Understanding Stablecoins and Their Utility, Why Stripe is Buying Bridge, Virtual Reality for NFL Quarterbacks
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Hello, and welcome back to another episode of sharp tech. I'm Andrew sharp and all the other line then bent tomson then how you do and do OK Andrew.

you know it's the first day of the MBA season. Have to sort of getting to shape. I did spend ten minutes for start recording erin. My grievances say, yeah, no.

left a sort of rap up, sort of getting the grove.

So i'm thank you for accommodating me. I'll try to distill my complaints into a short amount of time. Just IT takes a while to get back in the groom.

So I love IT. I thought you were going to be in a good mood because the box look pretty good, at least in the first half.

Of course, they look good. We have to hear about is going to leave when these the second longest, good.

more the band leads to all sorts of grievances. I cannot wait for another.

I'm happy. So I felt with grivet. So that's great.

Great at home. okay. Well, as for the podcast about technology, I am going to start with .

an email to go.

This e mail from Chris came in exactly a week ago and he wrote, hi guys, so stable coins are kind of looking like a real thing, huh? I've been a long time crypto skeptic, but i'll be fair and acknowledged that stable coins do seem to have some staying power. And real world utility tether has somehow not gone under and appears to be achieving widespread utilization globally with hundreds of millions of users.

Paypal is now completing transactions via stable coin. VISA is apparently launching a stable coin platform. And that's just off the top of my head.

he writes, is VISA in the same .

category as tesla. I mean, I say tesla, but I say what's correct?

I believe they are both essay or just add IT to the chocolate uh vocal groups on the podcast set around ideo. But what are you OK?

VISA is apparently launching a stable coin platform, and Chris asks, do you guys have any general coin takes now? Then I email.

yes, I know I was .

not familiar with the term stable coin one week ago. Today I did flag .

IT this warehouse. Yes.

I know we're returning to our roots here.

You're going to become to knowledge able about tech. It's sort of defeating, defeating the central concept. So we go back to basics here.

The expert norby concept, yes, is just in case anybody missed IT, a news peg for this conversation is that strike plans to buy stable coin, start up bridge, and according to sources, strike plans to pay one point one billion dollars for that acquisition. Stripe CEO patrol lin confirmed that news on twitter, where he said stable coins are room temperatures superconductors for financial services.

Thanks to stable coins, businesses around the world will benefit from significant speed, coverage and cost improvements in the coming years. Stripe is going to build the words the world's best stable coin infrastructure. And to that end, we are delighted to welcome bridge to stress.

So we can talk about strike and the bridge acquisition a little bit later, but let's nail down the basics. Can you explain what stable coins are for anyone who's uninitiated? And then if you'd like to unpack the stable coin superconductor analogy that collison offered there, that would be a fun little bonus as well.

Yeah, well, there's a lot to get into. We are back in the world of cypher crypto. If this all works out, we will probably take the crown away from uber as far as the one of the more long running and painful positions for me to maintain in the long run where I generally speaking, believe in crypto ah despite a overwhelmed sort of scepticism and um you know societal disapproval on the other side.

And is interesting, the reason why stable coins are compelling is they do sort of capture the best parts of crypto, well, sort of aligning the the worst parts. So to back up what is crypto, why is cyp to interesting, crypto is about block chains. What is in about black chains? Black chains are this idea that desperate groups can sort of come to a consensus without any sort of centralized authority, right?

So right now, in in crypto, the core concept, this is sort of the guide, this is the reason why i've been consistently proscriptive u as a concept is digital goods. We spend a lot of time talking about digital goods like the thing is they have zero marginal costs. They're infinite replicable, right? One, I can write one version of category, and that version can be duplicated endlessly.

Ly, if I can manage to attached to pay while to IT, then I can make basically i've infinite upside on the back at the number. Like sending an email to one person is the same as sending email two hundred thousand people or whatever IT might be. And that is obviously extremely economically powerful. But there is an aspect where digital goods are fundamentally difficult to monetize because it's infinitely dubal. If you can have a brazillian of something uncommon without in the cost to generate the gazillion, an then gating .

function is zero, zero.

right from a sort of monetary perspective. The reason why crypto is interesting is that all the qualities of digital, endlessly duplicate, can be distributed anywhere, access from anything. And yet IT has scarcity.

There's only one of everything. So if you think about this back up, so so that's the overarching principal wive always finished in cyp to and you know continue continue to be now, right? If I want to send money to anyone, right? IT has to go through what the easiest thing is.

I can walk up to you and I can give you a door right now if you want to get really pedantic. Technically, that dollar is just a piece of paper and sort of has to be backed by the full faith of the U. S. government.

8。 But let's assume that the dollar has sort of intrinsic value. Maybe we can see, I give you a piece of gold.

right? IT has an value of. So the cypher ideology is, I am not.

I not in the cypher ideology. This is part of what makes IT difficult, right? I think there is real functional utility that is going to be important and locked .

by the tech. Yes.

yes, we will get to that. So I can go to you in person and I can give you a dollar bill, right? So what is the trust component there? How do you know that? What there's a bit where, again, you're sort of believing it's not a counterfeit dolben, but but I am giving to you.

I'm sort of delivering at you. I could mall you money in the mail. Not a good idea that could be lifted. It's untractable. I be maybe as the advantage for some sort of activities, but by and large, if we're apart and I want to send you money, we need some sort of intermediary. And that intermedia is gonna vouch for me, say I have this money and then it's going to make IT available to you.

Those intermediaries are generally bick, right? So I can send you a now this could be in the form of like a check, not very, not very secure. But the concept of IT is, is, this is a representation of money that I am certifying with my signature.

You sign IT, you take IT to a bank and you get that money. What actually happens is the banks behind the scenes are coordinating to say, yes, this person has money. They're transfering IT to the bank and then it's available sort of in your bank account or you could do sort of a wire.

You do why there's there's like fed wire there. There's chips certain like that in in the international version is swift. These are actually messaging services.

It's like the world's most expensive instant messenger where they send along the information. This is the person sending IT. Here's the account information.

Here's X, Y, Z. They send IT to the other bank. Now in the sort of most efficient matter, say we're going between two large banks. So you're sending IT from H, S, B, C to city bank, right? Yes, they will have bank accounts in each other other's backs.

They're called like, uh, no strong and both straw account or something like that basically like like city bank, we'll have an account at hpc and sort of vice verso. And what they will do is this message says, oh, we're certifying that this is the correct information, xyz, and they'll do a debit or into that account or out or whatever sort of make sense. But the key thing is, is that someone has to actually ascertained boe's money do IT over here, right? Because H.

S. B. C is the own list of accounts, city bank, as their own list of accounts. They have to sort of settle that in some way. If you go across borders, there might be a currency exchange that needs to happen, like a currency exchange, like people think about currency and you just look, wow, the number and then you make exchange. Well, where does that number come from? That number is basically the most liquid market in the world, which is people literally saying i'll give you ex amount of dollars for exam of yet n td or or whatever IT might newtown dollars.

And you wrote about that aspect of the dollar problem right now and said that introduces a tone of friction in your piece on the OK. The key thing .

is you need verification. okay? You need to a middle in the middle.

Doesn't all that verification happen essentially instantaneously these days?

Not really. I sent a lot wires internationally. Are they do not happen to today. I believe .

there you go. okay. I'm not doing much crosswater payments.

What even a domestic wire takes a few hours, right? Reason is, is and you think about IT, you need some sort of valuation. Now if you do something like a bmo transaction, what's happening there is actually the service in the the middle.

So like vmu is acting as the verified. And what they're doing is they're actually holding a pool of money and they're just they're changing like they're shifting the money from one account, one spot, the pleasure to sort of another one. They are the centralize figure that sort of making that happen with the point being is there has to be someone in the middle.

right?

The thing about black chains are is no one needs to be in the medal because the the structure of them and the fact you have these different entities all sort of as a group, verifying the transactions means you get a couple of things for free. Number one, you have you have instant verification that is completely trustworthy and there's no one doing IT. It's just there sort of like that's what's enabled by the technology, number one.

And then number two, you have a ledger of every like like it's funny because people think about crypto in the context of like go criminal uses X, Y, Z. And the reality is is cypher s actually a very poor and use for a lot of criminal activity because everything is it's all on the leger. It's all like to watching these .

legionary conspiracy. That's rule number one .

for criminals everywhere, so you can trace the transactions. And so all things like mixing that people try to. But the reality is is is in many raise more transparent and more public than sort of a lot of transactions.

So like if the U. S. Wants to stoop on other ones financial transactions, they get like the U. S.

Control swift, right, right? They had to control the pipes, and they strong ARM. Any bank that wants to business in the us.

Or with us dollars has to give the appropriate level access to the us. treasury. And the us, in many respects, controlled the world via the us. treasury. So in blockchain.

discussing that on shark china this week, just for the record.

So yeah right or that's a big they build a separate system that the U. S. Have a xin and black change are thought of as being uh oh way around this actually, that they're totally transparent.

It's like only not only does the C. I, A of access to the us. Treasure of cess, everyone in the world has access. You can go through and you can trace .

all these sorts of things. So as you explain this, the one thing that i'm getting sort of hung up on, I understand that the structure of lock chains allows for scarcity in crypto. U, like, I recognized that to be true, and I could recite IT at a cocktail party if someone asked me about her tod's utility. But if we're in the trusty and I can share without fear of embarrassment, I don't really understand what that means and how that works and why that creates scarcity with a good that would otherwise be infinitely replicated.

Well, because the letter is so the banks are the back up that my dollar is good to you, right? yeah. And there is friction and fees associated with out look and deserve ably.

So it's providing a service. The fact I can send money to you halfway around the world is actually great. And so that whoever facilitating .

that should collectively, and that's right.

And there should be friction because I I actually do what there to be verification that if i'm sending your astronomically large paycheck to you, that everyone on both sides is .

sure that is is going.

And so block change, just do that automatically. You sort of get all that for free because every amount like those, the ledger is the west of who owns what. That's all in the blocker chain.

And the transaction is verified by the collective that that was the blockchain in an important, I note here. And this is really important. A lot of people still have in their heads.

They are like basic bit coin model, which is all this verification is happening. By doing this massive calculation that are using all this power, we're going to get emails talking about the sort of impact the reality is, is that definitely case for bitcoin? Almost everything has moved away from proof of work and including a theory, the other sort of a you of of the big two yeah.

And so they do proof stake for a theoria or proof stake or basically, it's just a different validation method. Different people can be involved. You by the amount of money you put down, you become a validator and and so and you get a share of sort of fees that happened with that.

So it's sort of the fee based model instead of a we're maintain new, new sort of token sort sort of model. It's different. But the key thing is everyone by participating gets A A pay off. And so there is a reasonable money there. But you have lots of people validating.

And so that gets the security because everyone the individual thing is got on visiting general problem where the question is if you have lots of independent actors who can't communicate, how do you get them to all sort of act in ordination? If IT was thought to be almost like an unsolved problem, the brilliance of the bitcoin paper is IT solve the problem. And in that case, IT did solve the problem by burning tons of electricity.

Like to this validation. But we there's been a way to figure out other ways to do that, that are very efficient and also very fast. So salona is another one.

But there's all these called out two chains that basically sit above. They ultimately distil down to the court chain. But there really fast like like doing transactions on these change is very fast, like faster than maybe not quite credit card speeds.

Credit card just the fastest networks. They're also the most expensive, but they're way faster than A C H or or wires where we're measuring the speed in a matter of seconds, not in a matter of of minutes or hours that sort of used to be the case. So so we ve solved this sort of envionmental problem.

We've solved the the oh is way cheaper, you like, just because you're not. So we solve the cost problem, we solve the speed problem. The big issue is is the the store of value problem, the problem using bitcoin, in part using bitcoin as an example.

But this point this supplied is like a theory um as well is you can't use IT for payments are open down when the value is like widely swinging in a day. There are still thousand like both thousand doors swings in a matter of or hours for bitcoin that is not useful as a currency. This is come in .

if if you're conducting transactions in crypto like in in bitcoin specifically, there's risk for the recipient of bitcoin because the value is correlated to you know a market that fluctuates up and down. And so that limits the well.

your true bitcoin also say actually know bitcoin is the true currency, the U S. Dollar, that up, down. But here in the real world.

here in the real world, people are started getting a stable coin. So what is the utility there?

So a stable coin is exactly what assets the value is. Stable IT sort of stays fixed and it's sort of just been settled that what we mean by value is the us. dollar.

So once one stable coin is one us star, now there's different ways to sort of build stable coins. You can literally just hold up like like tether and U S, D. C.

Hold assets equivalent to the numbers there. Now tether particular had some very shady sort of episodes. You also add a thing with USD c where they held their assets at silken value back.

And I came a dept um from a dollar with so daily big went under but then the sort of pop back up and said all access to be guaranteed but the most common essay would be A U. S. treasury.

So you have A U. S. Treasury that is back by the full faith of the U.

S. government. Is is sort of the the us. Treasury relative to the dollar is like a savings account relative to a checking account, sort of backed by the same entity. But the dollar is sort of more usable.

But he doesn't pay you in the interest like you IT actually is, is deflated, right? It's ort of all the time. A U.

S. Treasury pays interest, but you can't like, use IT. I can't pay you in us.

Treasuries far. Your page goes. So what this does a kind of is almost an arbitrary.

IT backs the stable coin with U. S. treasuries. And then IT says, this stable coin is worth one dollar.

Why is IT worth one dollar? Because we hold one dollar of treasury's in our bank account that that can be sort of converted. You know, the charge is the most liquid market, the world.

So you as much currency. But IT is like what the most liked markets in the world and so you are uh and so that's the idea. But as a stable point issue, you get to earn interest. And so earn interest how you make .

money .

from holding the asset. But they've converted this non usable asset into basically a sthetic dollar, which is which is uh uh other and so people so the the main use case for stable coins be super clear. Stable coins right now are almost completely a critter thing.

So if you want to get into crypto, the way you get in is you go to coin base or wherever might be, you buy a bunch of tether r or USD c and then you use that to buy bitcoin, or you use that to do X, Y, Z. Why does that makes sense? Is an on rap? Because it's very forty. You put one hundred dollars, you get one hundred other.

right? You know exactly what?

It's where yeah. And then from there you could do that stuff. But the other thing is you have this whole area called defy decent finance, where they're doing all the same stuff.

Banks do like people. This is could be a critique like wild cap pinking, like can do loans, you can have leverage and you do all these like crazy sort of santiago. All that stuff depends on there being a stable basis, right? If i'm lending you X, Y, Z, I need to know that xyz is not going a very well.

The and what of us is going to be on the losing end of a swing that we're not in control of. So it's already spurred all this stuff. Stable coins are the basis of that.

And so what you're basically getting is you're getting all the parts about critter that i'm interested in. You're getting this universal ledger, you're getting this scarcity, you're getting this speed of transaction anywhere in the world, all internet sorts of things. And you're avoiding a lot of the sort of downside, which is the pure speculation on a coin going up.

Your getting away from the sort of wild swings, the value that you get, sort of bitcoin. What you end up with is basically this currency that Operates like the internet IT can go anywhere, anytime IT X Q, anytime you have a legally say you wanted to, in theory, like you like set up some sort of financial you know, entity. You don't have to build out the whole back and to track everyone's finances and do whatever and a sort of oak, and then you have to build relationships back and forth.

You can just build IT on to directly on top of the blockchain. And so that's why stable coins are compelling. They really do capture a lot of the upside of crypt and avoid all the downside. Peers would say the way they avoid that downside is by to .

find the ideological yeah.

we're trying to get away from the dollar right or try to that's right and so but for i'm a pragmatic for pragmatist that sort of accept the reality that the us. Dollars is not going anywhere. What this does is make A U. S. Star dramatically more capable and possible.

right? And and you can use IT all over the world with less friction than ever. So so they go to example of .

like why this is compelling is for right now is across order payments, right? right? And so you think about IT, you might be be a contractor in a sort of a high inflationary country like this, an apple with the um uh scale I scale I has contractors over the world that are actually doing the annotation GPT outputs to actually they work and you can .

see really easy. How if you're in the developing world and you don't really trust the local currency or the local finance industry like you might want to just be paid in american dollars and stable coin makes IT easier to do that, right? And if you're see .

paying the amount of fees you need to pay to do this is rastle lower than trying to pay a fully integrated company that's trying to do all these sorts of things just because basically you've uploaded all the hard parts to the watching the actual holding of the body is a very difficult problem. The actual reconciliation of accounts is a difficult problem. The actual, like leger, keeping the trust is all a big problem. You get all that for free by using black chains. And so even you don't have to .

repeat that process. If you're paying contractors and fifteen different countries, you don't have to repeat that process fifteen different times and you just have sort of a standardized way to pay all the contractor you do. In that respect.

what you do is what is necessary big chAllenge with this. So the stable coin prospect is very clear. You basically have this pool in the middle that if you get in the pool, the the water can go anywhere, right? The chAllenge, how do you get IT into the pool?

How do you get get from you dollars into stable coins and from stale coins into pacs or leura or ort of whatever IT might be? It's that on ramp and off ramp. And this is what bridge is focused on.

Bridge is bridge has capabilities for entities to issue their own stable coins. So you could imagine, like maybe a company internally whats the internal stable coin for that because of international Operations. That is an easy way to sort the ledger stuff for freeze or thing. But the real focus, I think, in this fits and sort of the stripe sort of mindset is how do you actually get once you get the money into stable points is super clear all the advantages.

The question is how do you get the money into there? And how do you get IT out without people need to get wallets and understand all this, like all the complexity of crypto, it's all in the getting in and getting out like that, that that's the sort of tRicky part. And so the idea here is if we can build an A P I, if we can build all these pieces to get in and get out on top of that, A I people can build businesses that do that.

So you can, uh, so people on, on, on one side can build businesses that facility getting money in. People on the other side can build us that facilties money getting out. And you don't have to build all that.

You don't have to go go like a local company, a local entrepreneur or local bank can see all the tools are there in the A, P. I, and they build the product on top. This is building the infrastructure for other companies to come along and build on top of IT so that they can leverage all these stable coin advantages.

And this is where a lot of the important stuff, like know your customer, anti money lawyering stuff, all that is, is real things which will cost money. This isn't going to be free, right? Like like the verification part still matters. So it's not that this will make IT completely free.

but bridge would do that. Bridge would do that aren't behalf of any other companies that want to build on top of its A P, I. Is that right? Or do the companies have to handle that?

Yeah T, B, D, maybe they have like I i've actually not totally sure on that. Maybe it's a case where they just have the tools and other companies can build scalable sort of K Y C sort of Operations. But the cost, if you think about IT, your bank has to know who you are.

Once you start, once they know who that kind of a one time cost, once they know who you are, the ongoing cost are this verification and tracking and all the sort of stuff we talked about. So it's not that they will be cost free because K, Y, C and ati, under M L, they do cost money, but those are sort of one time cost. It's the ongoing it's the ongoing sort of transactions that basically become nearly costless because all of the hard stuff has sort of been outsource.

And so that's the future that stripe is looking at now. Yeah in the short term, it's the geography stuff. In the long term, it's all payments like like in the blockchain.

Once you solve the energy problem, once you solve the speed problem, once you solve this sort of scalability problems, which again, I think people who are don't follow cripp al, don't appreciate the extent to which those problems have either been solved or dramatic progress has been made. If this sort of the whole infrastructure in the middle is free to anyone, is transparent to anyone, like how do the old ones even compete? right? like. And so if you're .

old ones being like .

old C A C H wires, or credit or credit, you think about strike, you think about credit cards. Create cards are fast. It's incredible infrastructure and it's extremely expensive.

Like like multiple percentage points, not basis points, percentage points on every sort of transaction. I don't like credit cards, are you? You're very expensive. I think I to check like but credit or fees are very, very expensive and expensive.

I mean, I know that every statement ory customer is expensive.

The fees add up? No, exactly. That's so so .

the audience is very expensive.

But no, I I comparing my cost cost structure here details backwards but and so but you're paying for a real a really valid service. Credit cards are incredible instruments. It's basically a short term blown that you get for free uh, because of all the infrastructure that, that goes into IT.

Now stable coins don't necessarily to provide that. They they like things about like the short term loan sort of aspect, right? But the actual money movement components of stuff moving quickly and being verified immediately and all those sorts of things is almost more debit card like, is maybe way to think about IT.

This is a long I don't want to overpromise what is possible here, but you can certainly see why from sort of a strike perspective. Okay, what we do is we build infrastructure so companies can build on top of this. We build .

future describing value proposition IT basically is just sort of a platform that other platforms are going to .

be able to build on top of. Describe bridge as the stripe of cyp to right um but but you can see so in the short term, there are so many benefits here. It's worth a beat Justin ate into that. But you can also squint in the long run and see like what is actually possible in the long run.

People want people talk about fanciful things like, uh, your micro payments and i've talked a long time of all micropayment ts don't make this for content but whatever uh you that would think like A I agents and actually like different A S hiring other eyes to do stuff and passing payments back and forth, the sort of things are all things that might happen. You could talk about people being paid by the hour and getting paid immediately. None of this stuff can happen right now.

Everything gets batched because of the cost associated with IT. If there is no cost, if there is no friction, what you're doing, you're removing friction from money movement. Like if there is no friction, we can even imagine all the use cases that are possible.

What we need to look at is other markets where friction was removed and then what happened, right? So you look at information, you look at text on the internet, you look at videos on the internet. What happens when you remove friction? Suddenly everyone can do stuff? You have completely different ways of organizing content, of sort of surfacing things.

You get these sort of power law sort of effects. Again, who what do you think about that? Is that cat of scary? Like what are the long term implications of this? But the fact there will be implications is, I think pretty clear.

unmistakable. Yeah well and it's interesting because crypto and bitcoin specifically has been sort of pitched as this alternative to the U. S. dollar. This doesn't sound like IT would be an .

alternative is basically this is a maintain the us.

Doors dominant, right? I was to say the dollar is in the here because the value of a of stable coin like tedder is derived from its relationship to the U. S. dollar. This is just a more efficient way to transact in dollars.

right? It's kind like increasing amount of dollars in many respects because it's converting all those U. S.

Treasuries and assets into dollars, right, like that are actually usable. And now, now there are other ways to do stable coins. You can do them so you can back them with critter assets. You can do algorithm icc ones.

right? I have, I read about algorithmic tether.

So there is one called tero una, that sort of blue up. They can be broken, baby. In theory, the nice, they certainly peal to the cypher, sort of a approach of we want to be independent of the monetary system um again, I I solute the sort of crypto evAngeline's and true believer s and that know we're going to break the dollars, has money on on all kind of transactions.

I'm skeptical. I've long maintain that bitcoin, I think bitcoin will remain a thing, but it's digital gold. And it's kind of a bizarre thing because like the value of bit in this, why you don't want to like sort of this is the true believers too much because it's kind of like model zing, true belief. That's what vital does the .

institutions around the world, which is on the rise. So it's been doing well the last ten years.

Now you bitcoin tends to move in line with regular assets to sort of defeat some of the theoretical, but he is an in theory. You can see that sort of concept. I don't only bit when is going anywhere, but it's it's just never gonna use for transactions.

It's it's not doable or or sort viable. And you can't really use IT as a backing as a universal form of settled IT like people think you could replace the dollar IT. Just I mean, you would have to stabilize to such a degree.

And the reality is, is all world economies are built around via currency at this point, going back to be going to be like going back to gold work, like I get the arguments for the gold standard. There is strong arms against IT. And there's also the fact that, that ship sailed decades ago.

And and the structure, we have a built on issuance and debt in these sorts of things and and the world sort of trading structure where the U. S. Consumer market consumes everything and IT has a current account sort of sort of deficit and then pays for stuff with debt, which the important companies then buy the debt and then they pay for the U.

S. Military to police at all, make IT all work. Like that certainly frame, but it's not like it's so deeply sort of embedded in the way everything works.

It's not going I was to say it's pretty entrance all over the world. Yeah um one question in in the term you wrote in your piece on tuesday, what's interesting to consider is if stripe anticipates that the stable coin market will become very hot before they would have a chance to build instead of by build their own bridge like platform instead of buying bridge. Is I assume what you were referred to there. Can you tell me more about that possibility and what sort of insight event you're talking about there?

So bridge has built bio accounts with is a very good API. Ah that's all stripe started as well. They've also gotten regular ory approval, sort of particularly the E U.

And and I think forty eight states um and so in E U they have they have a license in poland, which is in the E U. So they can Operate across the E U, where they are license to sort of except payments coming in on their rails. And so that that's a big deal and it's very hard. And so there's a lot of value just in that in sort of you you're off the great line.

Yes.

yes, exactly a the big thing that could have a number one. There's always talk about central bank digital coins ah and and this idea is what you skipped this USD c and tethering on sense。 How about the feed st issues, their own stable coin, which is just quite directly backed by the U.

S. government. And the point there is an obviously this is like a lot of true cyp to believer s worst nightmare. It's like which just goes, what is latch straight onto the mothership. We're not going anywhere.

Well, it's funny because we talk about adopting stable coins IT sounds like this could make sense for a lot of different people and a lot of different markets. But as that adoption becomes more and more widespread, I can't see any reason why the fed wouldn't do that. right?

If you total visible, what's really a total visibility, right? The realize is that digital programmable money, it's like obviously useful.

right? And it's inevitable that that's where we're going to end up, one where right now.

but there is an entire separate, which I am pretty sympathetic to a lot of of the worries of about to be clear, right? You think that the U. S. Treasury has a view and everything now just a budget till they control the digital currency that everything goes over like. So I am acknowledging those concerns were not going to fill up the .

debate about them. Now everything that's right.

the government, everything you do is tracking able and tractable. And you know I if you've been paying any sort of attention to the last little bit, that's something that everyone should be concerned about. That an implicit problem with digitization in general, like like we have had sopco social discussions about the fact when everything is online invisible, suddenly people's supposed sort of concerns and principles about go out the doors, right, if you have the power.

is always going to be very attempting to use IT. Yes, I hadn't considered that as a log term concern with this system.

but IT IT was a huge problem. Like like right now, you kind of need like a wiretap and some respects to to like the equality of wiretap to go and see what people are doing with their finances if it's international. So it's actually quite similar like if people are if were converting, if you are having a phone call internationally, uh the U S.

Basically has an unrecovered right to IT according to our laws because it's international. So that and the same with money, like money goes over swift like they're looking they're looking at IT inside the U. S.

There is limitations on that because you, you you have to get a warrant. You have you to find that in the U. S. Can get a warn and go to your critical company or your bank and get access to your information. But they always have to like go through sub degree of trouble.

Like once it's all had like the digital coin, it's like what are we are even doing here, right? And and so again, all those are real. Not ignoring them, just IT should be acknowledge we're just going to focus on them.

Fox on you tell you right now the reason this will happen, this is the utility y's massive the right later. There's a lot of possibilities here. So never one.

If this comes out in the next couple of years, the stable coin stuff is going to explode. And again, bridge is not about their own stable coin thereabout infrastructure to leverage stable coins. So suddenly, stable coins are like the way to do lots of money stuffing. Forward stripe is ready for that in a way they want. Have been a more .

than two to three years to develop something to what bridge has today that can get regulatory approval in fifty states. And the E. U. Okay, that makes sense.

So number two is, number two is savings have been exploding and because the utility is real. But so again, a few things happen. Number one, the idea had to be invented tethers only like six years old like this, isn't that this is a pretty new idea?

Number two, the change in speed for these l two chains and the proof state based networks, it's just been in the last twelve, eighty months. It's gotta be a massive deal in where it's actually viable to do transactions with stable coins. And so I think there's a bit where even if there wasn't a central bank coin stable, ines are going, they're on the verge of exploding because OK the utilities real and a lot of the chAllenges have been overcome.

So there's a bit here like, yes, work like they have like fifty billion dollars in revenue. Paying a billion dollars is insane, but it's a perfect limit with our business. We speed on all this regular ory stuff.

We get a ready A P. I. And by the way, we think the markets going to explore this is like this is instagram in twenty two, sort of whatever IT might be right.

And so which I think is a reason, reasonable bet. And then number three, you have this recursive function, which is the act of stripe. Making this acquisition is going to spur more interest than an explosion in this sort of things. So they almost make their they're hockey stick by what you have, just who they are and sort of getting involved makes .

me more confident in the space at the future. And we wouldn't be in stable coin for the entire episode of sharp tech of strike patent bought IT.

And if you want to have like the steel man critique, it's like well describe sort of hit a wall with their sort of based business model. You know addison is is sort of like really moving the us, that they're Better at sort of integrating point of sale and sort of online and is strike like tesla sort of although we're going for autonomy.

we're not the about cars and our .

building payment reals. H that's the sort of I think the critique that you would put on this is, is all a great story, but you haven't actually have you actually finished building a meaningful business on what you did before? I think that's a fair critique.

I also, let's say this is such an obvious pet like the if if this if this happens, if this is a new payment rail and it's a payment rail that is so much cheaper and it's not cheaper because of regulatory arbitral. It's cheaper because it's a fundamentally Better way to do transactions that like you don't need you don't need private ledges and you don't need private verification. Again, you still need K, Y, C.

You still need A, L M, so it's not going to be free, but you're taking out a big chunk of the cost in friction and and that has its own recourse of quality. Less friction means more activity, which actually makes its sort of increasing like larger and larger. And you get up a virtuous cycle, I think is a totally logical bet for a company like stripe to do okay.

Well uh one bonus note here before we shift gears, ban says not sure if you guys are burned out on discussing a is effect on employment. But from where I sit in corporate america, people are way over indexed on AI job loss and weigh under index on White color jobs getting offshore to india, eastern europe and or south amErica .

and a little twice think it's more about yeah you you only gave IT about two wise or three wise let's .

find out how this guy products is VISA. I'm a little amazed event says that this is IT discussed very, very much in the discourse. Take a look at the career page of any midsize american company and note how many software IT or back off his job postings are now in hyderabad, pollen or columbia.

Ukraine was another huge job center before the war, i'd bet on this affecting developed country employment way before A I I mean, just following the path of what happened in manufacturing employment and call centers. So it's not exactly a big stretch. Cheers question mark.

He says at the end ta been so um I read that because I was reminded of this email reading about stable coins and scale. I specifically outsourcing all the data label linked to markets around the world. I don't know whether you have thoughts on the take there from band, but IT does seem like a trend that's accelerating a little bit.

Now what I mean may not be the discourse. It's been on the on. I talk about this. If you go back to say blue collar work, there was two two things that hit blue collar workers.

The one that people actually focus on is similar to bend point, which is outsourcing right, or basically the shifting of factories to outside the us. The other one was automation, which did like manufacturing levels in the U. S.

Are up from before all this over the last fifty years. But it's all automated like the number of people necessaries lower. So if it's a two pro thing, it's the internet and information like the container ships and and metal long range aircraft enabled this sort of outsource.

But the automation is this other prom that sort of destroys these these sort of jobs. And the analogy to White collar work is the exact same. Now we focus on on automation, to his point, that in the discourse of with A I, but the equivalent of outsourcing isn't just happening.

It's been happening for a while, right in to this point and has got up the stack from call centres to a lot of often are development is done international, the stage. India is obviously is a huge part of a lot of game development. I talked about the problem of games and asset creation and how the cost have balloon.

A ton of this is done in each year, year right now. And that has been been for a long time because of of the sort of the lower costs. And any sort of digital work is easily sort of transported abroad.

So yes, these are all like benny is correct uh and it's a real thing. And yes, this sort of currency makes that more viable. Sorry, not going to say yeah exactly.

IT reduces the friction and um we will be part of again, a trend that's gonna continue to accelerate because when .

you do IT originally, you you still need very, very large entities on both sides to match the coordination costs and all these sorts of things. This like the internet, like, what do I? What do I do? I like, I am like, I were a larger energy.

Now, what I started to teachers, I, one person by myself, reading a publication that is competing with the new york times now isn't doing the same stuff. No, but the only scarce currency is time and attention. Every bit of people's mean generous time.

Not reading other publications, right? And and why can I do that? Because of the total friction tous nature of moving content around on the internet.

So so you know you did have you know like other smaller publications that were enabled, but to go truly as a single sort of person, you took a lot about the infrastructure around that. I needed stripe, uh, as a as a very tangible example, to be able to accept credit cards on my own. But matters description sort of in a sustainable way, but you fast forward.

And now when you can do that and you you can do IT with money and you could do like frean's jobs you can hire such as needed, you don't need these intervening platforms are taking fees and all this sort of stuff. Now again, will stuff get built up around this? Yes, sub stack needed to be built up, right? Like there's still a lot of work to do.

A single ht substate makes IT a billion times easier to get started. They take care of all the difficult parts. And so you can run you can run a one person business in sub stack, will for ten percent do a lot of the work, money can move around.

And if you're super like technical savy, you would say, yeah, i'm technical savy enough to write eye questions at all, takes the able coins. Thank you. I'd actually rather store my income on the block chain where it's not to get deflated in my woh o currency.

That's great. Most people aren't going to do that. The sub stacks, what what bridge does is IT IT builds like like sub stack is made possible.

I building on top of stripe bridge is, say, oh, what's gonna the substate of of these countries that that is going to abstract away. Like most people shouldn't need to know about stable coins. They shouldn't to know what they are. All they know is I suddenly have a way to get paid or to do X, Y, Z or or there's new entities that are set up with fundamentally different cost structures because they're built on the assumption of the sort of technologies that weren't possible before. And in that sense, this isn't a one year, five year play. This is a, this is a you know, fifty year play like like that that this is going because you need to be a whole sale, rebuilding of infrastructure and what we need to do, we need to build the foundation so that other people can come along. And he doesn't be integrated player trying to do everything, is working to build all the infrastructure so there can be new companies created on on on top of what we have.

Well and as far as globalizing White collar work, um you know what used to be an intervening platform that people needed that is no longer as critical as IT once was an office span. And as that has become less central to the wake companies do business, there's be competition for a White colour work that springing up all over the world.

So I don't know. We talked about this. I wrote about .

this in the pandemic. We did have this conversation like eighteen months ago. It's become cooler to talk about I displacing White collar workers. But yes, this has been on our radar band, rest assured.

shifting to a world of work from home, add companies building a processes to a comedy that you to change how you work for IT to be effective. sure. Be careful what you wish for.

Yeah, the cost of giving may be a lot lower in kansas. It's drastically lower in the Philippines, right? And h, reducing friction is always great in the short term, and it's unbelievable destabilizing in the long term. That's the story of the internet. And now the internet is coming for money.

A boy, huh? Well, to keep things moving and shifting this so they completely different at the end. Uh, couple VR notes here. First, tim cook talking to wall street journal about the vision pro.

He said, i'd always like to sell more of everything because ultimately, we want our products to be in as many people's hands as possible. And so obviously, i'd like to sell more at thirty five hundred dollars. It's not a mass market product right now.

It's an an early adopter product. People who want to have tomorrow's technology today, that's who it's for. Fortunately, there are enough people who are in that camp that is exciting. So that's what tim cook said. And then a report wednesday from the information apple has sharply scaled back production of its vision pro mixed reality had set since the early summer and could stop making the existing version of the device entirely by year and according to multiple people directly involved in building components for the device as part of that decision, apple suspended work on a second generation version of the higher device for at least a year, according to another person directly involved in the companies 的 supply chain。 If that report is accurate, do you have any quick takes on that development?

I this suspended work for a year was a particularly funny line. If you suspend work for a year, technological process call IT, just you killed IT. Okay, well, let's be ordered here.

So yeah, this was a tim cooks is always a company mad. Actually, i've never interviewed tim cookie. I've ever him in sort of adjure.

The two sort of IT was just just because before i'd never got him before, before he left. Unfortunately, a tip cook is probably the big name. I have the least interest in interviewing. He is always a messing.

He never .

deviates, which makes this odd, sly, tepid endorsement of IT. This looks like an admission of failure. If you read tim cookies, this is like a yeah, that didn't work council hard.

It's very expensive of people have been that say, no, no, people are sorry. And maybe this actually gives guidance to what why was OK for socker berto an alt A R? He did need to get on stage to apple.

They screw up. Apple might have already realized that, yeah, this is not going anywhere. This is sort of a mess. So yeah, yeah, you know, the I think like we were on IT, we were nAiling the vision pro.

Where's the stuff? Where's the content early? Maybe apple internally I was on super like what's the point of making stuff for this? Knows going to use that. We did get we did get the N, B, A all star or all star sort of foot nine months later.

Yeah, and i'll tell you, wait, I will. I go to a go to an apple store and demo that sometime in the next couple weeks, like I excited to check IT out, I would have been literally a hundred times more excited to check IT out had that been ready when they launched. You can't just wait nine months. I mean, like it's they never really understood how to build momentum for this particular product.

Yeah I me you you know what? It's OK. The division pro is still awesome. It's like where the best demos ever you give IT to anyone to try IT blows their mind .

is IT possible. That will look back on this as just an amazing piece of technology and a bad product that apple didn't know what to do with because it's been describe as a flap.

I don't know, thousand doors, gold apple watches. Apple made the new in the nineteen, right? It's okay. Apple is not perfect. They're feel able like they are still the kings of mineralization, the king's of chips, the kings of making beautiful objects.

Now that those beautiful objects should be metal and glass if they are on your head, but like it's fine, it's okay. What there's a bit where you know at some point has apple a cross the line raw, the secrecy doesn't help them is sort of like an ongoing debate like like mean, grover, we will talk about every few months or so. There is a video where it's OK to screw up.

It's not like you don't screw the iphones and good for you. And that's really important not to screw the up. So are important to the bottom. But I think the vision pro, as we've talked about IT, seems clear wasn't mistake.

Facebook got IT right, like just the market structure right? A cheap like for V, R, focus on being comfortable and immersive and under one thousand dollars. And for A, R, that's where that, that, that has to be sort of the long term focus.

And this was maybe with in the wrong direction, and that's okay. It's OK. And maybe this is sort of laying the grounds to do that in a certain respect.

Yeah, why I saying what .

he said? Yeah, what he said was the exact opposite what he meant.

Yeah well, and I am curious to see what direction they go with the technology. The device itself was incredible to use. There's just not really a market fit. So obviously, IT is a flop as a product, but the technology is still really cool. And i'm great.

And that there was the best thing about the facebook stuff is, is obviously was there was never very much of a product for thirty five hundred dollars. The big thing that he is from my perspective, and obviously people disagree. But from my perspective, IT just showed that the fundamental direction was wrong.

You you can't make A R with a headset like you just you have to go straight to A R. And in the meantime, you do need to go for volume and make IT more accessible and pass through. That is good enough, is fine because no one is going to actually use that for a real sort of use cases.

And you can see how apple had this sort of vision that people want to see and they want to be out there and interaction with the real world. That's right. But there's no shortcuts to doing IT.

You have to go straight to the A R. glasses. And again, apple has tremendous capabilities and possibility in the in the space. So will see you out.

We shall see. I'll tell you what, i'm a professional podcasting and this is a professional podcast segway. We're going from past three to pass rush related to the mixed reality discussion, and we're going to the E.

F, L. And you had such a easy say way, because this is about V, R. You get V R to V R. But no, you sort of looked around. Pass rush i'll .

read from the athletic six weeks in to his rocky season rocky courter back jed Daniel is the talk of the league and part of naca MVP conversations. Perhaps the only thing quicker than Daniel's accelerated growth is the speed at which he sets the simulations in his VR headsets. IT moves faster within the VR than actual human beings, Daniel said.

Once you get out there, everything slows down. I know this is coming. I've seen this before, and IT moved twenty times faster in VR.

So then you and I both read this article earlier this week. I was fascinated by what's happening here. The story continues from there. We can link IT in the show notes. But the gist is that jay Daniel, who, for anyone who's not a foobar fan, his success in dc this year is one of the biggest stories in the nfl this season.

I would have you officially finally a ban on the cowboys. Are you to jump? Jump on the band wagon?

I feel like IT would be. You should do IT go away. What was shameful was you .

growing up and washing D C. And being a cobo's fan, just to make you down exactly.

And I don't want to compound that error. No, you.

no, you have to. You have to embrace the disGrace because compound in the error, compound in the error would be raising Charles as a cow fan and condemning him to your bad choices. What you need to do is you need to take the l and say, you know, I don't want my son to repeat. I don't want him to bear my sins for the rest of his life. And so you need to just, just gulped after the show, i'm going to order to you commanders.

great commanders jersey OK baby commanders .

jersey and Charles is gonna a commanders fan. You'd need you owe IT to your son. You want to just because you were a little bread that wanted to reject your father just like you want.

That's right. That's right. Because of day one. I'm going to now stay true to myself. Charles, you're ify actually .

where I was until thirty seconds ago when I got that pep talk from you. I am not a cowboys fan anymore. I quit the cowboys like seven years ago, and I had made up my mind like literally until we were record of this podcast.

I just going to stay on the sidelines for eternity. But i'm going to make sure that Charles roots, for his hometown team, IT, doesn't make the same mistakes I did. But maybe as part of that process, I also should cheer for the commander of decided on rap for him. Okay.

yeah, yeah. I went to a pacer a couple weeks ago, brought my dad and great, great. You know, we were both excited when they kick, know, the rams or and and you know what it's about, Charles, it's not about how .

long do I wait, how long do I wait before I explained to him that back when I A kid, I made some horrible mistakes, and I used two thousand twenty five years.

So the past be the past OK to right? New future.

You in gentle, I have to talk to some friends and say they cannot share photos from the mid two thousands in any event, James.

I think the conversation a of a familiar .

chAllenge of jay details is one of the biggest stories in the annihilation, is remarkably as rocky. It's not insane to think that he could be in the M. V.

P. Conversation by the in the year. And he starts every day working in a VR headset that was created by a germany, a german company named cognize. IT was founded in two and nineteen by vreni, crackle and Christian hartman, and he spent two years running through his playbook on there. IT began in .

his final year, and he was drinking Better than right? Yeah.

he was like a pretty ordinary prospect. And then a ceder year, he turned to the literally won the husband trophy and was a top three pic. Um so I just I want to make people aware that this is happening because I think it's really cool. Do you have any thoughts on this? I do.

It's it's amazing story, but there's a bit where this this already happened and there's certain coaches that are way behind the people because of this. And I just actually dentists li click for me until this story. I put two into together what are the long running jokes on sort of twitter or I build Simon talks about this all the time. Is all these coaches that can't manage the clock need to play more matted?

And what's this true?

It's a harder .

percent true. IT is a great point. And by the way, that breaks down by generation. You can tell the coaches that grew up playing .

math day is a freking wither with this stuff and you know he's played hours of matter, right? Like there there's just this bit where is because you're encountering completely novel situations. So you can't it's almost like goes back to our bitter lesson sort of concept, right? You you can't preprogram everything and under X, Y, Z, Z, you do why you have to just know how to respond in different situations.

The way you do that is by iteration, is by practice. And football is fundamentally constrained in this from, say, a coaches perspective. You just you're not in that situation that often once a week, seventeen times a year, right? But you could actually simulate IT multiple times a day, again and again and again and again, where you just intuit vely know what to do, courts the same thing, especially with the nf fell future.

Fewer practices for sort of obvious reasons, even when you're practicing. It's not like a game. You like the level of effort and out. Just the crazy is that you have to have to buy football at full speed. You're only getting that a few times here, but you can simulate with the r and yes, you could maybe get that as was. But now you think about the correct. I've always wonder like how do you actually figure out how to make decisions when you have this? You're never going to have this sort of physical fear factor of a later pound like crazy I done on you.

What I say, you can't simulate IT. You can't simulate IT in practices and what not, but they're simulating IT in this headset .

to simulate that's more that's right. That's why we have flight simulators. That's why f one drivers spend most time and simulators like going because there's a stuff you only get through particularly novel situations that are not sort of familiar with like like you only can get that through iteration.

And when you're dealing with an area where iteration is sort of impossible, this old thing is that I like time, like digital twins. What's the interest in digital twins? Well, because you can you can get rate. You can run a gazillion simulations like the, if you talk to sort of way or whatever. So oh, we have, yeah, we only have a few other cars on the road, but they've gone through a gazillion hours of simulations, right, like where sort of cost free and you get to experiment and try all these sorts of things and uh yeah, it's a great article because it's super interesting. The connection to his progression is startling yeah, we can't .

emphasize this enough as football fans, it's not Normal for somebody to just all of the sudden turn into .

a husband winning counter back. Charles is life like Charles is to grow up. The happy commander max.

to this V. R. Heads that that has transformed ted Daniel.

But the thing this is it's where the stories where it's kind of, uh, it's a shock when you read IT, but that is not a surprise. Like of course, of course, this solves the problem of of how to be a good core back. Of course, this solves the problem of how long until V R headsets are every single sort of pre draft interview in combine so they can actually see you Operate sort of this sort of situation is such an obvious sort of win.

And and yes, courter bax is a very specialized position. There's not that many in the world but number one, this might make more good courter backs. We are struggle. But number two is very easy to see how this becomes useful and viable for so many other sorts of uh uh of things and yeah it's it's a great story to one of my favorite in a while.

Yes, well, we'll put IT in the shower note so people can check that out. And hey, if you're unaffiliated, hop on the commanders bandwagon with me. If jay data is great places, yeah, that's true.

Wherever you are, cheer for your hometown team. And if i'm being one hundred percent onest, i've been silently cheering for the commanders for the last six weeks because when the commanders win, everyone in washington, D. C, is in a much Better mood.

And so i'm rooting for my neighbors to be happy. Uh, but yeah here we go. okay. Um well, on that note, hopefully the box can pull IT out and maybe the national media will even and give them some respect any respect .

I just ever that's right.

Everyone at the top of the show learned ban is happiest when he's aggrieved as a box fan. So we'll keep that tradition going for another year, and then we will keep the monday mail back tradition going next week. People can send questions to email at sharp tech dot F M. I hope you have a great couple of days, and I will talk to you on monday.

Yeah, go commanders, put truly until they put the factors.

Go back a boy packet er's exceptionalism here makes me sick on talk .

you soon fuck later.