CRAZY CARDANO DRAMA EXPOSED – THE FUTURE OF ETHEREUM AND AI WITH CHARLES HOSKINSON

Added: 2026-05-30

[00:00:06]Welcome back to the O show. Everything crypto every day. Wendy O here and I've got the amazing Charles H from Cardono Midnight and everything else. Charles, how are you doing today?

[00:00:19]>> Very good. Very good. How you been, Wendy?

[00:00:22]>> Doing great. I'm just I am going through I'm on X and I really fully understand why you left for a little bit. Why you were using AI to manage because it's just absolutely astounding.

[00:00:36]>> Right. Well, I'm trying to leave X. You know, I I the problem is the end user license agreement of X, unless you publicly declare the account is a bot, if you're caught using AI, they actually ban the account. And um and the challenge for me is if you declare your bot you the algorithm will automatically scale down your post and reach. So I was trying to figure out like is there a compromise here or like how do we handle this? Um the other thing is you know there was treasury season the Iran war and all these newsworthy events and the only place to really go to get any information and real time stuff was X.

[00:01:10]>> Yeah.

[00:01:10]>> So you know it's like the Godfather 3.

[00:01:12]They said you know just when I get out they they drag me back in you know. I tried really hard to figure out how to get off, but I don't want to be there.

[00:01:19]It's a toxic nuclear hellscape. And um there's this class of people. They serve as professional victims. So they attack you, then when you hit them back because they say something that's wrong or defamatory, then they play the victim and say, "Oh, look. Oh my god, you punched me." And they try to get a crowd to come in and say, "How could you punch that person and be so mean?" It's like it's like they did that thing. And it's like, oh well that thing doesn't matter.

[00:01:46]You know that you shouldn't have hit the take the higher road. Oh lord. Um >> well people are mad because I had talked about um submitting a proposal to the foundation to help with marketing efforts primarily like on Facebook and Instagram and they're just they're mad about it but it's like I've got a team.

[00:02:00]I have overhead. Um I can produce wonderful results but I you know I do have overhead and I'm happy to talk about um Cardano and Midnight um just the way I do every other project. Um, but at the same time, um, also to you guys, this interview is sponsored by Charles. Um, he has offered to, um, he's a McDonald's guy. He has offered to get me a McDonald's Happy Meal one day or a some a fish fillet something. So, whenever that happens, we'll be sure to post >> double quarter powder with cheese. That >> It's going to It's going to And I'm actually going to be down money because I do have to pay an editor to um, put on the proper things and then we post it and do the clips. So, I'm actually losing overhead for this. But um it's just absolutely astounding because um Cardono and Knight they embody the trifecta that I talk about AIDF or WAS with a little bit of privacy but at the same time it's that um you know we're we're such an echo chamber on YouTube and on X at times primarily X but in order to get that information out um you know it's important to do so but at the same time Cardano I believe that you guys were kind of grandfathered in into the 16 cryptos um with clarity. Is that correct?

[00:03:09]>> Yep. Yep.

[00:03:10]>> Which is to me um especially when I talk to people about first getting started, I says, make a watch list. Pay attention to those 16 grandfather cryptos. Why are they grandfa figure out why they're grandfathered in and why that matters and then kind of start your journey that route? Because it seems that, you know, the SEC wouldn't just give a title like that out of nowhere.

[00:03:29]>> Well, you know, the problem is is that they didn't do things in the right order. You know, we spoke about this before. um they should have really grabbed the concept of what is a security by the horns and looked 10 years into the future and brought all the RWA people together and say we need to create a concept of a blockchainbased security and we need a different disclosure regime. we need a different operating model than how we traditionally do things with S1 filings and IPOs and you know these types of things and regions and so forth and at the same time update modernize the KYC and ML uh uh and globalize it so we can have global securities markets uh for a change. So they could have done that.

[00:04:09]Instead they said, "Well, we just it's too hard. We're not even going to talk about it because we're cowards." And what we're going to do instead is we're just going to make everything a commodity if we can. And then the CFTC is very small. Only has 700 people at the CFTC. They're principles based regulator. And compared with the SEC, it's massive.

[00:04:25]>> So why the CFTC is small is they tend to look at the entire market structure >> and via principles, they come and they kind of steer it down. It's almost like a highway. The highway is going too fast. You don't go and just like try to give everybody a ticket. What you do is just try to do a few things to slow the traffic down on the highway so it's safer. So they look at the overall health of the commodity market and then they through principles basically try to steer it the healthy ways and they go after egregious manipulators like the cartels, the OPEC style stuff or you know the beer style stuff uh where and when they have the power to do that.

[00:04:59]They've never really had spot authority from a conventional sense like the SEC has had and they traditionally bat it back to the Securities Exchange Commission. So to give all crypto to the CFTC without a budget improvement uh increase and also just years and years and years for the culture to change in the organization um you're looking at 5 to 10 years of just building and it's very unlikely that they're going to get funding increases. So you're saying hey do all this additional stuff but no additional people which means there's delays. So, they'll have rulemaking, but then when you go to apply for something or you go to run an exchange or doing something, you have to ask the CFTC under these new regulations, you just won't get an answer. They won't be able to satisfy it and get it get it where it needs to be. Um, it's kind of like when they passed that Epstein transparency act. They said you have 90 days or whatever it was to release all the files. And the FBI, they're like panic redacting things because they had no intention to ever do it. there's only like 40 guys that can go through 3 million documents and they have to go and read through all of them quickly. So they they they tried as hard as they could to scrub them, you know, before they release them. And obviously they have their own motivations behind that.

[00:06:06]And the same thing is going to happen.

[00:06:08]You know, any regime can then weaponize clarity for their political purposes.

[00:06:13]And so if there's a Republican in, they'll use it in a certain way. If there's a Democrat in, they'll use it a different way. And what people don't understand is that the CFTC seldom gets in. But when they do, it's usually criminal and it's usually very serious and they get a lot of convictions. They have a high conviction rate. So this not necessarily a regulator you want running everything, especially when you have securities like stuff, >> right?

[00:06:36]>> You know, because it's much easier under a security to have market manipulation allegations or these types of things um uh than in a commodity. And so if you're a security-like thing, you apply those commodity laws and standards, it's very bad for you. Uh, so you know, they think it's going to be great and uh they think it's going to be wonderful, but you're you're taking a horse and making it a unicorn and you're gluing a horn on and painting it and all these other things.

[00:07:01]You're hoping it's going to be a great unicorn horse and tell you that's not a unicorn. It's a gluicorn.

[00:07:06]>> Well, my issue with it is is a lot of people just don't because they're like, "Oh, you're black pill. You're black pill. You're black pill. You're so negative." I'm like, I'm retail. Most of you that are watching are retail.

[00:07:16]There's a big discrepancy between accredited investor and retail investor and that is a gap. That is a wealth gap in the United States of America. And even the Bitcoin people, I'm like, you understand that laws could be a soft ban. A tax can be a soft ban. Any type of regulation could essentially be a soft ban. And if they if it's still kind of unclear, they can go after you for wherever you want. So just as long as we have the accredited investor law, we're not winning anything.

[00:07:41]>> Yeah. Yeah. And that's why you look at the whole system. If you change the security, you also can change suitability guidelines and compliance guidelines, including a credit investor and other things. And it really should just be if you're going to create a protective class, you have this idea of a demilitariz. You say you're entitled to by default these protections, but if you do these things, you can turn those protections off and then you can play with all these assets, but we both understand that you have no recourse in the event of problems occurring um above and beyond the warrants and representations uh stated. I would love a system like this and most consumers would be okay with it. Yeah, they him and haul. Oh, why? I didn't know. And like and fraud is still fraud. If they say, "I'm going to pay you on Tuesday."

[00:08:20]And they don't pay you and because they stole the money and bought a Lamborghini. Well, then obviously you can still prosecute that. But you don't have wholesale investor protections if you surrender them. And that's the entire point of a regggd exemption and these uh you know credit investor uh you know things. very rare for the SEC to go after investment vehicles that ultra rich people buy if there's no fraud. You know, they they're just like, I don't really care if, you know, Tim's Tim Cook loses $20 million. You know, he's a rich guy. You know, he's he'll be okay. He's or Elon Musk loses a billion dollar.

[00:08:53]>> Yeah. But what if but what if poor people from the hood lose all of their money on a scratcher or or the the Pchanga Casino or something like that?

[00:09:02]What what happens then? your mistake is you're asking for uh consistency where there is none. Uh the United States government is riddled with inconsistencies and you know we have a broader regulatory problem. We have too many regulatory agencies. We have too many regulations. Everything's a crime.

[00:09:18]I think there was a book three felonies a day where everybody inadvertently commits a felony because there's too many of them on the books. Uh and uh that's a broader problem. You know every I want a smaller government. What they're really saying is I want the parts of the government I don't like to be small and the parts of the government I like to be much much larger, you know.

[00:09:37]So, uh now I guess we have a $ 1.4 trillion military budget instead of a $900 billion budget, but let's go cut healthcare and nobody can you now a doctor has to see 28 patients a day to be able to break even, you know. So, this it's just and then a Democrat gets in and they swap. But it's you're still growing, you know, something is still growing somewhere. So, it's it's not smaller government by any sense the word. Yeah, I mean it it does it is a little bit worrisome to me just kind of what clarity is going to look like especially with midterms coming and you know who who we're going to get in because right now Elizabeth Warren they're going after the OC charters for like Ripple and Paxos and Coinbase which to me is absolutely absurd cuz when you really think about it your job is to protect retail. So these companies, they want to get the proper license and you know have all the book all all the papers in order, but you're saying no, that's not good enough. You and and you're not doing your like it's to me, you know, the I don't think it's going to pass. I think they're being wildly optimistic because there's just no bipartisan support. Every Republican will vote for it, but there's nothing to incentivize the Democrats to vote for it. And uh the Democrats are are going to run against crypto in November.

[00:10:48]That's their that's their talking point.

[00:10:49]Crypto equals corruption equals Trump.

[00:10:52]Uh so anybody touches crypto is bad. The younger ones will stay neutral. Um you know, they're pro crypto secretly. But >> yeah, >> the vast majority of people are like, you pissed in the pool and now you want us to drink the water. Okay, it's got chlorine and piss in it. It's it's Trumpcoin and World Liberty and all this other stuff. if he wanted a neutral, objective, bipartisan thing, why would you create a situation where the president of the United States gets billions of dollars of extractive value.

[00:11:18]>> Um, and that was my issue with him. Even though we're supposed to be operating in a true decentralized economy and anybody can basically do anything they want with the with crypto or Bitcoin or whatever it is, it still doesn't make it ethically okay.

[00:11:30]>> Yeah, it doesn't. And you know, that's why I'm not popular in certain circles.

[00:11:33]They invited me in the early days and I made a lot of commentary and you know privately a lot of senators agree with me and house members agree with me and a lot of regulators love me. In fact I have a lot of fa fans in the SEC and uh in other places they're like yeah we like that Charles guy. Uh the problem is that publicly they can't say anything u because this administration any disscent is brutally punished. We saw that with Thomas Massie and we saw that with the two Senate primaries, uh, one in Louisiana, one in Texas, where wildly unqualified people have been basically hoisted into office to replace people who have been there for a while and actually know what they're doing. And all the rhinos, Thomas Massie in particular, the only thing he's a rhino on is don't go to war with Iran, don't spend more money than you have, and punish pedophiles. So that's like the only area that he had any disagreement with the Trump administration on. And I guess that makes you a rhino. And they just they just drank it out of a cup, you know. And the other crazy thing is the $30 million that came in to finance his opponent. It came from a government.

[00:12:34]That's the crazy part about it. It's like we really want foreign powers, whatever they are, getting involved in our elections and pushing their country's policy to influence elections.

[00:12:45]>> How do you how do you feel about the crypto packs?

[00:12:49]>> Well, that's different. the crypto pack.

[00:12:51]These are American entrepreneurs with American money representing their interest. And if we're not allowed to do that, how come the NRA exists representing gun industry or the oil lobby exists or the educational industrial complex or the medical industrial complex or these other things? So, we're now the crypto complex. Of course, we have the right to represent our things because we create jobs, we grow the economy, you know, we add new capabilities to the US economy, and so we obviously have political needs. But that's a very different thing than a nation state and because that fundamentally changes because the United States represents the United States >> 100%. My issue with it though is that we I have not seen anyone any of these crypto packs advocating for retail investors um that which embodies um the crypto and the Bitcoin ethos where there's no barriers to entry where if you >> because they work for the billionaire class that runs large companies like the Krakens and the Coinbases and these other companies and so they're going to advocate for regulatory policy that benefits the status quo in the industry.

[00:13:50]If the retail guys got together, they created a co-op pack uh for retail things, they would go and fight for that. But nobody did that. And >> I think I'm going to >> I I've been thinking about >> retail money.

[00:14:03]>> Let's do it. I' I've been thinking about it heavily because I don't see enough I don't I don't see I don't see anybody advocating for this. I don't see anybody talking about retail. And at this point, I've I mean, I've been on calls and I've discussed with certain politicians or people running for office. Um, I've been asked, you know, to do, you know, I've sat in some rooms and at this point, nobody's doing it, so I might as well I might as well start because, >> yeah, >> you know, and they could, you all could vote on that with the your your reps.

[00:14:31]You guys can vote on that. Okay.

[00:14:33]>> The good old Dreppps. Yeah, you'll have a lot of luck.

[00:14:37]um talking a little bit about um we talked about like kind of with clarity and stuff like that, but I really want to get your take and I I want to talk about what Midnight's doing because I I really really appreciate the because you you didn't have to start Midnight. You you didn't have to. You could say, you know what, Cardono was a was a success.

[00:14:54]I've done what I needed to do. I can kind of just kind of retire from the internet. I don't have to deal with all the toxicity. But you wanted to just create something that that really embodied that cipher funk movement, the privacy. So, I love that you did that.

[00:15:06]But as but before we get into that, I want to talk about AI a little bit because I feel like people are placing so much focuses focus on the regulation of of crypto as opposed to the regulation of AI. And I feel that AI can cause a lot more harm than crypto can.

[00:15:22]>> Well, you know, AI doesn't necessarily cause harm. Um, the problem is that it's not clear how you create a regulatory layer for AI. There's there's kind of like three things that are missing from AI. One is there's no regulating layer for AI behavior because AI is non-deterministic systems. They hallucinate and they're missing higher order reasoning and logic like we have as humans and you typically get that from an older AI called symbolic AI which has been mostly abandoned in favor of deep learning and reinforcement learning.

[00:15:52]>> So um if you reintroduce symbolic AI and update and modernize it, you create what's called neural symbolic AI and then you could create a reasoning layer where you can regulate the behavior a little bit. And this is mostly what the alignment people are doing. They're rediscovering 1950s AI to create alignment with the systems. Where blockchain comes into play is you can create uh a ZK layer of the system and you could say each action involving a one-way door, the movement of money or whatever um is a proof. You have to generate a zero knowledge proof that you have the right to do this and this is okay against some sort of set of policies or intentions.

[00:16:28]>> Right. But a lot of the and you're and you guys are doing that. Midnight's doing that. But what about the the Grocks? What about the chat GPTs? What about the big boys?

[00:16:37]>> Well, that's that's you know interesting question. So the problem is that these systems are badly misaligned. And they don't appear to be badly misaligned unless you interrogate them and you actually know how they work. So they're misaligned with sickopantism. So you know I'm thinking about selling dog [ __ ] and bags and you know putting Santa Claus on the front. That's a great business idea, Charles. Here's how you win. Um, so that's one dimension of it.

[00:17:02]Um, you know, another another uh dimension is that you don't know the political leanings of the system. So, Grock and uh opening eye are radically different. So, if you want to compare, just ask a very simple question uh say uh you know who's a better person, George Floyd or Charlie Kirk? Um and a chat GPT will say George Floyd and Grock will say Charlie Kirk. And then if you want to interrogate that you know and go through a checklist of things you start going through that entire checklist and you know it's very clear that the reasoning engine of in particular chat GPT there's some alignment stuff that carries a very strong political lens behind it and it it'll actually fight itself if you if you force it like you start pulling the criminal record of George Floyd in or all these other things and when you start looking at all those facts and circumstances it has a really hard time because it quantitatively readjust the numbers from its scoring system, but then it regresses back. So there's something behind it pushing a particular view of the world >> and it's the same in claw and it's the same with Microsoft products and these other things. The end consumer doesn't know that they just >> how do they not know it? How do they not though be I mean anytime a human >> they don't see the political bias in Wikipedia or the political bias in the New York Times or the political bias in other things like Steven Colbear on the Tonight Show or these types of things they we we say it and if you agree with it and you're in that political lens you say there's no bias. it's reality and if you're on the other side of it, you say it's completely corrupt and wrong and and bad and and so you know if it's just completely contingent on does this thing agree with my beliefs and young children they don't know the difference if you're 12 years old you have no faculty upon which to assess that there's a agenda working its way through these types of systems so where the ZK can do it is you can have your invariance and then you can create a proof of alignment and you can see where in the political spectrum from this particular model sits and it can generate that proof based upon a collection of challenge response protocols and then you can say okay I only want to talk to things that are aligned within this band um that I consider to be politically neutral or at least uh fair to opposing views.

[00:19:14]>> No, and I think that that's fair. I just I get I do get a little bit nervous about um about the big AI dogs and how they're just they're just doing the damn thing.

[00:19:25]they're just out there and it's just people are using it. People are not understanding what they're using and they're not understanding that, you know, one can be created more on this um to lean this way or the other way. So, I'm I'm just like the government is spending so much time trying to regulate crypto, which crypto still has barriers to entry. It's not the easiest to set up a wallet or to fund an account and whatnot, but everybody wants to do but everyone wants to let AI do its thing.

[00:19:46]And then plus the data centers and those causing harm to the environment and taking up resources and all kinds of stuff. So, it's kind of my head is a little bit spinning with all of this.

[00:19:55]>> Yeah, it's challenging. And uh the problem is it's a classical tragedy of the commons. The people that it impacts don't have enough political representation or individual capital to resist uh the people who are very powerful. I saw this in my own backyard.

[00:20:08]So, I started my own clinic and I spent years and years and years trying to build a health care system in Gillette, Wyoming. Everybody fought us on it. The local hospital, the local government. Um they just made everything unnecessarily hard. And you know, structurally running primary care, you just can't make any money. It's just not possible. So, I always ran at a loss. Um, but the straw that broke camel's back is they're like, the county says, "We have no money. We can't provide a subsidy. We're going to give the hospital a $20 million a year subsidy." And they still lose $10 million a year for you, even though your reimbursement rates are lower. We're going to give you nothing. Oh, and by the way, a nuclear waste processing facility wants to move into town, and we're going to give them a hund00 million subsidy to come into town to create less jobs than your clinic created. And I was just like, what are we doing here? And my dad, he's retiring at the end of the year and my brother, his passion was gone. He just doesn't want to do it anymore. And so I said, if my dad brother don't want to do it anymore, and they're both doctors, um, you know, it's not really a family business, and it's not profitable. It loses money. It's kind of a public service. And the local government, the local culture is not embracing that. So people will tell you what the problems are but then when you ask to solve the problem many cases they actually don't want to embrace the solution and they just want to complain about it and then it gets worse over time until the system collapses and this is a fundamental problem with the way democracy works right now and the lack of agency people feel oversolving things.

[00:21:31]>> No, I definitely agree. One of the things I'm really big at right now in my life, um, is, you know, there's a problem, let's vent about it and then let's figure out a solution or let me I'm going to figure out a solution to to to stop the problem or to minimize it or to segue or to do whatever. And I think and I teach my daughter that too because if you're not able to emotionally navigate the world or if you're not able to emotionally navigate your own emotions, how are you going to do that at a job or at a startup or when you're building just in in life or a dance class? You have to do it.

[00:22:00]>> You know, people have to care. Um, and the reason they don't care is there's no incentive to care. It comes down to what do you gain? So, I read all these books on healthcare. I do all these things in healthcare. I'm better informed than 99% of the people in the world because I grew up in a healthcare family. I ran a health care business. I've worked on health care policy both at the state and national level. I've worked with pharmaceutical companies. I've done clinical research, done insurance, all these things. My vote on healthcare counts exactly the same as the crazy homeless guy that's doing meth and thinks that unicorns are trying to rape him at night. you know, and so I and so then I'm like, >> leave my old neighbor alone.

[00:22:36]>> Yeah. What's the value of me learning all these things if my voice is equivalent? So what do you do? Is there's an actual economics term for this. It's called rational ignorance.

[00:22:47]The value of knowing something is less than the value it produces. And so the time that you spend to know it is could be the opportunity cost is too high. You can spend it somewhere else. So it's actually rational to stay ignorant on that topic. For example, you could spend the next three years of your life, four hours a day, you know, sitting down with Ed Edin and learning Aramaic and Aadian and figure out how to decode Babylonian clay tablets and you could speak it fluently. You know, I even got one right here. So So this is the world's oldest customer complaint. Congratulations.

[00:23:21]You'll be able to read this and talk about Nimrod's quality of his copper.

[00:23:25]But at the end of the day, economically, you're not going to get a job from that.

[00:23:28]You're not going to make any money from that. And all that time that you invested in learning that lost language, if you'd spent it something else, like learning how to be a better marketer, you know, build a better business or maybe partnering with people, you know, you get a lot more money out of that. So rationally speaking, it's rational to be ignorant about Aadian and Babylonian and Sumerian. It's why it's a dead language.

[00:23:50]So there's all kinds of knowledge in humanity that are functionally dead because of rational ignorance. And there's all kinds of issues that have a tyranny of the minority where a very small expert class basically have total cart blanch and dominion over truth because they're the only people that have are economically invested in that thing and they end up controlling all the policy you know for that uh for that area. And then you know we live with the consequences of it and then we complain about it. We say who the hell made that decision? That's not fair. That's not right. Well, you kind of did. You know, it's because you stayed ignorant about it. You didn't participate in the political process and you didn't get involved when uh the time came to get involved. But, you know, you can't get involved with everything, especially >> that's why we have crypto.

[00:24:35]>> But that's why we have crypto. Crypto was supposed to solve all this. We were supposed to have governance. We were supposed to, you know, it was supposed to be equal.

[00:24:42]>> Yeah. Well, yes and no. Because uh, you know, crypto is an ecosystem. It's a it has buyers and sellers. It has an economy that has to form. It has to have utility. It has to do things. People have to migrate to it. You know, it's funny. I I was with some Bitcoin maxis back in 2014. Actually, yeah, it was 2014. I was at the Bitcoin Alliance of Canada's conference. This is April of 2014.

[00:25:06]>> And for the entire conference, they kept telling me about this one barbecue restaurant in Toronto that accepts Bitcoin. And they got really excited about it. They're like, "Yeah, it's the only one in all of Toronto that accepts Bitcoin. you know, we got to support the Bitcoin economy. We got to buy things with it. We got to use Bitcoin for practical things. So, they took me to this damn rib place. Took 45 minutes to get there because it's out of town and all this stuff. We finally get there and then we eat the meal and at the end of it, they're like, "Nah, you know, I think the price of Bitcoin is going to go up. I don't want to pay in Bitcoin."

[00:25:36]We end up paying with the credit card. I was like, "You son of a [ __ ] Spend 45 minutes to get average barbecue in the middle of damn nowhere, you know, just so you can spend your [ __ ] Bitcoin.

[00:25:45]And then when the time comes to spend it, you won't spend it because you think it's going to be more valuable. It's like this is not an economy. Okay, this is not circular. This is this is a speculative instrument at its core.

[00:25:57]>> Speculation. My sister always does that.

[00:25:59]Anyways, >> I want to talk about Midnight now, though.

[00:26:03]>> Yep.

[00:26:03]>> Oh, you guys didn't go to the Taco Bell um KFC instead and use a Bitcoin.

[00:26:07]>> So, your listeners may not know this, but my one of my first jobs was at a KFC Taco Bell. worked at it with my buddy Matt who's been my best friend for decades now and uh it didn't even have the dignity of being a KFC it was a KFC Taco Bell so we had to serve both and it was very mixed menu so I worked the cash register and I also made the chicken and I got fired from that job so what happened was that there was this person I'll just say person I don't want to you know say one way or the other who would come in during my shift go to the restroom and take a dump on the floor they'd stay in the restroom room for like 20 minutes, 30 minutes. And then I had to clean the bathroom. So at the end of my shift, I'd go and be chocolate log, right? Not in the stall, but literally where the sinks are, you know, in the middle of the room. And this same person would come in only on my shifts, come in the suit, you know, well-dressed, not buy anything, go into the bathroom for 30 minutes, and then, you know, leave. So, I got so tired of it when I saw this person come in, I waited about five minutes, I stormed into the bathroom and say, "Stop [ __ ] on my floor." And that particular person got so upset, they called my uh the corporate and corporate fired me the next day. How dare you do that? I was like, "There's [ __ ] on the floor." And I'm like, "Oh, this I clean it up and I put the gloves on and pick up the poo and it was bad. Who does this? Who who takes a dump on the floor in a restaurant? This is crazy." So that was my my KFC Taco Bell experience.

[00:27:35]>> I actually have similar experience to that. When I used to work in a thrift store, the stuff that used to happen there was absolutely insane. Um I'm trying to think of the most tame story to navigate. There was a prostitute and she would come in and um I would have to give her free clothes from the $2 rack or the dollar rack to get her out of there because she was always drunk all the time. Um but she gave really good back massages.

[00:27:57]>> Yeah. Yeah. Yeah. You get traumatized from that. You're like, I don't want to talk about it. What happened? I don't want to talk about it.

[00:28:02]>> No, I loved it. It was It was wonderful.

[00:28:04]It just was not safe. But I want to I want to talk about Midnight because that's what the people are here for.

[00:28:08]They want to know they they want they want to know all the cool things that Midnight is doing, but number isn't going up. And all the cool things that ADA is doing, but number isn't going up because we're in a goddamn bare market and numbers not going up for anything right now in a bare market. If in fact everything goes down, >> I mean, I could create something that gives you a 10-in dick, cures cancer, and you know, you wins the lottery. It'd still stay at 10 cents.

[00:28:31]um this market's so bad, you know, and so Midnight's doing real well actually because you got to understand there's a glacier drop and there's a ton of sell pressure from that. It's staying stable despite the fact that the entire supply is unlocking in quarters. So, it's actually doing better than I anticipated. People forget ADA sat at 2.5 cents for a while and then it went up to $3 the following year. So, >> today means absolutely nothing. Um it really comes down to what's the vision, what's the mission, what do we do? And when you break it down, there's like four areas that Midnight is just going to dominate in. You know, the whole rational privacy concept of being able to do selective disclosure and, you know, really digging into this this enhanced compliance thing that brings in the real world asset revolution. And it makes midnight uniquely the best place for web 2.5. And that's what Ripple is, that's what Tether is, that's what Circle is, that's what Binance is. It's a big market. It's where all the money is right now. Um, and we're the only open web 2.5 ledger. Canton and the others are closed.

[00:29:27]>> I was just going to ask you about Canton and and about I was just going to ask you about that because I think it's very interesting that they kind of popped up and it's it's it's a chain for institutions, but it's private. So, it's not to me to me that's not really crypto.

[00:29:39]>> And why would any bank that's outside of that circle want to go in because the minute they start competing, they'll be shut out.

[00:29:45]>> Yeah. It's it's like a permissiononly system, an invitationon system. It's like saying, "Hey, you know what we should do is have the US Post Office deliver mail for every country and they can read anybody's mail." It's like, Germany, are you okay with that? No. No.

[00:29:58]We don't really feel comfortable that somebody can read our mail in America.

[00:30:01]That doesn't make any sense. So, let's have our entire financial stack be built that way. It's just a rehash of the legacy system we're trying to escape.

[00:30:08]And it's built by the same people blew up the economy. They created the credit default swap and uh the CDO and these other things that created the 2008 financial crisis. If you look at their background in history, you know, and they they then created a roll up of all the banks and they say, "Oh, look at us.

[00:30:22]Look how great we are." And we already ran in this again. We saw with fabric and R3 quarter and these other things.

[00:30:27]The permission change always lose the open standards because uh whoever is controlling the permissioning is scoped to a region, a business vertical, a particular philosophy. And anybody who's sitting outside of that like the Bermuda insurance industry or the European banks or the Asian banks, they're not part of the club. And so they're at a disadvantage over that other system.

[00:30:47]United States gets to force everybody to adopt Basel 3. We don't have to adopt it, you know. So, so it's a it's the same old thing. Just give it a new lens.

[00:30:55]And they got people very excited about it in a certain circle and they're big enough to create astroturf volume, but it's it's just like JP Morgan with Kexus. They're like I went to their booth at Consensus and they said we have $13 trillion of transactions as how many of those are interbank transfer because they have like $4 trillion in under management. So they're moving accounts around, right? And they count it as transaction volume. But if it's like in and outflow the financial inst is you can't you can't verify that on chain. And that's my problem is I want to be able to I want to be able to verify on chain. Obviously, you can you can you can still mask the the wallet addresses like the privacy aspect, you know, kind of what Midnight's doing. But my point is is I want to know when money moves. I don't want to have to wait to a what is it a 13F or an F-13 filing, a quarterly filing to see who sold and did what. I want to be able to know in real time. That's why I like that's why open systems always win over uh closed systems. You know, the second thing is unification of the privacy stack. We have too much privacy technology, network automization, multi-party computation and all these offiscation schemes and homorphic encryption and ZK and it's all just a word salad. You need somebody to build a chat GPT of it, make it embeddible and then you just call through an API what you want and it works and it works well and they maintain it and they evolve it and you got to treat it like AI and that's what midnight does and you know we have some great bets we've made especially on postquantum crypto using lattises. You know the third thing is abstraction. You know this whole like oh if everybody just migrates to my system I'll win is okay no you meet the users where they're at not where you want them to be. Okay, Microsoft learned this the hard way with Bing and Zoom and Windows Phone and all their other products that didn't succeed. They just said, "We'll get all the people to migrate. Once a standard is set, it's really sticky and you got to wait for a generational change of the technology." So, we now have a generational change. We're moving into abstraction, both chain abstraction, account abstraction. So, the user is starting to not care about any of these things. So, they just want it to work on their phone and it's one click to do it.

[00:32:56]So we have technology called midnight passport and as it grows it's going to let you spend into any ecosystem. You can spend in and receive from Bitcoin and Ether and Salana and you pay your transaction fees and whatever cryptocurrency you want. So you don't really care that there's this midnight network. You just use it for privacy and coordination. And then finally agents the vast majority of cryptocurrency activity and transactions going to be agentic by 2035.

[00:33:20]>> We're we're seeing it now. I think Robin Hood just introduced um AI trading agents. They're allowed on the platform and it's a set like a crockpot. You set it and forget it.

[00:33:29]>> Yep. Exactly right. And so you have to have a system. And by the way, if you have privacy and ZK and selective disclosure and abstraction, that's how you control the agents and make sure they actually do the things you want.

[00:33:40]The language of agents is proofs.

[00:33:42]>> Yeah.

[00:33:42]>> Okay. Before you let that agent do anything at all, you have an intent. You tell it what you want to do and it has to prove it's satisfying that intent. So you need a ZK system to do that. So we're building Midnight along those four verticals. And we have two products, Midnight City and Midnight Passport to showcase uh those. And then we have regulated products like Monument Bank coming in on the web 2.5 side. They're tokenizing 250 million pounds of deposits.

[00:34:04]>> Is that going to be a competitor of Ripple? What Ripple's doing?

[00:34:07]>> I wouldn't say so. You know, in fact, we think Ripple is going to be one of our biggest areas of growth. We have Bitcoin DeFi. We're going to do XRP DeFi. And we've even talked to people in the Ripple ecosystem about this. And some of the Midnight ambassadors are actively building apps. But Ripple doesn't have a native smart contract system. They've so how do you take all that XRP which is worth tens of billions of dollars and get a yield on it. Uh so I would like you to be able to do that and you pay your fees in XRP and you get your money back in XRP or whatever thing you want.

[00:34:35]So pairing Ripple with a privacy solution that has RWAS is going to be big and that's what we've been building with Bitcoin DeFi. So that team is keenly aware that there's going to be a big Ripple place. That's why we view it like web 2.5 is our friend. you know, we don't want these guys to go and build their own solutions. They say just use Midnight because you never have to worry about it and it works with everything and uh you know, it acts as a middleman to do that and it's decentralized and and because of that you don't have to pay anything to use it. One of the things that bothered me more, I'd say, than anything else, Wendy, in the last 10 years of being in the industry are all these middlemen infrastructure providers, uh, and they charge you integration fees.

[00:35:12]>> I'm like, this is crypto. It's web two, web three. We should be self-s serve.

[00:35:17]You should it should be very straightforward and very easy for you give me an SDK and an API. I build it, you certify it, and it's working on your system. But to say that I have to pay you a $10 million, $20 million, $70 million integration fee, and I'm not allowed to write the software myself to integrate into your service, that's not decentralized.

[00:35:37]>> It's not. No, >> it's not. You know, and that's the whole close versus open. And every single time someone builds a closed standard that has these gatekeepers in the long term, you regret it. They they stop being your friend at some point. They turn on you at some point and then you're shut out of the market.

[00:35:51]>> Mhm.

[00:35:52]>> You know, so you have to move towards decentralized open systems. And when you look at midnight, because of what we learned from Cardono, we know how to do that. And uh we can have a very decentralized system that it lives in the space between changes like the dark matter you know in the universe and the space between chains and uh and it basically gives us the ability to navigate all that and anybody can use it for whatever they want to use it for.

[00:36:16]And we don't care if it's for gambling or for if it's for social networks or if it's for healthcare data records uh or if it's for finance or whatever have you. It's a general purpose system and it's permissionless. Mhm.

[00:36:29]>> You can come in do your thing with it and when you do it, you can build into Bitcoin and Ethereum and Salana and Cardano and these other places or into legacy systems as well or the web 2.5 stacks like Binance Smart Chain or XRP or these types of things you could build into those systems uh and uh you know there's a lot of value in those systems but they need privacy and abstraction and they need agents and they need selective disclosure.

[00:36:53]>> No, I agree with you. Before we go, I have one more question.

[00:36:58]What do you think about the Ethereum um all this all the talk about Ethereum the developers leaving the foundation and um >> well here's the problem um it's the AI has the same issue uh so you start in a small industry a small vertical >> and then massive quantities of money come in and you have all this amazing talent and that talent's real excited to work on these problems but at some point people show up and they're like hey if you come work for I'll give you $10 million and you're paying this person like $200,000. So what do you do as an employer, as a foundation? They come to you and they're like, "Okay, well, I mean, do you want to match it?" And you're like, "No, I'm not going to give you $10 million of Ether. It's equity they're offering you." Yeah, but you know, it's a sure deal. A6Z is financing it and all this other stuff. And it's like, I don't care. I can't pay that much. And so it's a not for-p profofit and it doesn't have the same incentive scheme and the same equity upside that a startup will offer.

[00:37:56]So what ends up happening is the foundation attracts the best talent because they created the ecosystem and they're connected to the founder. Three, five, 10 years later that talent becomes free agents and they come super valuable. So we saw this with uh Joffrey Hinton's lab at University of Toronto.

[00:38:12]Um so Joffrey Hinton kind of invented a lot of these things and uh deep learning and his students in him would start these companies and then eventually they got bought. That's how Ilia Suscover and and uh and Hinton got into Google. They got they built an image recognition system for $44 million. They they sold it to Google. Well then those guys working at Google um and Dennis Deis Hassabis is the same you know Deep Mind got bought. those people working at Google, invented the transformer and they created basically the modern LLM revolution. Now, is Ilia still at Google? No. He left and created OpenAI and then left OpenAI, created his own company. Uh Joffrey Hinton's out of Google. Uh you know, the only guy left is Demis and they have to pay him a king's ransom to basically stay there.

[00:38:57]And he's also not money motivated. He's very motivated by the idea of creating AGI and he thinks Google is the best player to do that from for a variety of structural reasons but but still has paid like hundreds of millions of dollars basically to be there. He's a very wealthy man because of it. So uh Ethereum Foundation is no different. You have all these world experts who are great engineers, great scientists and they're very valuable on open market.

[00:39:20]The EF can't pay to keep them. They don't have that kind of funding and these people are naturally going to leave and then mediocre people replace them because those are the only people that you can get for the price bands that they can afford. And so a cryptocurrency ecosystem has to accept that your innovation is going to leave the custodial entities and it's going to go into your utility layer and your experience layer, not your infrastructure layer. And you have to pre-plan for that, you know, as a as an ecosystem.

[00:39:47]>> That makes sense. I actually I appreciate the way that you explained it. I haven't heard anyone else explain it that way. All I see is it's going to zero. Nobody's going to use anymore.

[00:39:55]It's going away. Nothing's happening.

[00:39:58]>> It's like I $200 billion. It's It's funny because I get [ __ ] on so much for Cardono being a ghost chain. Then you look over at Ethereum and Bank list is leaving and all these people Ethereum is dying. Ethereum is dying. They got a great road map and there's a lot of great people there. You know, their work with Starks and all their ZK work is is second to none. It's amazing stuff. Um they have good consensus team. They have a great vision. Justin's a good guy.

[00:40:21]He's very smart. Uh they'll never say anything nice about me. Um but you know, >> you're the better man.

[00:40:27]>> I can be objective about it. Uh when I see these types of things, I think that they do good work. Obviously, we have disagreements about liquid non-custodial staking and UTXO versus accounts and you know, how governance works onchain governance versus off-chain processes and you know, the market's playing out real time to see how to price that. But if a if you're a speculator, what the hell is your expectation here? You're talking about a 200 plus billion dollar ecosystem with a hundred billion dollars of TVL and everybody knows it has ubiquitous brand name recognition.

[00:40:55]Governments use it, other people use it, and has great roadmap for the next 10 years. Uh there's nothing wrong with it.

[00:41:00]The founder is still there. He's still motivated. Uh he loves Ethereum. It's it's his legacy. He's going to he he's going to be here in 2035 >> just like you're going to be here with with Cardano at night.

[00:41:12]>> Yeah. I'm like the godfather. I can't leave. You know, they want to retire, they drag me back in.

[00:41:18]>> Poor Charles. Charles needs a break. You guys give Charles a break. One thing I did say on on the internet about you is I understand that you're very polarizing. I understand that you have very strong opinions and that's a wonderful thing. However, I wish people just would appreciate the fact how hard you advocate. You advocate for retail.

[00:41:33]You advocate for Cardano. You advocate for you advocate for other crypto projects. It might not come out as eloquently as they would like it to or in the exact words you want it to, but you're a human being. And you could have said, you know what, I'm gonna let other people take care of this and you're still here. And if anything, out of anything, at least show some basic respect on that the fact that you're still here.

[00:41:55]>> Well, Wendy, the problem is that the macro influences the micro. If we don't respect our institutions, our political leaders, our corporate leaders, our religious leaders, we don't respect um any facts anymore. Uh it's really hard then to say, "Well, let's respect Charles or this person over here." We >> It's okay. It's okay to disagree with you, but still have respect for you and vice versa.

[00:42:19]>> We've made a world where you either put a person as a deity and everything they say is perfect and they're great or everything they do is evil.

[00:42:27]>> It's it that's your U-shaped distribution of opinions. You're allowed. You know, it's like you don't have to be a Catholic to admire the Pope releasing uh an encyclical on AI and being part of that conversation and trying to push it forward. If you're Catholic, you're like, "Oh, it's amazing." If you're anti-atholic, oh, it's evil and the pope is bad and what the hell is he doing? It's the same with Trump. It's the same with all these other things. And this polarization has been created by social media and amplified by it. And then how people gain brownie points is being professional victims. So, they make a game out of finding somebody, attacking the person, then when that person lashes out, uh, then they play the victim with it, and then they get clicks. Like, there was a great thing with Russell Crow. I don't think you you may have seen it the other day.

[00:43:12]>> It was about he he says, "I don't know autographs or something along those lines, like space."

[00:43:16]>> And I know exactly where Russell's coming from. So, he's got like a stained shirt. He's leaving the hotel. He's obviously not there for fans. He's living his life. And these guys come up to them and these are not like an eight-year-old kid like I loved US Maximus.

[00:43:30]>> These are professional memorabilio people.

[00:43:32]>> Yeah.

[00:43:33]>> So what they're doing is they're saying, "Hey, can you go ahead and sign this thing? I'm going to take it, put it on eBay or sell it to a memorabilio shop, so please can you just give me free money?" It's like a beggar saying, "Got some change and give me time out of your schedule. Sign all this stuff. Do all these things. You get nothing for it."

[00:43:49]And of course, if he lashes out on them, they play the victim. I can't believe Russell attacks his fans like that. It's like I know exactly what you're going to do. You're going to put it on eBay for $500. You're not a fan. This is an economic transaction and you're [ __ ] the guy. Okay. And you're not You're giving Russell 250.

[00:44:09]Maybe we talk about that. That's why at the Comic Con, William Shatner, all these other guys, they charge you for the autographs. You got to pay.

[00:44:15]>> They've been doing that. My dad used to do all the He used to do all the car slot shows back in the day. I remember.

[00:44:20]>> Yeah. and because they understand vast majority of the people you're signing for, those people are going to resell it. Um, and and that's how they end up.

[00:44:26]If you ever go to those shops in the mall that have signatures and these things, where do the hell do you think they end up? So, all these people play the victim and they're attacking Russell Crow. He's so arrogant. He's so bad. You know, I can't believe he treats his fans this way and all this other stuff. And they don't take a moment to have empathy. So, so what's causing this issue is a systemic empathy crisis.

[00:44:47]We're unable to understand the other person's view. And as a result, we're unable to uh if they behave in a way that we we disagree with to be able to disagree and commit or disagree without being disagreeable because we think that they're behaving to hurt us, >> right?

[00:45:05]>> And and and and that's not the case. You know, we got to put it from his position. He's a superstar. He's a big guy. I've I've run into this myself. I'm a much smaller celebrity, but in Japan, I'm pretty big. One time I decided to take pictures and sign in Tokyo during the height of crypto. Um, and I had to stand there for three hours from 700 p.m. to 10 p.m.

[00:45:27]>> You really are big in Japan.

[00:45:28]>> Three three hours. We had a line going like 800 people long and they Japanese are very otaku. You like sign this, take this picture, take another picture, do this, put your fingers up, do that.

[00:45:41]Here's your faces on this thing. Sign this thing and this whole thing. And it's endearing for the first 10 times, >> but then you're like 800 people through and you're just so tired. And then as you're leaving, like the staff is like, "Well, this guy must be famous, so let's try to get a picture with him, too." So like the people who are cleaning up the conference hall, they were they they were say, "Can we take a picture, too?"

[00:45:59]Like, "Oh god." So what do you do? You say yes. Because if you say no, that one no will end up on Twitter and they say, "Look how bad this guy is. He's a piece of [ __ ] You know, he hates all of his fans and all this other stuff." And that's an lack of empathy. you can't really uh take it and uh you just want simple solutions. So there's plenty of people they got Charles derangement syndrome um and based upon a tweet or based upon what they heard from >> based upon one of the clips I'm going to put out.

[00:46:24]>> Yeah. One of the clips you put out, you know, because people they'll take a 10-second clip and put it out there and they say, "Well, that's what Charles is all about." Have you ever worked with Charles Hoskinson? No. Do do you ever meet Charles Hoskins? No. You do you ever do anything with Charles Hoskins?

[00:46:38]No. You know, it's almost like that Simpsons clip. I've never met Homer Simpson. I've never interacted with Homer Simpson, but but but then she starts crying and she's like, "It's okay. Your tears say more than facts ever will."

[00:46:48]>> Yeah.

[00:46:49]>> Um >> well, the world is crazy. Anything you want to add before we get going? Cuz I got to get my kid.

[00:46:56]>> Go to midnight. City midnight. City midnight city at aentic civilization.

[00:47:01]I'm just about to do a whiteboard video on the types of agentic civilizations and the eras of agentic civilization. So very exciting. Would love to have you at Midnight City.

[00:47:11]Thank you, Charles, so much. And again, you guys, thank you for watching. Um, we don't tolerate any um CDS over here.

[00:47:18]We're we're we're all in this together.

[00:47:21]>> All right. Cheers. Thank you so much.