A Conversation with a Crypto-Skeptic w/ Taylor Savage

Rex Kirshner (00:03.768) Taylor, welcome to the Signaling Theory Podcast. Taylor (00:06.629) Thank you, thank you, glad to be here. Rex Kirshner (00:08.45) All right, man. So before we get into it, like definitely with this one in particular, I it's important to level set like who you are and what your background is. So like go into as much or little detail as possible, but like who are you? What do you know about technology? And you know, we're eventually going to land at like, what do you know about crypto and what do you think about it? But like, give us just the context in which you were around technology to hear about crypto. Taylor (00:35.665) Yeah, yeah, so I'm Taylor. I have been a techie as long as I can remember from like poking around on a DOS terminal as a little kid to finding a Liberty Basic for Dummies book and reading it cover to cover in a car ride in like middle school. then, you know, learning, kind of teaching myself to program and building websites in the Web 2.0 era all the way to now. So, Big, big, big techie, big tech nerd, been a software engineer, been a product manager at big and small technology companies, startups, all of that. And generally I'd say I call myself a techno-optimist. And so I have been around the industry and curious about stuff for a long time. Rex Kirshner (01:24.792) Cool. Yeah, just, yeah, a bit of lore. Like you went into university knowing that you wanted to like study computer science and you took the intro class and then at the end of the intro class, you turned to me and we went to school together and you said, dude, like you got to try it. It's just like fun. that's, after that I became a computer science major because it was the first time in my life I was given homework and was like excited about it. But I guess also say is like all this, it's your fault. Thank you. Taylor (01:53.989) Yeah, of course. Yeah, exactly. You're welcome to the dark side. That's great. Rex Kirshner (01:55.342) Cool man. So I guess like this is like such an open-ended start that if you don't have a good one, like I'll ask a question but like just to start us off like what do you know about crypto and what do think about it? Taylor (02:15.441) Yeah, I've been following crypto for a long time. I, the original dip the toe, which is of course, I kicked myself in hindsight. But my, cousin was very early in like, in the Bitcoin world in like the 2014s, 2015s. And I think it must have been in 2015. He bought me or even before that, sorry, probably 20 2013. He bought me one Bitcoin for my birthday. And this is when it was like this whole this will get the correct date, but it was probably like 20, $30. And I sold it like a year or two later, kind of forgot I had it, sold it a year two later for $200. And I thought that was the best birthday present that anyone's ever given to me. And of course it was forged a lot more later. And what I kicked myself about is at that moment, I wasn't curious enough. He was trying to tell me, this is interesting, you should look into it. And I didn't like pick that up from the gift. Rex Kirshner (02:48.035) Yeah. Rex Kirshner (02:57.454) You Taylor (03:12.835) I just was like, that's weird. Noted. yeah, exactly. Yeah, exactly. And two years later, I remember that, isn't that Bitcoin sitting somewhere? So I had heard about it then, but never really got deep. And then kind of early on in my tech career, right around that time, it actually probably triggered the memory that it was sitting there somewhere. was... Rex Kirshner (03:14.528) Yeah, you gave me a chore. Taylor (03:39.601) a coworker gave kind of a presentation. He was also relatively early into this world and gave a presentation about crypto and Bitcoin and like, you the end of history was the theme of the presentation is all about what is truth and, you know, encoding things on the chain and permanence and all of that. And it was intellectually interesting. And so that reminded me, I should sell that Bitcoin. Which was arguably the wrong reaction. Rex Kirshner (04:02.498) Yeah. Taylor (04:07.34) I guess inarguably the wrong reaction, but I've been familiar with it for a long time, but I guess that also is the segue and kind of revealed preference there of that. I've also just not, I've not had the same, this is the panacea, this is the future reaction to it ever. And so I'd say I've been skeptical from the early days and clearly put my money where my mouth was. on that point. Rex Kirshner (04:38.862) Yeah, no, mean, think that, yeah, I honestly remember reading the Bitcoin white paper when we were in school. It's a sometime between when it came out in 2013. And I remember being like, OK, maybe it's just like internet money, I guess. who cares? Why would we need internet money? And yeah, mean, I wasn't even skeptical. I just didn't care until I found it. again in like 2020. So yeah, I mean, that story like kind of resonates with me where it was just like this thing and every once in a while you'd hear somebody made a lot of money or really what you'd hear is like, like, remember like that friend like get this you like got into crypto. And yeah, man, I think that's fair. And I think, you know, I'd love to hear just Taylor (05:25.358) Yeah. Rex Kirshner (05:33.558) You know, like that's a good kind of intro into like what you originally thought and how you're like originally exposed. But I'd love to hear like now forget all the good things you heard and the bad things you heard, but just what's your like fully cooked like vibe or like thought? Like if someone just on, you you met at a bar came up to you you're like, what do think about crypto? mean, like, what's your answer? Taylor (05:56.975) Yeah, yeah, my answer now, and obviously we've seen like a lot of cycles, so this is with immense hindsight. And also like, I will also say I am by no means an expert or like super close to the bleeding edge of what the ecosystem community is working on right now. So this is all semi-layman's, you know, armchair opinioning. But with that caveat, I would say it is a extremely like intellectually interesting and like technically interesting area feat that has very little actual practical use in reality or has proven to have very little practical use but has immense impractical and fraudulent use and value. And unfortunately, the universe we live in, everybody loves a get rich quick scheme. I think with every technological foundational breakthrough, which I would argue crypto is to an extent, because not all foundational breakthroughs are that useful. The the hucksters come out of the woodwork first and know how to make a buck on a idea that other people don't fully understand, but sounds like a good idea. And so I think that that's the been the shame. But I'd my my opinion now is there are emerging increasingly like specific areas where some of the properties of what the crypto rails provides can have some real value. That would be my like pragmatist view, but so much of that gets drowned in the hype and impracticality. And I also think that some of the theoretical promise doesn't deliver when it meets reality of the way the world works. That would be my take. Rex Kirshner (07:49.132) No, totally fair. mean, I think that last piece is interesting. Maybe we'll come back to it. But I think like it is completely fair to say the lived reality of like what crypto use is used for like one for sure was like the first run, right? Like it was straight up just buying drugs on the internet. And then I guess it got like more hairy, right? But like that is, you know, the Silk Road era. That's like how a lot of people were first like heard about it. And now I'm sure there's like a lot of buying of illicit things, but like the things you hear about these days are hacks that are funding things like North Korea or Iran or like, unfortunately, or I don't know if better or worse, right? But like, you also hear it used to essentially scam old people and like tech illiterate people. And I watch like on my YouTube algorithm is this show called catfish and Like I don't even know why I watch it because every story is exactly the same of just like some like middle aged to old person who's sad and lonely and like I don't know how they fall for some like Brad Pitt is like interested in them but then it's like literally always, yeah like I bought all this Bitcoin on this exchange or out of vending machine or like wherever the scammer's home to buy it. And so like, and so there's that right? Like hacks that find terrorist governments, right? Terrorists. These days that means less and less, right? But terrorist governments, two, like scams and just like the worst kind of extraction. And then three is like the Sam Bankman Freed style stuff where it's like, even in the best case scenario, like the wonderkin is it's just like, it is a fraud. I mean, it's, it's yeah. Taylor (09:38.361) Yeah. Rex Kirshner (09:47.104) It's crazy. yeah. Yeah. Taylor (09:48.41) Classical fraud. Classical fraud. Yeah. And I'm sure we'll get into it. But I think that that has been the core of my skepticism. You look at crypto economic history over the last 15 years, and it's basically just speed running all of the major financial frauds over the last two millennia. and why all of the systems and regulation that we've built as a society, why we've built them over time. It's because, yeah, if you have kind of wildcat banking and if you have kind of free for all money creation, you get all these scams that emerge. It's almost like predictable. Like you can almost like place that in advance. Rex Kirshner (10:30.956) Yeah, no, man. I, and like, let me even layer on a new level that like you would have no idea about unless you're in the industry, is, is quite frankly, what's driven most of what we've seen over the last, I mean, definitely saying being Sam Bainfield is part of this, right? But why VC loves crypto is because they are not subject to the rules around like. There are so many examples. The most innocuous one is there's a new project, everyone knows they're going to have a token, and people just hype it up, hype it up, hype it up. And then the second the deal is structured in this way so that the second the token is live and there's a market, VCs on day one can get out. Stupid valuations, 10x, 100x, 1000x. Taylor (11:19.119) Yeah. Rex Kirshner (11:27.402) I don't know how worth it is to like really like talk through some of these technical concepts right now, but are you familiar with staking? I'm sure we've talked about it, right? So the idea that you can put a token and then like, because you're doing this, like you're earning the new tokens that are created by the network. So a very common thing that's happened is that when VCs get their tokens, they're locked up for four years, but they can stake it. And then the staking rewards are. not locked up and they can sell. And there's an example with this company called Celestia where their main VC who like, Polychain, they might be big enough that you've heard of them, they invested like tens, maybe at most 50 million. And before their lockups even started, they were able to sell like over 80 million on these like stake tokens that they earned. And you know, like, There's a reason that A16Z didn't invest into crypto. They created an entirely separate legal entity. Sequoia didn't get involved. They created something called paradigm. The scam is at every level, in every way. It's bad. Taylor (12:31.865) Yeah. Taylor (12:45.593) Yeah, yeah, yeah. Yeah, I mean, and I think like, mean, I think any, I think we're seeing the same thing honestly happens sort of all over again with the prediction markets now, but that's neither here nor there. Rex Kirshner (13:00.886) Yeah, I you know, I think one of the things that I say to people in crypto all the time, which I think kind of gets missed, like the irony of it gets missed is I'm like, you one of the reasons that price has been so bad over the last two or three years is because all of the people that used to come in here, like they're distracted by sports gambling. Taylor (13:22.735) Yeah, exactly. And early AI. Yeah. Rex Kirshner (13:25.676) Yeah. And it's like, huh, like maybe that says something about what we were doing, you know, like even the most kind of like good faith, optimistic person who's like, we're here to build like technology and it's a new system. It's just like, okay, but like you're swimming in a pool and like everyone else is here to gamble. And like when there's somewhere else to gamble, there's no one in the pool. Taylor (13:49.219) Yeah, yeah. It turns out most of the liquidity and most of the price speculation was gamblers, not true believers. But I mean, not to put too fine a point on it, but to me, that is central to my skepticism of the philosophy of like, yeah, and that is why irreversibility is not a good idea. Because even though theoretically the whole thing is premised on Rex Kirshner (13:54.381) Yeah. Rex Kirshner (14:07.64) Mm-hmm. Taylor (14:17.538) that as a core concept. And actually you do want a trusted intermediary because otherwise if you don't have a trusted intermediary, you have old people going to Bitcoin ATMs and would try and cash or deposit in cash with no recourse. Like, yeah, these Rex Kirshner (14:28.152) Yeah. Rex Kirshner (14:32.685) Well, here, let me give you the normal pushback on that, which is if you want to calculate the amount of fraud that's done and then break it out into extraction through crypto, straight up cash, going through the banks, going through Western Union, crypto is just one tiny fraction compared to straight up Western Union. I don't know. Do you have response to that? Taylor (15:01.442) mean, fraud is bad is the response. Fraud is bad. And I think the flip side is too, Western Union's a good example, is fraud is bad and the global payment rails that we've had historically are inefficient and expensive and have wildly overly expensive middlemen at every step of the path. And should we try to solve that problem as a technology ecosystem? Absolutely. It's a distributed. encryption driven blockchain model the right way to do that? I think there's, it's a technically interesting way to do that, certainly. But I think at a certain point, like just the reality of like state actors and, and the world, the government driven, you know, state controlled violence world we live in is just like, it's theoretically interesting, but just not, not going to work at massive scale. Rex Kirshner (15:54.742) Yeah, well, let's go a little philosophical here, right? Because one thing that I would say, I don't know if you agree with me on this or not, but the biggest takeaway I had from my first career at Anheuser-Busch was, the problem that we have in America, American capitalism, whatever, but we were at that post-capitalism, there's competition in the market. state and it's really what's happened is there's been such extreme consolidation in every single industry and there's like the ones that we all know about like tech and google and the ads and like all the sexy ones but i mean like again anheuser busch 50 of beer in the world like every industry looks like this and you know what it's easy to say like okay there's so much wrong and inefficient with the payment industry and why for western union do you have to pay like 20 % fees and what like we should solve that in a better way. It's like you can't separate that from the fact that the people who set the system like this want it like this because they're making so much money. And so like if you're serious about wanting to solve this problem, you need to subvert it. Taylor (17:10.092) Yeah. Yeah. Taylor (17:15.406) Yeah, yeah, I think that that is totally fair. think that and like, even though like, you know, crypto software engineering in for that sake is an interesting application of, you know, firepower and mental cycles and like an approach. think it and that's sort of what I was saying earlier, where it's sort of a shame that the same philosophical starting point and rails that that ends up creating. those properties turn out to be very useful if you're trying to do bad things. I think there are other ways though, like political involvement. you know, it's a depressing world in which the only way to subvert centralized control is through basically a trustless universe. I don't want to live in either of those worlds. I don't want to live in a trustless world and I don't want to live in a Rex Kirshner (17:51.0) Mm-hmm. Taylor (18:13.549) fully centralized oligarchical world. Rex Kirshner (18:15.936) Yeah, well, I think that's like the crypto optimists point is like the point of crypto is not to erase the centralized things. It's to provide an option. Right. And like the way that I like to talk about it is like, okay, like I have my money in Wells Fargo, but what if like one day they decide because I attended a protest, I'm not going to say which side, right. But like I attended a protest. I'm a domestic terrorist. Like I can't touch my money. What crypto would is in its most ideal state is saying. Hey, you have like a rage quit option or an exit ramp option to say like, okay, like just because someone says that you're bad doesn't mean that like you don't deserve rights on your money. Taylor (18:58.882) Yeah, yeah. And like, that is an interesting use case. I think it doesn't. I think it is an interesting use case that's an extreme, like we suddenly enter an anarcho-fascist state and now we need an escape hatch. I want to do everything possible to not get out of the Again, I hope the answer is not. Rex Kirshner (19:20.566) I mean... I mean, I don't want to be too political here, but like, look around, man. Taylor (19:34.73) Everyone needs to have their own private key and know how to handle that because that's the only way to survive. That sounds like Mad Maxian. So just like philosophically, I don't want to live in that world. And so maybe I'm being naive, but I want other solutions north of that. Rex Kirshner (19:40.898) Yeah. Rex Kirshner (19:44.642) Fair enough. Yeah. Yeah, no, no, I hear that for sure. know, one of the things that I love, like the stories that like keep me involved, even when I'm looking at all this horrible shit that we just talked about is, I was talking to a co-founder of a protocol and she was telling me her story, which is, used to work for JP Morgan or Morgan Stanley, like one of the real wealth managers and her job, she was like on the team. that helps the African warlord get all of their money out of Africa. Just stuff that, regardless if you think it's morally right or wrong, sucks the soul. so she said, again, I don't know how verifiable this story is, but she says she quit, did kind of an eat, pray, love thing, and then flew to the border of Colombia and Venezuela. And she would just sit there and ask people their stories as they were leaving Venezuela. And she had said, you know, Every person had the exact same story, which was like, I was at work, I got a call from my wife. My wife said, like, don't come home, you're going to get arrested. And so I started walking towards the border and like, this is what I have. But like one out of every 10 or 20 or something would say, but I also have my private keys. And like, I don't know. I think the thing about crypto is that Like if you're American, you really don't deal with the problems that it's like relevant to solving. Like these problems are like South America, like inflation stuff, like, you know, repressive regimes, like freezing money, like all of these things like make this sell a lot easier than like, I fully agree with you in the U.S. It's just like, this is like a way we can do financial crimes that like the government hasn't figured out to like put the finger on yet. Taylor (21:42.07) Yeah, yeah. Yeah, I guess I would, I would wonder like, what is like, what does that mean? Like the and I guess in that specific example, like you cross the border and you have your private keys, but like, what do you eat? know, like, that's Rex Kirshner (22:03.118) Well, you'll be able to sell it for money in Colombia and then buy what you need. Taylor (22:07.243) Yeah, but I think that like, is that even that's kind of, suddenly the problem's over because you have your private keys. like, so what like, if it feels like optimistic in a sense that like, in that world, suddenly somehow magically, you're able to cross the border escape, bring your private key, it's, you know, Rex Kirshner (22:36.856) Well, let me put it this way. Like I'm telling you right now, I'm going to drop you off in the middle of Columbia and your choice is to have one Bitcoin with a private key or nothing. Like what do you choose? Taylor (22:37.013) That it you would. Taylor (22:46.903) Well, yeah, but you're not. I guess maybe this is all to say. It's interesting for that small subset of people. That's interesting. But what is the point? Is the point that everyone on the planet should have money in Bitcoin in case that there is a takeover of their country? Rex Kirshner (23:14.228) mean, money, okay, Bitcoin, like we can talk about the specifics like, like, no, obviously, no one should have money in Bitcoin, to be clear. But, but like, in terms of like having like self sovereign money, like whether it's stable coins, or just something that you control by nature of cryptography, and not by like agreements with the banks, like I think that's an, an objective good, right? Like, it's not a small subset of people, like another example is Taylor (23:20.631) Yeah Rex Kirshner (23:40.622) of the Russian men who fled the country in 2022 afraid of being drafted, right? Like they could leave with what they could get across the border or put in a backpack when they flew out, right? Imagine if they could bring their net worth with them. Taylor (23:56.523) Yeah, I guess, I guess I see it. like, I see obviously, like, theoretically, there's value. It's just a very like, kind of techno elitist view of the way that like, yeah, they're all gonna have, you know, thumbprint activated, like, encrypted thumb drives in their pockets. Like, like, there's a pretty big gap between I think the reality of these people's lives and, and like the accessibility of crypto ecosystem ever. I would much rather put all of this energy towards political means than this kind of idealistic, interesting, theoretical solve. Rex Kirshner (24:47.158) Yeah. Well, I think kind of what you're really getting at is like, you know, it's like when I, when you talk about like the idealistic things or like the technology things, like it's kind of hard to argue with them. you know, like, as you said, they're interesting and it's cool ideas and like, maybe it's worth doing whatever, but like when you balance that against really what crypto is and is used for and you say like, Okay, like, yeah, you're talking about this idea that I can get on board with, let's just look at what crypto is. 1 % is this. 99 % is child porn. Taylor (25:23.338) Yeah, yeah, Taylor (25:27.562) Right, right, right. Or, even like, you know, say there is some like mass event that requires lots of people, like crypto is also not a stable store of value right now either. and so like, Rex Kirshner (25:40.024) Well, if you buy like, if you have tether, right, or USDC, like assuming you believe in the value of like circle able, like they, you know, they have, they're supposed to have money in bank accounts and Taylor (25:53.677) Yeah, yeah, it's just, yeah, it feels like maybe there are some cases where that use, there are a handful of cases where that use case is like relevant and valuable, but I don't think that makes it like a world saving device, you know, if that makes sense. Rex Kirshner (26:04.568) Mm-hmm. Rex Kirshner (26:11.31) Yeah, well, here is another thing that I'd say, because I feel like you can kind of make that same argument about the internet 30 years ago, where it's like, come on, everyone in the world is going to have a device so they can instantly be connected and talk. And that's actually going to make the world a better place. Maybe it hasn't. But I think there's Taylor (26:36.001) Yeah. Rex Kirshner (26:38.602) If you call yourself a techno-optist at all, there has to be something about the internet you're bullish about, right? Taylor (26:39.099) Y Y Taylor (26:43.436) But the crypto world has been saying that for 15 years. When is that going to happen? Okay, okay. So even taking a face value, we'd expect something different to exist now. And it's just kind of hasn't. It hasn't become that internet. It's an easy argument. You can say any kind of useless technology is like the internet at its beginning. It's an empty argument to make. Rex Kirshner (27:09.934) I mean, I accept that, you know, I think like the easy thing to say is like 15 years isn't that much in the terms of like the history of finance, right? Taylor (27:24.458) Yeah, but I think crypto has gotten plenty of visibility. Like it's gotten plenty of exposure. It's not some niche thing. Rex Kirshner (27:29.132) Well, and like what's happening now, right, is that like for the first time, like every major bank is like hiring like crazy. They're putting products out there. you know, there's, there's a way to look at it from our, like from our side, but like there's a way to look at it from the crypto industry side and say for the first time ever, like BlackRock is building products to like have things out on public blockchains like fidelity. Taylor (27:56.129) Mm-hmm. Rex Kirshner (27:56.995) Like they're doing that. And part of it is just like custody so that they that, you you buy like your Tesla stock and then you can buy some Bitcoin. But part of it is like I was just looking at job listings from Fidelity and they're building out a team to tokenize assets. So like things that they already have, they want to project it out in the blockchain. And so, you know, I think it is easy and probably fair to be like, well, it's been 15 years. Like, where's this transformation? But like, I do have things I can point to say it's like. G said banks are doing it. Taylor (28:29.684) Yeah, yeah, yeah. And I think like, there's, I guess I would not argue that there is theoretically some in certain domains, like practical value. But that is not what I've heard the crypto ecosystem arguing for 15 years. It's not like they're in certain domains, there's practical value. I'd say like, that's impossible to disagree with. Of course, that's not been the argument. So, and yeah, I mean, even in the, even in like the custody crossing the border case, like, yeah, that's a practical domain that like a niche, but practical domain that has important value, like great. but like kind of, so what, you know, like why, why should I care in that, in that Rex Kirshner (28:57.71) But so what do Rex Kirshner (29:15.118) Well, why should you care? mean, don't like, fair enough, like, but I don't really care that much about like, improvements in solar technology. and so except for I care about like the like, super downstream effects of that. Taylor (29:30.7) Yeah, maybe, there wouldn't need to be this category of crypto skeptics if there wasn't like this other category of crypto evangelists is maybe another way to put it. Like it wouldn't make sense to have like, no one's a skeptic of something that people don't like believe in deeply. Rex Kirshner (29:52.406) Yeah, sure, for sure. Yeah. I mean, I think that... Yeah. And my goal with this conversation is not even to like, can I get him to say that he's not a crypto skeptic anymore? mean, like, you know, cards on the table. I do think that, you know, I guess I just wonder what, what people outside the industry like think and how they talk about it, because it is so easy for me to spin up a story right now about how like, Taylor (30:04.441) Yeah. Rex Kirshner (30:22.048) everything you're saying is true and it's worse than you know, right? Like I've been in industry five years, like you know me, like whether or not I'm actually competent, like I know how to get close enough to people that are making decisions. Like even in the best case scenarios, I'm just daily shocked, you know? And I... I think that, you know, so again, I wonder like when people outside of crypto look at it, do they think like, well, that's just like kind of nonsense noise and like let people burn themselves out on it. Is it like, this is something that needs to be stopped because all it's used for is to arm North Korea and do whatever drug stuff like. Taylor (31:01.845) Well, I mean, I have question on that for you. Do you think like writ large has crypto done more net good or bad for the world or is morality notwithstanding a complicated topic? But writ large has it done more good or bad? Rex Kirshner (31:16.75) I think it's pretty inarguable to say that it's done more bad. I, yeah, I don't know what to say. Like, I think it's inarguable that it's done more bad and the things that are good, are really all just promises at this point. and, and, you know, that's what you were saying earlier. and so I think that's totally fair. I just, I kind of position that against all technology and like look at like, Taylor (31:45.451) Mm-hmm. Rex Kirshner (31:46.905) pick something like AI or even the internet, on balance, has the internet done more good than bad? Because I can tell you a story about porn and about exploitation and about repression that makes the internet hard to balance out. Taylor (32:08.971) Yeah, I mean, I would certainly personally rather live in a cottage, but the internet has done more. I think it's different degrees by far. Rex Kirshner (32:14.188) Right. Taylor (32:23.091) I don't think, yeah, it's different degrees. Rex Kirshner (32:26.318) Well, what about AI, right? Like, let's not go so big as the internet, but like AI, like I can make a really strong argument that it's introduced so much confusion. There's so much of this like weird deep fake porn stuff. There's so much, so much just real negative, like talk about scams. Like how many scams are now you're hearing about using like 11 labs and doing like custom voice things and, but Like you and I don't shy away from that saying like, my God, this technology is doing more bad than good because we see the good that it can do and want to use it for good purposes. Taylor (33:06.089) Yeah, yeah. Well, and I think like the bad and good is maybe a extreme, impossible to measure argument to make. But I think like the reality is any new technology is inherently somewhat neutral. And it can be used for a great bad, it could be used for great good. And that is where like, society then steps in needs to step in and regulate. That's why we regulate things is because we agree, at least as a individual society, hopefully as a democracy that this is what Rex Kirshner (33:28.044) Yeah. Taylor (33:35.435) we are willing to accept for the benefit that we get from this technology. And so I guess I would be a techno regulationist to some degree, you know, we, and we regulate some technologies deeply, like medical devices, and we regulate other technologies way more loosely. And that's probably the way it should be. I mean, a great example, like we, we regulate the airwaves because if everybody could do whatever they wanted with RF, it would destroy its value. And so we regulate that. Rex Kirshner (34:03.694) Mm-hmm. Mm-hmm. Taylor (34:05.611) I think that's answer for all these things, honestly. We should be regulating crypto, not eliminating it, not banning the ability to do it, because that's silly, but in the same way for society to make sure that we hit at least, and obviously regulation itself is fraught, but there is like, I do believe we should be able to push the usage of any particular technology towards at least an optimal point that we collectively somewhat agree as a or as a society it should be at. And AI the same. Rex Kirshner (34:37.774) I couldn't be more aligned with you on that. I very much disagree with people that cheer, that were upset with Biden and Gary Gensler because of war on crypto. I fully believe that the second that there's real crypto regulation, that unlocks innovation and it'll make it safe for legitimate people. people that are involved or people that want to do illegitimate things. Like, you know, I say this about crypto lawyers. It's like, you know, it says something about someone whose profession is to do things legally. It's like entering a space where like, we're not legal. You know, I'm like, some of it's not illegal. like there's ground to stand on, it, you know, but here, here kind of turning around, something that you said. Taylor (35:23.743) Yeah, yeah, yeah, yeah. Rex Kirshner (35:37.581) like back at you is that's great to say in theory, but look, and we're Americans, right? Like that's really all we can speak about, but like from an American standpoint, look at our ability to regulate technology. I mean, like the most obvious one that we have just completely shown such utter failure that it's like resulting in the societal collapse is social media. And like at this point we can see the effects in our individual lives. And we're, We're not even talking about it. Taylor (36:09.31) Yeah, yeah. And like to that point, like regulation is going to have to be extremely slow. And also it's inherently captured like you were saying earlier also. And that's a problem too. But that's kind of like, we're getting it. The core of my skepticism is not the word, but like where I'd rather all of these intelligent people be channeling all of the energy and optimism is like, Rex Kirshner (36:18.7) Yeah. Taylor (36:39.358) political ends versus subversion, technological ends. that's like same with regulation. It's like, yeah, that is a problem and we should be pushing. We should have a lot more really smart people. And there are like really smart people in the ecosystem that are pushing for social media regulation. And there's some people that are pushing for over-regulation and like nanny type regulation. so regulation for its own sakes, never the solution, but. Rex Kirshner (37:03.416) Mm-hmm. Taylor (37:08.19) Yeah, there should be more of that. Rex Kirshner (37:08.238) What are, and like, not just, well, I'll let you answer this how you will, but like, when you look back at the story of Uber and Travis Kalanick, right? And this like real sense that everything has ossified into this state that is like bad for everyone and we shouldn't like kind of. walk around and ask permission if we can change this thing that like no one's going to let us do. Like you just go in there and you provide a better solution. you know, like everything we're having this conversation, there's a way to tell that story in a really positive way. And there's a way to tell it in a really negative way. but like, how do you interpret the story of Uber, the early story of Uber? Taylor (37:54.441) Yeah, that's an interesting question. It's an interesting question because I that is a good example where like there was a lot of good, there was a lot of bad. Like DUIs are down, which is great. And like, obviously getting around is so much more accessible, like for everybody, like that's great. And also like now there's this option of work out there that exists, unclear for how much longer, but that exists. And that's good. Rex Kirshner (38:16.686) And just to be clear, the downsides here are one, the disruption that it created with taxi people, and two, we've created this class of jobs that are, we've created a permanent underclass that like, they're terrible jobs that keep you in poverty. Taylor (38:32.712) Yes. Yeah. Yeah. yeah. And an extractive layer on top that, and I, but I, and I think this is like, this has always happened. Like this is just, it's the, that exact pattern has always happened throughout certainly American history and like all of history is new thing comes about manufacturing, industrial revolution, new way of organizing people comes about and immediately. And then the most aggressive people at the top are going to bend the rules the most. And if regulation doesn't catch up, they're going to be able to get away with a lot of stuff that we arguably wouldn't, as broadly speaking, want per se. But I think Uber is an interesting example too, and same with social media where, and I think this is like an interesting question about the particularly American regulatory framework where like If consumers want it and consumers are better off, is it a bad thing? If there's demand, then shouldn't we just let that happen? Rex Kirshner (39:39.022) Do you have an answer for that? Because like, heroin. Taylor (39:43.258) Yeah, no, exactly. No, and I don't think it's a blanket. Yeah, I don't think you can take that point and extrapolate. So I don't think that's right. I think there needs to be like... Well, but the flip side is the reason that these jobs need to exist is because we don't have a safety net that allows for productive work and that is kind of... granted and easy and accessible and flexible and in an ideal society, we would have that. But that's obviously idealistic. Rex Kirshner (40:20.502) Yeah, I really don't think you've said anything that I disagree with, but if I'll say it again, I don't disagree with you here. I guess in the nights that I have trouble sleeping over this industry and like, do I really want my name associated with it? And you know, just like my story associated with it. What I come back to is kind of what you're saying about Like this is just how it works, you know? Like the technology gets unleashed and the kind of the worst people are the ones who move fastest and capture it. And then we go forward from there, but they come, you know? They come and they transform the world and like, there's not, like even Travis, right? Like it's not like he could have stopped it from happening if he decided like, actually I really care about. taxi drivers because someone else would have done it next. And so I'm not, I'm not saying like, well, we don't need to have morals because someone's going to do it. So like, I can write off my conscious, but I think it's more about, I mean, as generic it is as it is that like technologies are not good or bad. They are like used by people for good or bad things. And if you can take on face value that this is a technology that does something interesting, it's up to you to find. good ways to use it. Taylor (41:51.038) Yeah, yeah. And I think a lot of it boils down to like human nature and human nature and people's individual morals that have fallen a bell curve and people and exactly that point. If you're like willing to exploit it, there's lots of opportunities to exploit in our system. But I think that that's, mean, it goes back to kind of regulation. Like in my mind, the one of the primary goals of having a agreed upon government that has legal and physical ability to enforce shared moral standards is to protect vulnerable people from the exploiters and to be the in-between. in some phases of American history, government's a better job of that than in other phases. And I think that's honestly, in today's immensely fractured society, that's a lot of what we've lost is that shared common ground of protecting Rex Kirshner (42:30.563) Mm-hmm. Rex Kirshner (42:37.912) Mm-hmm. Taylor (42:51.325) people from that kind of exploitation. And I actually think that's where there is a ton of common ground is around productive. So I wish we could find more of that and be faster and also like. Rex Kirshner (42:56.622) Mm-hmm. Taylor (43:06.043) understand and design regulation with that fundamental reality of human nature in mind, which I think we often don't do a good job of. Rex Kirshner (43:12.76) Yeah. You know, this question is either completely tangential or closer related, just depending on what you bring to the answer. But I mean, how do you metabolize what's happening with gambling these days? Taylor (43:29.641) I mean, a perfect, perfect example of this. It's like. And there's like a philosophical argument that like everybody should be able to do whatever they want. Like it's a victimless crime if people are gambling and losing money. actually don't think it's rapidly becoming not a victimless crime because prediction markets create an incentive to do stuff, to actually take action in the world. Rex Kirshner (43:50.478) Well, just ask like a gambling addict's family if there's no victims. Taylor (43:54.814) Totally, totally. Well, and like the if you know, if you believe in the sanctity of sports as a minimum and and like even now like, you know, I don't know, there's all kinds of speculation around every kind of weird thing that happens in the public where someone put a big bet on a prediction market is like, did they influence that? Did they have insider knowledge? Like, but and I think it's I mean, honestly, not to draw a two line to Rex Kirshner (44:02.241) Yeah. Rex Kirshner (44:14.68) Yeah. Taylor (44:23.827) far align, but I think it's a little bit of the same ethos of at least a certain part of the crypto community, which is like, we should be able to financialize everything. And it's like, there's actually like pretty good reason not to want to do that. Like it theoretically sounds interesting, but practically there's so much more bad things that happen when you take anything like that to an extreme. I think that's been the case with prediction markets. Like, should you be able to go into a casino and bet on a game? Yeah, of course. Rex Kirshner (44:36.334) Yeah. Taylor (44:50.226) Should anybody be able to from their couch bet on anything in the world? Why is that a good thing? It seems like there's so much more bad than good that would come out of that. Rex Kirshner (44:59.212) Yeah, you know, mean, it's like. You know, there's a reason that Monaco is so famous for the casino. And it's because we figured out like 600 years ago that gambling is poisonous to a society and like every country banned it. And then the one little bizarre principality that allowed it was able to like fund their entire economy because there was such good demand. But like we learned that if you just allow this, like things fall apart. and now that I'm saying it out loud, maybe it's not really like a cause it's an effect. Like you see this at the end as opposed to like this leads to something bad. don't know, but, yeah, I mean, I do think that the through line between crypto and gambling is, and just talking state of society and this like permanent underclass is people are just so desperate for. like salvation from the like financial, I don't know, just crushing, right? And what crypto and gambling offer fraudulently is like, you can get yourself out of this by like striking a big one time and everything will change. And what both crypto and gambling offer is predators like willing targets to Taylor (46:20.198) Yeah. Yeah. Rex Kirshner (46:28.856) to extract from. Taylor (46:31.75) Yeah, yeah, totally. the irony is that like, that's exactly what they want you to think. Yeah, that's exactly what they want people to think is that it's the exact same exploitation that lets people get into this desperate place in the first place. Rex Kirshner (46:47.852) Yeah. Yeah. No. And so I guess, you know, I, I think the biggest difference between how you think and I think right now is not what in an ideal world good solutions look like, but I think you still kind of have a belief that there's a path to get there. And I just don't really see it. We talk about regulation like... That's all that this industry talks about because there was that like the stablecoin bill that passed a while ago and now they want a market structure bill which says like what's the security, what's the commodity, and like people get so worked up about that. But I think kind of the big, you know, probably the reason that America is so far ahead of the curve in terms of technology is because we're the only ones that like don't even really try to hold it back. Taylor (47:50.368) Maybe, yeah, maybe. I think there's also a lot of other factors at play too. yeah, I mean, I think like the whole genre of science fiction is all foundationally about speculating about the what degree we should embrace technology and to what degree we should fear it. And so that's, we're just, we're just seeing it play out faster in the last 15 years than Rex Kirshner (47:55.64) pressure. Taylor (48:18.308) in a compressed way we have before. I think the danger is when we don't learn from the past. I think that's the reality is that like so much of it boils down to human nature and human nature has not changed all that much foundationally over the past thousand years and so you are more than that. So you can look backwards and you can see maybe it happened over a much longer period of time. But like this is what happens if you allow totally unregulated financial instruments. This is what happens if you allow totally unregulated gambling. Like we've seen it a million times before. Rex Kirshner (48:24.899) Yeah. Taylor (48:45.872) And why would we expect it to be any different? We're just going to speed run it now because we have a new platform on which we expose and enable that. Rex Kirshner (48:46.019) Yeah. Yeah. Rex Kirshner (48:53.964) Yeah, so slight pivot just on the way out to just get out of like, doom or land and at least talk about something different, even if it's still like maybe doomerish. But are you AGI pill? Like, do think that's coming? How big a deal do you think that is? like, cause one thing about crypto that like could play out without any moral judgments of this good or bad, but like, What is crypto inherently? It's internet native money. maybe part of what this story of technology is, is the robots need money for the same reasons that people need money. And what are they going to choose? Something that's internet native versus something where we can just rip them off. Taylor (49:40.432) Yeah, I'm not. Rex Kirshner (49:43.694) You don't have to talk about the intersection. Just what do you think? Are you AGI-filled? Taylor (49:47.976) Wait, I was just thinking about the intersection recently. I think like, at least in the shorter term, if you have agents that we allow to take financial transactions on our behalf, like we obviously need recourse for that. And so I think I would actually not want non-recourse financial transactions in a world in which an agent is taking action on my behalf. Rex Kirshner (50:13.358) Well, what about for the example of like, if an agent needs access to an API? Like what's the problem with irreversible in that standpoint? Like it's a transaction. It's not a like giant investment thing. It's like the agent might have, you know, authorization to spend up to 30 cents at one time and it needs weather data and they'll give you the data points for 30 cents. why not? Taylor (50:34.887) Yeah. Yeah, why not? mean, yeah, then there's, think, like, I think specifically with agents, like we still have not even come close to solving the identity and authorization problems inherent in there. And so, yeah, there could be a lot of shapes of interesting applications, I think remains to be seen. And some of it will be technical and some of it'll be just whatever the dominant shape emerges to become will kind of calcify. So yeah, who knows? But to answer your question. I'm not AGI-pilled in the sense that I don't think it means anything. I don't think it means anything tangible. don't think anyone's defined that in a precise and measurable way. I will say the models are able to do things that I would have never expected two, three years ago and do things quite well. Rex Kirshner (51:33.196) Yeah. Taylor (51:36.668) certainly in domains in which there's a ton of trading data, but like, yeah, it's pretty, pretty able to extrapolate beyond that too. I still think there's like the inherent nature of society is such that we won't want to unleash them to their fullest potential because it's chaotic at the, at the limits. And I still think that like people over exaggerate how easy it is to make a good agent do something predictably. Because it's not easy. It's like very hillclimbing. Like you solve one, you solve this little thing, it gets wrong and this other little thing, starts to get wrong. And so I think that in specific domains, they will be able to replicate human judgment. Absolutely already do without a doubt. Yeah, like what exactly like what what boat Rex Kirshner (52:31.288) self-driving cars. Taylor (52:35.547) But yeah, is that AGI? don't know. to say. I don't know. And I also do think, I think more philosophically too, I don't subscribe to the idea that token prediction or any emergent behavior that is grounded in token prediction fully models what we think of as reason. I think there's stuff missing and there's lots of people working on different angles of what that stuff that might be missing is. And I do think that there's stuff missing. Rex Kirshner (53:09.314) Yeah, I mean, think whether or not AGI means anything and if we're going to get there, it would be so naive to think that the path is just to make better and better LLMs. Our brains don't work in... There's more than language. I don't know what else to say. Taylor (53:27.473) Yeah. Yeah. Like obviously there's more than language. Yeah. Yeah. Rex Kirshner (53:31.168) Yeah. So I, and I hear you that the undefine ability of AGI makes the whole conversation pretty stupid. So like, I take that for what it is, but you know, for me, it is like we talked before we started recording about how much we're using Claude code and how amazing that is. You look at, you live in the Bay area. I live in Los Angeles, like both of us every single day see minimum five self-driving cars, like I, it is, it is impossible not to look around and feel like everything is going to change. and I, I don't, I understand this concept of as things get easier, that frees up humans to work on other things. And that's like how technology and stuff works, but every single example I've seen of AI has reduced a human from the equation. And like that freaks me out a little bit. Taylor (54:33.915) Yeah. Yeah. I mean, it's true of all technology to some extent too. I mean, it's certainly, I think part of it is it's from our, you know, from the white collar job seat, it's easy to assume, well, you know, it's the mechanical hands-on jobs that are these easy to, you know, replace. It's the production jobs, the manufacturing jobs that are easy to replace, but no one's going to replace me sitting at my desk thinking, doing emails. And this is an example where it's like, actually, no, it can replace that too. So it feels particularly threatening, you know, jobs have always been threatened. They just weren't jobs that we think about every day from our ivory towers. Rex Kirshner (55:05.89) Yeah. Rex Kirshner (55:12.471) Yeah. Taylor (55:14.969) in these industries. Rex Kirshner (55:16.684) I think what's particularly scary is how fast the collapse is happening, both from this like knowledge work skill work. Like you and I can do the work of 10 programmers ourselves. And at the same time it's coming from the bottom up, right? It's the Uber drivers and the Amazon warehouse workers. And like, I could tell you a story about how humanity transitions to. beyond this and we all become content creators that are making the world just a more fun place. But if this happens over five years, I think what we're really looking at is what happened to the Rust Belt and the industrial base of America and not this world where we're all transitioning to thriving individuals because we don't have to do the automated tasks. Taylor (56:05.466) Yeah. Yeah. And I think you're right that like the time window is going to matter a lot for this. Yeah. And I think the thing that scares me honestly, the most sometimes is that technologists using this as a very like broad brush, obviously I think are some of the worst people who should be in control of such powerful stuff. Cause they often are the last to factor in Rex Kirshner (56:24.334) You Taylor (56:34.992) For what end? Like I think you could squint and look at the industry right now. And I know this is more than just a speculation, but like, are we even on the side of the humans at all? What is our goal? Like if our goal is to eliminate humanity, we're doing a pretty good job of it. So yeah, I, I, I fear that sometimes the technology, I mean, historically and currently like Rex Kirshner (56:49.09) Yeah. Rex Kirshner (56:56.526) Mm-hmm. Taylor (57:04.772) the technology industry just loses sight of the why. Because it's so easy to get focused on the what because the what's really cool sometimes. I think the same I mean, that connects back to crypto to lose focus of the live in the in the in the fact that the what is so interesting and like theoretically curious. Rex Kirshner (57:12.579) Yeah. Rex Kirshner (57:23.362) Yeah. Yeah. And, you know, I don't know if you have read it yet, but that book, Careless People, the, you know, it's definitely written by a disgruntled employee. So you have to take it with a grain of salt, but just like the inside look into like how Zuckerberg thinks and operates, you're just like, I don't have a single good thing to say about a single politician, but like, Just like who is making any of these decisions? It's pretty wild. Taylor (57:54.855) Yeah. Who is making these decisions? I think that's the, that's the bottom line. Yeah. Um, yeah, but I, mean, I, I love watching, I don't know if we talked about this, but I love watching, um, documentaries from like the early two thousands of startups. And I love watching documentaries about like the early, you know, Disney imagineers. And it's like, there is a, there are people who are in this for the sheer wonder of it. and that is beautiful and cool. And that's when like really great, interesting things get built. And it's when that the sheer wonder gets replaced by greed that bad things happen. And I wish technology and the industry was more could get back to the wonder and get and like kind of eliminate the greed. But again, human nature, what can you do? Rex Kirshner (58:45.356) Yeah, man. Well, I think that's a beautiful place to kind of wrap this up on. So, Taylor, thank you so much for the time. Normally, if you were a crypto person, I'd say, like, what's your project? Where can people find you? So instead, I'll say if there is anything you want to plug or like suggest for reading or whatever, but I'll just like, yeah, hand you the plug opportunity. Taylor (59:08.398) My plug is build more cool art and things for its own sake while we still can. I like just build it. I mean, think the, my plug is use coding agents and do projects that are fun. Like that's, I think that is the closest it's bringing. It's the closest to the pure joy of, of technology that we've had in a long time and it's making it so much more accessible, which I think is a beautiful thing. So play around. Rex Kirshner (59:32.684) Yeah, no man, it's like you said before we started recording, when we talking about clogged code, it's like, this is the thing we were missing. yeah, like chase that feeling. Taylor (59:44.39) Yeah, yeah, yeah. Rex Kirshner (59:46.275) Cool man, all right, Taylor, thank you so much and have a good rest of your day. Taylor (59:49.607) Thank you, YouTube.