As an entrepreneur, engineer and investor, Preethi Kasireddy is one of the most influential people in cryptocurrency. We talk getting started in crypto, the future of digital currency, and the best investments. Then, we countdown the Top 5 Kinds of Hats.
Interview with Cryptocurrency Expert Preethi Kasireddy
Nick VinZant 1:24
basically what is cryptocurrency?
Preethi Kasireddy 1:41
Zooming out. There's a lot of different ways to explain cryptocurrency. But the very basics, it's a digital currency that is completely managed by a decentralized network of nodes. And so typically, when we think about currency, like fiat currency, like the dollar bill that you use on a day to day basis, how is that fiat money created? Right? It's created by a central entity, which is the government central banks with digital currency. These are basically currencies that are created by people like me and you and they're completely managed by a decentralized network of nodes.
Nick VinZant 2:21
I think that for people like myself, when I hear about cryptocurrency, the biggest thing is like, I just don't know what's going on. Yep. Is Is that a common thing? Like, Does everybody understand this, but me, or very few people really understand this.
Preethi Kasireddy 2:37
The reason that cryptocurrency is so hard for people to understand this because, you know, you can come into crypto from many different angles. And crypto really touches a lot of different subject areas, from economics, to finance to computer science to policy and legal philosophy history, like code touches a lot of different things. And so it's, it is very this like all encompassing subject. And so when people come into crypto, they try to maybe understand it from the wrong lens. And so they might not have an interest in that lens. But maybe if they look through another lens that might interest them, but people often fall off is they, they learn a little bit about it, and they don't get it. So they give up. It's like to spend a little bit more time how to do a little bit more reading, like if you truly, you know, truly spend, you know, how long like many hours or days or weeks just dabbling into it. And if you still don't get it after, you know, months of like trying to figure it out, then you know, go, I'll give you the benefit of the doubt. But most people give up too early.
Nick VinZant 3:48
When you talk about like coming at it from the wrong angle. Is that coming at it from a money standpoint? Like look, you can't look at this, like you look at the US dollar? Is that what you mean by like coming at it from the wrong angle, that it's more of kind of a overall philosophy slash movement?
Preethi Kasireddy 4:08
Well, what I mean is, you know, crypto, effectively, if you go down to the very bytes of it, it's essentially a tool, right? It's a primitive, it's a computer science, or math or science primitive tool that allows us to do all kinds of things. We have this thing called a blockchain and it's basically a digital decentralized record of things that happen in a network and using that we can do all sorts of things. And so for example, some people didn't get crypto until defy came along to them, you know, finance makes sense for them decentralized finance, like Oh, I get it, decentralized finance, okay. So instead of a central bank, or a central financial institution, instead of a central institution, creating all of these financial services that people have access to, we can have someone Just write code with all of these financial services and it's decentralized. And so they understood crypto after defy came along, or, for example, creators and artists, for them, like crypto didn't make sense. And if these came along, right, and they're like, oh, wow, I get to own my art, and she made my art in a completely decentralized way, there's no middleman, like, that's cool.
Nick VinZant 5:22
What would you say is kind of the overall point or goal of having these different cryptocurrencies?
Preethi Kasireddy 5:31
The goal is really, the goal is really, I think, to move power to the edges. And so before you had all of the power, slowly getting concentrated amongst these various large bureaucratic institutions, whether that's, you know, the Fang, like Facebook, apple, Amazon, Microsoft, Googles of the world or governments, right, like they have a lot of power. And if you think about how the financial and economic world runs today, it's like these people have all the power and whoever controls money controls the world, right. And so the point of crypto is to give that power to the, to the people to people like you and me and to the edges. And so, because we don't need the centralized institutions to manage a lot of these services, we can kind of create them from ground up using code and encode them in the blockchain, we can almost, you know, remove the need for them. Except in certain scenarios, it's not like all centralized entities are going to be unnecessary. But in some cases, we might, we don't need them to facilitate that service. And so we give, we encode it in a blockchain and it runs on its own and it leaves the gives the power to the edges. The basic, very basic example I think that makes sense is example of like this kind of decentering, Mr. intermediating, the middleman is like, you know, if you've ever sent money across the world, like you know how painful that is, right? And you have all of these banks in the middle that do all of this hopping, to get your money from one country to the other. It's like with Bitcoin or any cryptocurrency and i, you just send one, click and go and stare in 10 minutes, and you're like, what, like, you know, we didn't need a bank to do that, right? I didn't need a bank to send money across the world. So it's a very basic example. But you can kind of extrapolate that and see how the same thing is true in other areas as well.
Nick VinZant 7:40
Is is kind of the goal behind it. I know we're talking in very broad, broad terms. But is the goal behind it to replace the dollar to replace other currencies? Or is it just to be an alternative?
Preethi Kasireddy 7:54
Mmm, that's a good question. And I think Time will tell whether it replaces the dollar or whether it serves as a hedge or something else. But I think it really depends on it only makes sense to replace the system if a system is no longer serving or doing serving its stakeholders and constituents right? In the in, in the dollars case, right now, the dollar in nominal terms doesn't really have CLE, like hyperinflation, right. There's inflation and other ways, but it doesn't have hyperinflation. But you can imagine this scenario where that does happen, especially with what happened in 2020. And the bank's printing all that money and just people losing faith in larger organizations and our economy just being weird, right? Like, how is the economy just like, hose there's so much money flowing into the economy, like, there's definitely inflation from like a assets point of view, right? So if we extract extrapolate, you can imagine how the dollar if there's a scenario where there is hyperinflation for the dollar, then of course, something like cryptocurrency could be a replacement, but at the very least, it could be a hedge.
Nick VinZant 9:13
So I know nothing about it. And that sounds great. Is there any concern though, that we just replaced one master for another? Right? Because somebody is creating this and they're ultimately not going to do it for free, though Okay. Now the banks and and the government doesn't have control but we now we just got Tom Smith with NF t coin or something like that. Like, how do you keep replacing? How do you keep from replacing one master with another?
Preethi Kasireddy 9:42
Well, that's thing right? With crypto, there's really no master. It's like you have a team that launches their protocol. And sure, in the early days, they do own a big part of the network of the decentralized network. So over time, the network gets decentralized and the controlling ownership of that network gets distributed to the stakeholders, which includes the users and various people who are part of the network and helping maintain that network. And so there is no such thing as one master. Instead, it's a group of people who are controlling this network collectively. And depending on how much skin in the game you have, you're able to kind of have that much impact in the network. And that's why, you know, only if you really believe in a network, you can own part of that part of that network, and you can become part of an owner. And now you have a real say in what that network could do and what it could become. So that, like, in this centralized entity, you don't have that, like, it's not like, if you disagree with the federal, Federal Reserve of their policies, you have the right to like, go up to them and be like, hey, like, I want to I have I have, I don't agree with this, you don't, you don't really have that, like, we don't have a way to get people's inputs, and, and so forth, and, and decentralized control with the crypto network again, because users own it and govern it as well. And you know, a lot of these crypto networks, it's not just decentralized ownership, but it's also decentralized governance. So how the, how the network is actually maintained, what changes are happening in the network? What upgrades are happening, all of that is determined by the stakeholders of the system. So there's no one mastered? What's the catch? Is there a catch? The catch is that building something like this is just a lot more resource intensive and a lot more difficult. Because now, it's when you building a centralized entity, it's a lot faster and a lot easier, because you don't have to worry about distributing power across so many nodes with crypto, because these are open and decentralized networks, you don't really have a choice of who's going to participate in these networks. anyone in the world can participate as a stakeholder in these networks and parking and participate in these governance roles. That leads to a lot more malicious potential, where you can have a bad actor or many, many bad actors colluding to try to destroy the system. And so that's kind of the catch here is that it sounds good. But building these systems is a lot harder than building a centralized system. Because it's decentralized. Now you have to figure out that now that you're giving this power to all these nodes, you have to figure out how to avoid them abusing that power
Nick VinZant 12:41
on like a scale of one to 10. One being, nobody is ever going to do this thing. Nobody knows what it is 10 We are at dollar level. Where do you think that like cryptocurrency is right now? In terms of being accepted by the mainstream? I would say about 10% of the way there. Wow, that's like a one. There's like a one or a two, right? Oh, wow.
Preethi Kasireddy 13:06
Yeah, we're still early. I think. I mean, none of no one's using crypto on a day to day basis. It's not like it's mostly a hobbyist and speculative asset today. And it's just people's imaginations that are driving the prices wild. So like even like bet world class applications that are being built like defy and NF T's and all that. Like, I guess you can say that artists, there's a little bit of traction there. But even there, it's like, you look at the volumes. And it's like, some news platforms have hundreds of transactions a week, compared to like me, that's nothing right. So I just I think we're still early and it's it's mostly just people's imaginations that are, it's one of those things that it's just like slowly will creep up on us. And slowly we'll see more and more crypto be part of our lives, whether it's very direct are kind of in the foreground or background. And I think it will be at least another you know, 10 to 20 years before we start to see crypto being a part of your like daily life.
Nick VinZant 14:10
So this may be a long winded long winded question. But grandpappy VinZant always used to say buy land because they're not making any more of it. Right. The dollar used to be on the gold standard. Is crypto fundamentally based on anything that if the apocalypse comes, I can take this and I can get this thing for it. Right. Like is there fundamentally a backing that could ultimately move this to where the two to take this as far as it could go? Is there something there?
Preethi Kasireddy 14:46
Well, what's backing it is again, the ledger the proof, the ledger that says that you own this and that ledger is maintained and has been maintained by miners All around the world who expend it in the in bitcoins case, for example, the ledger has been maintained by miners who expended all of this compute power to verify every single transaction that went into that blockchain. So you can argue that it's backed by their compute power. And so it's not backed by anything physical, like, you know. And so when there are a lot of people get caught up there, because they're like, we're just so used to the physical paradigm, we're not used to the idea that something that's purely digital and ones and zeros, could be valuable. But if we all decide is valuable, who's to say it's not? Because at the end of the day, what is money, right? Like, why do we believe a paper paper bill is a piece of paper is valuable, because we all collectively believe it's valuable. And so same thing here. It's like if we all collectively believe that we want to consider this ledger, to be a source of truth and something that has value, then you can take that to someone else who also believes that same thing, it is kind of interesting how we, as a society, just decide that this thing is now like, we just how do we do it? Well, we just decide that we're gonna do it.
Nick VinZant 16:08
I mean, it's kind of like, yeah,
Preethi Kasireddy 16:11
yeah, exactly. values of subjective, right. It's like, why is a piece of NF? T, that's digital, like, why is that worth anything? Because we all decided is, are you ready for some harder slash listener submitted questions?
Nick VinZant 16:25
Sure. What is your biggest fear when it comes to cryptocurrency?
Preethi Kasireddy 16:30
That's a good question. Um, a couple of things. One is like regulation, that regulation slows down innovation. And I think you see that a lot. And we're seeing that a lot, right? Like in the US, for example, launching a cryptocurrency app is just have to jump through a lot of huge hoops in India. It's just, there's so many developers who want to build crypto applications, but the regulation is just like so unfriendly, and so unclear. And so I fear that regulation just like slows down innovation and discourages people from getting into the space because they're scared of getting fined or getting going to jail or getting taxed or whatever. The other thing I fear is, like more and more, I think one of the things you saw we sometimes see with crypto is a lot of like cult like behavior where there's very dogmatic views about one cryptocurrency being better than another. And I think reality is like, I believe in a multi currency world where all these different currencies represent different philosophies and different approaches to solving different problems. And so it's not that one is right and one is wrong, it's just that we just have different ways of solving the same problem, or different problems. And so I worry that all of that dogmatism and close mindedness will just lead to a ecosystem like of like, insular cryptocurrency networks, instead of all these cryptocurrency networks operating in interoperating. Together, I think crypto is is interesting in the sense that every network is workable. So if someone doesn't agree with one philosophy, or one approach to building a network, they can just fork it and create their own version with better rules. And so, because of that, no matter what happens, we'll look at there's a mechanism for the system to evolve into something that is better than what exists today. You know, and that, that's just that's powerful.
Nick VinZant 18:38
If you are a betting person, can you name the exact year that cryptocurrency will become mainstream?
Preethi Kasireddy 18:45
Maybe 2030 2035 10 to 15 years? Yeah.
Nick VinZant 18:53
Do I need to understand cryptocurrency? to invest in it? Or to use it?
Preethi Kasireddy 18:58
I would say yes. It just got general philosophy of investing, right? Why would you invest in something you don't understand? It's my it's your money. And so you're gonna, you're just gonna throw it into something? You have no idea. This because other people say it's valuable. So I would say yeah, you definitely should spend a good amount of time figuring out whether you believe in whatever you're investing before you put your money in. And also be very careful of how much money you put in because if you're getting into crypto, I think you have to come in with the mindset of like, you're investing how much you're willing to lose. This one just says, What if this actually happens? I guess I think what they mean by that in the sense of like, Alright, you talked about earlier how maybe we're 10% of the way, way there, since we have 90% of the way left to go.
Nick VinZant 19:43
Like, is there a looming issue? Is there a thing out there that like, oh, wow, we really shouldn't have done this. Right like is, is there any worry in your mind that we are creating something that we shouldn't have created?
Preethi Kasireddy 19:57
That's an interesting question. I do think about that sometimes, because there's a part of me that like, you know, there's the digital internet is great, right? Like, it's enabled a lot of things like for us to do something, this was never possible before without the internet. But there's also a lot of downsides, right? The internet has just as many dark sides of the has good sides. And so anything digital, anything, any technology can be used for good or bad. And I think, you know, if we're not careful and cautious and thinking about how to build these networks, there could be a scenario where we're just not happy with the outcome. Like, for example, even with the internet, right? Chris Dixon talks about this a lot, where he says he feels like the algorithmic ad model that we have on the internet was the wrong turn for the internet. It's not the internet that we want, right? Like, is that really like? Do we want to live with this forever, where people, these big corporations are basically feeding off your information and data and sending you ads based on everything you say, view watts, like this is that sounds like, just disgusting, right? Like, is that the internet we want? And so same thing can happen with crypto, like we have to make sure that whatever we're building is like, is long term, what we want and create a net benefit for society and not not perverse incentive intensive in incentives. But that's also the beauty of crypto is that because it has incentives built in? From the very beginning, you can kind of figure out that the the incentives of the system and make sure that because the only way it cryptosystem works is if all the stakeholders agree to the rules, and they agree to participate and govern those rules. And so if any stakeholder of that system is not happy with the rules, the system doesn't work. Right. Like in, in, in centralized entities, that's not necessarily the case.
Nick VinZant 22:03
Is Ilan Musk, good or bad. And that's specifically him, I think you understand, like, in the sense of like, are people like that somebody who can swing the market? Is that good? Is that bad?
Preethi Kasireddy 22:15
I think it's, it's just is, you know, it just?
Nick VinZant 22:21
Yeah,
Preethi Kasireddy 22:22
what what do you do? Yeah, like, it just is, and it's like, he can control the market, because that's how much power he has as an individual. And just, I think it's, rather than asking whether it's good or bad, it's like, try to kind of dig a little bit deeper and try to figure out like, what does this mean? Is there
Nick VinZant 22:40
What do you think I guess is kind of like to me, somebody's looking at it from the outside. First, there was Bitcoin. Then I heard about Dogecoin. Like, what's the next big one in your mind that I'm going to hear about? I'm surprised you haven't heard about aetherium. Okay, that one's a little bit familiar. But the thing is, is that the picture of Dogecoin is what really captured my attention, right? Because I'm like, Oh, it's a DOS.
Preethi Kasireddy 23:03
Yeah. I don't know what the next one will be. That's a good question. So Bitcoin and Dogecoin are probably well known because they're, they're basically memes, right? There means right? Bitcoin is a meme. And Dogecoin is a meme. And that's one of the things cryptocurrency showed us is the power of means and how much value means actually have and people try to rationalize it, but it's like, there's no rational reason for why Dogecoin is valuable. If you're trying to put common sense into Dogecoin. Like you've lost already, right? It's It's It's just psychology and human behavior and and mathematics. Explain what Dogecoin is,
Nick VinZant 23:41
is there a specific country that you feel will end up benefiting the most from this, like in the quest for global dominance, who emerged who emerges victorious?
Preethi Kasireddy 23:54
I actually think it's like the smaller nations that will benefit a lot from it, because you know, they don't have powerful economic centers or currencies, but they can if they embrace crypto, then they can almost like leapfrog the larger nations and create a digital and decentralized currency that's powered by the blockchain. And you can see countries like Estonia and Singapore really embracing crypto, for example, these are very small countries. But as a result, you're seeing a lot of talent move to these places because they're crypto friendly. And so I think in the long run, they can have a competitive edge in terms of just attracting talent and doing things ahead of everyone else while like nations like the US kind of fall behind. If they don't, you know, catch up.
Nick VinZant 24:48
Is there a country in your mind that like you guys are screwing this up like the way that you are doing this, this policy, this attitude towards this whether from the government from the people in charge From the people like you, this is the wrong approach.
Preethi Kasireddy 25:04
I think the US isn't a is one. India, you know, I'm a little bit disappointed by how India is managing it, I think they'll come around to doing a little bit better job. But
Nick VinZant 25:16
yeah, when you before you like investor before you get involved with a different coin, what do you look at?
Preethi Kasireddy 25:23
I look at a few things. One is the look at the team. No matter what investment you make, it's really important to really look at the team and what their background is, and figure out whether they're the right team to build this. Second thing is I look at the technology obviously figure out like, what are they building? what problem are they solving? are they thinking about the problem in the right way? Their thing I look for is token economics, if they have a token to the project, and I'll try to figure out whether they've really thought about how this token is gonna be used, whether like it aligned with the interests of the different stakeholders in the system. Beyond that, you know, I look at I tried, it depends on the specific use case and the industry. So like, I'll like look at competitors and see if anyone else is doing something like this, I'll try to figure out and extrapolate how big I think this can be. And what I think like, you know, if you just kind of play out the success scenario, whether this could be something that's truly, truly meaningful and make an impact, or whether it's sort of like too small to make a good investment
Nick VinZant 26:32
for people who want to learn more, how can they How can they contact you, like what's coming up next for you, that kind of stuff?
Preethi Kasireddy 26:40
Sure. So I have a free crypto email course, which they can sign up for the link is on my Twitter, as well as on my website. And it's just a sequence of emails that really digs into and teaches you the history of money, how, how central banks manage money, and then it goes into the history of Bitcoin and how it got created. It also teaches you a little bit about Bitcoin. That's, of course, is free for anyone to sign up. And then I'm also going to be launching a my first cohort based course on aetherium development. So it'll teach you how to go from knowing if you're a software engineer, I'll teach you how to become an aetherium developer in seven days. And this is a boot camp type style thing. It'll be a seven day intensive boot camp, likely launching either end of August or beginning of September. So I haven't opened up applications yet, but I'll be opening up applications sometime in mid July. So if you're on my email list, you'll hear about it.
Nick VinZant 27:48
I want to thank preethi so much for joining us. If you want to connect with her, we have a link to her on our social media accounts. We're Profoundly Pointless on Twitter and Instagram. And we have also included her information in the episode description if you really want to get into cryptocurrency. If you want to learn more about it, she teaches some excellent courses that she's made available. Okay. Now, let's go ahead and bring in john Joe. Okay. Do you think that you're going to adapt with the future or that it will pass you by?
Unknown Speaker 28:23
I will say that I will adapt where needed. But even in terms of like today's technology, I'm already behind to a certain degree because I still read books. If If I didn't have a job that required me to be on my phone constantly. I wouldn't care what kind of phone I had, you know, I just so that I don't, I don't think it'll pass me by but how much I partake in, it might not be a lot.
Nick VinZant 28:50
See, I think that means it's probably going to pass you by. Because you're not going to do the necessary thing to like, keep up with the next thing. And then the next thing comes. And then the next thing that happens to you is you're the guy one finger typing on the keyboard that doesn't understand like, wait a minute, where's any key? I can't find any key like that. That's what's gonna happen to you think that's gonna happen? What's gonna happen to me too?
Unknown Speaker 29:14
I think we're on that fringe. Like age, you know, like we weren't born into, you know, like, when we were teenagers. It wasn't all about technology. But, you know, like, half of my high school class had a cell phone, but not everybody.
Nick VinZant 29:29
Yeah, my high school class. So a couple of people still had pagers. Like somebody had a pager and you had to stop at it. You had to stop at a payphone. Like oh, man, I'm getting paid. It's called the payphone. But we grew up with the basic language, right? Like we could figure it out. The reason that I asked this is because our guest is a cryptocurrency expert, and I don't have any clue what that is like no. And I feel like that whole thing this next wave that's coming is just gonna go right past me. You can go right over my head.