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At this altitude I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question now? It is. Cybernetic organisms living tissue over metal embryos go to Paris, so. Hello, boys and girls, ladies and germs, this is Tim Ferriss, and welcome to another episode of the Tim Ferris show. I'm going to skip my usual preamble. You guys have heard it before. And I'm going to get straight to this guest because we are going to run out of time before we run out of material.
My guest today is Catherine. That's with an R y n commonly known as Katie Horne HQ. And on Twitter at Katie Katie underscore you U.N. She is a general partner at Andreessen Horowitz. Previously, she spent a decade as a federal prosecutor focusing on fraud, cyber and corporate crime alongside agencies including the SEC, FBI and Treasury. She created the government's first cryptocurrency task force and led investigations into the Mt. Gox hack. We might talk about what that is and the corrupt agents on the Silk Road task force.
I have quite a few questions about that. While with the US Department of Justice, Katee prosecuted, RICO murders the find that organized crime, public corruption, gangs and money laundering. So lots of good guys. In other words, she also held senior policy positions at Justice Department headquarters in both the National Security Division and Attorney General's Office, where her portfolio included antitrust tax and national security. While in the private sector, Kati's testified before both the House and Senate on the intersection of technology and regulation.
Katie serves on the boards of Coinbase and Hacker one and has invested in and advised tech companies from seed to series E stage. She teaches a management course at Stanford Business School and previously taught cyber crime at Stanford Law School. Katie clerked for U.S. Supreme Court Justice Anthony Kennedy and is an honors graduate of Stanford Law School. She is a lifetime member of the Council on Foreign Relations. Katie, welcome to the show. Tim, thanks for having me. Great to be here.
I am so excited to chat for so many reasons, and I thought I would just set the tone for people listening with a few lines from our mutual friend of all overcut, who is a certainly a a crowd and listener favorite. Here on the podcast, I emailed Devall to ask if there might be any questions or subjects. It would be interesting to explore with Katie and of course, indicating that I would do my own homework. And he replied with the following.
I asked him if I could give attribution and he said, Yes, you can cite me. So here's what he said. It was his very concise response. Quote, She has a concealed carry group in Cairo, can't set foot in Russia, dealt with a lot of violent criminals, et cetera. But she's also a suburban mom with kids and runs the number one hard charging DC fund and crypto. She's quite the character. If I'm down to one phone call instead of calling my lawyer, I'm calling Katie.
All right. So so on top of that, you seem to be the child whisperer from another mutual friend, Suna.
And she talked about how incredible you are with children. So we are going to run out of material, I think, very easily. And I want to start, if it's OK with you, with the Silk Road. So the Silk Road is of great interest to me for a lot of reasons and principle. Among those is the fact that I used to work many days a week out of Glen Park Library in San Francisco. And and so for those who don't know the the founder of the Silk Road who used the handle, Dread Pirate Roberts, of course, an allusion to the character from The Princess Bride, was apprehended in Glen Park Library on a day I happened just not to be there.
So the fact is not to be I was not there. I was not there. But it makes me assume that I must have been sitting right next to this guy many, many, many times. So for those who don't know, just as an introduction, could you explain what the Silk Road was?
So if you weren't at Glen Park that day, Tim, that means you missed the lover's quarrel that the FBI staged in order to nab DP's computer. And if I did, I did.
I did. I did. And actually, Nick Bilton, who ended up writing an entire book about this, was also just a few blocks away, lived in the neighborhood. Yeah. So let's move into this and you can also explain the well, maybe the Silk Road and then the lover's quarrel, why that was in in any way tactically important.
So the Silk Road, as many of your listeners probably already know, but for those who don't, is a darknet site. And it's a site that you can buy anything from fake passports or that you could buy anything from fake passports to heroin to fentanyl to drugs and just all kinds of contraband. Right.
I was actually not involved in the investigation into Ross Ulbricht and DPR. A lot of people think, oh, you ran the Silk Road case. I was actually involved in what I'll call the twist of the Silk Road case. I was involved in some of the. INS who are investigating DPR and Ross Ulbricht in the Silk Road, I ended up having to prosecute them. So let me back up before we get to that. And that, by the way, that started with a tip that someone in the government was up to no good and moving cryptocurrency.
But before I get into that that twist piece, just to answer your earlier question about the Silk Road, so there was this, as you mentioned, DPR and the government, the U.S. government for years was trying to find out who is DPLA, where is he or she located? Are they in the U.S. or are they elsewhere? And how are they running the Silk Road? And so they spend a number of years trying to find out. And one of the kind of secret weapons that the U.S. government had was an undercover federal agent who I'll call Nob.
And Knob is one of the people ended up prosecuting. But this undercover federal agent befriended the mastermind of the Silk Road DPR.
Pause for just one second. So usually if someone has a placeholder pseudonym like Jane Junto, where is the hub coming from? And is that was an RN or Katende then.
And it's not B, but if you think NAB is a kind of crazy handle the persona's that knob invented to actually then extort the mastermind of the Silk Road were French made and death from above so we can get into that element.
So Knab is just the tip of the iceberg.
All right, sorry to interrupt. Please continue.
Well where were we. So we were at the Silk Road. The government's trying to figure out who's the mastermind. And it has a couple different task forces on that job. One, as I mentioned, is outside of Washington, D.C. That's where NAB and others are befriending DPR and getting little clues into, you know, who or where is this person? How do they do that? They do that by having Norb, who's an undercover federal agent, befriend online DPR, Ross Ulbricht.
And so for about two years, NAB and DPR are communicating almost daily and they become actually friends. If you read the chats, their messages on the Silk Road website, which the government leader sees, they become kind of you know, they engage in friendly banter back and forth. What did you eat today or what are you doing? Are you working out? And the reason for that, Tim, is those kind of little clues in inform the government.
Where is this person at? Like, are they online during hours in the middle of the day? What kind of workouts are they doing? Are they hiking the hills? What are they eating? Are they eating salmon? You know, where is that found? Right where.
So just little clues over two years really can help a government investigation. So Norb was getting these clues by befriending Rossell, Brooke. And Knob's cover story was that he was on had connections to the criminal underworld in Latin America because he was a drug cartel leader and his his into Ross Ulbricht was I hey, I want to buy your business, your Silk Road.
I like this business. So that's how the two started communicating.
And somewhere along the way, not one bad now became a double agent, playing both sides and extorting Ross Ulbricht for hundreds of thousands of dollars at the time of Bitcoin, which today would be hundreds of millions of dollars of Bitcoin are of dollars in Bitcoin, but also selling rossell secrets into the government's own investigation, using that death from above monicker. That's just incredible. My understanding is, please correct me if I'm wrong, that one of the key elements of this story in apprehending DPR was also the fact and I want you to fact check this understanding that this wasn't where you kind of entered the scene, but is that he used he made a bit of a rookie mistake and he used the same handle it something like Altoids or something like that in multiple locations with his email address that ultimately allowed agents and law enforcement to triangulate, at least that that seems to have been a piece of the puzzle.
I might be misremembering that. But when you became involved, what were the key elements that allowed you to figure out what was going on and then prosecute effectively?
So, again, I didn't prosecute Ross, but I remember that case well, because as you note, Tim, he was apprehended in San Francisco. So I actually remember when he came into the federal building at the Justice Department that day. And you are right that there were some mistakes. He was pretty good to obfuscating, but there were some mistakes. And I think there's a New York Times article on this that the IRS agent on the case, Gary Alford, was kind of just on the open web, found a reference to his real name on Google somehow.
So I think your memory is correct. But of course, like you say, it's a bigger piece of a puzzle. I mean, it was a multi-year investigation. It involved search warrants, from what I understand, all over the world and a number of different pieces of the puzzle. But one piece, indeed, was what you said, which is the kind of rookie mistake of leaving a few digital breadcrumbs in the form of his real name that ultimately led to his apprehension.
And I should have been more specific by prosecution. What I meant was in reference to the two federal agents, one of which being NRB.
So because in this twist, I mean part as I understand it, part of what makes this pretty fascinating is that the sort of the technology itself, some of the technology that play made it possible or at least facilitated the tracking of these digital breadcrumbs. Yeah, could you speak to that?
So actually, I'll go a step further and I'll say in law we have this concept called for, but for this this wouldn't have happened. And I can tell you that. But for the Blockin, we would not have caught. By the way, you said Knab, there are actually two federal agents will get into that in a second because it turned out there was another rogue federal agent doing all kinds of other things who was on that Silk Road task force and bought for the block chain.
We would not have caught these two corrupt agents. And I say that if I sound like I say that with certainty, it's because I'm certain of it we would not have caught them otherwise. And in fact, the only reason that we were able to investigate and follow the flow of funds was because of the blocked gene technology. And without it, we wouldn't have been able to bring these two individuals to justice. In fact, they'd still be today federal agents, I'm quite sure of that.
And moreover, they'd probably have over a billion dollars worth of criminal proceeds in the form of Bitcoin.
Given how the price has gone up, there would have been highly resource rich and enabled sort of questionable characters that I mean, what an alternative universe that would have been in this case if we could pause for a moment. You seem to have a superpower of getting in front of an audience. And this is certainly shown up in previous profiles of you, CNBC and elsewhere, getting in front of an audience of people who come from all walks of life, such as the members of a jury, and getting them to understand a topic they might have not heard of before, or that might be very complicated, possibly complicated.
Could you explain for people who have heard the term block chain, really don't know what it refers to, what the block chain is?
Well, there are numerous block chains, but let's just use the example of the Bitcoin block chain. And it's essentially what it is, a massive ledger that keeps track of kind of who owns what. And instead of some central entity keeping track, it's instead done by what are called nodes all over the world. And these nodes, in the case of the Bitcoin block chain are called miners. And the best way to think of them in my mind is think of miners like the workers who are performing computing work to secure the system that keeps track of this ownership.
So it's kind of this decentralized, not centrally controlled, big, huge ledger that keeps track of who owns what does that. Paint a picture for you, and it's also the key things about the block chain is it's immutable. No one can change it. And that turned out to be really important in the case we're talking about, because these agents, while I was investigating them, were agents the whole time. So they were hot on my trail.
They could look and see what I was learning. They could peek in our investigation.
In other words, the government wasn't able to terminate them just because we thought there was some nefarious conduct afoot. And so the block chain was actually really necessary because in in several instances, they were actually able to get banks and financial entities to destroy records, to cover up evidence of their crime.
They also forged subpoenas and forged court orders and the like, I think burn bags. And because of flashing the badge, hey, this is an undercover operation bank, so and so delete those records. And not surprisingly, the banks complied. Here's a federal agent with a subpoena saying delete these records. It's a sensitive undercover operation.
So the block chain was really critical because it was decentralized and immutable, meaning it can't be changed. We were able to follow the trail, and that's why I say, but for the block chain, we wouldn't have been able to bring this case or this indictment. In fact, I mentioned knob, but I didn't mention the other agent. The crazy thing is they weren't even working together. But another agent on that task force who was a Secret Service agent on detail to the NSA, who was one of the U.S. government's experts in encryption technology, it turns out he had stolen ten, twenty five thousand Bitcoin from Ross Ulbricht in the Silk Road, which today that would be worth just over a billion dollars.
And and he had staged, by the way, he had made it look like the Silk Road. Russell Brooks, right hand man who was, by the way, a grandfather in Utah, if you can believe that the right hand of the Silk Road, he had staged the whole thing to make it look like that individual had stolen the twenty five thousand Bitcoin. So Ross Ulbricht says, you know, what is my right hand man doing stealing twenty five thousand Bitcoin from my side.
I know it's him. I've got to take care of this. And who does he turn to to do the taking care of NRB, the other undercover federal agent who he's befriended over two years. So the details are quite crazy. But I will tell you again that without that block chain technology, we wouldn't have been able to get the records because in the case of the Secret Service agent, one of the things he did was he transferred those 25000 bitcoins to an exchange called Mt.
Gox, which was a Japanese exchange that had gone belly up. Well, we went over to get the Mt. Gox records, and they didn't have any they had been you know, the exchange had kind of gone under.
And Mark Karpeles, I remember meeting with Mark Karpeles in Japan and Mark Carapella said, you know, those records we don't have. And by the way, you guys did a seizure. You guys being the U.S. government did a seizure warrant for Mt. Gox, not just not only where we hacked the feds seized it, but guess who was the affiant on the seizure warrant? It was none other than our Secret Service agent who had stolen the twenty five thousand Bitcoin.
I mean, really, it is just built for screenplay, this entire story. Now, it seems like if I'm getting my facts straight, that there is one other. But for possibly and that is the tip. Could you speak? I don't know how much of this is public record at this point, but who did it come from or what was the tip? How much did you have to go on?
I'll tell you what is public record. And, you know, if listeners want, you can go read. There's a ninety seven, I think, or ninety page criminal complaint that lays out all of the facts of the story online. You can just go Google it. Silk Road agents, it's out of San Francisco. But what happened was I was sitting in my office in San Francisco on another crypto investigation and one of the lawyers who used to be an investigative journalist pulled me aside, said, can I talk to you about something else?
And I said, what? And he said, you know. You've got I think you've got a a mole or someone up to no good, you know, on your payroll, they're moving cryptocurrency. And I thought, oh, here's sounds like a real conspiracy theory, which, of course, I was in San Francisco. I hear a lot of them. Right.
About how the government is bad.
And, you know, I thought, OK, this poor agent, I've got to go clear this person's name, because here is this lawyer, former journalist, spreading rumors. And I thought probably if he's moving Bitcoin, it's probably, you know, on a poorly backstopped undercover operation. So I actually that was the tip I got. And I actually was really started to look into it more to clear the name and just, you know, then I thought, oh, that information was correct.
Mm hmm. But I did look into it. Like I said, I got a couple of agents, and it's not a popular thing to go to agents and say, I want to investigate some other agents. Right.
But not a crowd pleaser.
No, but I got a couple of agents who knew a thing or two about the block chain, and we hopped on Wallet Explorer and started looking at some flow of funds and saw, wow, this is a lot of cryptocurrency moving around. And then what what flipped in my mind, Tim, was the moment where I saw emails that this individual had sent to crypto exchanges saying, please delete these records. And I thought, now, if this is undercover and you're in the government, you don't want to delete evidence, you want to preserve evidence.
So that's how I knew something was amiss. But we only got a tip about one agent and of course, that one agent, once we kind of solved whodunit and we knew he was extorting Ross Ulbricht in the Silk Road and we knew he was selling information to the government's case, we thought, oh, that's probably who stole the twenty five thousand, you know, Bitcoin as well. So we were just thinking that's that's who did it. It wasn't the Silk Road administrator.
But in fact, I remember on Christmas Eve getting a call from one of those agents and he said, Katie, I don't think it's him. The patterns, the movement of money, the kind of services that they were using to obfuscate, they're not the same person. The M.O. is different. And we've got someone else who stole that Bitcoin. And so then we launched kind of a separate investigation team into who stole a billion dollars worth of Bitcoin, a billion now.
Yeah, if I could pause for a definition, please. Sure. What exactly is a federal prosecutor?
Oh, a federal prosecutor is so a lot of people have heard of district attorneys or D.A. is, right. Hmm. That is a local prosecutor. A federal prosecutor is another name for it as assistant US attorney. And a federal prosecutor takes those kind of crimes that cross state lines or that are of a certain kind of subject matter that the federal government has deemed are also federal crimes. Now, a lot of things could be both. You could have certain crimes that could be prosecuted at the state level or they could be prosecuted at the federal level.
And then you have other crimes that could only be done by one or the other. So my job as a federal prosecutor was to kind of investigate and bring to justice where crimes that occurred. Now, another important part of the job of being a prosecutor is knowing when not to bring a case where even though the facts support a charge, because what I always say is the government wasn't hurting for business. Unfortunately, there are a lot more criminals than there are resources to prosecute.
And so one of the things as a prosecutor that you really want to do is look for what are the worst of the worst? Where are you going to get the most bang for the buck here? What is your theory of punishment? Is it deterrence? Is it punishment? Like, why are we doing this? And so you really need to look for kind of the most important cases and very important. I don't mean high profile. I mean important for justice to be served.
I would imagine I mean, this is me knowing nothing about this, but also important possibly as a setting of precedent or otherwise acting as a domino that knocks over or helps to possibly knock over other dominoes. I'm looking at a letter which is online at A16 Z. That's the Andreessen Horowitz website, A16 Z Come. And this is the hiring announcement by Ben Horowitz, certainly of the namesake Jason Horowitz. Ben has been on the podcast as well. So as Mark, for that matter, and I want to read just a portion of this letter, there's a lot to it, including some Nicki Minaj lyrics for people who want to see Chudleigh lyrics not going.
I'm not going to read those, but here it is.
Quote, As I learn more about her career, I was even more impressed. She stood up to murderous motorcycle gangs and cartels, shut down organized crime, nailed RICO murderers. Again, that acronym that I want to define uncovered the largest money laundering and cybercrime rings and stop white collar crime and public corruption through it all. Her prosecutorial record, not a word I read every day was whatever in zero. She never lost a case. Not once, not ever, OK.
So bookmark Rico, we're going to come back to it, but OK, what and I'm going to pull a couple of possible answers to my forthcoming question off the table. So the working harder or preparing harder, I understand that you do both, meaning you work and focus very intensely and you've had a reputation for that for a long time. But what do you think you have done differently or how have you approached things differently that has helped you to have this record?
Well, it's a great question. If it's easier to kind of swap places, how would your friends who really know you and have seen you over the years, how would they explain it, if that's easier to answer?
Well, let me take a stab at both and I will put a pin and Rico will come back to that. I mean, one of the jobs I had as a federal prosecutor is going to before a grand jury. Right. That's a secret jury presenting evidence and seeking an indictment. Another kind of job of a prosecutor is meeting with the witnesses in a case and trying to maybe get them to flip, bringing evidence to bear developing evidence. It's also working with agents and it's to get agents motivated in some cases to go, you know, work nights and weekends to go chase the lead, for example.
The other thing that you do as a prosecutor is you go to court just like you see on TV, you know, law and order, like the prosecutor stands up and, you know, makes arguments to the judge, if it's a judicial argument or if it's a trial, makes an argument to the jury. So that's a little bit about the job of a prosecutor.
I think one of the things, as I think about it, that I did differently was, well, first of all, I just had an amazing mentor at the Justice Department. So put a pin in that and we'll come back to him in a minute. But one of the things I did differently is just I think it's really important to obviously you want to make sure that you're charging the right case and, you know, you have all your evidence because even though ninety five percent of federal cases plead guilty, at least in those days, they did some go to trial.
And to me, you never know which ones are going to go to trial or which ones are going to plead guilty. The ones you think, oh, they'll take a plea, they surprise you, the ones you think will go to trial, surprise you and take the first plea like you just never know.
And so one thing I always did is I thought to myself, I have to prepare this case as if it's going to go to trial and I have to convince a jury and how am I going to convince that jury that this is the right case to bring that is righteous and that the law was violated and that what I'm asking for is, frankly, a no brainer. One of the things I did was I developed something called, well, I didn't develop the concept of a reverse proffer, but I'll tell you about what I did.
That is sometimes you just felt like maybe there's something lost in translation. Like maybe this defendant doesn't understand the evidence I have against them. Who knows? Like, maybe they're lawyers telling them. Maybe they're not telling them. Maybe they're telling them. But the defendant doesn't really trust their lawyer.
And so I did something called a reverse proffer, which is I said with the, you know, permission of the defense counsel in defendant, I said, hey, would you let the defendant come into my office marshals? And if they did marshals, can you bring the defendant to the office? If the defendant was in custody, they'd come, you know, shackled if they were out of custody, that just show up in a, you know, street clothes with their lawyer.
And I would sit them down in the conference room at my office and I would give them a little snapshot of here is a kind of flavor or sampling of the evidence I have against you that a jury is going to hear. And here's how I'm going to present it. And I want you to be aware, like with this evidence staring you down the face, do you want to go to trial or not? And I think a lot of times seeing what would be presented and seeing, oh, we do they do have all of these witnesses who will say X, Y and Z, cause the defendants in some cases to say, no, I want to change the circumstances here.
I want to like, stop the bleeding, so to speak, because obviously, if you go to trial, the sentences tend to be longer.
The judge pronounces always the judge pronounces the sentences. But when you're in a trial setting, you often get a lot longer than if you take an earlier guilty plea.
So reverse proffer was one thing. I think another thing that comes to mind is just being able to develop a rapport, not just with the defendants or defense counsel, but with the witnesses, you know, witnesses or some of the most important evidence that you can have in an investigation. And in a number of cases I was doing particularly gang cases. Why is some witness or some member of the gang like why are they going to trust you, a government prosecutor?
What can you do to build that trust and to really talk to them in a way that is relatable?
And I think that was something that I spent a lot of time trying to develop, is putting myself I can never put myself in the shoes of some of the folks that I encountered, but trying as best I could to think what's motivating them, what might they be scared of, what's holding them back from wanting to cooperate with us.
And through doing some of those things, I think we were. Successful in being able to flip some key witnesses so that could contribute to it, but I would be remiss if I didn't say that I had just an amazing mentor. He was actually my boss at the Justice Department and he was an incredible prosecutor. And just watching him that also, I think, accounted for a lot of it.
So I can't tell. And also I had an incredible case, agents and FBI agents and everything.
So I can't really take credit for all the, you know, verdict records.
There's a lot that goes into it. Yeah, I would imagine it's a team effort. Just a quick thanks to one of our sponsors, and we'll be right back to the show. This episode is brought to you by LinkedIn Jobs. The New Year is here, and it marks a fresh start for your small business, whether you're shifting business hours or hiring more remote employees. One thing that remains unchanged is the importance of having the right people on your team.
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If we take a closer look at this mentor. What were some of the things, if different from those you've just mentioned, that stand out as making him an excellent prosecutor? So or an unusually good approach? Yeah, well, I think the key thing is he did not care. I mean, I'm not suggesting prosecutors most career prosecutors are not thinking of their next job. So just to be clear on that, but really with him and his his name is Wolfenson.
You know, I've worked with a lot of amazing mentors to him in my career, Justice Kennedy, the attorney general, tech CEOs and folks in D.C. But this guy is not a household name. His name is Wolfenson. And I think one of the things that comes to mind when I think of Will is he just didn't care about anything other than just in that moment doing the right thing and doing justice. And he didn't care about what his next job was going to be.
He didn't care about the consequences. He didn't really even care. I'm not endorsing this necessarily. But he I remember some judges being court ones for a judge. Mr. Frandsen, why do you shake your head at me like that? Like I'm stupid? You know, no judge would ever usually say that to a prosecutor, but he had this.
Yeah. And and we'll had this prosecutorial swagger that was unique to him. He took down MS 13. I mean, that's what I think.
There was a newspaper article that described was prosecutorial swagger. But in my case, one of the things he did that made him an amazing leader was he, first of all, threw me into the deep end. But he also had my back when I needed it. And he recognized when I was ready to lead know in fact, I did a bike or murder case involving the Mongols and the Hell's Angels and it went to trial. That was the one of the ones that I thought for sure would plead guilty and instead went to trial.
And it lasted two plus months. And Will became my second chair. He became my deputy, even though he was my boss and, you know, was a high profile murder case. He said second chair during that case. But I think he also had my back. And when I tell you he doesn't really care about his next job, can I share a story involving Google? Sure. Yeah, that's good. Yeah, well, so there was a murder case, we were doing a different one than the one I just mentioned.
It was a gas station robbery gone hard to keep track.
Well, that's what do you have a lot of a lot of murders?
Yeah, it was a really sad circumstance of a guy who was shot over two hundred fifty dollars while he was working a second job at night. And actually we had some amazing evidence that we knew was in the defendant's Google mailbox. It was like Google Voice records and stuff. And so we we got a search warrant, which is different than a subpoena. We had to go to the court to go to a judge proof probable cause and get a search warrant.
And Google just simply put it in the line and basically told us to get in line and we'll get to it when we get to it. And we said, you know, this is a court order. This is now unsealed.
So I can say this publicly at this time. It was it was sealed is that this is a court order.
It's a murder case. You know, we need these records. And they basically told us we're Google. Well, we'll get to it when we can get to it. And, you know, we'll said, you know, that's just B.S. I mean, we go around expecting mom and pop stores all the time to comply with search warrants or people. Right. Ordinary citizens like why should Google get a pass?
And I said, you're right. That's B.S. like, let's write a motion to the judge to have them held in contempt. We'll give them a fair chance to comply first. But if they don't like, let's go to the court. They should comply with the same rule everyone else has to. And we gave them several chances and we said we're going to go to court.
And they basically ignored us and we are Google. We will crush you. We went to court. We got them held in contempt of federal court. If they didn't produce these records, what ended up happening and this was all under seal at the time was I won't name names, but someone at Google high up called the political appointee who was running our office at the time and basically suggested that we should get this undone. And, you know, we were in the jurisdiction of Google.
You know, we're in the northern district of California.
And Wil and I were both like, no, why should we do that? Like they didn't? This is a murder case where the victim's family is relying on us to bring the best case and the best case involves those records. And we're not going to just stand back because it's Google, you know, calling up and suggesting we undo this motion. So we we stuck to it. And that was a case where, well, another boss might have said, you know, let's kind of figure out a way to broker a great settlement here and make this go away.
And he said, I don't care who they are. You know, he really just didn't care. So he was fearless and also he was egoless. Like I said, he let me often and when he knew I was ready to lead, he would let me first hear a case. So that really stands out to me.
Fearless and eagle. This is a formidable combination, right?
Rare. Very rare. Rare. And I do not want to fight that person on anything that's going to be very difficult.
Now, you mentioned Fearless and you also mentioned the Hells Angels Mongols. This might be a good place to define Rico. I don't know if that racketeering it is. You got it right. There are racketeering.
It's the racketeering and organized corrupt. I think institutions are racketeering in corrupt organizations and it's basically a federal statute where it just creates a class of crimes that are more serious if you've done certain predicate crimes. So, for example, it often involves cases involving conspiracies and then you allege several predicate acts. So in furtherance of the conspiracy, maybe there was some, you know, gun trafficking, maybe there was money laundering, maybe there was fraud. And so I did a number of RICO.
There's also I'm not going to bore you with acronyms, but there's a fake ah, those are kind of this class of cases, again, where you're talking about a corrupt organization. That's the CEO, Enrico Orazio. And what it means is basically an organized criminal enterprise. And you have to prove they were organized. You have to prove they were serving a common goal.
You have to prove they did certain things in furtherance of that organization or conspiracy is basically what Rico is it does that also help you to prosecute people who are in leadership positions who don't necessarily, for instance, carry out a hit or murder themselves, but they issue the order for that hit? Does Rico play a or the, I suppose, short laws the right way to put it? But does that assist you in any way in prosecuting, thinking about these larger groups, Hells Angels, Mongols, you mentioned MS 13, for instance?
Yeah, it's definitely a tool and a prosecutor or an agent's toolkit to kind of wrap up an organization, like you said. If otherwise, the individual might not have been on the hook for actually like a murderer. Maybe they just commissioned it, for example.
Now, there are other laws that you can do to Tim. You don't only need RICO, there are conspiracy laws, but RICO is just kind of another tool that one might use and it also enables. Were you at trial to get in what are known as, like I just mentioned, predicate acts, so, you know, what the Hell's Angels and the Mongols trial, we included predicate acts like there's I don't know if you remember the Laughlin Riverrun riot and a series of other murders and a whole host of other criminal conduct that the jury heard.
And we think, you know, not we but the Congress who passed the law because, of course, prosecutors don't make the law. They just enforce the. And so Congress passed this law saying that the jury would be able to hear all of these different kind of predicate acts.
Now, standing up to Google is or a company like Google at a tech company with incredible power wide reach shows a level of fearlessness with respect to suppose many aspects of life, including possible, maybe, maybe not career advancement, career options later, who like politicking within the office, etc. when you're dealing with, say, prison gangs or like waste or familia, one of the world's largest prison gangs and other groups that are associated with intense violence.
How have you thought about personal safety? And I'm struggling to ask a more pointed question, but like, what is the self talk been so that you can operate effectively in a job that entails what I would imagine to have some degree of personal risk. And that's that's a meandering question. But I'd love to at least open the door to just hearing your thoughts on that, because I don't know if I would have the courage to do it. Quite frankly, I think, you know, you might if you see some of the victims families and you might if you kind of saw some of the witnesses that were intimidated or some of the consequences if you didn't.
I mean, I completely hear what you're saying, Tim, and I.
I don't, you know, dismiss it because it's certainly something that I've thought about. But I also knew that in those moments there was something really wrong going on and someone had to step in and do something about it, you know, and it wasn't just me.
It was, like I said, a lot of really brave men and women, law enforcement personnel and other prosecutors. And by the way, judges and even juries, you know, jury, there are plenty of instances of jury intimidation. But, you know, it's critical for our system to work because obviously we can't just be running amok with no laws and, you know, violence. I think in the case of Nuestra Familia, you mentioned a prison gang.
This is an entire world. People don't realize. I mean, and you think, oh, they're in prison. So therefore, then they're locked up. But the truth of the matter is, and there's they actually agreed 60 Minutes episode on this. It's called Operation Black Widow. By the way, running criminal enterprises from prison is pretty common. You know, there's a whole system that goes into taxing criminal activity on the outside in exchange for protection on the inside.
And the people who are running these gangs, frankly, a lot of them could be running businesses. I sometimes think if circumstances were different, they're hustlers, they're dedicated. You know, they have a lot of passion. I'm not trying to make it sound glamorous at all because it is criminal. I'm just saying that they're very organized. They have a whole system for getting messages outside. I remember once a judge said to me, what do you mean that defendant is under the influence of whatever drug it was.
They're in prison.
And I thought, oh, your honor, like so naive to think that they're not able to get contraband in prison and they're running the prisons sometimes. And so this case you mentioned, Nuestra Familia, was a was a really large gang. It was you know, they affiliate on the outside with the norteños on the street. And then, like I said, there's a whole tax system. Some of the street gangs will pay into tax, essentially into inside the canals inside so that if they ever get hooked up.
And put in prison, then they're protected within prison, but one thing I think that you might think, oh, these danger you see when you say large, just could you give us an idea of what large means? Well, they're worldwide.
I mean, you know, like even in the case of MS 13 or Nuestra Familia, I mean, these it's not just in the U.S., but they're certainly in every city. I mean, you're talking about thousands and thousands, if not tens of thousands of individuals affiliated with these.
But I prosecuted Nuestra Familia. I indited that case. This was before that Silkroad case. This is in my violent crime. DESTIL And you talk about being scared. I mean, the truth of the matter is a lot of the defendants that when we extradited many from all over the country and these were the kind of carnality, these were the big chiefs, these weren't like the street level gangs.
These guys, the cardinals are the leaders.
Yes. Within. And I think we indicted over a dozen. Most ended up pleading guilty. Some did go to trial. But, you know, you think, oh, well, those are going to be the scariest of the scary. But, you know, again, like I told you earlier, it's really a human thing.
And different people, even if they're in a really violent prison gang, react differently to things.
Now, a lot of I think a lot of the listeners also myself, I would include myself and probably you in this, like we think it would be the worst thing in the world to go to prison, like we don't want to go to prison.
The interesting thing is a lot of the people involved in these prison gangs don't necessarily think that way. It's like it's not really a threat to say, I'm going to put you in prison. That's kind of like where they shine sometimes. And so talk about trying to deter criminal activity against that backdrop. But I think because of that, a lot of those individuals sometimes think this is the cost of doing business, like I'm going to get, you know, hooked up, part of the game, part of the game.
So it's not a personal thing. And the thing I try to do is to just treat the defendants with respect, treat all the subjects with respect and not make it personal. And we ended up flipping a kind of key witness in that case, a guy who is now in the witness protection program.
So I won't say too much about him, but he did end up testifying. So I can I can tell you that because it's all public record.
He was a Nostra Familia enforcer and he was a hulking, huge guy with tattoos who came in and out of my office for weeks. And as we tried to flip him and he eventually came around to testify.
But, you know, most of them I mean, it's kind of violates, I think, an oath to the gang that you would never testify. That is the worst thing you could do in the gang's eyes. About see, you mentioned earlier that one might imagine that these cases would be the scariest. Is there a moment where a case or an incident, if you're willing to share where you were actually scared, rightly or wrongly?
You know, I I don't really want to get into it because I call it OPSEC, Tim. Let's just say I've taken measures and I won't really say much more than that. You know, you mentioned I have a CCW. It's not because I'm a gun nut or I'm passionate about guns. It's just because, you know, you want to make sure you can always protect yourself. And I've taken other measures as well. And I obviously I'm not going to get into I'm here.
But I think, like I said, it's really just in the moment of that case, you just feel like your job. And I felt like my job was to actually as cheesy or cliché as it sounds, pursue justice.
And what kind of message does that send? If I just, like, walked off the case or walked away and certainly a lot of people I worked with felt that way, too.
It wasn't just me bringing these cases.
There are a whole lot of other people that in some way reflects well, certainly reflects, I think, deep aspects of your personality, but also just a few chapters in the book, The Wild, Varied Life of of Katie Hohn. And so I'd like to switch gears in a sense and ask you, when you first heard about Bitcoin, it was right after that Mangels Byker murder trial I told you about with the Hells Angels.
And and that had been a couple of months.
And, you know, after that, I had just really done a lot of violent crime cases over the course of a decade. And I remember thinking, I'm ready to switch to something else, like maybe I'll leave.
I didn't really know what I would do, but maybe I'll do something else. And my boss came to me and said, you know, let's have you put some of these investigative skills you've brought to use against criminal enterprises to technology and cyber crime. And I said, OK, great. You know, we're here in the northern district of California, seems like sensible to do some cybercrime.
And he said, well, here's what we want you to do. We want you to investigate Bitcoin. And Bitcoin is this kind of criminal technology, and we need to kind of stop it, basically, and I remember and so that was around twenty twelve and I remember going home and talking to my husband, who knew way more about Bitcoin than I did.
I had not heard of it at all. That was the first time I ever heard of it was 2012. So I was I feel like I was kind of late to the party.
I mean, it was the citrusy white paper was in 2008. This is four years later. And I had never heard of it. And my husband told me you might want to, you know, learn what it is before you go around talking about how to prosecute it, because it sounds a little foolish.
And I said, well, what do you mean? He said, well, look at this wiki page and tell me if you think you could prosecute it after.
And the more I learned about it, I pretty quickly realized that would be like saying, I'm going to prosecute cash or I'm going to prosecute, you know, the Internet or something like that. Like, it's not it's not possible. No. One, and it's also not desirable.
But what instead ended up happening was prosecuting some of the nefarious uses of cryptocurrency, just like we prosecuted, like I said, like I prosecuted a twenty five count indictment for mortgage fraud, conspiracy, you know, and they used cash and they used wires. So, too, here were some cases like we talked about Mt. Gox. We talked about the Silk Road twist.
There was also the BTC case there.
There was criminal use of cryptocurrency. So we prosecuted some nefarious use cases of it.
And in the course of that, I ended up starting to get to know some of the early players in the crypto space.
Tim, I also started realizing more and more what I had kind of realized early on or just doesn't seem all criminal. It seems like there are actually a lot of people trying to build some really important products and services that can be used for good. And so that was kind of how I frankly got into the space. Early days now I was in the government. I always joke like I bought Bitcoin earlier than anyone I know. Unfortunately, it was undercover in the government, so I never kept any.
And I, of course, never bought any when I was in the government, which is probably a shame because, you know, I don't need to tell you what the price was back then.
OK, so and feel free like we can always edit later. Right. But I'm curious when you got to know these some of the earlier players in crypto, I mean, I did read one quote that I thought was fantastic from there. I mean, we can mention them by name, of course. But he said he was he was terrified of you.
And this is Zuka Wilcockson and which which makes sense. All right. I mean, it does make sense on a bunch of levels, but how many of those early contests do you think played nice? Because they, in their mind, had the sort of maximum of keep your friends close and your enemies closer or through other motivation for other reasons?
Right. You are very good at developing rapport, but I have to imagine that a lot of these people were hesitant or tentative or had some misgivings about engaging. I'd love to just hear you speak to that if anything comes to mind. Well, that's a first I thought of it, but it's an interesting way to think about it. But keep your keep your enemies close. I think what ended up happening, though, because I did establish the government's first crypto task force back in those days, which was comprised of a bunch of different agencies.
I think what ended up happening, it might have started out that way. Tim. And I can certainly appreciate why now being in the space like I now encounter people, I'm like, oh, we don't want to talk to the government.
And, you know, I think that's just borne of they don't really know that there are a lot of people in the government and not everyone thinks the same thing in the government. Right. It's made up of hundreds of thousands of people.
And some people think the organization. Right. Right. And then once you actually start making the connections and meeting people, they realize, you know, you're not so bad. Like it doesn't seem like you want to close out. Like we thought that you just wanted to close down everything. You know, it turns out that maybe you just want to keep bad actors off X, Y or Z platform. And, you know, it turns out we want that to write.
A great example of this is Coinbase. And, you know, I'm on the board of directors of Coinbase now. Fast forward several years. You know, Coinbase did a great job of this in the early days. Like, I don't think it was about keeping me an enemy away. I think it was more about it's not good for their business to have criminal activity on the platform, I'm sure. I mean, they don't you know, it's not like they're cozying up to the government either.
But I think it's every kind of pragmatic and good business leader thinks, why would you want a bunch of nefarious activity on your platform, especially if you're trying to build a business to kind of change the world. So I think you might be right, though, in the early days. But fundamentally, after they saw some of the bridge building that we in the government in those early days started trying to do, and we did things like we hosted a summit where we, you know, is invite only.
But we invited some of the early folks in the space. I did this with a number of different agencies and then the agencies would come in and talk about what their equities were. And I think that kind of two way street and dialogue is really important because. What you want is you want you know, you mentioned Zucco, I want Zucco to hear, you know, what are some of the consequences of privacy coin's. And I want people in the government to hear what are some of the real benefits of privacy coin's.
And I think it's very, very, very smart guy. I mean, very, very, very, very slowly.
I remember meeting him, actually. I remember exactly what you're talking about because I remember meeting him and I've kept in touch with him since that time.
But, you know, I even remember Bitstamp, which was an early crypto exchange, which was in Slovenia.
They featured in our Silkroad twist case we talked about earlier. And I remember I needed their cooperation for some records and I remember them thinking of us. Prosecutors are coming. We think it's a trap, you know, and that I didn't the State Department told me you can't violate the sovereignty of Slovenia. We can't have you meet on Slovenian ground unless this and this are followed. And I said, what? I'm going to lose the evidence. The guys are willing to meet with me now.
And they said, well, we did just seize a yacht in a DEA case off the coast of Croatia. Maybe we could arrange the meeting there in international waters. I said, OK, if they didn't think I was coming to if we convinced them I was not coming to drop them off, I suggest a yacht to meet on.
I'm pretty damn sure they're going to cancel the meeting, just casually drop that one and just meet me offshore. Guys, I'm really not trying to set you up. But anyway, long story short, we ended up meeting in in Slovenia. I hope we didn't violate any sovereignty or anything there, but we ended up meeting and that was early days. And, you know, I think they ended up seeing what we were trying to do and realizing it was actually good for the space and ended up providing us with the records we needed.
So amazing. And it's not just Bitstamp or Coinbase.
I think a lot of companies, especially over the last several years, have tried to proactively engage with regulators. But I've also, like I said, I think just as important is that government also, for its part, keep in touch with the crypto industry. And why do I say that? One key reason is because this technology is changing so fast.
And I think when I talk to my old government colleagues, they're like, God, we just kind of finally had mastered Bitcoin and then we have ethe and now we have these other dozen. And now, of course, we have over a thousand crypto assets. It's really hard for government employees with the training available to keep up with this technology. Frankly, it's not just government place. It's hard for any of us, even those of us in the space to keep up with how fast moving this is.
So I think there's also just like an important education and training component that benefits the government to have these more open dialogues.
And of course, if crypto projects feel like the government's just kind of out to shut them down, they're not going to be willing to provide that two way street. So I think it's really a win win to have these conversations. I don't want to be naive or Pollyanna ish about it. I'm not saying like one, the crypto industry and the government should team up and spend every day together, nothing like that. But I do think this kind of ongoing dialogue is really important.
Yeah, I agree also because we're not the only country developing the block chain based technologies and cryptocurrency. I mean, just like artificial intelligence. So it's important to have an informed global perspective and geopolitical perspective from thinking about a lot of these things. Just for context for people who are interested, Zucco is the guy is still CEO of the Electric Coin Company, s.E.C. Which is a for profit company, leading the development of what is known as zie cash.
For those people who want to look into that now on the pro, let's just focus on crypto and block chain. Excuse me for a second. But on the on the pro crypto, let's say pro BTC Bitcoin side, you have kind of true believers who can sometimes paint with broad strokes and missed a lot of nuance and details. Then on the anti crypto side, you find a similar kind of militant anti crypto people who have somewhat maybe naive or simplistic arguments.
But my understanding is that you it was in Mexico City of all places that you debated Paul Krugman, is that right?
Yes, that's right. Who publicly said that you give the best thesis for crypto? He had heard. Now he's notoriously anti crypto. What was it about your argument that he found compelling, if you remember?
Well, I don't want to say. He said it was compelling pages that I wrote, but I don't want to get some I don't want to get some angry tweets. And I want to get some angry tweet from Paul Krugman saying, you know, I really never said I was compelling. Right. You say he's like I said, it was the best of the worst. Yes. Or whatever. Exactly. But but to the extent that he said, all right, this is this is some of the better.
This is some of the better material I've heard. What was it?
Well, I think one thing was and I'm not let's just even back take a step back and zoom out, because I've encountered many people who are skeptical, like Paul, not just Paul Krugman, but as you can imagine, many, many people.
And I think one thing I always emphasize is this is not just about currency. Well, first of all, it's not just about Bitcoin and speculation, and it's also not even just about currency. There's this whole world to crypto. And that's one of the reasons I've stayed in crypto, is it really is so interesting to me and that it brings together so many different elements of society and different verticals. It brings together economics, computer science, technology, but also, as you just referenced, geopolitics, finance and certainly law and policy.
I mean, I could go on and on and now even Art, we'll talk later, I hope, about NTIS or non-functional tokens. But really, there are so many things that crypto touches.
And so one of the things I tried to do with Paul Krugman and with others is to illustrate, you know, the good, because so much of what I hear is, oh, it's for money laundering, it's bad. And I think that's a really ill informed view.
Like I said, without cryptocurrency, we would not have solved some of our cases without that block chain technology.
One of the things I try to do is focus on here are a lot of the good things happening with crypto. And I think, gosh, we don't have time. I could go on and on for so long telling you about some of the good stuff going on. So I, I did try to focus him and others away from just thinking it's only about money and it's only about speculation, because to me it's about so much more.
NFTE, you said said you let's you said, let's talk about it, let's talk about it, let's do it, OK?
Well, yeah, well, yeah. Walk us, walk us through it. OK, well, first of all, I hate calling them by acronyms, but and I did it myself. I know. So I'm guilty. But NFTE, let me just break it down. What that is, because I think one of the problems today in crypto is it feels so inaccessible to people. They tell me, I don't understand it, I can't wrap my head around it.
And they said, you know, OK, if I can learn it, you can learn it. And part of it is just I think the industry needs to do an even better job. And we've already improved as an industry, but we still have work to do on being able to speak plain English in terms that normal people can understand. You know, it's just like there is all this fancy crypto babble.
And that's true not just from crypto, by the way, that that was certainly true in law and in government, like each area.
Industry has its words. Right, that make it feel inaccessible to people. And I try to break that down. I did it in law, too. It's like, you know, you use all these Latin terms in law, like, what does that actually mean?
So NFTE is like that and end of T stands for non fungible token and it's basically fancy crypto babble. That just means it's a special kind of token. And by special, I mean unique because, you know, of course, fungible means not unique. And this is a non fungible token. So it's a unique token that lives on a block chain that tracks something unique like art or a collectible.
But it's different from the usual kinds of tokens like Bitcoin or Ethereum, because, like I said, an NFTE is not fungible. It's unique. It's one of a kind. So it could represent an image, a piece of music, a video. And in fact, him it's it's it's actually kind of serendipitous.
We're talking about NFTE. First of all, the spaces, as you know, very active right now. But I actually just acquired and left my first one and then someone also gave me an NFTE. So I now actually own two digital works of art that are unique on the block chain that can't be replicated that I ever wanted to.
I could sell there just like regular art. But they're digital and they're unique. And that's one of the things crypto does because people say, well, wait, can't you copy it? Whatever, with cryptographic principles. You have digital scarcity, so whereas you could previously copy a photograph, this is digitally scarce, you can enforce digital scarcity and that's a really big idea to get your head around.
But the idea is that if I wanted to sell you and I'm not going to because I just acquired it, but if I wanted to sell you my NFTE, my really cool NFTE that I got from an artist in Spain, he created it and minted it.
The really cool thing here is he gets a cut if I sell it to you. So the content creator, the artist, instead of going to a bunch of middlemen, actually gets a cut of all future transactions. And I think that's really cool.
Could you just walk? US through a use case, because even for me, sometimes I have difficulty envisioning this in some concrete respect, right. So is it a what does it look like to give someone in NFTE? Right. Do you actually see the image it's associated with or is it just a. Yeah, you know, something, a hardware wallet that you then later do something with love to just have you give us an example. Sure.
So it's both so you can display it. And in fact, there's a whole kind of industry that I suspect will grow up.
And by the way, one of the interesting things is we know what the use cases are today. What I think is very interesting is we have no idea what the use cases are going to be tomorrow, just like when the iPhone came out, who knew that the camera and GPS in your pocket would spawn things like Uber or ride sharing and gig economy? I mean, I don't know what later use cases there might be with NFTE. I know that right now there's actually a company, I think it's in Florida where they sell NFTE or digital art frames.
So you can certainly display it. But like you said, you could also put it on a hardware while at the point is, is yours, it's like a bear instrument, but it's digital. And I think so much of our lives today are moving from the offline physical world to the online world, like think about how much time we spend online now and connected.
Doesn't it make sense that goods would also start to move online? Right. Like and you might say, well, what do you mean? And I would tell you, you used to have books like that you held in your hand. But now there are digital books. You used to have cassette tapes, but now we have Spotify and streaming and stuff.
So I think that art and collectibles and other kinds of pieces of content are going to follow a similar trajectory.
But to answer your question about making it more practical, do you follow sports? I don't personally follow a lot of sports, but do you follow sports like NBA?
Minimally, I am aware of I don't know if this is utilizing the same technology, but a company I think it's based might be based in France called Cerar or so rare.
It's pronounced so rare, which is which is like a limited edition. Collectibles like football, meaning football in the European sense cards and so on. But I don't let's pretend that I follow sports because a lot of people listening to this is so rare.
You gave an example of one another, one that's in our portfolio that's been in the news a lot lately. So full disclosure, we're investors as dapper labs and through a partnership Dapper has done with the MBA, they've created this thing called MBA top shots. This is kind of like a big going on right now. It's like I said in the news, a lot of LeBron James video highlight just sold for seventy thousand dollars. You could buy the Steph Curry three pointer if you wanted to spend just over twenty five thousand.
Think of it as like a digital sports collectibles. So an NBA top shot basically captures a moment from a big game and it creates this unique virtual asset that has limited supply and so it can increase in value. And I think the best way to think of it, Tim, is think of it like how people used to collect rare baseball cards so that this is the digital digitally scarce version, twenty, twenty one version of a rare collectible. And then you can trade them in all kinds of ways that are really neat.
So like I say, who knows what is next. I just think that's it. That's another example of an NFTE that people, including many of your listeners, might have heard about with this MBA top shots.
And, you know, I don't know what sports could be next, but presumably if they're in the NBA, you know, you can imagine there are all kinds of collectibles that one could put on this.
You mentioned rightly that it's impossible to predict the range of future applications and use cases for these technologies in the early days. Right. I mean, it would be like trying to envision some type of immersive virtual reality when you were first on, like AOL dial up and these new technologies, not so much.
It would just it would just be so far beyond the scope of imagination for most people, for all people really. On some level, since these things can emerge over time, what do you expect some of the probable or possible developments might be? And in crypto or block change over the next three to five years, if you were and obviously this isn't couched as advice of any type shirts.
Oh, no, let us do that. Right now. We're not giving any advice. No advice, informational entertainment purposes only.
But as someone who's immersed in this day in, day out and really at the bleeding edge. Right, you're going to see things at the edges first. What are some of the kind of events or developments that you would be unsurprised to see the next handful of years?
Well, I think the two that come to top of mind for me. On his just mobile payments, and we have a company in our portfolio, so again, full disclosure, I'm not trying to plug I'm just trying to give you an illustrative example, and it's called Celo.
And they've built their own block chain and they just launched Cedella Cielo. Yep. And they just launched an app on top called Vlora. And the best way I can describe this is Venmo for the developing world or basically Venmo for the rest of the world. Also, it's basically a way to exchange value that's pegged to the dollar. OK, so it's not pegged to other volatile assets that uses an innovation called stable coins, which we can put a pin in if you want to come back to.
So the important thing is it doesn't the value stays the same of this particular cryptocurrency and you don't need a bank account to use it because it's a cryptocurrency. It's distributed and decentralized. So it doesn't rely on a central authority. And all you need is a mobile phone. And why this is really powerful is because, you know, for us sitting here in the US, most of the U.S. is banked, although there's a lot of people who are under banked.
But for three billion people in the world and probably more than that, they're unbanked and they have smartphones. And transferring value is like a kind of basic human need. Right. Everyone needs to transfer value. Like no matter who you are, you need to transfer value at some point to get something right, maybe to get food or shelter or whatever you need to transfer value no matter where you are.
Well, it's really hard, it turns out, for people who don't have bank accounts to do, get access to basic financial products and services like money transfer. So what do they have to do? A lot of them, they have to go pay platforms.
You know, I'm not going to name names, but certain incumbents and those incumbents take a lot of fees.
And so with them, with like a Venmo for the world, if you can imagine it on your phone with your cell phone number. In fact, Tim, if you want after the show, I can send you some send you a couple of dollars just so you can see how quick and instant it is.
But here's the difference, because you might tell me, because people do. Well, who cares? That's just like Venmo. I have that. No, here's the difference. Venmo is a digital IOU. This would be like it's basically replacing you, Tim, flying from Austin to me here in California and handing me cash. That's the only way we know we have the better instrument, right. That no one can ever disrupt or screw with. And this is how something like mobile payments in the crypto context so slow works is I'm actually when I send you Celo, I am transferring you the bits and bytes.
I'm transferring you the bearer instrument. And there's no central authority that can freeze your account or shut it down. You actually have basically what's like cash once you get it. And again, here in the US, you know, we have Venmo, we have PayPal, we have bank accounts. I think a lot of people in the world don't have those things. And so we forget often here in our bubble that these products and services are really important to a lot of people in the world and are really societally beneficial.
I think of it kind of like long distance from here. I think we're around the same age. But like you remember how you used to have to pay a long distance bill, like if you called anywhere.
Well, now your face time or VoIP and all of these things disrupted that. So now it's free. And that was really beneficial for consumers.
I think that's going to happen also with mobile payments where instead of paying, you know, sometimes twenty percent. In remittance fees and by the way, 20 percent, I've actually seen some cross-border payments cost even 30 percent, and they're also slow. Anyone who's ever seen an international wire knows that takes a really long time. There are also, you know, you have to pay tremendous fees, the poorest and the people can least afford them bear the brunt of those fees.
In my long distance example, we were all paying the same long distance rates. That's not true with the under banked and unbanked.
So I think mobile payments is one area that we're very excited about at Andreessen Horowitz for Crypto. And it's not just Celo. There are lots of other projects that are doing that as well.
And then the other one I would mention is because I think it's important for content creators and now if you're running your own podcast.
But as we have more and more content creators creating content and influencers, there's one of our portfolio projects is called Rally, and it allows creators and influencers to create an issue, their own branded currency.
And the unique thing here is that I know I can order to be your tippity, Tim going to be tokens to me to buy some of those. I'm betting on that one. It's not investment advice, but I'll trade you some time to consider Swifties.
I really I really hope people are offering NFTE as nifty as I think they might.
But really this allows Tim Coin. It can allow people who to connect directly with their fans. And, you know, you have a lot of fans and a lot of listeners already. But imagine a content creator just getting started. This enables fans who discover that content creator early on to share in the economic upside of that content creator in a way that's really cool. And then they're economically incentivized to kind of spread the word, if you will. But the bottom line is it gives this content creator and the fan the ability to share in the upside instead of just giving a lot of upside to intermediaries.
So I think that's another area that we're starting to see and that we're going to continue to see in the time range you gave me because you gave me, I think, three to five years. So mobile payment of content creators, that's what I'd say.
Thank you. I would love to also ask you to comment on the next three to five years from a different perspective, and that is the government's regulatory perspective. So these technologies in some cases are poorly understood, not just within government, but certainly across the board. I mean, there's so many misconceptions.
There are good uses for let's just call them benevolently uses, malevolent uses and sort of gray area uses, just as there would be with any instrument if we're talking about currencies in the case of, for instance. Sure.
And I think that the you know, the volatility also involved with many aspects of cryptocurrency are both incredibly attractive and alluring, but also incredibly terrifying, not only to those participants who are in the game, so to speak, but those who are the rule makers. Right. And I would love to know what you would not be surprised to see on that front.
What I would be surprised to see. OK, I'm trying to and that's an awkward question.
But like what you think might likely happen and I'm not asking to be Nostradamus, but you've just been both you've been on so many different sides of this that you seem like a great person to ask. Like what what what kind of like announcements? Would you not be surprised to see where you. I've seen that coming.
Yeah, well, I think you're going to start seeing more and more countries creating their own versions of their own cryptocurrency pegged to their currency. So I would not be surprised to see that.
I think, you know, look, I think there is some thought on the part of some in government that, oh, crypto it's the Wild West. They don't want any regulations. They don't want any laws. I think that's not true.
I think most in the crypto space, what is not wanted is regulatory uncertainty. They don't mind regulation. They just want to know what are the rules so that I know how to follow them, because that's much easier than like we have no idea what rules apply to us. And therefore we have to like, be, like you said, Nostradamus, they just want more regulatory certainty.
Tell us what the rules are so we can follow them.
And I think the risk is that the U.S. starts to offshore and chill this technology if they continue along the path with kind of regulating by speech or you know, and by the way, it's not even speeches. Sometimes I hear, oh, you know, so-and-so said this. And did you hear what the treasury secretary said? And then you go, actually, that's the media reporting the speech, right? It's like you go read the actual speech and it doesn't say that.
The problem is that's what crypto entrepreneurs in the U.S. are hearing. And it is, I do think, starting to offshore we run the risk of offshoring or chilling some of this activity. I mean, if you think about what regulators care about, they care about things like. Consumer protection, they care about money laundering, they care about national security, and so do I. I mean, I dedicated, you know, 12 years to being in national security and, you know, against money laundering and consumer protection.
I devoted a large part of my career to it. But I do think that misses the forest for the trees, because to me, Tim, the bigger national security threat or consumer protection threat, for that matter, is offshoring all of this activity. And let me tell you why. I mean, we already know that China has developed a digital version of its cryptocurrency and it wants to export that to South America, to Africa.
And so that's problematic if we have China starting to control, starting to threaten and this is going far. I don't mean to suggest that we're going to have the U.S. dollar being upset as the global reserve currency overnight. But you could see play this out a couple decades. This happens. So that's a terrible national security threat. Also consumer protection. You know, if consumers can't have access to certain products and services in the US that they want US consumers, guess what, with an Internet connection now and certain kinds of weapons they can just go to overseas.
Platforms and those are not as good, I think, by and large, at providing consumer protection, so I just hate to see this activity kind of just moving offshore. And I think we really need to be careful because I'm starting to see the beginning of it happening already.
And I'm trying to, of course, work to do whatever I can to make sure regulators understand how powerful this is and how powerful it is to the economy and to national security and not to lose this opportunity. I mean, can you imagine, Tim, if in the early days of the Internet, like we had said, the Internet's bad, we shouldn't have this, you know, and then think of all the entrepreneurs who moved to the US to build kind of companies and services we now have that was like huge benefit to the US economy that they came here.
And it was a huge benefit that we weren't passing laws or, you know, giving speeches, saying that it's bad that they wanted to stay here and build those companies. So. Right. Equally equally paramount to those people who were U.S. nationals who developed the technology. Right. If they feel like it, feel like they can better develop it or humans, humans, let's face it. Also, if they can more directly profit in building a company outside of the US with technology that for some reason has been forgotten or hamstrung in such a way to be less financially feasible in the US than you're going to drive offshoring.
Yeah, absolutely. We see that with certainly with different types of taxation and so on related to royalties and how different countries treat things very differently. And you just see the flow of operations and headquarters of companies.
You see that in the United States, certainly, and particularly now with work from home, with covid, with people realizing, oh, you can have teams remotely. Yeah, yeah, it's you know, I pulled my audience at one point on the question of. Whether or not a developing country and I sort of made an assumption there, but which developing country would be the first to embrace Bitcoin or other crypto as a reserve currency? And it was fascinating to see the responses.
And I put up as the image a photograph of a 100 trillion dollar bill that was gifted from the Reserve Bank of Zimbabwe from, I think 2008. I can't recall exactly. And the comments were really interesting. I'm very fortunate to have some some really bright followers and also a very global audience. So people spoke to the there were Venezuelans talking about huge underground crypto economy that already exists in Venezuela, but that, you know, taxes might be paid in the sort of state run currency.
But that all let's just call it peer to peer or other transactions would begin to take place in crypto. It was very interesting to see the range of responses related to that. Do you have any any wagers or guesses as to if you had to characterize the type of country or the country that would embrace digital currencies in a very powerful way? Do you have any thoughts on where that might land?
Yeah. Do you mean the people or the government? Because I think that's different. I think the most. Oh, interesting. Well, populous. I think it's what you've mentioned. You mentioned Venezuela and Zimbabwe and of course, any economy where there's been hyperinflation, people are searching for an alternative. I mean, I know exactly the trillion or zillion dollar note you're talking about. I mean, I've seen them before and Venezuela I've actually seen videos.
You can pull this up on YouTube. People literally burn bags of cash because there has no value and it takes up too much room. I mean, it's just it's really tragic. So I think any for the populace, any economy where there's hyperinflation, I think we're going to see that. And then in terms of for governments, I mean, you see some small I think the smaller, you know, nimble governments will probably possibly beat us to the punch us being the US.
And I'll come back to that. But, you know, you talk about digitally first governments like think about Estonia or some of the, you know, Estonia I'm very interested in following.
They have to be thinking very deeply in tracking this very closely.
Yeah, well, and I think it's also like an interest, you know, like Delaware is like the haven for corporate law in the U.S. You know, every companies at Delaware. You know what? To me, I wonder, like what jurisdiction is going to attract a lot of, frankly, economic development by being, you know, welcome and open to this? I think that'll be interesting. I'm curious to ask you, your listeners, what surprised you most in the response?
Like you mentioned, Venezuela, that's not a surprise. Zimbabwe. Was there any one, Tim, that stood out that surprised like you?
Well, I think that surprise I mean, I think the response that came in multiple times that I wanted to reflect on, and I should say also, I am not by any stretch of the imagination, I do not consider myself a cryptocurrency nor lockshin expert in any respect. I mean, that would just be laughable if I were to sit down at a group dinner with anyone who is actually on the computer side of this, who understands these things in detail, like a retallack, or there's a long, long list right now that have been said I am a student of currency and the concept of money.
Right. Just the origins of money.
I remember reading a book called I Believe It Was The Biography of a Dollar, which was written a long time ago, I might add, that I found really, really to be a helpful one on one education, on the emergence of money and the decoupling or unpegging of the U.S. dollar from the gold standard. So on the response, it came up multiple times that I thought was worth contemplating on some level was in effect. Tim, you're asking the wrong question.
And you know this. I'm looking at one here. You know, respectfully, I think that perhaps your question is off point. A reserve currency is held by central banks or other monetary authorities as part of forex reserves. The whole point of Bitcoin is to eliminate the central bank, eliminate fractional reserve banking, eliminate reserves altogether to remove that that that that that. Right.
So the re framing of the question or the pointing out that perhaps my question is off base, I found brain stretching and thought provoking for me as as someone who is really not an expert in global flow of capital and also the separation of, as you said, of the populous use of capital and currency from state mandated policies around money and also control of supply of money. And the idea, I think that those could be very different things. Right. Is sort of to me, still a pretty novel idea because we're like, OK, we all use dollars in the US and like.
I just paid for lunch with cash that I got out of an ATM, which is very old fashioned. Did you really? I know, I know. And very old fashioned and kind of silly also in the days of covid, but I had some cash. And so the idea that what the government talks about as money and the money I use day to day for my common transactions being different is still pretty unusual an idea to me. Yeah, that's as someone who spends a reasonable amount of time thinking about cryptocurrency.
Well, you probably have, though, like I mean, at some level, certain companies become so omnipresent, like for like for me, it's Amazon, for example, you know, and they give you kind of credit and it's not Amazon dollars, but it's you know, you never get the credit back on your credit card and you think, who cares?
It's on the Amazon platform. I'm going to use that currency again. I mean, is that a currency? I. I think that's interesting. I think just going back to your question is one thing I spend a lot of time thinking about is will the U.S. government kind of embrace some of the properties of cryptocurrency and create a U.S. dollar that is a cryptocurrency? And I think, you know, if you hear Jerome Powell or others talk about it, I think they they say they're several years away.
And I just wonder if that is too late. I think it is, frankly.
And I one thing I spend a lot of time thinking about is you could imagine a private cryptocurrency that's pegged to the dollar. You could also imagine a public cryptocurrency pegged to the dollar.
One of the things that the U.S. did well, I think in the days of the Internet and the Internet, the U.S. government had a head start because they helped develop it. They're much more behind on crypto. I think one thing I spend time thinking about is would there ever be some kind of private public partnership? You know, if they said, OK, wow, China is really developed this or maybe the European Central Bank or whatever, name your central bank of choice.
We've really got to get with this. And we have some really smart people in the private sector and private companies. And these problems of distributed computing are hard problems to solve. I mean, I'm on the board, as you might know of D.M. I know Facebook and many other council members have devoted legions of top engineers to kind of building that block chain. It's not easy. And so do we think we have that already resident at the Fed or something?
I really think the one idea is to have a private public partnership. But then, as you point out, there are other decentralized systems that are working already like Bitcoin. I mean, Bitcoin is volatile, but now you also have staple coins and you have wrapped Bitcoin. I don't want to talk too much because like you said, crypto is like religion. At some point you have like maximalists.
I'm a crypto maximalist. I'm not a particular asset maximalist.
But I do wonder if you know what will win and what is going to have a good go to market first. And I think fundamentally, what's going to start getting used first and early adopted because and obviously already Bitcoin is the grandfather at being developed in two thousand eight. But who will get enough market share earliest? Because it just there's real network effects. Right. And so if the U.S. government develops a digital crypto dollar in whatever I'm making up a year, twenty, twenty eight, has it already been overtaken?
That's some of what I think about. It's a serious question, a huge opportunity and a gigantic threat from a geopolitical perspective. I mean, it's seems kind of like hard to overstate. Yeah. How big that is in the game of risk that is played around the globe. It's just gigantic. Yeah. You know, the other another question that comes to my mind, I don't have an answer to this, but is what factors or events would lead to a decrease in Bitcoin volatility to the extent that larger institutional investors like pension funds and endowments and sovereign wealth funds begin to allow Bitcoin to play within their portfolios in the way that might treat gold?
Right. So if they if they have certain rules, which, of course they tend to, which might say, you know, if X, Y and Z has a drawdown of more than 20 percent, they get cut like they're at what point is the curve smoothed enough that a small percentage of assets that are allocated to something like gold or gold like equivalent begin to get shifted to Bitcoin because it doesn't take percentage wise, a very large shift to start to have a tremendous impact on Bitcoin.
I just don't know what those events are. I don't know if you have any thoughts.
Yeah, well, my first thought when you said 20 percent shift, I thought that's child's play, 10, 20 percent volatility is nothing.
But yeah, I was actually thinking about some of the recent events with, you know, hedge funds and Shamy and all that. Yeah. Oh, right. Right, right.
Of course. Well, I think look, here's what I think about Bitcoin. I think it's still early days, although two thousand eight it's been around since 2008. It is still early days. And I think we're going to see adoption in waves. And again, this is not a price prediction, no investment advice, et cetera, et cetera.
I know of all those disclosures, but I do think that we'll see waves of it. And we're still in the early days. But you are starting to see I mean, you saw, I'm sure, Elon Musk's tweet about or I guess it was in his tweet, but it was the S1, the Tesla filed that says they're putting some other Treasury and.
Into Bitcoin, and it's not just that, right, MicroStrategy, and there are a couple other companies I know that are looking at that, and I think those are kind of early examples of companies putting small portions of Treasury into it.
And I think we'll see another wave, I suspect, where more and more companies do that down the road. I don't know when that would be. You know, we could even see at some point a wave where certain governments might put a small fraction. I'm not talking about a lot. I'm talking about a very small fraction you pointed out, just like they do with gold. And so I think, yes, that would obviously, one would think, offset volatility.
But who knows? As you know, Bitcoin's been hugely volatile asset, which is which is why we have stable coins. And I'm not knocking Bitcoin at all. I'm obviously a fan of Bitcoin and we've disclosed before we have a sizable portion of our fund in Bitcoin. So we are Bitcoin fans, but. I would just be completely speculating if I said I would know what would happen to the volatility, I think that the best thing I could say would be that I think we are in waves and we will continue to say, see waves of, you know you know, we see some early adopters of institutions now, some early adopters of companies.
And I think in the next wave we'll see more and then there will be another wave.
So let's come back to you. And I know we have a little bit of time left, hopefully. And I'm looking at a bullet here in front of me. Then I would like to explore and here's how it reads or paraphrasing it, you've spent lots of time saying no to things that your peers thought were must do to pursue other paths people around you thought were the wrong move. What of those? Was actually the most challenging. I want to I want to try to humanize you a little bit for folks, because I think that it's like Wonder Woman in the bracelet's with the kiss, the old carry with, like, crypto ninja skills.
I want to sort of paint a picture of. One of those decisions, if it exists, I don't I'm not asking for fiction here, but if you have said no to a lot of things that people thought you should do, maybe even insisted that you needed to do to take the path less traveled, has there been an example where you're like where it was difficult or where you did it and you're like God, that this might be a terrible fucking mistake?
Many times. Many times. I don't only have one example of that. I, I sadly or happily have several. Let me think what's becoming top of mind. I mean, I'll tell you one from personal, because you said you want to humanize me, which I appreciate. Thank you.
You're welcome. You know, there was a time and this is actually a personal thing. I have other professional ones which we can talk about if you want. But I actually have one top of mind, professional and personal one. You know, I was engaged many, many years ago. I was engaged to someone and, you know. I don't think he was excited to be engaged to me, and I don't think I was very excited to be engaged to him and fortunately, we mutually made the decision that we were not going to get married.
It was pretty early on and the engagement, but we had been living together and it felt like the right thing to do on paper. You know, everyone around you is saying, oh, how perfect.
But I think both of us in our heart of hearts knew that would be a bad mistake.
And so telling our families and friends that there's a sense of, like, almost shame, you know, it was embarrassing, but we both realized it wasn't right for either of us. And so that felt a bit like a failure at the time.
Not a bit. It felt like a big failure at the time. And oh, by the way, talk about humanizing me. I had to be a bridesmaid in my one of my best college friend's wedding about a month and a half after that happened.
And I just remember being there and just it was like kind of. Really not a great feeling, right, my my own wedding's been called off and again, it was mutual, but I actually took the opportunity to move back to California.
This was when I was in D.C. I moved back to California. And, you know, right after I moved here, I actually met my future husband, like, super serendipitously. And we this month have our 10 year wedding anniversary. And so, you know, that was a that was something that felt like, wow. And even in the move here, I was like, wow, maybe this was the wrong call. You know, maybe I'm going to just, like, end up alone forever, which would have been OK, too.
But you do question it.
That's a personal one that I want know that that checks the box. That's great. I mean, you're welcome to scratch it, but I think this is this is paint a fuller picture, adding we're adding some some earth tones and adding adding a little sun, a sunrise to the painting. I think it's good.
Well, there's a professional know. There are a couple. Yeah.
If you want this. You want me to tell you about that. Of course. Of course.
Obviously, I had walked away from different opportunities in law like along the way, but I was still always within the realm of law. Right.
I was oh should I go be at this law firm Cravath where I have an offer? No, I'm going to pursue my passion and go to D.C. and be a prosecutor. And, you know, and I also had been doing a clerkship on the Ninth Circuit when I was told, if you want to stay another year, maybe it would increase your chances to go to the Supreme Court, which for a lawyer and a young postgraduate law student, was like a big deal.
And I said, you know, it's not no, it's not worth it to me. Like, I want to do other things in life.
I don't want to do that for another year. You know, people thought that was a mistake. And maybe I did at the time, too. By the way, I ended up clerking on the Supreme Court anyway, but I didn't know it at the time.
And then I think the most profound one, though, was I really kind of left entirely a career where I had, you know, in the law done things that I had really invested a lot of myself and time into, whether it was being a prosecutor in the Justice Department clerk hands from court, I had firmly kind of established my legal career and I completely left that and pivoted.
And, you know, when I was doing that, I was actually to join the board of Coinbase.
And when I did that, I remember people around me, particularly those of my friends who were lawyers or from D.C., are like, what are you doing?
Like, you could go be a partner in this or that firm and you're going to join the board of a crypto company. I mean, you have liability and crypto, and that's so crazy. You know, I didn't really look back after I joined, I just jumped in it did it, but I do feel like a lot of people have told me in my life, you know, this is your one shot. Like, you can't do that because this is better for your career.
And I've definitely been someone who cares, although it might not sound like it from our conversation, because we've talked mostly professional stuff. I care very much about living along the way. And, you know, I grew up overseas. One of my great passions of spending time in other cultures and with other people and with my family and friends. And I don't really want to sacrifice that just for work.
Let's we're going to talk about two at least two aspects of that. And one is the coin based decision. So I would like to sort of turn this into a movie for a second. And I would love to hear you tell the story of making that decision, because I can't imagine you walked in, you met them. You're like sweet. Yeah, I'm going to totally pivot. And that's that. I walked out and I made a phone call and that was it.
No, I doubt it unfolded that way.
So please, please tell us the story of how you made that decision. Not at all.
Actually, I remember when I first met Brian Armstrong, who's the founder of Coinbase, and I won't talk much about Coinbase because that company is now in a quiet period, as you know. So I'm talking talk about the company, but I can certainly talk about the circumstances of my affiliating with the company. I remember meeting Brian and by the way, Frederiksholm, who I don't know if you've met him, but yeah, very, very, very, very smart guy.
Yeah. And Brian and I remember telling Brian, you know, he was telling me about Mean and I said, oh, I know about Coinbase, Brian, you know, I've been to your office. And he said this was, by the way, when I was still in the government. He said, what? And I said, Oh, yeah, I've been with the FBI in your office before. You didn't know that.
He's like, no, I didn't know that. It was it was a it was a friendly visit, a friendly visit.
It was an informational gathering visit. Coinbase, I've done anything wrong. It was just, you know, part of that.
Well, I talk to you laughing but it's genuine.
It was. No, no. But that is one that is a great way to get undivided attention.
Oh, it was a friendly visit by the FBI.
Oh, well, I guess I am totally relaxed. Yeah, no. Well, this was fortunately for Brian, this it had happened years, Pat, or before. Right. So just right. Anyhow, I said, Brian, I already know about Coinbase.
In fact, you know, I told you about some of the bridge building we were doing and some of the summits we were putting together Coinbase and not Brian himself, but like someone from Coinbase, just like many early crypto players would come to those, you know, numerous crypto representatives, call them from the industry, would come and meet with some of the government folks. I won't I won't say who because I don't know if I have their permission. But the bottom line is, like a lot of different folks in the crypto industry, it wasn't just Coinbase.
So I kind of knew the company already through that work while I was at the government.
But I definitely never thought I would be working in the crypto industry or in venture capital. By the way, I guess I thought I would probably have gone to be a judge or a partner in a firm or I didn't honestly know what I would do, but something in law. Right. And remember, when I joined the crypto industry, it wasn't the cool or fashionable thing to do. It was like I think I joined in what we call the crypto winter.
And people thought I was just really crazy that I was giving all this law stuff up.
But back to the story of Brian.
He you know, he said, I really think that you ought to consider partnering with us somehow.
And I said, well, you know, I work in the government, so I can't partner with you, which is what he meant is do you want to come in and work here? And I thought, you know, that's a really interesting idea. I had never thought about working full time for a crypto company, believe it or not. And instead, I said, you know, I really want to work with a few different companies. You know, I've never been in tech.
And I would like to work with a few different companies.
And Brian and I'm forever grateful he he had this kind of innovative thinking, said, well, then why don't you join our board of directors, which is, again, something I'd never thought of. And I I did jump at that chance. Now, it was a little bit interesting timing because I was actually under consideration for some high level government posts at the time, which I won't go into other than to say that I had to withdraw from those in order to serve on the Coinbase board and sort of serve just for my clarification, to serve on the board.
But serving on the board consumes time and energy. But it's not a full time job.
So the but you to be able to take that board position would have to sort of recuse yourself from government employment. Is that was that how it works? That's right. Separation of church and state? Absolutely. Absolutely.
And I had already actually by that point, I had left the government just to clarify. I had already left the government when I was having this conversation with Brian, but I was thinking of going back in as a high level appointee. And in fact, I was already. Going through an FBI background check and interviewing with all kinds of senatorial committees, and so I was already out of the government, but I could not go back into the government as a political appointee or otherwise or a judge and also be on the Coinbase board.
Of course, like like you said, strict separation of church and state, which is definitely we want to keep it that way.
So when I took that Coinbase board, I was really saying goodbye, I think, to a career in the government. And, you know, I did make that decision.
I did make it actually pretty quickly by the time I made it. And which I do is something I do. I can obsess and waste a lot of mental energy on small little decisions to him that aren't that consequential, which is a big weakness of mine. But on big, huge life decisions, I'm pretty quick and I made it.
And, you know, there it is, four years over four years later, I'm still on that board.
What was it that made it a fast yes and not a fast no? Well, that's a great question. I think in life, someone told me this once and I can't remember who, but it has always stuck with me.
And they told me this a long time ago in life there.
Is either hell yes or there's no, and if it's not hell, yes, it's no. Is that a cliche thing I had never heard? Oh, that's OK.
That's actually that's actually something, I believe, that was started by Derek Sivers.
Oh, I didn't know that entrepreneur who founded a company called CD Baby. And one of his rules in his life is hell, yes or no. Yeah.
And it felt like hell yes. I hope that was the right decision.
I think it was, you know, and from there, again, I'm not speculating. I think you'll do I think that's going to prove to be a pretty good decision, possibly on a bunch of levels.
Yeah. Yeah. Well, it's been certainly you know, I really one of the things I've always done is follow my passion, follow my gut and then do stuff that interests me. And by that measure, a hundred percent. It was the right decision.
And, you know, it's also given me a great flexibility now and then. By the way, there's that's how I met Marc and Ben. You mentioned they've been on your podcast. I actually met Marc and Ben, the founders of my firm, now that I where I'm now working full time through my work on the Coinbase board. So, you know, it was one decision, but then it led to other decisions. So who knows how that's changed my career trajectory.
That's exciting. So exciting. What a remarkable right turn. You know, it's just it's just fantastic. And I said there are two things I wanted to to explore. The other is family or specifically kids. And the reason I bring up kids. So we're not going to talk. We can talk about your family, certainly. But I want to talk about the family of one of our mutual friends, her girls, who one of which one of whom the grammarians out there will teach me which way it is, is I think 10 or younger, wanted to be an actress and now wants to be a prosecutor, thanks to you.
And she the mother has told me that she would trade everything that she has for the influence that you have had on her girls and girl in this case, and that you are just remarkable children and that they are they gravitate to you. Why is that good if you don't ask?
Well, I don't know. Can you have a talk with my own kids? Because they don't gravitate toward me. They turn me out. And, you know, I thought Krypto would be cool to them. But, you know, Mom is not cool. So if you want to have a word with them, that would be appreciated.
But I'm not going to be a I hope it's not a child with her to my own kids. But let me I mean, you know, I think one of the reasons is, you know, I grew up with a mom who always told me you can do of course you can do anything you set your mind to. Of course you can. You know, I don't know that that was true. But the fact is, I believed her and I thought, well, she says it is it's my mom.
And she, you know, as a young girl or a young woman, of course, you believe what your mom tells you, at least to a certain age. And I think it is almost a self-fulfilling prophecy that someone was believing in you like that, that, yeah, you could do anything you set your mind to. It might take small little chunks, which we can talk about, like I set goals. But then I, I, you know, if they're audacious, I'm not going to achieve them just easily.
Right. You break them down into small bite sized chunks. But I think with kids and I've seen this just even in teaching, you know, I've taught over the years and I have several students, I've seen this with young people and with even younger kids.
Is that really making them feel like they can do anything and that really what they need to do is find what they're passionate about? And that is exciting and that makes you really want to work hard. But also, I've always thought, as I said, you really want to live along the way and find and that's why I think it's so important to find your kind of sounds cliche, but your calling in life for work. And I think when I talk about kind of stories or jobs, I just must have you know, I did it out of a passion or a mission or, you know, some purpose.
And I would hope that comes through.
It's funny you say that it was a girl, because the amazing thing about being a parent and I know just from listening to your podcast, you know. In the past that you've said you don't have you don't yet have children, but the amazing thing about being a parent is that every once in a while they just say stuff that completely pulls you over.
And someone asks my son, who's in elementary school, someone asks my son a couple of years ago, you know, what do you want to be when you grow up? And Tim, he said, well, it's kind of crazy because what I want to be is a girl's job.
And they said, well, what not? And he said either an FBI agent or a prosecutor.
That's amazing. Wow.
And I don't know if it was just the kind of story and it's not just the stories. It's just like I think he or other kids, I hope, see that I've been passionate about my work.
And it's, you know, but as you know from this podcast and you're listening to now, you have to find balance in life and it can't be all work and no play, but better when it's work that you actually really enjoy. And that feels fun.
I would love to know how being passionate manifests itself.
Like what is the passion that your son observes, but how does he see or feel your passion that then sort of leads him to gravitate or even say like FBI agent or this other friend's daughter who's now saying prosecutor? Like, what is it that they feel in you? Because I can guarantee you there are plenty of investors. I know who if they sat at a dinner and a kid was present, the kid would tune them out completely, would have, if anything, the desire to do whatever that person, the opposite of whatever that person does exist.
It would not resonate with the person nor the content would resonate at all. And so I'm wondering what it is that. Sort of enchants these kids, in a sense, what is the passion that gets, how does it manifest?
Well, one thing I learned, and I think this is not really from being a prosecutor, I think this just dates back to how I grew up, which I don't know if you know this, but I grew up moving kind of every couple of years at most. Like the longest I stayed anywhere, I think was three years.
And from places ranging from Utah to Texas to then like Cairo, Egypt and overseas and Europe in the Middle East and Africa. And what that meant was like I was always the new kid in school and you had to make kind of fast friends if you wanted to have any, and you had to really adapt to your surroundings and find some kind of common ground that you could connect with people about. Right. I mean, the people that you're meeting in, you know.
Utah are very different than the people you're meeting in Zmolek or downtown Cairo, as you might imagine, particularly when you're a young person, like the young friends you're making. They have different interests.
And so I think one thing is just I'm used to being around people. And that's also true, by the way, from prosecuting and being around witnesses and confidential human sources and informants and then switching to venture and being around tech folks and crypto people to their own class. So I'm just used to being around a really wide variety of very different people and wanting to find a way that connects with those people. Because I want to have relationships with fundamentally each one of those kind of communities I just described or constituents that I just described.
And of course, children are part of that. Right. And you've got to find some common ground and things that interest them.
And it's not about creating a persona or being phony. It's about being completely authentic. But in a way they can relate to, you know, and it's it's also about, I think, my ability to explain stuff. Maybe your listeners will disagree. Maybe I haven't explained anything clearly on this podcast, but like explaining things clearly in a way people can understand.
And what I mean by that is, you know, when I had to go in front of juries, we had to talk about all kinds of complicated concepts. But you need to break them down in a way that 12 different people on that jury can all get, no matter their background, no matter their education, no matter their training, no matter what field they're in.
And I think the same is true with kids. You know, what are they going? Can you explain things in a way that teaches them anything in a way that excites them? I think if if the answer there is yes.
Then the rest comes a little. I won't say it's natural, but it's much easier for them to be interested in the conversation if you can make it on a level they understand. Yeah. That definitely makes me think about one of my favorite books. Surely you must be joking, Mr. Feynman, about the physicist Richard Feynman. He talks a lot about his father, who is incredibly gifted in that respect. And, of course, Richard Feynman later went on to become famous for many things, including his ability to reduce complex complexity in the world of physics to a simple demonstration, perhaps with an apple and a pencil in front of a class and.
Just maybe one or two last questions for you for this round and the next one, I'll make book related since I mentioned the book. OK, are there any particular books that stand out in your mind or come to mind that you have reread? Many times or regret at all or gifted often to other people. Mhm.
Not that I've reread many times. I guess it's hard to answer the question because I kind of think of it as through the filters of life experience, like where were you in your life at the time you read that book. Right. Like where were you at that moment.
Have you have you seen that TED talk, by the way, the remembering self versus the experiencing self?
It's really good. I haven't, but I imagine there's quite a difference between the two.
Yeah, well, and this is kind of what I'm getting at is like, was it the book that was so good or was it like the surroundings where you were when you read it?
Was it the stage in your life? It was like, oh my God, I'm feeling the most fit I've ever felt and I felt great, you know? So it's it's viewed through the lens of that. But I would say with all those caveats and I haven't read it many times, but a couple that come to mind, one is Memoirs of a Geisha.
I just I loved that book. I don't know if you've read it. I always found it.
I haven't I haven't read it, but I know a lot about it. The first few drafts were completed and thrown out by the author who started afresh until he got the version that you read. Just just mind boggling to imagine. I never I never knew that.
But I the reason I loved it so much as I read that book and I can't believe it was written by a man because you are convinced as you're reading it, it's written by the Geisha why I just have such a great memory of reading that book as I read it while I was studying overseas in a language school and I was studying by myself.
And so I'd go to dinner every night alone. And, you know, you feel awkward at the restaurant by yourself or, you know, you could. And so I would always have a book with me. And I remember reading that Memoirs of a Geisha book while I was learning a language. So that stands out.
But the other one that I really love is Palace Walk, which is I don't know if you're familiar with that, but it's written by a Nobel laureate, Naguib Mahfouz, and it's set in the turn of the century, or maybe it's nineteen twenties, Cairo, Egypt. And it just reminds me of Cairo, which is a place I kind of grew up as a kid.
And so a lot of powerful memories of the city. Obviously, it was set in a different stage time frame, but that's one that I, I love Palace Walk. That's fiction.
Yeah, it's fiction by Naguib Mahfouz, who I think was the first Arab Nobel laureate. He's certainly a Nobel laureate.
So there's those are some obviously there are a lot of related to my old kind of work, which I love, even though I shouldn't. But it was like the killing of Pablo Escobar, I thought, or the hunting of Pablo Escobar, I think it's called. That's by Mark Bowden. Black Hawk Down.
Yeah, under and alone is a good read, by the way, if you want some more true crime under and alone.
What's that about? Yeah, it's best selling New York Times book. It's actually remember I told you about the Hells Angels Mongols case? I did. Well, the agent went deep cover for three years and they taught there's a lot of quandaries they confront when they're deep cover living among these criminal enterprises, they have to fit in. So like what happens when they're asked to violate the law and they can't because they're federal agents, you know, and how do they pass that lie detector test?
And it's the story of one agent's journey of living undercover, deep cover, a double life, really, and rising up to the top of that gang. And that's a true story. So that's interesting.
Wow. God, that just seems. It's how I'll have to check it out. I mean, it just seems like such a easy way to identify who is a possible Plitt, right? You just ask everyone to do X, Y or Z, and then whoever doesn't do it, you're like, all right, well, just to be on the safe side, like you take care of you.
Well, the good lie detector tests and that came out during that trial I did is how did you pass the lie detector test? And the jurors were on the edge of their seats to figure out how how on earth the agent that we had embedded pass this lie detector test because they they do administer them. So that's a good read. And actually, I have gifted that. I have gifted that book. It's a quick read. Or if you're not a beach guy, it's a quick it's a quick read.
Whatever you might do with your quick tequila in the yard, read under it alone. Amazing.
Well, Kitty, it's been so fun to spend time with you. Kitty Hahn at Kitty Underscore Hahn on Twitter, and you're doing a lot of exciting things and have many new chapters ahead of you, I'm sure. Is there anything you would like to talk about or any comments you'd like to make? Questions you'd like to post, things you'd like to ask of my audience, anything at all that you'd like to add before we bring this round one to a close?
I mean, I guess the only thing I would ask your audience is just take a moment to explore Krypto. It's not really a plug for an industry I'm involved with. That's not what I'm saying. It it's just mostly because there's so much written about the headlines. And I'd love to encourage your listeners to just explore a little bit more and realize it's really not all just about one asset or speculation. There's a lot of exciting things happening in the space.
And the ask I would have of them is also if they're not and I know there are a lot of techies and people very sophisticated in technology and technical among your listeners, Tim. But if they're not not to get intimidated by it or think they can't figure it out, I had recently a female CEO who has in times one hundred most influential people. I won't say her name, but I will say very successful across multiple dimensions, personally, professionally.
And she told me I need a PhD to figure this stuff out and I just can't. So I'm just not going to do it. And I told her, look, there is no food to be had in crypto and if there were, it would be outdated the year after it was granted because it changes so fast. So just like don't get don't let yourself intimidate is not the right word, but don't let yourself just think, oh, it's too complex.
I don't want to go dive deep in it. You don't need to dive deep in it. Just go learn something about it that you didn't know. And I just ask that of your listeners.
How would you suggest? Because there's there are some great resources. There are a lot of terrible resources. There are a lot of scams masquerading or Fly-By-Night operations masquerading as how to content sources. How would you suggest or how might you suggest someone learn more?
Yeah, as you're describing, I mean, we have up on our website, which is I believe it's a 16 dot com. We have what we have call a crypto canon. And even that is what I'm saying. Proof's in the pudding is out of date already because we posted it.
I don't know when. And now, you know, there's all this stuff that's changed in the space. So we need to go update it. But we do have this crypto canon up that you can learn more on our website. I also think just getting a few folks who know what they're talking about in the space and following their writings on things like medium. I mean, one other thing is and I wasn't intending to plug a portfolio company here, but clubhouse you might have heard, which is an interesting harlot's investment.
I've noticed that on clubhouse there are a number of sessions online every day happening on crypto. And it's a great way to just listen in while you're doing something like doing the laundry or you're drying our hair or you're doing something else that you don't need to be fully present in that experience.
Hop on and put your earplugs in and listen, because there's I keep seeing all these sessions on.
How are we going to call him Tim Niftiest on NTIS on on DFI, by the way, we didn't even talk about DFI, but on DFI, it's like daily there's daily sessions on all of these things and you can just listen in and hear what people are talking about. And it's kind of a great way to separate the wheat from the chaff. I know it's I think clubhouse is still invite only, but I, I, I think that will soon change.
And I know a number of your listeners are probably already on it, but our website has the crypto canon and then I've just seen a number of great medium posts. Honestly, by the way, our our canon, our crypto canon pulls not not just us. I mean, we pull some of the people we've already talked about on here, their writings on. So it's not just Andreessen Horowitz and it's not even just necessarily our portfolio companies. We kind of search for the content and put it on our website ourselves as well.
Yeah, you guys have put together a lot of really good content, Will. Linked to those in the show notes for people at timbal blogs, podcasts to be able to find a really easily, we'll link over to that. I hope that niftiest, if they're not already called niftiest become nifty, is I'd be very excited about that.
Well, call them child. What they need is for all your future keynotes, Mufti's.
And there are also, as you mentioned, there are some some very I at least I would consider very bright people who make an effort to explain some of the core concepts within block chain and certainly comment on Bitcoin of all. Rovics mutual friend is one of them. He has interviewed on my podcast in this podcast, Nick Zabo s Zabo also incredibly, incredibly sharp. And that episode is also a decent place to start and a great place to start.
Actually, can I tell you, that episode was the first episode I ever listened to and it was a while ago. That's an old episode, if I remember I was a few years ago.
Yeah, well, actually that's how I learned about smart contracts. And I remember Nick talking about a vending machine and I just thought, now I can visualize a vending machine. OK, that makes sense to me. So now that episode is a must listen. Thanks for listening. Yeah. Yeah, that's amazing.
Yeah. We had a blast I was a few years ago and the intent of that episode was to have a conversation that would be evergreen, that would have some lasting power, because like you said, if you're covering the latest and greatest developments, you're going to be obsolete very quickly. I mean, within weeks or months, you will probably have said something that needs revision. But we really started with basic the fundamental concepts, smart contracts, what a ledger might look like, what analogies are helpful currency itself.
Forget about cryptocurrency, discussing currency and what that represents, how it's evolved and different applications. So I'll put that in the shadows for folks as well. Is there anything else that you'd like to to say or ask or point people towards before we adjourn?
No, thank you so much, Tim, for having me on. This has been great. And thanks to your listeners.
Yeah, I really. Appreciate you taking all the time. I know you have a lot on your plate and certainly you have a lot of exciting things going on. So I appreciate you carving the space in your schedule to do this. And to everyone listening, all the resources, everything that was mentioned from the very beginning, all the way to Palis walk and the Nick Zabo Davola I've got episode will link to in the show notes also point to the address and Horowitz resources at teamed up log for such a podcast and just search Katie Katie.
And this episode will pop right up. And until next time. Thanks for tuning in. Hey guys, this is Tim again. Just a few more things before you take off. Number one, this is five Bullett Friday. Do you want to get a short email from me? And would you enjoy getting a short e-mail from me every Friday that provides a little morsel of fun before the weekend and five? Black Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week that could include favorite new albums that I've discovered.
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