Jeremy Epstein, crypto economist and one of the leading experts on digital currencies, is my go-to person when I need to really understand where we are with these technologies. When I last had a LinkedIn Live almost three years ago, I asked him where we are and he said we were in the very early stages. So with all that has happened in the years since we last spoke (like NFTs, Web3, oh yeah and that pandemic thing) I needed an update from him. And fortunately, I caught up with Jeremy recently for another LinkedIn convo to see where we are now, and also to get his take on some of these newer technologies and how they are shaping the digital currency landscape.
All I can say is if you have even the slightest interest in this area, do yourself a favor and check out the edited transcript of a portion of our conversation. And if you are really interested in this, click on the embedded SoundCloud player and listen to the whole conversation as we went way deeper this time around than we did three years ago. And there is no way I can let three more years go in between convos with Mr. Epstein again!
Still early innings with crypto
Brent Leary: So…. Is it still early days for crypto and blockchain?
Jeremy Epstein: I am the chief marketing officer of a company called RDX Works, which is the company responsible for developing the Radix Public network, so XRD is our token symbol. The Radix Public network is intentionally built to support a decentralized global financial economy. The global financial economy today is $400 trillion. That doesn’t even include all the metaverse stuff that’s going to get created, all the growth. I can’t even take myself seriously when I say this, but it’s not unreasonable to think that the global financial economy will one day in the next, say, decade be one quadrillion dollars, okay. That’s ridiculous, but it’s possible.
Brent Leary: I don’t know what that means. Give me that in poor person’s terms.
Jeremy Epstein: I guess it would be it’s a one with 15 zeros after it. It’s a lot of zeros. So today it’s $400 trillion. The whole crypto market is $2 trillion, and the whole world of decentralized finance, which is lending and borrowing and all the financial stuff is $200 billion. It’s 2000 times smaller if that’s right. When you think about how small it is today and how big it’s going to be, you’re like, wow!
What we’ve done is we said, okay, imagine a scenario where $400 trillion in value all takes place on a decentralized platform, what would that require? Then, work backward from that to build that network, that’s what Radix is doing. In the grand scheme of things, I mean, the UIs on Web3 suck. The developer experience totally sucks. There was a hack yesterday for $650 million because the security is still bad for a lot of these places. I mean, it’s like CompuServe, Prodigy, when your mom just knocked you off your modem by picking up the phone when you were in high school kind of thing. Okay, these are engineering problems. They’ll get solved, but it’s still too hard. Anyway, that’s my answer.
Brent Leary: Wow. Three years later, we’re still very early days.
Jeremy Epstein: We are. I mean, the pace of innovation is ridiculous. The growth is exciting, all that. But, in terms of where the potential for this financial revolution enabled by crypto technology is going to take us… I mean, there are 2 billion people on the planet without a bank account. When they get a bank account, then we’ll know we’re getting there.
Crypto and Ukraine
Brent Leary: Is their phone kind of their bank account, their digital bank account?
Jeremy Epstein: Their phone will be their wallet, but it’s not their digital bank account. There’s a story I saw about a guy who was escaping Ukraine, and all the banks are shuttered. The ATMs aren’t working. Your credit card’s not working, but he walked out of Ukraine with a couple thousand dollars of Bitcoin on his phone. He was able to restart. He took his family, got them started in whatever country he was in. Imagine that.
I’ve seen stories of people crying in Venezuela, that if it weren’t for Bitcoin and crypto assets, we’d be dead. That’s amazing, and we’re just at the tip of the iceberg of that. That’s what motivates me now, man, is just like you want to talk about equality and inclusiveness and all that stuff. You know how discriminatory our current financial system is on so many levels. It’s offensive. It’s downright offensive.
Look, this thing’s not going to be perfect. Web3 is not going to be perfect. It’s going to have all kinds of problems with it. But, I think it can, just like the internet… Internet’s got all kinds of problems, too, but is it a net positive? You and I wouldn’t be doing this without it.
Brent Leary: For sure.
Jeremy Epstein: I think it is, and that’s how I feel about crypto. But, hey man, I’m a radical.
Web3 meets Crypto
Brent Leary: Maybe you could tie some things together. You mentioned Web3.
Jeremy Epstein: Yep.
Brent Leary: You’re talking about crypto.
Jeremy Epstein: Yep. I threw a lot of jargon out there.
Brent Leary: NFTs are going to be in there. Tie it all together. Where do all these things come together and eventually have impact on regular people who are not at the bleeding edge of this?
Jeremy Epstein: I think it basically comes down to who has control and opportunity. Individuals should have more control over their own assets, their wealth, their information, and be able to leverage those to create additional opportunity, to access opportunities freely without other people telling them what they can or can’t do. I mean, I’ll give you one example. Are you familiar with accredited investor laws?
Brent Leary: No.
Laws are in the favor of keeping the rich, rich
Jeremy Epstein: Accredited investor laws basically say unless you have a million dollars of assets and make more than $200,000 a year for two years in a row, there’s certain opportunities like early stage companies, you cannot invest in. It’s illegal for you to invest in them. Now, if you’ve tracked the growth of software companies, you know that the big opportunities come early, but those are off limits to poor people. Why? And even middle income people. Why? Because somebody thinks, oh, poor and middle income people don’t know how to manage their money. They don’t understand risk. They’re basically stupid. We’ll let you buy lottery tickets, but we’re not going to let you invest in the next Uber, the next startup, the next whatever because it’s too risky.
We’re going to reserve that for rich people, and that’s what happens. That’s offensive. I would rather live in a world where I say, look, it’s your money, Brent. It’s your money, Anand. It’s your money, whoever. Invest it where you want. That’s being able to have control and being able to have opportunity and be able to what you think is right for you and your family and your community at anywhere in the world at any time.
Leveling the financial playing field
What Web3 is about is truly leveling the financial playing field. Internet leveled the information playing field. Now you are as powerful, if not more powerful than CBS and NBC because you can create one thing, and it can go viral. We all know that, right? It wasn’t obvious to everyone. I mean, it was obvious to the two of us 15 years ago, but not everybody else. Now, it’s obvious to everybody else.
The financial playing field is not level. The reason why we have so much inflation now is because the federal reserve has been printing all this money. But you know who got the money first? The really rich people. Why? Because it drove up stock prices, so really rich people made a ton of money. Now there’s seven to eight percent inflation for everybody. Why? Because the federal reserve printed… 40% of all new dollars ever created have been created in the last two years. That’s not acceptable, and it’s not going to create this ability and the opportunities for growth that we all need for us to prosper as a globe. Web3 is about taking the power back from the people and the institutions that have basically captured it for themselves. See, now I sound like I’m totally off my rocker, and I kind of am.
Will the playing field ever be leveled?
Brent Leary: The first, I don’t know, industrial revolution or first economic revolution was around farming and agriculture. We moved from that to the industrial revolution, and part of that was for people who wanted to have more opportunity. If we’re moving from a farm base to an industrial, that should provide even more opportunities for regular folks to make some money. Of course the guys who owned the plants and the means of manufacturing, they got most of the money. The workers got more work and dangerous work at that.
Then, years after, we had the computer revolution, and that was supposed to open up more opportunities for more people to make more money. That happened to a certain extent, but mostly the people at the top got even richer. Now we’re talking people with hundreds of billions of dollars, whereas the average worker’s still kind of working on the same wage scale.
With all that as a backdrop, now we have this Web3 thing, and the promise of it is to spread the wealth, spread the opportunity. But, will it… I don’t know what will happen, but based on the track record, this just seems like another opportunity for the folks at the top to get even more of the wealth and get it faster this time around than the regular folks. How will regular folks benefit this time?
Jeremy Epstein: I love it. I think I challenge your premise.
Brent Leary: Okay.
Jeremy Epstein: I’m not going to disagree that there are people who make a lot of money out of new innovations and, frankly, that’s fine with me. I don’t really care. But, I would argue that the standard of living and the quality of life for people today is significantly higher than it was when they were working on the farms, serfs in Russia, sharecropping, whatever. We have better education, better food, better healthcare. You talk about the new technologies. Everybody and their mother now has a phone. You have the computing power.
New Tech and the digital self-starter
Two stories that blew me away recently. Number one, I was in Mexico for a conference and the driver of the car, his English was amazing. I was like, “Oh, how’s your English get to be so good? Did you live in the US at some point?” He’s like, “No, I just watched a lot of YouTube, and I taught myself.” I’m like, that’s amazing.
Same thing. There’s a guy on my team at Radix who’s from Vietnam. Same thing, and he’s talking about that’s what people do now. You can educate yourself, so that could never have happened pre-internet. Now, he has opportunities that he didn’t have before.
Yes, are there going to be people who are adversely affected? Of course. But, think about all these people who are TikTok influencers, YouTube influencers. They’re making a lot of money. They weren’t at the top of the pyramid before, but now they have this opportunity. You have an opportunity to build your business on this platform, get your name out there. I mean, your name’s already out there, and it’s one of the great all time names, of course, but continue to promote. I’m not sure I’d agree that we’re worse off than we were 50, 100, 150 years ago. These technologies have generally moved everybody forward.
I mean, in India, everybody has a cell phone. I mean, I think 50 years ago that would’ve been mind boggling, just insanity. Now it’s like everybody’s super connected. I think there’s a lot of things to look at, I mean, there’s always room for improvement, I think that see the same thing, and I don’t mind if a few people get really rich. What I do mind is that when the opportunities aren’t available to everybody.
I think this is a trend in giving more people more opportunity, just like the internet gave more opportunity, just like the industrial revolution gave more opportunity, just like the agrarian, opportunity. Just like going all the way back to Gutenberg and the printing press. It brought literacy or opportunity to read to more people. Exactly. That’s exactly what I was trying to say. At least we have one person watching this.
Brent Leary: All right. I agree with a lot of what you said.
Levis Strauss and the Gold Rush revisited?
The same thing that happened at the beginning of the gold rush where somebody found gold, said, Hey, man, I got we got gold over here. Millions of people come with tin pans. And the only people at that made significant money were Levi Strauss and the guys selling all the picks and shovels to the wannabe rich dudes, which ended up not being rich at all, except for the few folks who were smart enough who had the ingenuity to sell the things that everybody needed.
I think I see a lot of that going on here. And I could be wrong, but I’m just wondering how can we make things different this time around in WEB3?
Jeremy Epstein: I think a lot of it comes down to who owns the network, right? And who owns quote unquote means or production. if you look at our current system, the ownership of all of our financial system is limited to a handful of shareholders in a couple of banks and what have you in a decentralized network environment. It comes down to how broad and how distributed and how wide your network is.
Everyone who’s a member of the network shares a piece of ownership. And you can participate in multiple networks. If one network is not delivering you value, you can easily leave it, easily join another one, and you have the opportunity to participate and benefit from the group like Facebook. We’re all part of the network but the value only accrues to a handful of people.
Revisiting the Net Effect
When you and I join network, join Facebook, we add value to Facebook, right? How much value do you get from Facebook economically for having increased their share price? You get some marginal social value because you connect with your friends for sure. But the 2,000,000th person in Bangladesh who joins Facebook doesn’t really add a lot of value to your life.
In a Web3 environment, every single person who joins the network contributes in a valuable way and every single person benefits in a valuable way. If you have a toolkit, if you have a token, which is the token behind the Radix Network, there are only 2.4 billion tokens out there.
It’s about who owns the network
So every single person who joins in increases the value of it, of the equity for every single person And so I think it’s the model of ownership. It’s we instead of having control and value accrue to a handful in the center. Control and value are distributed and dispersed to every single member who’s a contributor, who’s a contributing value creator.
And it could be just having a token, it could be on staking my tokens, it could be on building an app, it could be using it. There are multiple ways to participate but if you will hold one of the tokens, you are an owner of the network, there’s nothing you could do. Right now we are creating value for LinkedIn but you’re not getting paid by LinkedIn for any of that value. In a real world, you will.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.