Welcome to the market report with coin telegraph. We are back at it again and have some juicy juicy topics to be diving into this week Absolute chaos in the markets and we also have a huge guest sandbag been freed that you do not want to miss I am your host Benton and we were joined again by a resident experts Jordan Fineseth and yashu goa Jordan has used his background in psychology and human behavior to spot emerging trends in the crypto markets and yashu Is a financial analyst who has been covering the crypto industry since 2014 prior to his career in journalism yashu was a security analyst at Premier Shield and a copyright at App and technology. What is up guys?  I know while charts we have so much So much to get into Bitcoin the dump the pump back up the markets just going sideways now I don't even know where to start but we have a lot lined up We're gonna break things down get started with our markets pro segments And then we're gonna get into all of the other segments experts and we're gonna have our huge guests Make sure you stay tuned if you haven't like and subscribe our channel. We're here every Thursday 12 p.m. Smash that subscribe button make sure you turn on those notifications So you know when we're going live and we have the biggest guests in the game So let's go right into our markets news this week Danila. Let's run it So guys Bitcoin talk is here. Who's selling? What happened this week giant flash? Crap crash And we saw like reminisce of like March 2020 We saw the huge dump a lot of people on social meter We're buzzing about this saying the market crash because of manipulation Jordan. What happened this week? What's your take on why Bitcoin crashed? Why a Bitcoin crash again? Like there's lots of different TA out there and all stuff that this is why I did No, no, it seems like it was part of a natural market cycle We were getting hot and heavy prices had run up quite a bit since the they bottomed out What was around July 20th? I think it was a healthy correction in my opinion. What do you think? Well, I do think that we had plenty of catalysts behind this you know new dump and one of the the primary ones I actually noticed was from China and Somehow it rippled through the US dollar market and to the gold market and to the Bitcoin market There's a there's like a plenty of chart based evidence to prove that thing. So I'm gonna show you guys later Yeah, I think we're gonna dive into some of that stuff But I noticed a lot of other outlets all coin daily was citing conflict between Coinbase and the sec Crypto banter was calling crash of the biggest manipulation in crypto history I think there there was a lot of stars aligning here between countries institutions whales and there was some manipulation Happening whether we can connect those dots or not. I think time will kind of tell us Extremely weird kind of stuff happening though inside of that BitBoy was calling for manipulation as well Was any of this like you both kind of said this was like a natural cycle When do we have these types of corrections? What's stopping it from sliding even lower? Beyond 42k is that retailers or institutions kind of jumping in and setting that support level at that 42k mark? Yashu, what do you think? Well, like always we are excessively Leveraged, you know when we are betting on our you know upside positions So even a small movement in the market, maybe it's not that small enough But even a five-person downside movement it can just trigger a long liquidation event So we might we just have to like you know de-exilate a bit when it comes to really leveraging the positions And that's how we can de-risk ourselves from you know facing such crashes I mean in March 2020 some said that we almost crashed to zero because because of bitmix. So These kinds of events are you know Becoming the part and parcel of our Bitcoin life altogether I mean the same kind of crashes we have seen in February and May but we are always bouncing back because you know sense prevails And sense comes from those retail investors you were talking about who bought the dip and now I think they are sitting on a very good profit So congratulations guys. Yeah, there's a lot of over leverage in the market It seems like every time this gets over levy was almost back up to where it was earlier in the year And every time that happens they come out and just dump it on the market I think and you go back way just at 2018 2019 when they cracked on my CO's if you noticed all these exchanges launch their derivative projects because that's how they make money now They don't make as much money as they used to launch a new projects or even just from trading fees So they launched derivative platforms so they can short or like liquidate people and that's what happens And this is like it's crypto is still is still not this like well established Global thing where it like it can't be manipulated inside as such and it does and I don't know I just think that that's all part of the game that we go through and if you look at how quick the whole market has bounced back I'm sure Bitcoin still kind of struggling but a lot of the altcoins are starting to take off. I'm bullish now This is a good sign for me. I Also want to note though like who was selling and we know this was kind of a little bit of of that derivatives market Where it was getting overheated and we're talking about this healthy cleanse It's a data appears to show that it was not hoblers who are selling It was some big whales in the market who just accumulated their their Bitcoin most recently So Yashu, what are your thoughts in regards to actually who cascaded the sell-off? Well on chain data showed that Most of them majority of them were like new holders. They were not even holder They just entered the market and they just saw an opportunity in this old off We cannot actually call them veils or you know, any kind of serious institutions But my guess is that all of these people they were very much like exposed to the gold market as well at the same time because there was a slight correlation between What happened with Bitcoin in the gold market at the same time the crash was very very You know middle like so. Yeah, there is no point of guessing but they would actually short term holders definitely Yeah, I had friends and people calling me that I had gotten into crypto like so what's going on? How did this happen some to me? Yeah, the people that aren't really Used to cryptocurrency and the volatility that exists might be the ones that are more kind of like dumping things that the Things are going really south Yeah, I do want to kind of circle back here to that to that manipulation. Is it possible that that countries were doing this? Manipulating we had the news of El Salvador releasing that they are now accepting Bitcoin as legal tender Is was their manipulation of the market? Yes or no, Yashu. What do you think? We have seen similar crashes in the past and I we cannot just go back You know to the same point all over again. That's it was manipulated. It happens I mean we have seen it before and it was not much of a big crash You know after this much value you have seen since July 20 There has to be some profit-taking and because of that profit-taking there has to be some liquidations Against the people who were betting on on a higher Bitcoin prices. So what's there to guess? I mean, I think manipulation is just a rant if you have the reserve currency Or you like something like the IMF that controlled the monetary system of the world Would you kind of want to like slap the hand of a maybe a rogue country that did something you didn't like? Or I don't know. I like I don't see it as just a country I see this like we're in the midst of a financial shit like a paradigm shift And it's not just gonna go easily the people that used to have all the control They still have most of the control are not gonna let that control go. So, yeah Like there was there's been every market on our planet is manipulated if you ask me like I don't see anything That's not so this is all part of the game and just so happens on the day that El Salvador was like We accept Bitcoin is legal tender the market tanks. Hmm. Yeah, and back when Elon Musk was like, you know what? Bitcoin mining is bad. It's in like a week later. China shut down its coal mining like yeah, there's no no There's no collusion here. There's no coordination. No, I Think that countries have a vested interest and there's a lot of people going after Bitcoin And I think countries were partly behind this whether it be China whether it be countries in South America who may be starting to shift To a Bitcoin reserve currency I think there's a lot of people who want to start trying to get in cheap and those are going to be countries This was the first dominant. We see in El Salvador We now see the Ukraine taking steps to adopt Bitcoin You're starting to see it more and more of these countries start to chip away at that US dollar standard And I think countries are gonna start kind of teaming up and especially those that feel like they have been left out of the traditional system And so I think that's partly This this kind of movement that we've seen but as we've seen though with with the Overleverage that's definitely a part of it It's just a lot of things are kind of starting to line up and this is part of that that natural cycle So very interesting stuff happening this week in in the markets We're gonna start to dive into a little bit about that golden US dollar which I want to roll into next So let's go right into Yahshu's expert segment for this week so Right, I'll just begin. I should always wait for my turn before speaking So I actually the reason I was telling you guys that it might not have been a manipulation Is a simple correlation between Bitcoin and gold and the US dollar index So I'm going to share a screen with you guys so that I can just like present this thing just a moment And here we go So if one sees the screen they can they can see that Bitcoin market was more or less reacting to the price performances of its top safe heaven rider I mean gold in the US dollar that was very much, you know Like instrumental in driving the Bitcoin prices downward if you if you focus on these big red candles and Ali chart So there's a green and red candles, you know that belong to Bitcoin the black and white one. They are gold and These blue and yellow ones. They are US dollar So you see that's about this this red candle, you know that arrives at 10 a.m EST so Bitcoin faulted this time about 20 percent gold falls by about 8 percent at the same time US dollar Index rises about, you know, 3.0 point 3 7 percent. So this is the first first trigger You know that we are looking at that all all of this, you know market crashes. They were entirely correlated So there was something macroeconomic happening, you know, so that's one thing I really wanted to flash out that what started it Meanwhile, like like I discussed in the previous section that there was a long liquidation event triggered by this You know small this basically minor correction and it turned into be a bigger correction. So which is why we were looking at Crypto price crash at the first place But we really have to see that why the US dollar was rising So this route out manipulation though because like to me this kind of looks like when the market dump the crypto market dumps All the dumps in the stable coins go up though I think our world financial markets are so inter correlated now because I know everybody's shoving their their money into these assets trying to get out of these Fiat that are losing money that yeah when any asset starts falling everybody rushes to the stable coins to the dollar So it does rise, but I don't know like that doesn't necessarily rule out speculate or manipulation in my opinion Well, you might be right about it, but see I really have to define one thing that people are exposed sometime a portfolio is Completely completely exposed to do different asset at the same time. Maybe it can be a portfolio or it can be You know golden bit gone portfolio or a bond for you again So again, you feel you start losing money in one asset you try to offset that loss by selling some other asset that is sitting on a good profit So that is how you protect your money, you know, you you just turn back to cash So which is our why I believe it's not actually some kind of manipulation. It's simply a market reaction and I mean if that answers well, I mean I Would like to judge me tell that why it was happening because There was a there was an article I read on Bloomberg which actually noted that China's annual interest expense Right now is greater than the yearly increase, you know, and it's not nominal gross domestic product So therefore we are looking at a potentially potential inflationary shock in China right now And which is why we are seeing some, you know, real growth concerns there and The foreign investor as a result is putting now money in the US markets So it is pushing the US real wheels and US dollar index price higher So that's one one thing. I mean and whoever they are I mean, they could also be putting money in the golden Bitcoin market. They can But probably they are, you know, as we speak here, they are buying Bitcoin But this week's action show that how far Bitcoin has come in so much that it's price declines are matching steps with traditional assets like gold Do you think I'm sorry, you think this is going to be more short-term pullback or what do you think it's going to be up ahead for Bitcoin? The best thing about this correction was, you know, the buy the knife strategy by retail investors I mean, we have seen it before it fell to 42k somebody or an army of retail investors Just jumped in and bought it they don't want the price to go down because they know that what they are facing ahead in the market and Which is why I would like to actually discuss that what can prompt people to stay invested in Bitcoin That is the uncertainty a very very scary fundamental in the form of what Janet Yellen the US Treasury Secretary said You know told the lawmaker and I would like to actually press on that with your permission that She said that she won lawmakers about a potential financial Armageddon. By the way Just a moment Yeah, and I'm again it sounds ominous that sounds dark and ominous Yeah, dark and ominous. So basically what what she's saying I mean, you really have to listen to this one because it's interesting. It goes interesting She said that the US Treasury will run out of cash by next month by October 22 Maybe they will run out of cash. So as a result federal reserve of federal government the US government They won't be able to respect their debts. I mean, that is the warning that is coming from Janet Yellen herself If that isn't a case for Bitcoin, I don't know what is Exactly because because you I mean we viewers also need to understand that what what is happening exactly in short of federal You know German default basically would be an economic catastrophic Because you know what it does it actually increases the interest rates and because of that the stock market also suffer They go down all the retirement account you look at you know They also take a beating the value of the US dollar erodes and the financial reputation of the country One of the you know, I'm not actually the one the only superpower right now You know the financial reputation of the United States which also drops hard so basically Yellen tells congressmen in a letter that They are basically wasting time, you know big ring hoping each other That should not be happening. They should raise the debt ceiling and the time They are wasting in you know by just doing some really political Catfide they are actually pushing US to the brink of a financial disaster So why why why would one stay invested in the US if they really like default on their debts It could this be worse than 2008 like is that is that kind of what I'm hearing Well, I really don't know because in 2008 we were looking at a house market collapse basically altogether and this time we have a debt collapse more likely because We are already sitting on a 29 trillion dollar debt. Yes, it's gonna be Yes, it's gonna be worse. This is a global bad like China China's biggest One of China's biggest companies is going bankrupt ever grand. They're the largest property holders They're the largest foreign property holder in Australia and the United States What's that gonna do the property market in the United States in Australia if they go bankrupt? Like this is like we've been we've been living on borrowed time probably since 2008 and Like politicians have been kicking the can down the road not actually offering any kind of solutions to changing our world And now we just printed how many trillions for six trillion since the start of COVID and we're acting like We can keep doing this. No that chart is starting to go parabolic It's the same as crypto charts go parabolic and that voice inside and he's like Jordan takes a profit That's happening. It's not a good parabolic Jordan is absolutely right, you know, because even if they raise the debt I mean imagine they just take the chance and they really raise the debt ceiling, you know, okay They can now borrow more Even then we are looking at a good prospect for adoption for Bitcoin because man They are you're just creating a very big debt bubble because of that and it's Person on the world is starting to realize like all these central banks are just printing money We have to work We have to dig stuff out of the ground and create things and they're just printing money And people in countries, especially you're not outside. It was like we're out of that game man It's this old this is just a start to like a whole transformation and it's gonna be painful Exactly and it is already painful guys.  He will have to find some safe haven. I mean if Bitcoin is the solution. Yeah, go there if defa if any anything It defies the solution.  It's defi. It's all of the systems and framework being built in front of us right now that I think could possibly be That solution for for our future So I think there's light at the end of the tunnel, but that is a dark picture that you paint yashu So I appreciate you walking us through that in showing us those correlations of what could possibly happen ahead Scary times, but if you haven't liked and subscribe make sure you do that now Our coin telegraph channel is here on YouTube work live the market report 12 p.m. Thursdays So let's roll this over to Jordan segment I know he's gonna be talking about some defi today because he is our resident defi expert So let's jump right in Yeah, so we got some of that bad news out of the way Let's jump into crypto and see like there's news if you can go ahead and share my screen to neil One of the hot uh projects for everybody if you've been paying attention has been Solana I mean it's up over 200 dollars now And that it's really starting to bring back this discussion of is it Solana the aetherium killer And a lot of people are really starting to compare the two and even i'm like for the future price target of here at 500 dollars is I think the Solana um Circulating supplies about 292 million compared to about 117 million for aetherium So that's if it kind of reaches the same parity, but what's really attracting people To Solana is it's growing defi and nft marketplace or uh ecosystems That have have they exploded on aetherium But if anybody that's been trying to use aetherium lately knows Like it's really expensive to transact on aetherium if you got people in other countries like uh, venezuela Or anywhere where even a five to ten dollar fee can feed your family for a week That's not really feasible for them to be using aetherium And I think Solana has really kind of stepped up to the plate here a lot of it's also because of the people that back I know we're going to be talking with sam a little bit later and um ftx the the exchange that he runs Has been a big backer of Solana. They just launched the nft marketplace for Solana So they're selling nfts that sell on Solana I can pull that up here. Yeah, there is so jordan while you're pulling that up I I want to break this down for our viewers today Uh, why is Solana's ecosystem? Absolutely surging you mentioned nfts you mentioned defi But like what makes it different than some of these other blockchains like binance smart chain or phantom Uh that we've also seen grow in polygon. What makes it different? And why is this absolutely skyrocketing right now? well, uh, a lot of it is the low fees I think it's like it's really super low even lower than binance Binance uh came along. It's connected a lot with it's just the older world and binance got a lot of its own A lot of people have concerns about the binance smart change whether it's it's controlled. Is it decentralized lots of different things? I think the just the general public feel about Solana is a lot more positive Doesn't have the back history that binance does and it's it's super fast like And cheap. I don't know if anybody's ever if you've jumped on Solana and try to use it even compared to the binance smart chain or anything it's quick and that's like The first thing I really looked for after I got in the crypto everybody gets in the crypto You buy a bitcoin you like you try and send it you're like this hour long wait ain't working for me So you move on to something to maybe like a light corner did uh ripple those kinds of things But then you're like man another legacy they're getting boring now Solana's launching defi It's launching nft is it's launching defi nft ease with the game fight like the yeah I think game fight just just raised 4.1 million. So it's it's captured the the the nft and defi energy and and solves the problem of high fees on um, ethereum So I think that's but it was surging when bitcoin was dropping like is is that just money moving over from different chains Or like, you know, what are you kind of seeing? Why was that surging when bitcoin was dropping? That's really good marketing man. Like talk about releasing good and announcements and catching a wave right at the right times like it When when the market's dumping But one coin starting to move then people are like let's show if I've watched it so many times It's where the whole market is dumping, but there'd be like three coins that are just like shooting up And it's like people either they go to stablecoins or they go into an altcoin And right now it's actually they're actually choosing altcoins that have a long term validity and like strong use case That have like they're it's going to go up in value in the future So why not catch it now on the dip and people I think uh took advantage of that and along with like multiple good Big announcements coming out of both solana and ftx But jordan, don't you think that uh, solana is also facing stiff competition not only for from ethereum But also from other competing chains like cardano. Yeah, what do you think that how much how much they must have? Yeah, I think cardano is gonna get bogged here, but right now you can't jump on cardano and do d5 I'm sorry like if the capabilities will be there right now. Solana has like first mover advantage and this current bull run as far as like catching the the the hype of what's happening on ethereum, but offering a better a better environment for people to do it Like I try my argument that Jordan is you see chains you see chains with low transactions and fast speeds Like that's nothing new to the d5 space. So it's like for me It's like are these chains just doing a much better job of marketing themselves And that's why they're getting in front of more people and more audiences Or they do it are they focusing on education how to get people set up on their chain Like what is the secret sauce a lot of it? It's all of those things in the really strong community You'd be amazed at how much like word of mouth and like good market go back to 2018 or 2017 Good marketing to ask Justin's son like what does good marketing do for your project? You know part of it's that you got a really hyped up a community People love Sam which he's a cool awesome dude Like I think that even just having a good figurehead is like at the top of this Brings new energy like people are going to support him over a cz in my opinion kind of a thing You know because if he's in that like that benefits the project, but it's It's they've been doing like the right steps this whole time Like I haven't seen a whole lot that I haven't appreciated from Solana over last year That has it has made me kind of had any kind of negative feelings towards the project and that goes a long way with people Where do you see Solana going in the next six months to a year? If you had a price target, what are you kind of looking at for the asset itself? I don't think five six hundred dollars is unreasonable. Again, if it's Ethereum's 117 Solana's 292 that's like two and a half times So I take the ethereum price divided by two and a half if they can keep reach parity with Ethereum and and keep building its momentum. It could easily get up to that like a To a multiple of the ethereum price So even a thousand dollars isn't without a ring like again We're head what we were just talking about like the world's economy is crashing There's gonna people actually start onboarding into cryptocurrencies Solana is going to be one of those top projects We're not we're not going to be investing in train cars people are going to be investing in train tracks And Solana is a really good train track but Jordan I was looking at Solana's technical indicators and I happened to come across RSI which was like completely completely overbought And I I'm actually I know that it can actually go up because of all the promises it's doing right now But at the same time for for investor who want to enter the market When is the next step according to you in Solana markets? When the next what sorry next step Oh, it could happen right now man. It's gone up again. It's the one of them I wouldn't I personally would not be jump dumping a whole bunch of new money into Solana right now Just because it's gone parabolic like All time high do not buy And even the other one corner like Algran Like it's it's it's being chosen by El Salvador to host a lot of its actual blockchain stuff But it's at a new all-time high too. These are really like all the algorithms and other good solid layer one blockchain Pure proof of stake low transaction speed fees, but they're at all-time highs now So I wouldn't I wouldn't personally recommend buying any of those like the dip will come But once it does, I don't know. Maybe the dip for Solana was when bitcoin just took a shit like this past week I the one thing that gets me with Solana is is uh token supply I mean right now it's sitting at number six in regards to to market cap Uh, the token supply is almost double of finance And ethereum, so I there's a lot more circulating supply and there's actually supply I believe that hasn't hit the market yet So I I do think there's a little bit of that ceiling below 500 Um in in my opinion, I feel like when it comes to that supply demand aspect I don't know if Solana has a burn mechanism. Is that something jordan you you have information about? I don't know. I mean you say that don't have it off the top of my head But it's something I could look into and again, that's all I love about the beauty of this It doesn't mean like if you if you as a person that's in the community see that as a valuable thing That's something that could be added in the future Just the same way that it's been added with ethereum with the the london upgrade and eip 1559 And the new burning mechanism that that was why they added that because People had a lot of concerns about the emission rate of ethereum and inflation and all that stuff So those are all things that can be addressed later on in the future But right now it's about building that ecosystem and building the community behind it But yeah, the the price will eventually cap out and have a pullback And I also want to note like there's there's a difference between you know buying the asset As a play or an investment versus actually utilizing that asset inside of their ecosystem to get around and navigate through those d5 protocols So there is a use case for Solana It's not just buying to hold that asset That's one direction you could go but you could also use it and utilize it for gas fees getting in and out of pools Or whatever kind of ecosystem buying nfts those kind of things It sounds like on their platform So i'm always a big fan of projects that have use cases for their tokens Um, especially inside of d5 ecosystems, but awesome awesome If you want to you want to close out the segment one last thing It's also the staking mechanism the staking mechanisms are the ones that are doing the best already have launched staking mechanisms full like Finance smart chain doesn't have an easy to stake Solana does auger and does Cardano does so Good stuff Well, if you haven't like and subscribe that youtube channel for cointel graph We're here thursday's 12 o'clock p.m. Make sure you are tuning in We're going to shift over to our markets pro segment. So let's go ahead and dive right in All right, breaking news is what moves the crypto market and the news quake service by ct Markets pro helps traders stay on top of important news news quakes are automated alerts that instantly notify users when market moving events happen We are going to look at a chart today in particular radium I don't know if you guys have heard of this particular token But this was yet another case of binance staking announcement Anytime you're seeing those announcements staking announcements Exchange listing announcements our platform markets pro is able to catch it and it was able to catch radium Which had a super surge after that news quake? You see there on the lower side of this chart You'll see that red circle that is going to indicate when that news quake happened and that white line is the price line In that middle yellow and green line is the vortex where we see what happens after a news quake that price line Absolutely just went parabolic and that's the power of the news quake So when it comes to markets pro that news quake feature is super super awesome to keep track of But I do want to move over to the next token that we're going to be highlighting this week, which is iost We're going to be looking at the vortex score for this particular token And for those of you who are not familiar with the vortex score It is a comparison between its current market condition and the social conditions of those in the past A high score for a vortex score means that judging from historical data the assets current outlook is bullish for the next 12 to 72 hours So a vortex score of 80 or higher is considered confidently bullish So on this chart you see for iost that first red circle in the middle of the chart is that vortex score hitting at 80 You will see nearly days later and hours later that price line of the white line actually surged up after that So that high score of 80 or higher that 12 to 72 hour window is typically when we will see a little bit of price action According to uh historical data So that score has been in the green zone and like I said that vortex score anytime it's green You just love to see it So it took that iost price from 0.5 cents all the way up to eight cents So that historical data has been clearly instructive here Uh, so super awesome stuff for their markets pro platform If you haven't checked it out make sure you do you want to make sure that you are staying in tune with the markets And the markets pro platform is the best way to do that Uh, so we are super excited for our special guest here And uh, I know we have sam bankman fread coming on next So make sure you like and subscribe our youtube channel for coin telegraph Let's jump right into our interview with the man the myth legend sam bankman fread All right, we have sam bankman fread who is a pioneer in the decentralized finance space And he was named forbs 30 under 30 in 2021 runs ftx a global Cryptocurrency exchange specializing in derivatives that he began in 2019 Ftx is one of the largest cryptocurrency exchanges and routinely has daily trading volume in the tens of billions of dollars He also manages 2.5 billion dollars of assets through almeida research the quantitative crypto trading firm He founded in 2017 Welcome sam. We are super excited to have you on the show today. How are you? Doing well. Thanks for having me Yeah, awesome stuff. I I know I have been seeing ftx just absolutely everywhere man You guys are crushing it with the marketing from mlb to celebrities athletes all that kind of stuff Uh, I want to start things off here like where is your team heading next with with kind of the marketing? I'm absolutely loving this Yeah, I mean You know what what we're really looking for are what are the things that can Reach tens of millions of people without diluting our brand and you know, we're really excited about the partnerships You know with with tom brady. Good. Good luck tonight With with stuff curry with um, you know the miami heat with major league baseball tsm um, and you know, I think that we're gonna keep you know on the lookout for um I for things that can really move the needle there. Um, you know, I also think that I we've we've done a lot already in that space and you know, we're in a fortunate position to be able to um, but I in the end Endorsements can only get you so much in the end. It's it's all going to come down to our product and our execution How much has fdx spent on on your marketing this year so far? I It's probably gonna end up somewhere between 15 100 million. Um, you know, it depends on exactly what ends up coming through But that's going to be the ballpark and and of course those numbers seem, you know Big compared to what even you know, we were thinking about a year ago, but um You know, we're in a fortunate position where it's not not that big compared to Uh, you know, what our our budget's gonna look like this year. So Good deal. Well, I want to do kind of roll over to the the markets and I know we saw limited chaos this week So I'm curious to hear your take of of what you saw happening in the markets and why we saw that that bitcoin dip this week Yeah, totally. I mean, I think it's a classic thing where like I you know There's a ton of bullishness in this space. There has been for a while We sort of recovered sentiment, um, you know from I from the crash back in may And I you know what you started to see was all the signs of people getting leveraged along again The space getting really long the space getting bullish. Um premiums going up usd bar rates going up sentiment very positive and You know, I think that an important point to make about that um Is that sometimes that just leads to more Runups like sometimes there's just a straightforward effect where when people are bullish things go up But there's also sometimes an effect where if things start to go down You get some liquidations, you know, you get some margin calls. You get some people cashing out and de-risking Um, you get some of the hot air leaving this space. Um That's what we saw over the last few days Open interest is down a lot. You know, I think it's probably five billion or so um of liquidations and You know, I think that that was what drove, you know, two thirds or so of that that that decline um But I think another thing to note is if you sort of look at like march 12th And then, you know, may 19th of last year may 19th of this year, and then you look the last few days each time, um like Each time that happens It's a lot less of a shit show for the space and I think for people who are around in 2020 um You know, I It was a really scary moment for the space When when markets crashed when bitcoin went below 4k That's really really different than how it felt You know a few months ago in may You know, and I think it felt like a lot of cooling off in this space, but it's still a lot of hope Um, and I think now you look at, you know, the sort of crash a couple days ago Frankly, oh, we're already halfway back up and you know, I think market sentiment is already fairly positive again Um, I think each time the liquidity and crypto markets has gotten deeper Um, the hot air has gotten less overheated and it's been more sustained in flows. Um, and so I do think that it's been I You know a healthy trend for markets So do you suspect that we'll see more of these kind of shakeouts? Like before the end of the year or before kind of bitcoin kind of keeps going up You know, we're always going to see these time again Like you can't go up if you don't go down you can't go down if you don't go up like there's there's always going to be both movements and um, You know, I think it's important to keep in mind that like bitcoin is up like what it's like up 200% on the year or something like that um Whenever you see an asset with that level of up moves, you're gonna see 20 down moves Um, if not, you just have an implausible price graph, which is just like a straight line up And and what happens what you know if people are expecting that is you get people buying an anticipation of the future Uh, the future increases. Um, you get sort of speculation And that can be good for market health and efficiency because it can realize price movements earlier Uh, but it also means that there's a bit of a speculative bubble bubble that that can cause a mini crash They come hand in hand with each other. Um, and it comes hand in hand with trying to have efficient markets Yeah, I want to kind of shift this over to like the altcoin world And I am curious to hear your take in regards to maybe some uh, some altcoins that you feel have the highest potential Are you looking at ethereum uh to continue its surge and and could we potentially see a flip in the future of bitcoin? you know anything could happen and Um, I would be surprised if there is that flip but but it's not impossible. Um, I think that like if it were to happen Like if you came and told me look sam Two years from now ethereum had a higher market cap. Um, then then bitcoin predict what happened Um, I think my prediction would be that there is massive institutional inflows You know, my prediction would be that what happened, you know over the last year um was uh That you know institutions really got involved um in in buying ethereum for the first time and uh, And I think that could have massive impact on on token prices Uh, you know, of course you could see a crash as well. Like, you know, I don't want to say that will happen, but If it does go up, I think that's likely to be the cause If we were talking about solana in their ecosystem earlier, uh, is that an ecosystem? You've had your eye on it and what are you most bullish about in the development of that that ecosystem? Yeah, I mean, I I've been, you know, serve a fanboy of the project Uh for a while. I think that it's really exciting And I I think that it's sort of is um, you know, I I think it's basically The only uh one of the only blockchains That is really trying hard Um to scale as much as it can um and and to get to the point where I it can support just massive massive operations on it almost no other blockchain is even trying I think the world is starting to come alive that I think its institutions are starting to Um, I come alive that and I think that the crypto community is, you know, as well I serve one a you know, I don't know about price predictions. Obviously. I you know Was fairly bullish on it. It's up a lot. I'm still really bullish on the project um, I don't know what the right price is for it and um, you know, a lot of that's gonna have to do is crypto sentiment overall Sure And so like what areas of defy are you most interested in and why? I think that like One piece is just building really great user experiences across all products. It just hasn't happened enough um I think that like a second thing um, is I starting to see real existing businesses back end into defy um Businesses that were not natively decentralized start to use it. Um as I show that it's not just cool But it can in fact be better Than existing other off opportunities for some businesses. We haven't seen that much of that yet, but it could happen Um, and then I think you know, I think social networking is something that hasn't really made its way on chain yet I know we've seen a few kind of attempts at it and I think a few people are working on it Um, but uh, but I think that's something else where there's a lot of ground left to cover But it's a pretty natural thing And so like what would be your vision for the future of defy and and how that could coexist with a traditional finance system Or mesh with that traditional finance system You know It's a really complicated question and I don't think anyone knows the answer I think that you'll hear some people who give the answer like, you know defy is about to flip banks That's not about to happen. Maybe it'll happen at some point in the future. We're not we're not close to that point There's a lot of progress that needs to be made. Um, and I think that um You know, you'll get other people who will sort of speak confidently about the future of the regulatory landscape for um, I You know for for defy and I think that's also not not right because The real answer is is we don't know Is that that's sort of a really important open question for the future of the industry? That just you know is going to take time to resolve Um, so so I I don't know the answer for sure and and and that's my strongest belief is that I don't know um, but um You know, I think sort of outside of that like, um I what are the things I think I you know Are are going to be the biggest touch points figuring out how custody works figuring out how institutions can get comfortable Storing assets on defy figuring out what uh, a ml regime it fits into um and um You know figuring out what happens When you have part of the world on a blockchain based system and part of the world On a non-blocking based system. How'd you interface between the two of those and I think you know Stable points are sort of one attempted an answer there. Um, but it's not the only possible answer It's so early in your career you made a name for yourself by doing a lot of arbitrage trading Can you kind of break that down for our audience who maybe are not as experienced with that and how did you get so good at doing that? Yeah, so one of the interesting things is um, how easy it is sometimes to spot an arbitrage Um, you just see two markets for the same coin trading at different prices And it's like, yeah, what if you like buy on the low end and sell on the high one? You know uh Do you make money? And in theory the answer is yes, right and and sometimes you see that in crypto You'll see two exchanges same token different prices. That's an arbitrage opportunity And then you can ask like, okay. Well, if it's that simple Why is never and do it? Why are these opportunities still exist? And the answer is anyone who's really tried to do large-sized trades On quick time sales in the crypto ecosystem globally as quickly learned how difficult that is Operationally and it's gotten easier over time and that's coincided with efficient with you know more efficient markets but I But you know the number of problems that run into from you know withdrawal limits jurisdictional limits banking issues exchange issues deposit withdrawal issues It is like the problems compound really quickly and it can be operationally quite difficult um Just to kind of like send assets to an exchange buy a token there Send it to another exchange sell it there send those assets back sent it back to the first exchange I gotta jump in with the questions sam if I may. Yeah, uh, how do you actually Like spot these opportunities because it it sounds like a pretty like humane task I mean, uh, if you get any if you just keep looking at different computers Do you have like a special tools you have created to a quantitative computing tools? Maybe to sport certain arbitrage opportunity and how legal is that? I mean in some countries I have heard heard that arbitrage trading is kind of like an illegal thing How do you answer that? Can you name one of those countries? Oh, well, I can't really but I will get back to you about it, but yes So there's some like things that might be helpful for doing some arbitrage is that might be restricted to some jurisdictions Short selling is an example of one where in some countries it is difficult or impossible to short sell some assets They speaking even outside of the crypto regime. This is often true. Um, um arbitrage does not tend to be outlawed It's sort of is the fundamental principle of providing liquidity in markets. Um, um, but I you know Putting that aside for a second.   Just pull up coin gecko, right? Like I don't know pull it up typing your favorite token Right, like click on like the markets tab And it'll tell you what it thinks the price of each asset is Right on each exchange and just feel like are those the same number, you know And like right now if you type in bitcoin and sort of I'm doing this as we speak You know and you click it on the markets. What you're gonna see is uh, I It sometimes it's um, I It's I has bad data. Um, but when the data is correct, you're going to see every market pricing. This is basically the same price Um, uh, which is you know about 47 200 right now um And there's some variations here but that variation is mostly because I think coin gecko doesn't really know how to price your own so um, but um If you put that aside for a sec, um It used to be that if you type that in you would you see wildly different prices and and part of the point is that this really is part of an answer to like What what a scheme could look like there, you know to be able to to identify arbitrage opportunities, um Literally just pull up coin market cap or coin gecko pull up the page for a token and see on which markets you get different prices Um, and it being a little bit glib here But but it is really true that even something that simple can get you some of the way there Um, and then what sort of a more sophisticated tool? Well, you can build something that alerts you when there's a difference, you know You can build something that highlights when there's a difference. You could build an automated trading system That actually does those trades based on on those prices. Um, but I you know, I think that like I A lot of the tools that you might want to use there are actually surprisingly straightforward and simple And rather than being like incredibly complex mathematical formulas, it's sort of like alert This price is bigger than this price. They're for the same asset Can I go maybe get your opinion on the like the growing nft space? I know you guys just launched the nft marketplace for the solana and in my opinion It's it's almost attracting more people than defi is so I don't know I just seems like one of the biggest things that the whole crypto industry guys going for it What's your opinion on nfts? Yeah, um I think that like the amount of excitement we've seen for nfts not just from people in the crypto ecosystem but you know more generally um from Businesses all across the world is unbelievably strong um, it's Like it's just like it's something that we've almost never seen for this quickly. Um It's not um, this is not just a bubble internal crypto if it's a bubble. It's a global bubble. Um And I think that there's a huge amount of long-term interest in them I think that there are a lot of areas where they make a ton of sense. I think ticketing is one obvious example um I will also say that I personally am really really bad at judging aesthetics It's just like it is not what I'm good at. I don't know what pictures are pretty. I I don't know And so like what when I try and say like what's a good nft? I'm sort of like dude. I'm not the target audience here And we we have a lot of other people on our team who I think are better at that but um Uh, but but I think that's sort of the the goal of the platform that we built rather than trying to Decide which nfts are good and which are bad. It's to be a platform You know, that's in the end what we're best at is building platforms. Um, and and you know our nft marketplace It's a place where anyone can mint nfts anyone can list their nfts Anyone can deposit and withdraw nfts between Ethereum and Solana cross-chain um, and you know, we just want to be uh, we want to be facilitating that and um making it really easy for people to uh to distribute their work I was wondering how you guys are gonna like one up yourselves with this marketing thing You got Steph Curry. Are we going to see like space ftx next or something? You're going to do your own space space brand What we'll we'll see I I'm going to take us into the fire round where we have a couple fun questions kind of get to the no usvf Uh, so let's kind of jump right into this So I have one question here and it's if you had a superpower. What would it be? Oh boy, I mean can I make up anything like you can anything That'd be pretty powerful. I don't know Um, yeah, why not? All right, and when was the last time you didn't look at a computer screen for more than 24 hours? Oh, oh boy. I mean There's a mobile screen So like sometimes I travel and like when I'm traveling like I'll use my my my you know phone But but I sometimes won't use the computer for a day So so I guess my answer would be you know three months ago when I was sort of last traveling Okay, and now what would it take for you not to look at a computer screen or a mobile device for more than 24 hours? I mean, you know, it would be painful, but I could do it like I think it just Meetings maybe is the answer like if I had some incredibly important in-person meetings for a day I could imagine it'd be a little weird if I weren't checking like slack in between meetings Right, but like I could do it wouldn't be the end of the world Yeah Uh that with ftsc's recent marketing blitz. Uh, do you have a favorite sports team? I grew up watching the san francisco giants.  Yeah, how they have the best record in the league Very good. And last question and fire out. What is your favorite planet and why? Uh Fair enough. I mean, we're all here so it makes sense. Yeah Good deal. Uh, well, no, we appreciate you joining for today's show. Uh, sam awesome getting to know you and chatting with you about your insights regarding the market We would love to have you back in the future and we appreciate you joining Thanks, sir All right. Take care same All right, that was fun getting to know svf the man the myth legend of ftx Uh, his name's in the space. It was it was super fun to chat with him But uh, we are going to get into our questions from the audience today We're gonna get you guys involved. Give us your burning questions. We want to know what they are We want to answer them anything goes answer all the questions that we got Uh, we let's let's uh go ahead and get started here All right, folks Tons of questions are flooding in Uh, let's see. Can you quickly pump salt? No Wrong question. Uh, all right, let's see. Uh, give us your questions guys. Uh, let's see what we got out there today. Uh No shot you have the most Do you guys have any questions? Well, we're waiting I just like to like read like Again, NFTs are the biggest thing on the planet right now Look up a google searching. Can even compare it to maybe even big when I need to look up that one I know it's bigger than d5 NFTs They're they're the thing that's bringing the mass adoption All right, I got one question here, uh, let's see we have what is the next salana I will let uh, jordan jump in here first Well, I'm gonna go with the algorithm right now just because it seems to be really hot uh next salana I haven't been too impressed with the avalanche when I've used it Yeah, I've I've kind of liked the algorithm since it first launched a long time ago and they they've put some like They're starting to launch some cbd Cs and kind of host those So I think that that's a good one to watch in my opinion Yashu, do you have a uh, a next chain that could top salana Ethereum, of course I mean despite okay, I'm gonna get a hit mailed again But despite all the drama that there's gonna be an ethereum killer Why do we forget that ethereum is still the largest chain available? It has it has mousstrapped the markets and it is also developing. It is also building its product So let's not forget that ethereum is still in the game So I think ethereum and salana are pretty much uh You know two really good projects and yeah, they In the in the previous session. I also said there is enough space for everybody So there is no next stop previous. They can just coexist together based on what they're offering Yeah, the way this is all developing ethereum's like we're gonna we're gonna scale we're gonna scale for how long now and like I think all these networks They haven't figured out the magic blockchain bullet yet that can host 7 billion people So it's gonna have to be a mixture of networks Probably for like decades until we get this all figured out I think if we're talking highest upside potential I have heard a lot of chatter about phantom chain. So I think they're relatively new in the space Uh, we've seen polygon around for a while. We've seen bsc around for a while I know they just had their one-year anniversary I would say if there is a next chain, uh, and i'm a betting man I would probably take a look at at phantom as possibly being that chain I was playing around with a lot of their Their projects on that chain last night actually and I really like the ui and and feel of what they have going on Um, let's move on to our next question here What should you guys prefer invest or trading? Yasha, I'll kick this one off with you uh, yeah Well invest actually i'm a i'm more sort of an investor. I like to play it safe and Trading really comes to me when it really has to be, you know buying the dips I mean, I I'm I'm always looking for some good support levels and uh, so I read charts and I invest And based on what I actually want in my real life, you know to pay for my rents and everything I trade accordingly because I want to live free for the rest of my life So my goal is to make thousand dollars trading every month And that's it. So trading comes later, but yeah, I'm more sort of an investor Yeah, I'm focused on investing too. There's a like a psychological principle If you give a person an option to pick a thing and they just have one option They like this thing But if you give them like three different choices to choose from they'll pick one and later on they'll be like Oh, I should have gotten a different one Like they'll be less happy with their choice giving more options And that's kind of like what trading is for me like you can go and you buy it Like yeah, I got a good and the price dips you're like, no I went down And it's such a like psychological game to actually trade Daily that I'd say 95 percent of people should stay out of that game and just invest That's just my personal opinion like trading is maybe if I'm trying to get some side income or instead of going to the casino I'm like, let's go to the let's go to the market but Like investing long from harrowing dollar cost averaging It's my way all the way man DC a I will die on this hill dollar cost average start with investing Dollar cost averaging is your best friend trading is playing with fire. It is a fight for survival The way that I see it when you get involved with trading and yes, it could be an absolute thrill ride sometimes But it can absolutely be a huge bloodbath This is not financial advice. Just want to also reiterate that but if you are interested in exploring getting involved with crypto I would look into dollar cost averaging So our next question from the audience is from cal toro And how do we pick the right NFTs? Jordan, I'll just kick this one off with you That's a good quick. I don't talk to my editor. He's the one that likes NFTs That's the one one area cryptos. I'll get in there now NFTs. I start staring at all these things on open sea I'm like my half my brain falls asleep and I'm like now Like I I did that's just not my game. What do you think? Oh, well Like I said in the previous session actually because I'm a dino collector myself So I can really understand that when you're collecting something it should be very unique You know or it should come with a certain offer or from somebody who's quite famous So you cannot just go into the market and buy an NFT from some random dude who's not famous enough Or who's not known enough that is not a collection If you really want to buy an NFT it has to be From a very good artist somebody who's known So this thing will always have value or it should belong to some some grand value You know like harry potter maybe if Harry Potter reads this card. I'll buy next day for sure But it should be it should be You should be able to sell it later, you know because you're also like investing in a way like baseball cards So you you should always buy an NFT when you know that you can sell it later at a good price in your tough times Yeah, and this game if it's not a famous person or famous artist if it's one of these newer projects Look for a rare the more rare it is the more likely it's going to worth value in the future if it goes up in value at all I know that's one thing you look for the rare things Certain unique features or things that it's hardly any of because that's just again written in the scarcity aspect of it Seems like the scarcity thing is what's biggest in the NFT game I the way that I see NFTs is like art. It's it's very Subjective and granted like, you know, I think a lot of people are in it to make money and buy low and sell high But for some people out there, they just like art and it's like if something looks cool and you like it It's like and you're into collectible stuff, you know, it's it's very subjective So I think it's it's a challenging question from Cal Toro To pick the right NFT because I don't think there is a right NFT for one Like broad sweeping kind of statement there. So let's give one more question for the q&a segment today from the audience Let's see. What else do we have here from? looks like we had one from gh crypto guy that i'm trying to find here in the comment section We have so many people today just asking tons of questions. It's so hard to go through this We appreciate everyone for uh for chime in here and last question is another NFT question gh crypto guy chimes in and says what NFTs are you minting? Are you guys minting NFTs? Not currently I was looking at a few things Actually, I think every more is one I was just looking at and this isn't for angel vice. This is just me Searching around the NFT game. I'm like, oh, that one looks interesting. How about you? Yes, you? Man, I don't have money to mint NFTs really and uh Yeah, when you're on the theory, yeah Definitely not but uh, but personally I'm actually trying to mint this uh mean collection You know, I've made it after my friend my best friend So I just wanted to make fun of him. So on his birthday. I'm just gonna release an NFT. That is the plan. Don't tell him But but I hope it's cheaper So let's see Good deal I've used to mint a lot of NFTs on rareable. Uh, I've got it. I got out of the NFT game a while back I was on that fad last summer. So I think I was an early adopter and kind of like fizzled out But I haven't really been paying attention to FTS much But anyways, that's gonna wrap up our our questions and answers from our community today Guys, do we have any closing thoughts for today's show? What do we have cooking in your heads? Jordan kick us off with your closing thoughts Nothing has changed in my perspective on crypto Especially now that even with this recent dip like as yashu was talking about and if you go search the world's economy is kind of like It's not looking so hot Like people are starting to not dig the fiat currencies that they're just printing left and right And cryptos are think they're about to come into their own I don't think we're quite ready to onboard the whole population. But We're we're as ready as we can be at this point because things are about to get a little little bumpy Would I would like to add that? Yeah, I would like to say that we had plenty of healthy correction this week throughout the you know top token brass But for the people who still wants to buy solana, I would like to say please try to wait for the dip Again, this is not a financial advice, but please try to wait for the dip because When I was looking at the chart, it's like completely completely overbought So I still see her, you know top out risk. So just watch your back. That's all The buy the dips and dollar cost average. I'll leave you with those thoughts Guys, this was an awesome show. It's super excited for next week. We appreciate sam bankman free joining us today from ftx Super awesome day. I hope you guys have an awesome one. Thank you for tuning in and make sure you like and subscribe Smash the notification button so you know when we are on it's thursday to 12 p.m. Eastern. Thanks for joining us until next time over and out


I've lived the life of an economist thinking about how the world works and as a venture capitalist deeply engaged in changing how the world works. This course on venture capital and the economics of innovation derives from my book, Doing Capitalism and the Innovation Economy, now in its second edition. The course explores the history of economic development through technological innovation, using the history of professional venture capital to identify the complementary roles played by the mission driven state and financial speculation. In mobilizing capital to finance investments whose economic value cannot be known in advance. This course is predicated on the fundamental idea that history matters, that the meaning of observable facts is always and everywhere context dependent and that context evolves historically. This is not the dominant view in the Silicon Valley of the mind where today's digital entrepreneurs mostly dwell. Anthony Lewandowski is an engineer who led Google's Waymo Autonomous Vehicle Project when he departed with Google's intellectual property for Uber, Google pseudom. In fact, he's now serving 18 months in jail. For the question I would ask, looking at this quotation from the New Yorker interview with him, is whether the crime of intellectual theft was worse than the crime of intellectual ignorance. At the technological frontier, success is achieved by trial and error and error and error. Innovation at the frontier necessarily generates what I call shampaterian waste. Excessive focus in the allocation of resources will inhibit innovation and from time to time actually serve as the enemy of innovation. Here, it's Darwin's vision of evolution under selection pressure that is most relevant. This is an environment in which the various purposeful participants are doing the best they can to survive and grow. But it's not an environment in which the, quote, optimal inter-temporal allocation of resources is a meaningful concept, nor is it one where future returns from investment can be credibly, quantitatively evaluated in advance. How can you optimize a utility function that ought to include goods that have not yet been invented? How can you maximize profitability when the market you wish to serve has not yet been created? Evolutionary processes appear to be random. But since 1750, there's been a positive drift based on advances in scientific understanding and the cumulative accumulation of technological inventions. It's possible to identify through this history a succession of general purpose technologies that have defined techno-economic paradigms, steam, electricity, the internal combustion engine, computers. Carlotta Perez has developed a partitioning of history from the onset of the first industrial revolution through to the present. She positions us today somewhere more than halfway through the fifth great surge of development driven by technology. Note that a critical regime change outside of Perez's schema from small state to big state capitalism occurred during the fourth surge driven by the response to the Great Depression and World War II. We will return to this structural shift in due course. Perez identified a recurrent pattern in each of these waves of innovation characterized by a bubble of financial speculation that accelerates the development and deployment of the new technology, what I term a productive bubble. At the frontier, all of the actors, entrepreneurs, investors, policymakers, workers and consumers are subject to the same condition of necessary unavoidable ignorance as to the future consequences of their decisions. Keynes summarized this in uncompromising terms when he summarized the message of his great work, the general theory of employment, interest and money. By uncertain knowledge, I do not merely mean to distinguish what is known from what is merely probable. The sense in which I am using the term is that in which the prospect of a European war, he was writing in 1936, is uncertain, or the price of copper and the rate of interest 20 years hence, or the obsolescence of a new invention, or the position of private wealth owners in the social system in 1970. About these matters, there is no scientific basis on which to form any calculable probability whatever. We simply do not know. This is a statement of ontological uncertainty, not a function of the limits of our brains or the uniqueness of specific events. The latter is the source of uncertainty for Frank Knight. Our ignorance of the future is a simple, inescapable result of the way the universe is, as most succinctly captured by the second law of thermodynamics. The historian John Lewis Geddes puts it well. The trouble with the future is that it is so much less knowable than the past because it lies on the other side of the singularity that is the present. All we can count on is that certain continuities from the past will extend into it and that they will encounter uncertain contingencies. When it comes to the actions people themselves choose to take, though, when consciousness itself becomes a contingency, forecasting becomes a far more problematic exercise. Yet as Keynes well understood, we nonetheless must retain the capacity for action. Keynes here invokes exactly the same enabling factor, the convention that the world will stay the same until we have sufficient evidence that it won't. As did the great Scottish philosopher David Hume 150 years before, albeit without acknowledgement from Keynes. Harvard's Richard Zeckhauser has neatly charted the different categories of knowledge of the future, from risk with known distributions of probabilities, through uncertainty with unknown distributions of known possible states, to Keynes's ignorance where we don't even know the possible future states of the world. Yet it is this last domain, especially when the context is historically unique that the great investment returns have been made. No one can address the economics of innovation without taking account of Joseph Schumpeter and his central message, economic evolution through creative destruction. Schumpeter emphasizes discontinuities in the competitive process, competition not in kind. Note that Schumpeter does not explore the systems of innovation upstream from commercially motivated enterprises and entrepreneurs. But over the course of a generation, he presented two very different models. From 1912, Schumpeter Mark I. This is all about new firms and new men. Note that in the heart of the Second Industrial Revolution, characterized by capital intensive process industries such as steel and chemicals, innovation is expressed through new lower court processes, not new products. By 1943, Schumpeter reversed himself into his Mark II version. Innovation has been transformed into a bureaucratic routine operated by giant established firms. In its context, this was understandable and relevant for a short generation, but it has proved to be utterly misleading in our contemporary world. And in the midst of the war which would transform the state's role in the innovation economy, Schumpeter had only disdain boarding on contempt for the state's interventions. Schumpeter Mark II persisted for 30 years with innovation driven by the great central research laboratories of the giant monopolies, AT&T, IBM, Dupont, General Electric. But from 1980, the structure of the American innovation has been transformed into what might be termed Schumpeter Mark III, characterized by a division of innovative labor. Recently, two scholars have revisited Schumpeter's models, his two different models, through rigorous empirical analysis, separating out exploration for new products and markets from exploitation of established competitive positions. AXAJET and CUR indeed find that it is small new firms that most contribute to economic growth through successful exploration, versus the established firms focus on exploitation of technology that already exists. Now one final introductory thread should be introduced here. This course concerns innovation at the frontier of technological advance and scientific knowledge. But the vast majority of people live in societies more or less removed, far removed from the technological frontier. Historically, the dynamics of the innovation economy have been radically different for those followers who seek to catch up and reach the frontier. They appropriate existing intellectual property, they designate national champions, they are exposed to systemic corruption, and most of them fail to reach the frontier in their efforts. As Agyan and Howard point out, citing pioneering work of Alexander Gashankron, in principle, followers should be able to grow more rapidly than those already at the frontier by adopting the technology that has already been developed and proven. But it is very challenging for effective followers to become frontier innovators, even if they overcome the corruption tax on growth. The institutions that get them to the frontier may be barriers to innovation at the frontier. Successful copiers need an entirely different context to become effective inventors. Until recently, the few successful followers of the original leader, Great Britain, have all had to recapitulate the entire history of industrial development from textiles through light and heavy manufacturing to the science-based industries of the late 20th and 21st century. This was true of the United States, of Germany, Japan, Korea, and China. But as Daniel Bresnitz and John Zisman have documented, the digital revolution has opened up new selective paths to the frontier. Instead of having to replicate entire industries, follower nation states can enter the global economy by attacking one or other of the components of transnational supply chains. Taiwan did so in semiconductor fabrication, Israel in software research and development. And the supply chain needed not exist only to produce physical goods. Productized IT enabled services have similar decomposed characteristics, as demonstrated by the Indian information technology industry and its outsourced role in the supply of software to the world. But now the question arises, how does this innovation get financed? Schumpeter proposed another division of labor between the entrepreneur and the financier. Note how he says the entrepreneur loses other people's money. That's a note of warning to venture capitalists down the generations. When capitalists scarce, the dynamic relationship is often characterized as the golden rule. He who has the gold rules. As we'll see in lecture three in the context of the ongoing, though staggering, unicorn bubble. That rule seems to have been stood on its head in recent years. At the frontier, financing innovation necessarily must escape from the narrow confines of conventional finance theory, where share prices are specified to represent economic fundamentals. In fact, share prices are far more volatile than cash flows, as the Bank of England's Andy Haldane pointed out a decade ago. And at the frontier, it is scarcely possible to estimate the economic fundamental with any confidence. In the vast majority of cases, the prospects of investment projects, the stream of future returns cannot be understood in standard probabilistic terms. This is obviously true for investments in innovative products and processes for which estimates of returns cannot be based solely on the profit history of existing products and processes. Let me repeat, at the frontier, we are necessarily investing in ignorance, where the substantive rationality of conventional neoclassical economics is simply not available. The great social scientist Herbert Simon made the useful distinction between substantive and procedural rationality more than a generation ago. And a long generation before Simon, Keynes introduced the beauty contest as the metaphorical setting for investors doing their best to make money in the stock market. Here, procedural rationality, as represented by close observation of other investors, reflects the hope of anticipating, or at least not missing, the movement of the crowd. Note that in the markets today, dominated by index funds including exchange-traded funds, momentum investing is even built in as a dominant strategy by contract. Guessing which way the market's going to move is no longer an individual responsibility, it's built into the mathematics of the funds in which investors invest. The potential for standing out against the crowd, the contrarian investing, the Warren Buffett style, if you like, has become rare to vanishing. Keynes went further. He constructed a bridge between what occurs in the financial markets and the future developments in the real economy. Keynes accurately foresaw both the modern buyout business, quote, there is no sense in building a new enterprise at a cost greater than that at which a similar existing enterprise can be purchased. And he also identified how the incentives to launching new ventures generated by a hot IPO market can drive innovation, providing, quote, an inducement to spend on a new project, what may seem an extravagant sum if it can be floated off on the stock exchange at an immediate profit. Innovation does not take place in a macroeconomic vacuum. The state of the macroeconomy conditions investment in risky ventures. Recessions can stifle invention even as they force laggards to adopt proven innovations in order to meet the competitive conditions of slack final demand. A shortfall of aggregate demand creates unused resources and undermines potential growth on the supply side of the economy. This is what I've called counterproductive Keynesian waste, the waste of unused human and physical and intellectual resources. I came up with that insight as a way to conclude my book and then discovered, as I have all too often, that Joe Stiglitz had had the same idea and formalized it some 20 years earlier. The economic downturns have long run consequences, Stiglitz wrote, with lower expenditures on R&D and lower levels of investment and production resulting in less learning, the growth path of the economy is shifted down. Short-term Keynesian waste generates long-term social costs in terms of slower growth. Plus, the social cost of layoffs exceed private savings to the former employer and the social benefits of foregone R&D exceed the private benefits to the firm. We will consider this sort of market failure in detail in lecture four. My own vision of the innovation process is set out on the first page of my book. The innovation economy begins with discovery and culminates in speculation. Over some 250 years, economic growth has been driven by successive processes of trial and error and error and error. Upstream exercises and research and invention, downstream experiments and exploiting the new economic space opened by innovation. Each of these activities necessarily generate much waste along the way. Dead-end research programs, useless inventions, failed commercial ventures. That's shumpertary and waste. In between, the innovations that have repeatedly transformed the architecture of the market economy from canals to the internet have required massive investments to construct networks whose value and use could not be imagined at the outset of deployment. So at each stage, the innovation economy depends on sources of funding that are decoupled from concern for economic return. But how was and is innovation at the frontier financed when it's impossible to know what the returns will be in advance? Again, let's take a look at the stages of technological transformation step by step. Since World War II, financing upstream science has become an acknowledged responsibility of the state. The model for which first emerged in Germany and France in the second half of the 19th century as they attempted to catch up with Britain. We can observe multiple modes of funding, the really chunky investments needed to build transformational infrastructure. But whether the public or private sector delivers the preponderance of the cash, such investments always have involved, have required state sanction. Downstream, financing the Darwinian exploration of novel applications of the new technological infrastructure has been delivered primarily by financial speculation. At the frontier, the effort to calculate and rank the current economic value of investments will inevitably favor the less uncertain, shorter term projects over those that, unlikely as each may appear, nonetheless collectively have the potential to change the world and create a new economy. This is why, again, overriding concern for efficiency in the allocation of resources is the enemy of innovation. Thus, examining the historically observable dynamics of the innovation economy reveal how the complex interaction of a mission-driven state and financial speculation have repeatedly combined to transform the market economy. Their dynamic interaction is what I call the three-player game. Like the three-body problem in physics, as the players reciprocally react on each other, reflexively, as George Soros put it, no stable equilibrium can ever exist. In the next two lectures, we will explore in depth how venture capitalists played their role in this game and how evaluating their performance can provide profound insight into the roles played by the mission-driven state and financial speculators.


Looks like the cap for the ridge vent may have come off up there. So let's go up here and try to fix it. I do not know. Looks like an animal may have been trying to get in there. That should take care of that. Got the yard mode this morning. Let's go do something else. Shape every 1000 here. Today I'm going to show you a clip, a couple clips. It's from the caves that we took our fans to and we took them to an abandoned subdivision. But great group of guys.  So they're on break right now. So they're just out trying to have a little fun, do something different. So we took them to the caves, took them to that abandoned place. The clips I'm going to show you are not mine. They're from the one gentleman. He had a GoPro strapped on his head. So he got some pretty good footage and I'm going to throw that in for you so you can enjoy that right now. Sorry. Coming up or down? All right, I'll go first. It's wet right here. So what's your stuff? Yeah. Yeah, that's real wet, baby. Nice and dark. This is really cool. I'm sinking over here. Is that Mikey's water? Are they coming down? Yeah, they're good. Okay, record that. She falls. I can get some YouTube revenue. Yeah. No viral. This is really dope. This is crazy cool. This is what it was like in Mexico except there was water and it went down for like 80 feet and they were dead like Aztecs in there. Years ago. Yeah, I jumped in. I have a video of me jumping in it.  No. Where was it at? It was like in your Cosmo or something? No, it was in Cosmo. It was just Coast to Mile. Like way out in the middle. It was like Crystal Lake or something. It was like it had an opening at the top and then there's like a water. Did you jump in the water? I didn't jump in, but I was like down in there. Did people jump into the water with you? Yeah, there were people jumping in. I didn't do exciting trucks on, but I was like. I was wearing just shorts. We had you had a right full with this out there, didn't you? Yeah. Yeah, that's what we did.  I got a video of me jumping in. Yeah, that's what I did. I was right where you hurt. My ribs really bad. My cousin and I were like we both had jeans on. Yeah, it was crazy cool though. Sorry, it's just fine. Oh, you can actually go down in there? Yeah. Oh well. Yeah, Aaron. Aaron, come sacrifice for us. Bring it in there.  Oh snap, dude. This is really nice. I hope this thing still works. It's like smoking some peyote in here. Yeah. Seeing things coming out of the wall. What? Half a flashlight now? That's really cool. Whoa, dude, there's a ghost. Look at that. Leaving Aaron's body. I wish we were going the other one, but it's wet, man.  Is it bigger than this one? Is there like a bunch of different like I'm fine crawling. Yeah, I think so. It sounds like one. So it must have been the other one that this this kid's got stuck in that. Yeah, it's the next one I'm going to take you to. Hey, I'm fine getting stuck. It'll be fine. Yeah, there's a lot going there, dude. That don't go nowhere. That's where you like this. It's the shithole. That's where they poo. It's the birth canal. There you go first. I'll flash that. I don't want to be. Is that bad?  That was really cool. You want to get that on camera? What is it? It's just like a gap back there. Yeah, I'll get it on camera. That's the coolest thing in here, though, that green, uh, that green ghost on the wall right here. Look at that bad boy.  Oh, that goes forever back there. Yeah. Yeah. There was one in there. Oh, yeah. It's huge, dude. I got it on camera. I'll pause the video when we go up. How do I will? I've been thick, boys. Hard to get into, you know. Hold up. Don't discount enough. I should have wore some different shorts. Yes, sir. Hold the flashlight and give it to me when I get down. Not too bad. I'm gonna wait for them. Dude, that's freaking dope. I know. It goes on for a while, too. He can go ahead and just get out of the way because they're gonna come down. I'm waiting for them. I can come. I'm just waiting for them. She's staying? Yeah. I was gonna wait. I just slammed my head so hard on the roof.   Here you go. That's the flashlight we need, dude. Pretty sure I got a concussion today. That should hurt, man.  You can see it all the way out here. Mine goes. This is more narrow-pointed so you can see more clearly. It's a police officer's life. My dad used it when he was in the narcotics.  I'm not bleeding.  This is really cool. What have we got up in here? I don't know. I don't know why. I don't know why I'm in here. Is that it? I don't know. It leaves anywhere? We're gonna find out on the way back. Yeah. This just goes up. Well, it probably goes over that way. There's a little hole in that wall area. It's an entrance. Well, that one up in here, that's where the kids got stuck way up in there. They got stuck up in here? Yeah. Up here? No, over here. Oh, I can see them. I don't see them, but I mean, I can see how they got stuck. Yeah, they made that turn and then got stuck. I got to the turn.   Yeah, that's the one I didn't get all the way down in last time. Yeah. That's great. This is helpful. Yeah, I see what you're doing. I don't feel like crawling back in there. I don't know, I'm telling you, I'm gonna start with you. But, yeah, we'll go over here first. Heck yeah. Oh snap, all right. Go ahead. Yeah, you're basically in the frontal hole and basically not the chubby turn right back. I think there's another way to get in that one. Up here? Yeah. How's that? There's a hole on that right side. There's an old cadet there. I don't know if you can fit to that. I'm pretty sure. Confident. Can you do it? Latest way. Yes, basically. There's a wheel here. There we go. We got a chicken out. Run. Yeah, give it for yourself. I don't know about that, chief. No more than that. I don't like that one. It doesn't. I don't know. It's the left one. I like him more, though, right? This is where I wanted to get down. I think he's got another hole there. Does that go anywhere? I don't know how big it is, though. I was gonna talk, because that's kind of like a little... Other hole, but it's kind of small. Down there would be a Florida mountain line. What's that? Time to get dirty. Bump head bump to the day. I see your leg. Oh, wait. He's out there? Yeah, so we see. Here we go. Where are you at? Hey, Will. I was coming behind you. You need to get that light out of the way. Hey, y'all. Hey, Will. How we doing? I'll go back around. I don't know. Atlanta, the sage, the bird.  Yeah, I know. You rolling on your GoPro? Yeah, I got it rolling. Cool. This should show up pretty good. What's going on all the way up? Oh, snap. We're doing a 360. This is where we just came up through. That'll be it. That'll be it. That'll be a rough five. I think I got this down first.  I might hit twice, dude. I might hit counts two, twice, dude. How about you, Will? Hmm? Zero. Zero. Zero. Oh, what's the zero thing? How about you, Aaron? Zero, too? Yeah. What's going on? I, the only two times I came when I was falling on Will and it was over. I had a broken knee right there. Did you see a hand coming out of the whole wall? A what? You see a hand? He's alive! Where was I the survivor? Black and mild record down there. Here, man, hold it. That's awesome. Yeah, I got run out of here. Let's go up. Yeah, don't film me for a little bit. I'll be your cameraman. There you go. Awesome. I got a camera, man. Drop up in here. They're back over that way. They're down this way. Wait, you, is Glacier down there? Yeah, they're still down there with his pack of cigarettes. Aaron, you can't get that. All right, let him go search for his black. Will's got him. You'll see him. Why don't I get up in here? I don't think he did. I don't know. Well, last time he did, didn't you? Has a lead in there? I can see it. You see that light real quick? I can see how they got the stuff over there. I'm going to be picking my backpack. You find them? Oh, we got them. Oh, we got them. Oh, we got them. I'll walk right past them. Thanks, man. And the 305s. Don't want to forget those.  How far back does that go? I don't know. I've never been up in there. Does it drop off? We don't see it. We don't see the ending for sure. I can crawl back there and see if it drops off. Go for it. Do it. You're going to break that one. Here, let's film it. Here, hold it. Excellent. All right, I'll get you a light, buddy. Yeah, just keep filming. Here, take the backpack. Yeah. I'm not going to get you. You can go for it.   Yeah, you're still rolling. Yes. Get my phone too. I don't want to crack that thing any worse than it already is. Oh, Jesus Christ. Give me a flashlight. Oh, there you go. It's got a good view here, Dustin. Yeah, yeah. Oh, Jesus.  I'm not even sure.   Yeah, there's a curve over here. I can't fit through that, though. You sure? Well, if you can't fit, I definitely can't fit. Oh, come on, will you? You can try it. Oh, he just hit it. I saw it. I saw a head bump. Ow.  It was the other side. He probably should have come through this area. I could see that. Yeah, I don't go anywhere. Interesting. It ends? Yeah, it ends. Jesus Christ. I'm about to get a sack shot. Let's pop out. What is that? Daylight. Why show light over there, bro? What? Oh. Let's do it. Onward. Selsior.  I see it now. I couldn't see it.  Okay. What? I know.  Oh, yeah. It's one of my favorite channels. Yeah. Oh, that's cool.  Damn, that sucked. That was my exercise for the ear, right there. Yeah. Oh. Well. Happens the best of us. Shit. We went down that way. See, that's where you went all the way back around. Oh, I can't. Okay. I want a circle. Yeah. I wonder how those kids get stuck, man. Man, that's crazy. Damn. Oh, yeah. He's loving it. See, I should have brought the other camera. You could have used it. Could have gotten those. Wired you up with a wire. Yeah, Mike. Yeah. I got a wire or something. Yeah, I'm sure. Definitely have to clean that up. I'm gonna try to replay that. He's got a quality literature on the walls. What? Quality literature. What does that even know what that says? I don't even know the vibe. Yeah, that's the question for you, here. That's the question.  It's shade, right? Yeah. I want to run an upward. I'll be sure. You get one there. I'm off this area, so it'll be kind of happy. Crazy down there. Yeah. No, take that. Let me see if that's like. A guy was killed on the bridge. Mm-hmm. Yeah. They think a drug deal or something. Yeah, that was like in the police reports, too. That really happened. That up, I did get that right. Because I wasn't sure about the bus going over the bridge. Yeah, I wasn't. That's kind of a legend right there. Yeah, so I mentioned it, but you know, I always say, look, I can't prove it or disprove it. Yeah, yeah. But I do know that a woman was killed there and a man was killed there. Because I did see the police reports on them. Mm-hmm. Now you get pictures? Yeah, the whole video. The whole video. He's got to go for it. We're rolling the whole time. Hey. It'll be a little dark, but I think I can clean it up. Or did you? Look, there's daylight. It's up in there. They're like, that's the way we came in. I was a little disoriented, too, so. Yeah, it is. Because I've seen this light, you know. Because I was thinking it was back in there.  Oh, yeah? But. I was watching for bear. Found one. We're at. Damn. Yeah. Yeah. Oh, yeah. That goes all the way up to Sweet Bridge, don't it? Yeah. That's what I remember. Yeah, I love that in the video. Yeah. Yeah. We take our canoe in there. Really? Yeah. What's what happened? We went to Dinellen. That's what I wanted to do. We take our canoe in there and run. Batteries run out. There's current real bad coming back. Mm-hmm. So. Well, this is a great place that all in through Dinellen and that. Mm-hmm. That's great. So I dropped you off at the campsite there, and it's just a short walk to the truck. But by the river, it's like a mile. So I went back. Well, we heard the bear. And then when I went back, it was dark. And I turned around and there's that bear, like 20 feet from it. I fucking, I would move and that motherfucker would move. I'm talking to the bear, right? I'm like, yeah, I'll be out here in just a minute. As soon as I got to the campsite, where we docked a boat, it was like all moved down. As soon as I got there and hit the open, the bear took off. Like it knows, you know, if people stay there or whatever. And I was like, yeah. Because ever since I moved down here, I want to see a bear. I'm talking about like in the truck, I can just pull over and film, right? This motherfucker was like, right there. That's cool. What am I going to do? She's like, did you film? And I'm like, look, I ain't pulling out in the camera, turn the light on. That's how you die, you know. Well, I said they're in the truck, waiting, they're waiting. And I didn't like, okay, what if he doesn't come back? What do I do? Okay. So I hope you enjoyed them clips. We really had a good day. It was nice. It rained probably after they left. And Monke and I went and did a couple more of those buildings. But then, I mean, it wasn't five minutes after we left there. It just poured and poured and poured. And so we timed it. We timed it. You know, the timing was great. And so, and it worked good. It was really hot. But I mean, it was still hot in them caves.  But in the caves, it was still a little warm down there. But yeah, we had a good time. I want to give them a shout out and say thanks. And I appreciate that. And we had a great time.  And I've got more places we can go to and stuff like that. So maybe we'll have a cookout or something. So anyway, guys, thanks for watching. And please give this video a thumbs up for the guys. You know, I mean, they traveled a good ways. They traveled here from Georgia. Come down, see us and spend a little time with us. So we appreciate it, guys. So with that being said, Shea Bear 1000, I'm going to send them gone for now. Don't forget to check out Monkey 1000's channel. And remember, give us a thumbs up, comment, rate, and please subscribe and share these videos. Thanks, guys. Appreciate it.


Going on everyone Sam here with late sports cards been one box of 2023 leaf exotic football hobby for Maya P. It's a good luck here mile. There is the box Let us open it empty empty and empty We're gonna start off with a Kendra Miller. Nice one there. He is a New Orleans Saint 9 of 13 9 of 13 Kendra Miller for the Saints We've got a that's cool Jaden Reed four of eight He is a packer, Michigan State Spartan Grats on that one there Maya and then really nice one here as well Down in the top loader Tyree kill five of nine for the Dolphins. That's sick. Good stuff Maya on the cracked ice atomic Very nice one there that'll do it for your break Maya Thanks again for the support get him right out to my friend