Wondering About Kardashian, Elections, Gamefi and Crypto!

Episode 4

Andrew: [00:00:00] Hello and welcome back to Lex Con Crypto. We're excited that you are here for yet another episode

 today, Alex and I are in the studio and we're focused today around this this pesky question that's been bothering us for a little bit. When you're involved in the crypto space, you, you have to do a lot of wonder.

You wonder where this is all going. What's gonna happen next? You wonder what new technology's gonna be introduced what new crime is gonna be perpetrated. There's all sorts of things that, that we speculate and wonder about. And so we thought we would do an episode on just that what is it that we are wondering about this week in relation?

The crypto market and specifically around regulation. Yeah. Did I, you know, is banter going? But we necessarily wanna to split up a [00:01:00] couple episodes for you. One, with what we're watching in the news, what we've been seeing, and two, what we're wondering. Being things that aren't maybe grounded so much in news stories, concepts being put into words, things that maybe are a little bit futurist, maybe overly paranoid or excited on our part.

Alex: But this is the safe space for us to share some of our wonder. And I know Andrew has a couple topics of wonder for us. What do you got? 

Andrew: My first thing that I'm just wondering about, I want you to know that it's not wondering at the level of losing sleep at night wondering, but definitely something I think about is.

What is the outcome of this midterm election have on the development of crypto regulation? And of course there are several bills, two in the Senate, three or four in the house that are being closely watched and have [00:02:00] come very close to completion. But just were did not have enough bipartisan support to be able to.

Through to the, the, the House or Senate calendars and to get votes on. And so I'm very, very curious. I'm, I'm wondering how the outcome of the midterm election does power swing from the, from, from Democrat hands in the house to Republican hands. You know, is there a shift in, in the Senate does that usually, I mean, you're, you're a student of political person that it surprises me, like you said, you're not being kept up at night.

Not that level of wonder, but I would say for you, it's not an uninformed, you know, curiosity. I would think that you have a pretty good sense of, Yeah. Republicans are probably gonna take the house. Well, it's, it's a, it's a historical fact that the party. Who loses the presidency wins the midterm election.

It is the, it is the anomaly that the, that the, the party who wins the presidency also wins the midterm. That's [00:03:00] just Do you think, do you think that the wonderment of it for you is the fact that, you know, this is happening, like so many of these things, so many of these unresolved regulatory things in crypto that maybe folks like you and me have been riffing on for a while, seems that we are.

Maybe, but months away from decisions such that people who win in November will result in come January, February, March, some harder and faster rules. What it really is, is more than particularly party, it's the personalities who get appointments. It's the personalities who take committee chairs and that really is going to determine.

The makeup of the, of the regulation. So, you know, finding you have people driven. Yes, yes. And, and so, you know, is there a potential that you get sort of a a very conservative stodgy, almost anti innovation type of [00:04:00] a Republican? I think it. Possible. Both parties have have those for sure. And, you know, could, could an appointment like that disrupt the momentum that a particular committee had around some legislation?

I think that that is absolutely possible. That's interesting. If you have a cultural traditionalist who is otherwise a free market person, but that traditionalist impulse might override. Their economic ideology. Yeah, definitely. And when a party switches hands, there's a, there's a, a bunch of people who get promoted and you know, as a congressperson you want to take whatever the most powerful committee is.

And so perhaps you have, like, for instance, at Patrick McHenry. Who has a very influential bill and has a very powerful role, but also is definitely in line for a pretty significant promotion inside of the Republican caucus. Could he be promoted to a place where his influence over that particular committee could be changed or diminished?

I think, [00:05:00] you know, there's possibilities for that to happen. And if that happens, does that change the makeup of the bill? There's some, That's a good point. We should, we should put in the show notes some of the speculation in political recently about some of the preelection maneuvering within the Republican party.

Yeah. Or some of those party leadership positions. One that I read that's relevant to us is a challenge. For house conference chair that could be made by freshman Congressman Byron Donalds of Florida. Mm-hmm. , who's a MAGA republican, a former financial advisor before he represented his district in southwest Florida.

So he has some finance chops, so someone with those kinds of finance chops if they wind up in a leadership position. I would actually suggest that he would be quite good for a crypto in blockchain. I think he. I think he general generationally gets it. I think he'd be hip to it. I think he'd strike the right balance between consumer protection and innovation.

Right. But you're right. Somebody like that, you know, [00:06:00] a McKendry. A Donald's, they could have a new, a new bully pulpit. Actually it's beyond a bully pulpit, right? It's because they already have their microphones. But yeah, more greater power within committees and caucuses. It could be a very could change person driven thing.

So yeah, you're wondering about that. What else are you wondering about? The other thing I'm wondering about is the announcement today from the SEC of a fine of 1.3 million against Kim Kardashian. For advertising and promoting a a coin. Now we can all speculate that perhaps the coin was, was was sort of a scam coin and, and wrong and all those sorts of things.

But here's, here's why this makes it tricky right now. What may, what we may not understand or know, Is that advertising a coin and particularly a purchase of a coin on most major digital advertising platforms is illegal as bann. So you're not allowed to advertise on Google or Facebook or Instagram or a lot of the, [00:07:00] the main stream types of channels.

So the main avenue for most crypto companies today is to use alternative methods of advertising, including, Influencers. And influencers is a very large part of the, of the market, and every influencer of any significance in the crypto space and outside has at one point or another shield for a coin.

And whether it's a, whether it's for a coin. That's funny. That's like a shilling reference. There's something there. It's some, it's so, it's, it's prominent. There's a lot of evidence of this. It's interesting that the S SEC decided that after, after more than, I mean easily 10 years of this occurring, they're gonna choose Kim Kardashian as their example of who they want to go after.

Floyd Maryweather, Elon Musk, others have prominently promoted coins and advocated [00:08:00] for the purchase of them. And so it's a very interesting piece approach. Is it a message to every other influencer to be very careful about how they're engaging with these companies? You know, being, being someone in the space who works with influencers, I know that many.

Are earning their life's income and, and living off of this business. So will be very interesting. I'm wondering how this announcement affects that market and does it ultimately shut off yet another avenue for crypto companies to be able to advertise? Yeah. You know, prior to you mentioning that I wouldn't have thought myself as somebody who'd be drawn into Champion Kim Kardashian but selective prosecution.

In any form is something that just really, really bothers me. Yeah. I actually, this is strange. I don't know if you know this. I attended the arraignment of Rod Blagojevich. Talk about people who became, yeah, if not influencers, you know, maybe, maybe celebrities or blist reality show types. I attended his arraignment, [00:09:00] arraignment on corruption in federal court in Chicago.

Yep. Because I wanna set the example, While I'm generally involved in more Republican politics and I did not like the what I considered improper prosecution of Bob McDonald, former Governor of Virginia for white collar crime on a services fraud, you know, it was important to me to show up to witness something that I was, I thought was wrong, right, against somebody who was, was.

Of a party different than mine and maybe was an easy target because of how much he flapped his mouth. Right. And it's, it's, yeah. So that, that is an interesting one that you share. Can I hit you with my three points, please? Wonderman, please. All right. Like you, while I was trying to bifurcate out things that we're watching in the news versus things that we're wondering that are maybe a step or two more removed by regular reporting.

Yeah. You and I are are reading enough that oftentimes, you know, our wonderment is inspired by [00:10:00] stuff that we're reading. And Larry Tab, a Bloomberg writer Yes. He recently tweeted about Ethereum becoming the benchmark return rate. . And that gives me wonderment because when I work in other investment spaces and, and I do some traditional stock investing I find that I get quite a bit of pushback by analysts in an investment club that I have when I'm asking for benchmarks.

When we have a new fun strategy or something. And you know, I don't want the s and. I want some sort of exchange traded fund or a actively managed mutual fund in the space to measure up our dabbling, whether it's a sector play or a cap size play of so kind. Right. I always wanna, always wanna measure myself and ours ourselves against something and who or how benchmarks in crypto will be established.

Yeah. You know, good luck. You know, I think if it's the [00:11:00] case that the, the trading volume is that much higher on a select one or two crypto, that might be a really easy way for that to become the benchmark. There's some sense that TAB had, that it's post merge that Ethereum has emerged as a benchmark rate of return with.

Risk free rates of return comps. Yeah. So we'll include the, the article to that. But the idea of any kind of a benchmark in the crypto space is, is one that I can't even imagine. Yeah. Be, Yeah. No, be because I, cuz I get that pushback on, hey, what are we trying to do here if we do a mega cap value play?

And that shouldn't be that, that hard to find like a Vanguard ETF that tries to do just that. And like, Yeah, we're trying to go against. . But junior analysts just hate, It's not that they hate accountability, I don't think. Maybe that's it though. Maybe it's like, you know, the second you have a point of reference.[00:12:00] 

Yeah. Or being judged for things that are ultimately out of their control. Yeah. Maybe that's what the discomfort is. Yeah. It's something like that. I, I think in one that I have, Can I, Hold on. Lemme, lemme go on with that. I think dis when it changing to the proof of. The, the, the merge that occurred and the new consensus protocol that Ethereum has, has evolved to, needs to reach greater distribution before I think it could be come.

What, you know, he's talking about as a benchmark, I think it's totally possible, but to date, you know, still two nodes control over 46% of the transactions that are occurring on Ethere. And I think that there's a need, we need to see a much broad. Adoption after after the merge in order to, to really see that come, come true.

But Ethereum is the only chain at this point with the number of exchanges and, you know, other Ds playing on top of it to be able to give us any sense of a [00:13:00] industrywide and truly a, a, a benchmark. So if, if it can reach a broader. Consensus, greater distribution. If, if we can see, you know, adoption and transactions of significance, then I, I think he, he could be right.

He could be, It could emerge in that way. If we get to the point where it's a benchmark and it becomes, you know, one of the you know, when like folks on the radio, you know, read. How the Dow was doing or something, you know, when you're watching non-financial news, like not CNBC or you're not checking out something on, on Bloomberg or whatever where you'll have just a regular news bloke reading and the Dow was down today, 20 points.

And like you could tell by the way that they misread it. Right. I don't realize like how insignificant from a percentage standpoint it is, right? But if we get to the point where Ethereum as a benchmark is just included with what the Dow did and what the s and p did, and we allow non-financial people to read that as as some sort of regular statistic that we encounter, that would be, that would be huge, right?[00:14:00] 

All right, Check this out. Here's the, here's the other one. So so Robert Kiyosaki, who. An enormous name in passive income, investing in real estate investing. His book, Rich Dad, Poor Dad, is the gateway book for so many people to start investing in alternative asset classes. I've observed in recent years, however, that he has been shilling for silver.

So a lot of people who really have been into him and he never did it for me, you know, I read the book. You know, I'm, I'm a firm believer in investing in, in real estate. It works for me, but I wonder sometimes for people who so admire him and so admire his book. Well, at what point do you stop taking his advice?

You know, do you decide to not follow him into silver? He tweeted recently about Bitcoin as a quote, buying opportunity, and I always feel uncomfortable when anybody on [00:15:00] television. Categorizes something as a buy or somebody tweets, something as a buy without knowing their audience or specifying an audience.

And how can you arbitrarily give, That's exactly what the scc, that's exactly what the SCC was talking about. I mean, so that's, that's irresponsible. And what I would say to Mr. Kiosaki, however, is, well, if it is a buying opportunity in your universe of known holds, are you buying that Bitcoin with? Ethereum or other cryptos that you're selling, are you buying that Bitcoin with your next earned US dollars from your cash flowing real estate?

Are you buying that Bitcoin with real estate that you're selling? Are you buying that Bitcoin with silver that you're selling? So where does the money come from for Bitcoin As a buy? Yeah. Is is a question that I would have for him. Good call. And then my last one where I have to disclose. An investment [00:16:00] interest, at least at the level of a Friends in, in Family Round is a company called Shepherd out of New York.

And that's a very close personal relationship. The, the founder and I were best men for one another at wedding, so there's that kind of a close relationship. Yep. And he has an AI company that's advised by an NYU psychology, PhD on. Buying behavior. It's a platform that makes the value proposition to users that it will help you find the right car help you plan the right vacation.

And what's right is based on your friends' choices. Okay. So it's an AI that's highly influenced by what your friends in your social network have decided to do. Yeah. With the, the notion being something akin to. Man, a lot of people in your socioeconomic personal set have made the decision about that minivan.

Do you really need to reinvent [00:17:00] the wheel in deciding which way to go? You know, do you land on the Honda Pilot or the Chevy Traverse? You probably don't need to spend time on that cuz your friends already have sort of a notion. Yeah, So, so my wonder is where compliantly, a company like that can. So other than help me find the right car, which was their initial one, the one that Shepherds worked on the most.

There are six others and the two that are the the most financy are help me decide on a credit card and help me choose a bank. What I'm wondering is, can a company like that go into. Help me decide what crypto to dabble in. Right. Because I, I think a lot of people are wondering about that. There's fomo, fear of missing out in crypto.

Oh yeah. Such that people who don't have a lot to invest or a lot that they're inclined to [00:18:00] invest, wanna hold at least a nominal amount of crypto so they can say or feel that they didn't miss out on. The apple of our generation or Yeah. Or whatever it is. Yeah. Yep. And some people perhaps make that buying decision based on what's offered on a trusted or already used app.

So for some people, I know that PayPal really helped narrow down the choices because they made it that easy, right? To buy and hold for free. Right. Bitcoin, Ethereum and Bitcoin Cash. . Yeah. Can shepherd help people pick a crypto without being in this kind of advice business where they open themselves up to all kinds of exposure?

Yeah. So I think that it's a company that is onto something can provide some useful services. But are there areas where. They can't help educated, educate [00:19:00] folks on what their friends are likely dabbling in because of compliance reasons. Can they by way of AI allude to what they think that their friends.

Are going for. Right. Well, in interesting extension of that is of course with the, with any crypto purchase, it's publicly available on the ledger. And so a company using AI could actually, you know, given, given some. Some key bits of information actually attach, you know, your friends crypto portfolios assemble that pretty easily.

There's some companies who are already doing that. So that that could be even a, an pretty interesting extension, even if it wasn't a making buy recommendations, but simply saying, you know, here's, here's some of your friend's crypto portfolio. And an estimate of, you know, essentially what percentages that they are holding onto what, what make up that [00:20:00] portfolio I think could be.

Could be pretty interesting. Mm-hmm. You know, with a meta, meta mask address or something like that, you can really track a lot. You can find out a lot of, lot of information. Everybody's wallet's public, so you know what they're holding and you know, you know from what change they're buying it from, so you know what coin they're holding and percentages.

So it could be, you're right. Could be interesting. And if Shepherd, you know, is, is the company that, that does that, or if there's other companies you could imagine, it sort of seems like. Interesting idea to be able to navigate Roger saying, You gotta know when to hold 'em, know when to fold 'em.

That's it, dude. And, but if people are, if, if most people are not financially incentivized to give that advice right, about when to hold or when to fold, is there something with a little bit more credibility or skin in the game or verifiability to. Help nudge people in a direction or help give them some sort of comfort level that that which they are exploring [00:21:00] has some basis.

Yeah. In reality, I mean, it's easy to see what, what car your friends are driving. It's easy to see their pictures on Facebook about where they've vacationed. A lot of people I think I have. I have some vantage vantage points into this. A lot of people have, have a lot of misperceptions about what kind of financial decisions their friends are making.

Right? Where their friends are at in terms of their, their savings or what their portfolios look like, Right? Right. But with, with that fomo is there a way to give them some more accurate sense about how mainstreamed. Specific crypto choices are in their social sets. Yeah. Yeah. It's interesting.

It's very interesting. Hey not to, not to riff off your illustration of the Kenny Rogers song, but I think it's time to fold this episode. Can I sing another islands in this stream? There you go. That is what we nowhere in between. How can we be wrong? See, we're, see, we first knew that, knew [00:22:00] that melody from like May.

In Ghetto Superstar, but I'm now an older soul, and I, I'm reaching back to the Kenny Rogers and Dolly Parton. You're in touch with them. Yeah. You better wrap this up. Otherwise, I'm gonna keep singing. We're we're, we're, we're declining. Yes. Hey folks, thank you so much for joining us for another episode of Lexicon Crypto.

I hope that this was insightful and valuable to you. If, if it was, we'd love for you to follow us and where I've found on every major podcast platform from Spotify to Apple Podcast and many more. Hello way we follow us on the word to subscribe and come back for our next episode. We're looking forward to it.

I promise you, I will stop Alex from singing and we'll rely on each other.