Billionaire Bitcoin Bull Reveals Vision of Free, Global, Decentralized Future | Tim Draper


We can keep our power. Hold on to our power.
I guess I’ve been playing wrong this whole time.
You have been playing Monopoly wrong. What’s up, YouTube? My name is Jackson, and
today I’m here with billionaire venture capitalist and Bitcoin bull Tim Draper. How are you doing
today, Tim? I’m doing great. Doing great. It’s a beautiful
day. Wonderful feeling. Everything’s great. Awesome. So I’ve watched a lot of interviews
with you, and I’ve noticed that yours… Oh, I am so sorry. Well, I’ve enjoyed them so far, so don’t worry.
Not a problem. But I’ve noticed that you’re always in this location and I haven’t seen
anyone ask you what’s on your whiteboard behind you. I never know. It’s always varies. I use it
for a sort of brainstorming. So it could be anything. It’s plans. Lot of interesting things
I’m thinking about up there, but probably things I thought about two or three weeks
ago. And now either I’ve done them or they’re out of sight, out of mind. Anything you’re particularly excited about?
I notice just from looking there, it looks like you’ve got DAI on there. Is that in reference
to make her MakerDao’s cryptocurrency or is that something different? Yeah, I’m actually an owner of some maker
and a big fan of it. I’m excited. It brings, you know, Bitcoin is really the ultimate solution,
making it all crypto and all. But this is a nice bridge that allows us to kind of bridge
our current banking system with the post banking world. Once the banks are, you know, have
either transform themselves or gone out of business. This is what will allow the consumer
to move from that old world where it was fiat currency and aside all tied to governments
and tribal and all that to this new world that’s global, transparent, decentralized
and open. So I think it’s exciting. And I think Maker has figured out a really nice
model for how they’re going to match the old world with a new world. So I was watching
ultimately down the road. I see this as a Bitcoin economy. Yeah. So I was watching an interview you did
with Bloomberg where you said that when you’re investing, you look at industries that have
the worst service for the highest cost. And so as it is, MakerDao as DAI an example of
a solution you see to an industry that gives a poor service for a high cost? Yeah. Yeah. Banking and finance. Finance,
I can say that because I’m in the finance world. I believe that banking provides bad
service with the high cost at this point because I mean, they’re charging 2,5 to 4% every time
you swipe a credit card. And we’re not getting real value for that. It can be done with Bitcoin
for almost frictionlessly. Almost free. It can be done in so many ways in a better way
than it’s being done. And the banks are getting more and more where
they’re charging fees for things that they never use to charge fees for. So I get the
feeling that this is like the the roar of the dying lion there. They’re trying to hold
on. They’re clinging to their past glory. But really, the world is moving in a new direction
and they either are going to get on board or they’re going to become extinct. So this is a really exciting time. And yes,
they do provide bad service at a high cost. And there are very few of them. And they have
sort of monopolistic moat, because if you wanted to start a bank today to compete with
them, it would cost you $50 million. That’s a huge moat. No one really wants to start
a new bank today. There are very few people do. And I think if banks, they have that moat,
they have this oligopoly. And so we all have to deal with whatever they all start throwing
at us. And if one group charges decides instead of 2,5 to 4%, we’re gonna charge 3 to 5%.
All of a sudden, we’re all paying 3 to 5% or the merchants are. And then we have to
pay by osmosis. This is very interesting, but banks aren’t the only group that are providing
bad service at a high cost because they’re an oligopoly because crypto, Bitcoin, blockchain
smart contracts. You combine them with an actuary and you have an insurance company.
And insurance also provides bad service at a high cost. And that’s why you see all these
ads for insurance companies trying to get your business because they’re clearly making
a fortune off of you. Actually, using a smart contract and using an actuary insert some
AI, you use AI to check out fraud. You can actually create a really great insurance company
for very little. And what is government but a bunch of insurance companies. And so I think government is probably the
industry that provides the worst service at the highest cost. And that’s true throughout
the entire world. And they’re all going to have to start competing for us, at least at
this virtual level, where a government can provide better insurance than they do today
by using Bitcoin blockchain, smart contracts, artificial intelligence and just good actuary.
All these huge, huge industries are about to go through a complete metamorphosis because
we now have a decentralized world. And this whole. we were always tribal, and this tribalism
is now global. We can be global. We can operate globally if one government is not performing.
We can actually move to another government and we could move virtually to a new government.
Estonia, Malaysia and Kazakhstan are all working on e-governance, which could be provided to
the rest of the world, not just the people in those countries, to the rest of the world
without having people have to live there. And so that creates this sort of virtualization
and competition amongst governments. And it’s a whole new way of thinking. And I think in
their guts, the governments and the politicians all understand that they are losing their
old world. And in some cases, those governments are saying, hey, we’re going to be the leader
in this new world. And that’s like when Japan says Bitcoin is a national currency or when
Malta accepts all of the blockchain and crypto companies through Malta or Estonia creates
this virtual residency program, they’re realizing that this is all changing and they’re okay
and they are going to lead that change. Other countries are saying we’re going to control
it all because we like the old way and we’re going to live under the old way so we can
keep our power. Hold on to our power. And they’re little bit maniacal about it because
they are vested interests that really don’t want to see this future, at least until they’re
retired. But there are also this new generation. You know, if you ask the average 30 year old
if they’d rather have a Bitcoin or $10,000, they’d all take the bitcoin. If you ask somebody
who’s, you know, 45 or older, except for me, 45 or older, they’d always take the dollars
because they are living in different worlds. The younger people are saying, well, this
is a global world. We’re open, we’re transparent. We like the
openness of the world. In fact, you know, that old world of currency put me in debt
of $200,000, because I was, you know, I went to a good school and that’s not my currency.
That’s their currency. I don’t like their currency. I want my currency. I want to move
with Bitcoin and I want to be on the blockchain. And I don’t have to be tied to any existing
tribal government. I can be open to the world and free. And all the transactions will be
very honest because the view on the blockchain and there won’t be that friction that’s created
by regulation where regulators kind of create friction and that friction creates corruption
ultimately, because if someone stands between you and you getting what you want done, that’s
always some weird form of negotiation. And if they have a regulation that they can cling
to that says you can’t do this until you get past me, then they have this extra power over
you and that breeds corruption. Fortunately, in the U.S., it has been very little corruption.
But that’s because it used to be a very relatively unregulated country. Now we have extraordinary
regulation here. It’s very high regulation and it is breeding more corruption. And that
scares the heck out of me because I’ve always loved the land of the free and the home of
the brave. It reminds me of a quote that you made in
an interview with us a couple of years ago where you said: “Freedom equals prosperity
and regulation equals poverty”. And I’m wondering, do you think that any sort of regulations
are necessary to protect consumers? I mean, where do you draw the line here? Well, I think you make regulations when people
are at that point not creative enough to create a market system to solve a problem. So regulation
should be an interim step and they should be temporary until there is a market system
that solves the regulation. Cap and trade is the market system that solves for carbon
emissions where regulation is just you can’t pollute. And I think, we’re really, I think
in a perfect world, the regulators would allow for innovation to happen until there was an
outcry, that was a really big outcry from a lot of people saying this is not fair for
us. And then the regulators can come in and say, should we regulate or is there an entrepreneurial
solution? Is there a market solution that we can create that will incentivize people
to do the thing, do the right thing, do the thing we want them to do? And I think what’s
happened, though, is like the regulations from 1933, 1940, they’re 80 years old. And
somehow those regulations are dictating what happens with the ICO market and the air drops
and whatever else. And it’s all dictated by something that happened 80 years ago. It makes
no sense. That should have all been sunsetted after. I mean, I don’t think any regulation
should last more than 20 years. After those 20 years if you want to re-up the regulation,
great. You think it’s still a good thing? Great. But during that time, a lot has happened
and a lot of different market systems have evolved. We don’t have to live by some, just
because somebody wrote it 80 years ago, we don’t have to live by that. We can read, re-think
it. It can be a market system. And so, yeah, I do think that the higher the regulation
I mean, you’re going to see you heavily regulate China. They’re getting heavily regulated now.
Their economy was booming and now it’s flattening off. I mean, the ultimate is a socialist economy,
Russia, everything’s regulated, right? It’s all determined by government. They tell you
you’re going to be an ice skater. You have to become an ice skater. You’re going to be
an engineer. You have to become an engineer. And it’s all done by the guys at the top and
the guys at the top determine what everybody else has to do. And that was Russia for many,
many years. Their economy was total flatline. Meanwhile, the U.S. economy was booming. And
finally, the wall fell down. They recognized that they needed a market system in there.
They built their market system. And now for some reason, they’ve got leadership that’s
saying: let’s go back to this socialist economy where we can control all of your people. I
think that hubris, you know, anybody who says, yes, socialism works – it’s never worked.
Capitalism hasn’t worked everywhere, but socialism has never worked. So the fact that we have
two presidential candidates, two who claim to be socialists and they’re doing okay in
the polls, makes me think like, does anybody study history? Does anybody understand what
has happened in the past? This is ridiculous. Socialism creates poverty. That whole, all
that regulation, all that government control creates poverty. You know, the closer the
decision making is to the top, the worse the country does. Socialism doesn’t work. They
don’t understand human motivation. The drive of humans. The incentive to allow a human
to achieve what they want to achieve is so powerful. And by subverting it with regulations
saying you can’t do this, actually, it ruins motivation. And people used to, people in
Russia used to say they pretend to pay us and we pretend to work. Is that really the economy you want? No. You want an economy where people are driven
and motivated and they know they’re going to make big money if they’re successful, make
huge sacrifices to get where they’re going. All those things, I think those are really
critical for a big economy. So you clearly seem to have a lot of faith
in the free market and the positives of competition. Do you see Bitcoin as the ultimate form of
capitalism? No, but it frees up Bitcoin, frees up the
world, it allows us to do business anywhere in the world without friction so that we can
pay employees somewhere else. We can send money to our relatives somewhere else. We
can operate. We can hold money anywhere and that we can pull down anywhere in the world.
I mean, imagine being some Syrian refugee and you had a lot of money in Syria. And now
you are going and you’re in Greece and you have nothing. And you’re a refugee and they
don’t accept Syrian money. You’re screwed. But if you had Bitcoin, you would just go
to Greece, you pull down your Bitcoin, you buy a house, you start your life over. Everything’s
fine. And you go get a job. You get it all going. The world doesn’t end. Well, you know, there are military dictators
out there. They make life miserable for some people. Some of them push people out because of what
they believe. Some people push him out for one reason or another. Sometimes they have
just horrible ways of operating. And so people have to leave those countries, well, if they’re
stuck with currency in their own country, they’re stuck. Nobody’s going to take that
currency. The dictators currency. Who wants that? So why not have Bitcoin? My original question was, is Bitcoin the ultimate,
ultimate form of capitalism? And I think you said no. Why don’t you think so? Well, because it’s not the whole system. I’m just saying Bitcoin is a currency that’s
global and open, transparent, wonderful. Everything’s great, frictionless. It’s not the whole capitalistic
system. You need buyers and sellers and suppliers and customers. And there are a bunch of things
that make up capitalism in a fair market system, free and fair market system. There are a lot
of things that make up capitalism, but Bitcoin can actually help spread good business around
the world. And I guess that would spread capitalism around the world. But yeah, ultimately it’s
a better form of government. And for some reason there are people who still
feel like socialism or some other form is going to work better. I just don’t see it.
I’m kind of curious. It never has. I mean, you go back in history. Never has, zero. Yeah. I’m kind of curious. Do you think you
could give me a ballpark of how much Bitcoin you own? Why would I do that? You ever play Monopoly?
Do you tell everybody how much money you got when you play Monopoly? Well, you’ve got to show it right. No, you don’t, no. I guess I’ve been playing
wrong this whole time. You have been playing Monopoly wrong. You never show your cards. I’m gonna remember that for next time. That’ll
make my friends angry for sure. So if there’s one piece of advice to give to someone looking
to invest in crypto, what would it be? Do it, do it. It’s the future. It just makes
perfect sense. It’s the future. And it’s a positive future. It’s a future of peace and
love and openness and transparency. It’s a future that we all want. How do you feel about privacy coins? Honestly, I don’t think that they’re gonna
be private. I think people will figure out how to find out who’s on that blockchain. You know, and that’s it’s a little bit like,
you know, hey, oh, there are all these criminals and they’re using crypto to do their crimes.
If you’re a criminal, you should be using cash because, you know, there is no way you’re
going to get away with it. If it’s on the blockchain, there is a perfect record of every
transaction that sits there on the blockchain. It doesn’t make any sense for a criminal to
try that. Throughout this interview and other interviews
that I’ve watched, you have this very forward thinking mindset. How do you cultivate this
mindset in order to spot opportunities that others, other people may not notice as much? I don’t think, I don’t think it’s necessarily
just inherent in me, I think anyone can do it. Everyone I meet is telling me about what
their future is. They’re all saying, hey, I got this new deal, I got a new company this
is what we’re gonna do. This is what it’s gonna look like. So I meet with all these
people, you know, it can be as many as fifteen in a day. And I might hear 15 pitches in a
day. It starts putting pieces together for me of what that future might look like. And
then I can make my judgment as to what investments I might make based on the future. I’ve learned
from all of that. And then I also have lived a long life. So I get to look back in history
and say, you know, what has worked and what hasn’t. Over all that period of time. So it’s, I guess, just because that’s what
I’ve been doing. That’s what I’m better at. Like, if I were a journalist, I would know
much more what’s going on in the world right now, right today. But I wouldn’t really have
a sense for what’s gonna happen tomorrow, because it just happens. And then I bring
it in and it’s part of my life. But if I’m a venture capitalist, all I care about is
what’s going to happen the next 5 to 10 years. I see your point. And being a journalist in
the crypto industry is particularly nuanced, I think, because all the topics that we deal
with are all about the future, you know. You’re a little bit of a combination because you’re
a crypto and you’re a journalist. And so you see what’s going on in crypto today
and you get what crypto is going to be bringing to the world tomorrow. So at least you have
that good sense. Yeah, everything going on in crypto today
is about what’s gonna happen tomorrow. Right. Yeah, at least it seems that way to me anyway.
And I guess one final question, because I I’m still curious about what kind of criteria
you use to evaluate these pitches. And I guess crypto companies specifically, are there other
things you look at besides these worst service high costs when you’re really reviewing a
company or a coin when you’re deciding whether or not to invest in it? Well, I’m evaluating the people who are working
on this as much as anything and the market size of what they’re going after. And then
my biggest question is, what if it works? What if you’re successful? Have we created
a happier or more peaceful, loving, open, wealthy environment or have we created a military
dictatorship? And I think you look and you say, I want an open, free, peaceful, loving
world. And that’s what you’ll get if you back this entrepreneur. And then if they’re successful,
it happens. If they’re not successful, they at least push the ball forward in that direction.
So, yes. So those are the things I look for. What if? The big question, what if. What if
it works? No, what if it works. What could go wrong?
There is plenty of things that could go wrong. If you’re a startup, you’re going to grow
a lot of things that go wrong. For sure. Ok, well, thank you so much for taking the
time to talk to us. That was incredibly interesting and I really enjoyed our conversation. Thanks for having me on the show. Thank you, everyone, for watching. My name
is Jackson and that was Tim Draper. And, guys, always remember to like, subscribe and hodl.

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