. As we see it today, at the moment, you can have security, you can have scalability and you can have decentralization. You can pick any two of those. You can have all three. So Bitcoin is pretty secure because there's 11,000 nodes and they all have to it's proof of work and, but it's slow. It is very decentralized, but it's not scalable. It can only handle about five transactions a second. So that's not really a way to transact the, just for a point of reference visa net, which is the network of visa. There are 3.3 billion visa cards in the world. The visa net worldwide can handle 65 transactions, 65,000 transactions per second. They have never needed to handle more than about 3000 of them. At the most busiest time of the year. They've never done more than 3000. There were only 7 billion people in the world. If every single person on earth had a visa card, the visa network wouldn't, wouldn't slow down at all, but Bitcoin can't go any faster than it's going. Now. Block gets written every 10 minutes and those blocks can hold 23 to 2,500 transactions or a megabyte. Each they have to be distributed on a peer-to-peer network worldwide to 11,000 nodes. Every single time of blockage. And, it's very decentralized, it's very secure and it's also incredibly not scalable. So I don't know what that means to the, outside world, but to, to the world of cryptocurrency that becomes just a fact of life. Now you will have faster networks polygon, which is a layer. Two solution sits on top of a theory and polka dots. Same, same. These networks have very high throughput, but they're not so decentralized as you'd have them. They'd have you believe and

Gene:

there's the trade off there. And. The, the podcasting 2.0 stuff runs on lightning. So the transactions are tiny with very low fees and very fast, but you do lose some of the decentralization

Shelly:

right? Let's go through lightning. Well, let's go through lightning. And so at the end of the day, it's the same thing. The security, if you have validators and you're minting and you're doing it optimistically. I think most people who understand that optimism, the layer is coming for a theory from let's be Ethereum 2.0, if it ever gets here, they said, July now, I think it's going to be delayed until Q1 of 20, 22, but who knows, but polygons already out there with a layer two solution and the, they're doing a good job, polka dots, doing a good job. Dan was just about. to start, but all of these networks, because they are proof of stake, they are by default, less secure. It's just that simple, there are less validators and there's a higher opportunity for someone to get past what we would call crypto crypto economic security. I mean in a perfect world, philosophically now in a perfect crypto grab crypto secure world. I can't hurt you without hurting myself 10 times worse. And I can't help myself without helping you just as much. That's a crypto economically secure transaction, but in a. In a network where it's proof of stake, some oligarch, somewhere of any ethnicity, I'm not trying to cast dispersions on any ethnic group. Some oligarch with a billion dollars to burn says, I want to screw this person over here and it's worth a billion dollars to do it. They'll do it. So that's not a cryptic, cryptographically, secure environment. There are plenty of people that have a billion dollars. I want to cause harm. So will they be able to do that? Can you overpower, can you put a double spend on, can you do a 51% attack? What can you do to a network that where there are 20, 30 validators or even a hundred validators, as opposed to 11,000 nodes in the ant that have to agree? I got a proof of work. So the, I mean there are trade offs and I think what's going to happen is the central banks are going to use possibly. I believe they'll use distributed ledgers, but they're going to use them in a way that is very centralized and Yeah. there'll be distributed, but kind of distributed because they're going to have their dibs on it.

Gene:

Yeah, it'll be distributed amongst the members.

Shelly:

yeah. And I don't think a lot of people are going to realize that when it goes down, the, the kind of pressure and the kind of tyranny that could be rained down upon the populace, by a government that had a digital currency. And that was the only way to transact that would get crazy. Now the good news is because defy is decentralized. I think they'd have to turn off the internet to really stop it, which they're not going to be able to do, but there's a kind of a little bit of a war coming between the people who want to control us, all of us and the people who don't want to be controlled and finances have been the thing that, it's an information currency in the military. That's what makes a government. If you've got a big military, you control the currency and you control as much of the information as you can. You're a government No. We have private individuals who are able to do their own space race. Now we're going to have private individuals who can do their own money. So where's that? Where's that leave

Gene:

we have them now.

Shelly:

Yeah, So I'm saying we're going to, but spendable money as opposed to money that you can speculate on.

Gene:

sure. Yeah. But you know, it, that just to, since you're alluding to Musk, when Musk takes a puff on some weed and tweets about Dodge coin that absolutely has a huge impact financially because a lot of people are reading things in, into a much deeper degree than I think they're intended to be.

Shelly:

Well look, if he was, if he was doing that with a stock or a bond or an equity or something that the sec has control over, he'd be. in jail. The fact that defy is not regular. I wasn't really alluding to Elon Musk. I was really thinking more about the fact that there are probably 20 or 30 individuals who have enough money in the bank where they could do their own space program. And, several of them are doing their own space programs. Musk is one of them. So it was Jeff Bezos, right? There's like you got, you got plenty of people that are, are as well-funded as small countries doing their own space programs. It doesn't take a whole lot more to put together a kind of currency that's backed by some store of value. That's done by an individual, not a country. So you don't need to be a nation state tobacco currency. That's my point. So it's like, we're, these are, these are different times that are coming and the technology is now readily available and well understood. And there are plenty of good engineers out there to make this happen. And all of the tools are open source, a little. And you can read and write English and you have the ability to watch a YouTube video or two, you could be putting up your own coins and your own smart contracts a couple of days.

Gene:

And they were literally people doing that every day.

Shelly:

yeah, so that it's a different world, a lot more interesting stuff going on right now. And it's, I think it scares the hell out of the governments. I think it the most people don't understand this and they don't want to understand it. It's so hard to wrap your head around the idea that you could democratize finance the way we've democratized information. And I don't think many people understand the negative effects of democratized information. I think everyone generally thinks that the good outweighs the bad, but if you look at what's happened with companies like Facebook and Twitter and even YouTube where the content adjacency to pure hate speech, pure misinformation, New phrases were invented in the last four years, alternative facts and fake news. Well it's rampant. And while there's always been people lying to the media, there have always been gatekeepers and the media was so hard to distribute. It required such an incredible infrastructure that while there were people who had political points of view, they, there weren't a lot of them. And you kind of knew what you were reading and who you were reading it from. So if you knew that a paper was known to be a yellow journalism, if you knew when was always going to be a tabloid sensation, sensationalist tabloid, in other words, going to try to be straight news or as best they could, but at a liberal bent to it, you could bring your own understanding to the editorial perspective you were reading. Now, every human being on earth is their own publishing company with no with absolutely no effort. And that has not been good for humanity overarchingly. So you can imagine a future. That's quite dystopian where you've got a lot of different currencies and you've got a lot of different information and. There are many things going on simultaneously that really hurts your head to think about. I think a lot of people don't want to think that through, unfortunately for everyone who doesn't want to think that through, it's not going to change the fact that it's happening all around you as fast as it can possibly happen, literally at an exponential pace. And so whether you choose to acknowledge this or choose to think about it, or you want to get into it or not, it's what's going on and nothing's going to stop it. Nothing is going to stop this

Gene:

Well, I think a dystopian is really something that is based on the perspective that you have because in every, every dystopian book or movie that you see, there is a class of people, generally the bad guys, right. As the way they're represented, who are not living in a dystopia, they're living in a utopia, they've created the world that they wanted regardless of everybody else. So, yeah, and I think what happens when everybody's doing that, when everybody's creating the world that they want to live in without giving a shit about everybody else,

Shelly:

We're getting close. That's

Gene:

it's gonna, yeah. I think we're, we're seeing a lot of that happening as we speak right now. But also it's a. I think in a lot of ways, what I'm seeing is with parallels from the 18 hundreds, both in terms of Jenner journalism, in terms of people's mentality of screw you, I'm going to take my stuff and move out west where, I can not be bothered by anybody that I don't like. There's a lot of things that I think right now, at least in the U S and actually Europe, too, that people are expressing, which are quite similar to expressions during the 18th century. So I think while we had a couple of world wars in the 20th century I think the sentiment that we have right now is, is getting closer in line with the 19th century.

Shelly:

It's probably right.

Gene:

We also had more currencies back then.

Shelly:

yes, many

Gene:

We didn't have national currencies while we had some, but plenty of regional currencies as well.

Shelly:

Yeah. And no technology to deal with it. So it obviously got to a point where there was there was a need, there was a a serious need to change and it changed, but for a very long time, yeah. There were multiple currencies everywhere. And at the end of the day, I think your take on this, it's only dystopia. If you're on the wrong side of it. you're on the right. Yeah. Ah, that's, that's probably, that's probably correct. I mean, that's more than probably correct. That is correct. And I look history is also written by the winners and whether you won or lost is always in the eye of the beholder, right. It's always based on. Always based on who's telling the story. So this is this is a really fascinating time. I mean, it's an amazing time and I'm, I'm super excited by it. I think a lot of people are scared. They shouldn't be necessarily but they are,

Gene:

Yeah, well there, there's definitely, I think the one difference between the 19th century and today one of many of course, but one difference is the population. It's, it's a lot harder to just say screw y'all. I'm going to move out to my own piece of land out in the west when there's a lot more people than there used to be to do that. And in the U S we still have a ton of land. Now it's all privately owned or it's government land. It's not just up for grabs away. That used to be a hundred years ago or 150 years ago, but there's still quite a bit of land, but in other countries, even, that's not really the case there they're basically border to border towns, if not cities, and you, you have no, no option for just sort of, being a antisocial type and moving away from a civilization. So that, I think that brings some additional stress and problems. And I think certainly mental illness, the higher the population, the more that becomes a problem for society as well, because even if it's the same percentage of people that, that have mental. That raw number is higher. And each of those people has a potential to cause a lot of damage through others as well. So there'll be some interesting problems. Uh I'm I'm sure that to solve in the next hundred years, but right now we're just sort of living in a, in a bit of a a little bit of anarchy, a little bit of we like there, there's a general sense of, we don't know what's going to happen tomorrow. Let's just see what happens.

Shelly:

In practice though, you never know what's going to happen tomorrow. Any kind of security. You had that anything more than the sun was going to come up because that's what the sun does. Tomorrow is, was folly. Anyway. I mean, you were never, no one ever knows the future. You don't know the next 10 minutes, what you're doing is you're using the best algorithm you can, as a pattern, matching human being. You're saying that whatever just happened, whatever the most recent thing I did is probably what I'm going to do next, whatever I just did last, I mean, it's just basic mathematics. So at the end of the day, the part about this that's important is that you inject yourself in the process that you actually become part of this. It's not something to be scared of. It's not something to shy away from. It's not for the kids. It's not for those financial wizards. It's not for no it's for none of that. The world is about to change exactly the same way it changed between 1995 and 2001. I think history is going to repeat itself. Very clearly there we had prodigy and AOL and CompuServe, and everybody thought that was the internet there's walled gardens. It wasn't, it was just a place. You could go hang out online. There were chat rooms, like, instead of text apps that none of the, none of the things were different. We had word processing, we had spreadsheets, we had everything. It just wasn't quite the way it is now. Wasn't there weren't shared files. There weren't, there weren't apps. There weren't smartphones. Everything was done on a laptop or a desktop. And there were laptops and there were desktops. Then mark Andreessen shows up and Tim Berners Lee says, this is hypertext transfer protocol. And at the time there were two competing people don't remember because unless they were there, there were two competing factions. It was gopher. And there was hypertext transfer protocol, which is the worldwide web. The guys that go for wanting to charge money and charge advertising. And they were trying to apply business rules from that. To the web and Tim Berners Lee said, I'm going to make everything free. Free is very pro-consumer and free one. Otherwise we will have a different world right now. And so the web happens, Marc Andreessen becomes crazy rich. We start in a world of startups. That's 96, 5 6, 7 8. I think we're up to now. By 2000, there was the, the gold rush was on. Anybody could do a.com. People are making a zillion dollars in March of 2000 to January of 2001, the NASDAQ lost weight for it. $8 trillion of value. As everyone walked away from the.com bust $8 trillion

Gene:

Oh, yeah, I was there. I remember I had to fire a bunch of people.

Shelly:

so. We haven't gone through any of that in the world of crypto yet. We're still at the, no, one's quite figured out what the world looks like. No one quite knows what the metaphoric website looks like yet. No one quite knows what any of this looks like. We just know that we're all trying to figure it out. And so, Ethereum was a $4,500, four or five weeks ago. It's at $1,891 right now, that's, it'll go back up or it won't, it could go to zero. It could go to 10,000. There's no way to know. Is that really what crypto is about? I hope it's about more than that. I really do, because it would be very sad if this was just a casino. That was like a cool place to hang out. Throw your money.

Gene:

Well, you can make many things in life into a casino. If that's what you want to do. I think this is just one of them. This is the most recent. So the, I, I wanted to have you on, because I think you can do a really good job of sort of demystifying and explaining. Bitcoin and crypto to people that are a little more unfamiliar. And I kind of feel like we just had a lot of a trip down memory lane here. So one of the creators of gopher as a friend of mine Adam Curry, who who was one of the first people to be sent the bill from gopher is my business partner. So there's, there's a lot of history that we can chit chat about. But in the last 10 minutes, I want you to just, if you would provide a little bit of a like from your opinion, having seen now what it is from a low level and you provide a high level description. Let's just imagine somebody that's been doing music or art or whatever they're doing a podcast they want to, they've been hearing about the crypto that maybe even they jumped on board with the podcasting 2.0 stuff, but it's all kind of still mystified to them. W what's your short version of what it is and what's it. Good.

Shelly:

So my short version is you should think about the blockchain as a block of granite. A block of granite is something you can carve information into. There's plenty of things written in stone. They last forever. So you carve something in stone, 3000 years later, you can still see it carved there. Importantly, the stone does not care what you write on it, no matter what you write, the stone doesn't care. And also importantly, you can tell if it's been altered. So a block of granite With carvings in it is a really good metaphor for a block. Blockchain is the technology that empowers crypto. Now smart contract is just like a regular contract, except that all the conditions of the smart contract are digital, which means that in the world that we live in, which is a hundred percent digital, if the conditions of the contract are met, then the contract can automatically do the transaction that it was designed to do. So, for example, if you're a musician or a singer or an artist or poet, and you decide that you're going to sell your work at an auction and you create a smart contract that puts a price or price range, or has a price where, or a an algorithm that says at the conclusion of a timeframe, the highest bidder or the highest bidders, whichever you choose are going to win, or only one person is going to win when that's a war. They will transact by sending us a certain amount of cryptocurrency. The people we owe royalties to will automatically get their chair before anything else happens that transactional completely complete itself with nobody's intervention. As long as the conditions are met, the coins have transacted the transactions written on a blockchain, and it's done. Now that transaction will be anonymous for all intents and purposes. If it wants to be, or you could put the people's name into the metadata does it's up to you, but one way or the other, the smart contract will be fulfilled and it will track. It will automatically trigger the actions, transfer of ownership of the content transfer of coins to the sellers and the royalty holders and the other stakeholders done. And then it's written. So there's a written transaction that is immutable. And it's the history of what happened to the ownership of it. Piece of content and that content can be anything, can be digital content, physical content doesn't matter. So if you think about a smart contract as a vending machine, you walk up to a vending machine. You put in a dollar, it says a dollar 50. If you don't put in the other 50 cents, it won't give you your potato chips. And it'll just give you a dollar back and tell you to go away. But if, if you do put in the dollar 50, then immediately you get a potato chips. There's no one to go see about it. If you get your potatoes, you don't want them. You can't return them. It's not, you're done. It's it's over. You've got your chips, it's got your money. And then magically the little elf that writes on the block block of granite goes and writes the transactional block of granite. The math is set up in such a way that once about once a few blocks are written on the blockchain, some get written every 10 minutes, like the Bitcoin blockchain, some getting written, get written shorter than that. Some are just a few seconds. Depends on how the technology is. Once you're about once your I'm going to call it five, 10 blocks into a past where your block was written with your information. There isn't enough computer power on earth to go back and change the blockchain. So the blockchain is immutable. It's going to be there forever that transaction's locked. It's written in stone. Now, when would you use it? When would you use a smart contract and a blockchain? When would that be appropriate? Why wouldn't you? And this is the big question. Why wouldn't you just use a well-structured database and a secure password? And that the answer is that if you are a central authority, like a bank, like a business and you are trusted, like a good brand, you should just use a database because it's easier. Just do a database and do a coupon. You want to, you want to understand the world of crypto, open up any video game by EA and use in game court. That that's the same as cryptocurrency. It's just digital currency. They're digital coins. They're owned by EA. It's totally centralized to the video game. That company that you're in, they charge your real money. You'll use real money. And then those coins will be used. You want to see some, some other use of tokens go into a casino anywhere in the world. They give you the chips or what they call checks and the business. They are have they, they have denominations on them, but sometimes they don't. Sometimes they're just colored so that they kind of lull you into understanding that you're, you're just gambling with house money. You aren't, you're gambling with real money because when you want to leave the casino, you can't spend those chips anywhere else in the world. You have to go cash them in at the cage at the casino. So we all understand what it is to have representative currencies. We all understand what it is to use tokens. We all understand what it is to use digital currency in a video game or game currency. Now, the question is, is the business model you want to think. Going to benefit from this idea of a decentralized environment where there's nobody to ask permission from nobody has to approve anything. The contracts are written algorithmically so that they will be automatic and they will be executed automatically. And the transactions will once completed will be represented on a distributed ledger for all, to see if this is what you've been waiting for to build your business, then you're in luck because the tech is in place. Now, if you can't think of a reason why you'd want to have a fully decentralized world of value exchange or why a smart contract would help you do your business or cut costs out of the work that you're doing, then you don't need the blockchain and you don't need cryptocurrency and you don't need defy or decentralized finance. You just need a database and, and some coupons to give to people so they can get a discount when they go to the soup. But there are an awful lot of business models that benefit greatly from fully decentralized finance, fully decentralized participation and currencies that are able to be transacted in that the tax people don't have a piece of that. The government doesn't have a piece of that. Nobody has a piece of that. It's just yours to do

Gene:

Yeah.

Shelly:

Yeah. Well, look, everybody should pay the taxes that they should pay and everybody should, adhere to the local laws. And again, this isn't financial advice, but we're coming into a new world. Folks. This is just a new world. And again, if you can't think it up, then you can't, but other people are and other people can. And by the way, this not only deals with data, with money, it deals with data. Why is it evitable that mark Zuckerberg gets a hundred percent of your data that Sergei and Larry at Google get all your. That just Jeff Bezos gets all your data. Why can't you hold your data and your health records and all, why do I need a centralized authority for Facebook? Could I not write a decentralized Facebook? Could I not write a decentralized Instagram? Could I keep my photos in a decentralized database, like IPFS and have access to it? Only granted to people that I want to have access to and vice versa and not have mark Zuckerberg be the one who's telling me what information I'm allowed to have and not have, and not have Twitter decide what I'm supposed to have and not have. So there's a lot of other ways to approach this. We're talking about currencies as if they're all money, but data is another form of currency. So as attention I pay attention, it's written into the grammar of the English language. I receive attention and pay attention. It's a currency. So if I translate that currency into wealth, by building a defy system, to translate that currency, Google translates intention into wealth. You never intend to go to. You intend to go somewhere else, but Google has figured out a way to charge people for your intentionality and they deliver on that intention. I need some shoes. Let me go to Google and find the right person to sell them. To me. Google's taken a piece of that transaction. Every time they've translated the currency of intention into wealth, Facebook translates the value of your presentation of self your, your aspiration. I would call it your presentation of self in everyday life into wealth. Jeff Bezos, your shopping is it turns is a much more direct. Netflix is your passion into wealth, but these are currencies. These are these, these things of ours. These ways, we feel these things. We do these behaviors. We exhibit, these are currencies. These are all different ways to translate those currencies into wealth. And That's what makes this a super exciting.

Gene:

That's great. And I couldn't agree with you more on the most of those points. So, I know we gotta wrap up here. You got to run, but I certainly think that this has been a great episode. I'm sure people will enjoy it. And if they want to check out your book, you said it's on Amazon and what is it?

Shelly:

Yeah. So the, the, the title of the book, it's not as clever as I'd like it to be, but SEO is very well. It's blockchain, cryptocurrency NFTs, and smart contracts, smart contracts, and executive guide to the world of decentralized finance. You can just go to Shelly palmer.com or just Google Shelly Palmer, S H E L L Y P a L M E R. And you will get absolutely all the info you could ever want. We have a daily newsletter that is available for free. We've got all kinds of things you can attend. We have daily salons Monday. I'm sorry, Tuesday through Thursday, we have my Now crypto Wednesday live stream, which happens Wednesday at 1215 on YouTube live. You can, again, just Google Shelly Palmer or Shelly palmer.com is where you can get it all. And if you are so inclined, the book is on ebook on Amazon. I don't know when this podcast will air by the time it airs. My suspicion is there will also be a paperback of the book. It's very short. I'm donating all of my proceeds to a charity called girls who code so you can do well do good by doing well. It's interesting information. It's going to give you a good framework to think about blockchain and cryptocurrency NFTs and smart contracts. And it's also going to give some young ladies an opportunity to become engineers. So I'm excited to, to contribute all of my proceeds to that wonderful charity. So I hope you'll support the book and I hope you support those young.

Gene:

That's great. And you can also see the link directly to the book and Shelley's website in the show notes and the the chapter links as well. Thanks for coming out and Shelly, I appreciate your time. And I've enjoyed hearing your perspective on this stuff. It might be a couple points of contention we have, but in general, I think you're right on the money.

Shelly:

Thanks. I'd like to be right on the money. It's been a pleasure to be here. Take care.

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