Invest Like The Best
Episode 56 Hash Power – Part 1
Invest Like The Best

Episode 56: Hash Power – Part 1

Hash Power – Part 1

We cover the potential of blockchains, the idea of scarcity in digital assets, and hashing. Our guides are leaders in this field such as Naval Ravikant, Olaf Carlson-Wee, Fred Ehrsam, Ari Paul among others.

This episode is brought to you by:

Fidelity Investments. Fidelity is a company that is constantly researching and experimenting with emerging technologies, like crypto assets and blockchain, to improve the lives of their customers. Fidelity provides a comprehensive set of products and services to individual investors, employers, and financial advisory firms.

[00:03:25] – CHAPTER 1 – Understanding the Concept of Blockchain

[00:04:30] – Jeremiah Lowin explains how blockchain is like a database

[00:05:46] – Owning a digital asset

[00:07:14] – Naval Ravikant, CEO of Angelist on how blockchains can help to create personal networks and organize humans

[00:11:01] – How blockchains represent a way to coordinate global activity through tokens

[00:13:33] – New coins popping up around data storage and utility needs like solar panels

[00:14:57] – Permission vs permissionless networks

[00:16:37] – Protocols and the introduction of scarcity

[00:18:13] – Keeping track of scarcity and the introduction of tokens

[00:18:49] – Societal structures and how blockchains will change them again

[00:21:55] – The role of blockchains in the informational age and the rise of more individual sovereignty

[00:23:29] – Fred Ehrsam, co-founder of Coinbase, on the increasing shift to digital worlds led by incentive structures

[00:27:48] – CHAPTER 2 – Blockchain Technology

[00:31:53] – Charlie Noyes, Pantera Capital, explains how SHA-256 was developed and what makes it so special

[00:35:48] – How miners create new blocks and the incentives to do so

[00:40:22] – The nonce field

[00:43:48] – The incentives that exist for miners and the arms race to build more powerful systems to mine

[00:45:20] – The development of mining pools

[00:46:54] – Ethereum, the “spiritual successor” to bitcoin

[00:48:36] – How the Ether network is an ecosystem in which other tokens can sit

[00:50:51] – Naval Ravikant on alternative coins or tokens

[00:51:37] – How the protocol creators are the ones getting wealthy

[00:52:43] – Blockchain as an experiment in distributed government

[00:54:10] – How cryptocurrency is more than just technology, it’s a movement

[01:00:07] – Peter Jubber, of Fidelity, on how huge institutions, like theirs, are getting into the cryptocurrency game

[01:03:34] – The notion of cooperation in an open-source project or protocol

[01:04:39] – Olaf Carlson-Wee, the first employee at Coinbase and the founder of Polychain, on the early excitement for cryptocurrency

Hash Power – Part 1

Introduction

Patrick
The documentary you were about to hear started with an email from Matt Goetz, the now CEO of a cryptocurrency investment firm, BlockTower Capital. Matt emailed me and invited me to lunch. He had a great job at Goldman Sachs but was leaving it to start a new hedge fund that dealt in cryptocurrencies, to which I said, "That sounds cool. What the hell is a cryptocurrency?" His partner, Ari Paul, was also leaving his job as a portfolio manager at the University of Chicago's endowment. Ari would be the CIO and Matt would run the business. Over the next several months, with the significant help of Matt and Ari, I had conversations with leading thinkers and creators in the field, big picture philosophers like Naval Ravikant and Fred Harrison. Creators like Juan Benet and Mooney Bali. Investors like Ari Paul and Olaf Carlson-Wee. In the coming episodes, these leaders will be your guide to understanding blockchain technology, cryptocurrency investing, and the future of markets.

Hash Power is meant to be an introduction, but really, it's an invitation to explore this emerging world on your own. As you'll see, nothing that is this early in its development is easy to understand. I hope Hash Power will serve as a litmus test for your own interest in blockchain and cryptocurrencies. Now, crucially, nothing you hear here is investment advice of any kind. Naval Ravikant and several others made a very good suggestion to me. Don't buy any cryptocurrencies unless you spent an enormous amount of time investigating them. It's important to note that as I was having these conversations, I owned virtually no cryptocurrency. I did buy small amounts so that I could watch and experience the blockchain in action. Buying, sending, receiving, converting between currencies. Things like watching transactions settle on the chain without ever being verified by a centralized entity or authority or sending money to Europe and back. You wouldn't opine on Uber by reading stories about it. You'd order a car, ride somewhere and compare your experience to that and the yellow cab.

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