WEBVTT 00:08.931 --> 00:11.752 [SPEAKER_00]: All right, everybody, we are here at the OutEast Summit. 00:11.852 --> 00:15.834 [SPEAKER_00]: I've got an incredible guest who I'm very honored and privileged to have joined me. 00:16.274 --> 00:21.016 [SPEAKER_00]: Scott Shea, the co-founder of Next, which is an incredible crypto bank. 00:21.316 --> 00:22.796 [SPEAKER_00]: Scott, nice to meet you. 00:22.876 --> 00:26.217 [SPEAKER_00]: Thank you for joining us today and how you enjoying the summit so far. 00:26.237 --> 00:27.538 [SPEAKER_00]: Real quick, so great. 00:27.718 --> 00:29.140 [SPEAKER_00]: Yeah, I love you. 00:29.200 --> 00:32.145 [SPEAKER_01]: I love you know, uh, you know, closet or just about the poor. 00:32.846 --> 00:34.728 [SPEAKER_00]: Yeah, hopefully those are fertility simply. 00:34.768 --> 00:35.550 [SPEAKER_00]: Yeah, it is. 00:35.590 --> 00:38.754 [SPEAKER_00]: It feels like, you know, fertile soil for the next bull market. 00:38.794 --> 00:39.776 [SPEAKER_00]: Yeah, exactly. 00:39.816 --> 00:42.640 [SPEAKER_01]: We're going to talk to over, you know, we need the soil to be ready. 00:42.720 --> 00:48.643 [SPEAKER_00]: I know I was talking to somebody else about the four year having cycle, I guess we could start there. 00:48.703 --> 00:49.843 [SPEAKER_00]: Is that going to remain true? 00:49.863 --> 01:00.848 [SPEAKER_00]: Do you think Bitcoin is going to have that sort of four year having cycle where it has this big long pretty much symmetrically year long bear market seems like for the last three. 01:01.008 --> 01:07.291 [SPEAKER_00]: And then has another couple of good years after, isn't that is a self-fulfilling prophecy that might keep happening or is that spurries? 01:07.491 --> 01:07.651 [SPEAKER_00]: Yeah. 01:07.731 --> 01:08.091 [SPEAKER_00]: I know. 01:08.791 --> 01:09.972 [SPEAKER_00]: I look, I can't explain it. 01:10.432 --> 01:17.398 [SPEAKER_01]: But when you think about bitcoins or Ethereum or do you think about any, you know, that's your coin. 01:17.458 --> 01:19.920 [SPEAKER_01]: I mean, that's based upon an algorithm. 01:20.561 --> 01:25.946 [SPEAKER_01]: It's essentially already, you know, tailor made for a cycle. 01:26.026 --> 01:26.186 [SPEAKER_00]: Yeah. 01:26.366 --> 01:29.168 [SPEAKER_01]: And you built in having you built in a whole bunch of, 01:30.069 --> 01:33.993 [SPEAKER_01]: cyclical issue into the mathematics. 01:34.033 --> 01:34.314 [SPEAKER_01]: Yeah. 01:34.874 --> 01:43.323 [SPEAKER_01]: So unlike a stock that is under like cash flows here, you really build an instrument. 01:44.384 --> 01:48.107 [SPEAKER_01]: There's no particular reason that you'd be up and but on the other hand, there's no reason it shouldn't. 01:48.268 --> 01:48.548 [SPEAKER_01]: Right. 01:48.868 --> 01:50.290 [SPEAKER_01]: It's very interesting, everybody believe. 01:50.330 --> 01:53.633 [SPEAKER_01]: If enough people believe in something, how you're going to convince them it's not true. 01:53.773 --> 01:55.994 [SPEAKER_00]: Yeah, it's like the 200-day moving average. 01:56.074 --> 01:57.075 [SPEAKER_00]: Why the 200-day moving? 01:57.095 --> 01:58.236 [SPEAKER_00]: Why do people care about it so much? 01:58.476 --> 01:59.076 [SPEAKER_00]: It's a filter. 01:59.256 --> 02:02.619 [SPEAKER_00]: It's self-fulfilling in a sense, but look, you're the banking expert. 02:03.039 --> 02:04.760 [SPEAKER_00]: You've started banks. 02:04.780 --> 02:05.120 [SPEAKER_00]: Four. 02:05.440 --> 02:06.181 [SPEAKER_00]: Yeah, four banks. 02:06.221 --> 02:08.302 [SPEAKER_00]: So look, we want to talk all about banking. 02:08.322 --> 02:08.722 [SPEAKER_00]: We want this. 02:09.102 --> 02:10.023 [SPEAKER_00]: We call it cryptocurrency 101. 02:10.043 --> 02:10.784 [SPEAKER_00]: That's our podcast. 02:10.804 --> 02:12.945 [SPEAKER_00]: We might have this episode called Banking 101. 02:13.005 --> 02:13.205 [SPEAKER_00]: Right. 02:14.185 --> 02:25.948 [SPEAKER_00]: And so, I think most notably you came on to my radar during the whole signature fiasco, but it shouldn't be called the signature fiasco, it was really operation choke point 2.0. 02:26.308 --> 02:40.931 [SPEAKER_00]: When basically the government ostracized and discriminated illegally against any firm that was really trading crypto and shutting bank accounts down and you just happen to be in the middle of all this. 02:43.572 --> 03:07.413 [SPEAKER_00]: What that whole thing was from from your viewpoint and I believe if I'm not mistaken you testified in front of Congress I mean, which is you know, I don't think I'll ever I was just I don't think I'll ever met anybody who's testified in his own a Congress So it's very very nice to meet you and be grazed here, but tell us about that experience and then how did out of that Experience you decided to go at first back in the bank it back in the crypto 03:08.160 --> 03:09.601 [SPEAKER_00]: So I'm gonna take a half a step back. 03:09.621 --> 03:12.562 [SPEAKER_01]: Let's do it as important as it's as a crypto 101. 03:12.602 --> 03:14.564 [SPEAKER_01]: We need context, yeah. 03:15.844 --> 03:34.034 [SPEAKER_01]: So I suppose you would have to call me like a banking nerd in that I was a founder of bacon, I did of Texas, which was a regional bank, a little plaque every other bank, he would imagine, be correct from a one and a billion dollar bank to a $20 billion dollar. 03:34.174 --> 03:36.796 [SPEAKER_01]: Wow, before we sold, and then in typical, 03:37.377 --> 03:48.671 [SPEAKER_01]: Modern Baking Context, it was sort of sold and sold and now it's part of JP Morgan Chase like half the banks in the area in states And then I was a founder of a bank-hulked mayoric bank of his co-founder. 03:48.791 --> 03:54.759 [SPEAKER_01]: I was a co-founder and that was a credit card bank So I got to learn a lot about the guts human system 03:54.859 --> 04:11.467 [SPEAKER_01]: Yeah, for okay, I dug how funny pools, you know what actually happens when you put your card, you know, and those days you would actually If it's what it's but you know what it would happen and how those money bows what all those Bridges are about and how the deep plumbing takes place. 04:11.567 --> 04:11.907 [SPEAKER_01]: Sure. 04:12.628 --> 04:21.012 [SPEAKER_01]: So I started Signature bank with the idea that we could create a shoe for high service model a packet. 04:21.032 --> 04:22.293 [SPEAKER_01]: We opened it May 1st 2001 04:23.915 --> 04:34.678 [SPEAKER_01]: And it was a traditional bank, a great community bank, essentially, that was just growing, always profitable. 04:34.758 --> 04:43.221 [SPEAKER_01]: And then here's the thing, in 2013, I started to get interested in crypto and Bitcoin. 04:43.841 --> 04:44.541 [SPEAKER_01]: So you were early. 04:44.802 --> 04:45.502 [SPEAKER_01]: I was early. 04:46.162 --> 05:00.409 [SPEAKER_01]: And I started reading cryptography, you know, books on cryptography, and understanding how the confluence of cryptography and blockchain created the possibility for crypto. 05:00.429 --> 05:02.390 [SPEAKER_00]: I mean, you know, I like it to centralize the bank. 05:02.410 --> 05:05.172 [SPEAKER_00]: Like you didn't need any intermediaries or trust. 05:05.512 --> 05:05.712 [SPEAKER_00]: Right. 05:05.732 --> 05:07.073 [SPEAKER_00]: You just had this asset. 05:07.857 --> 05:14.322 [SPEAKER_01]: So I 2013, I sort of went public and then I went on CNBC like the closing mellers. 05:14.362 --> 05:26.370 [SPEAKER_01]: Yeah, one of those those and I said up here phrasing, I don't exactly what I remember exactly what he said, but he said, I'm not sure about whether Bitcoin will revolutionize makeup. 05:26.450 --> 05:27.811 [SPEAKER_00]: with blockchain will. 05:28.131 --> 05:28.631 [SPEAKER_00]: Wow, yeah. 05:28.931 --> 05:33.294 [SPEAKER_00]: You know, block sheet, Max, super like home, what's a blockchain in the back? 05:33.554 --> 05:35.475 [SPEAKER_00]: I mean, we're making literally on the show. 05:35.495 --> 05:35.755 [SPEAKER_01]: I don't know. 05:35.775 --> 05:36.915 [SPEAKER_01]: Making money, you brought me the way. 05:36.956 --> 05:37.876 [SPEAKER_01]: Literally making fun. 05:37.996 --> 05:38.456 [SPEAKER_01]: I believe it. 05:38.836 --> 05:39.417 [SPEAKER_01]: And I did it. 05:39.497 --> 05:41.238 [SPEAKER_01]: I said something on Fox business. 05:41.678 --> 05:45.000 [SPEAKER_01]: And I thought the guy didn't, somebody else, I thought the guy was going to throw something at. 05:45.700 --> 05:58.304 [SPEAKER_01]: Because here I was a traditional banker, and I was saying all of our legacy systems are basically should be discarded. 05:58.384 --> 05:58.764 [SPEAKER_01]: They're old. 05:58.944 --> 06:00.284 [SPEAKER_00]: They're old. 06:00.384 --> 06:01.865 [SPEAKER_01]: They're old and more. 06:02.145 --> 06:08.867 [SPEAKER_01]: And it really is, you know, you had to be built on C++, and you had to build on like Billy, old, old sister, or 06:13.448 --> 06:15.969 [SPEAKER_01]: with respect, with respect, but a proper area. 06:16.829 --> 06:23.551 [SPEAKER_01]: And so I sort of got into it and got signature it to trying to be crypto and blockchain friendly. 06:23.731 --> 06:23.892 [SPEAKER_01]: Yep. 06:24.212 --> 06:26.252 [SPEAKER_01]: And the beginning it really was the Wild West. 06:27.033 --> 06:32.574 [SPEAKER_01]: And it took us until I do 173, 2018 to start really making crypto companies. 06:33.235 --> 06:37.456 [SPEAKER_01]: But then we did and we became the first to 06:38.513 --> 06:53.566 [SPEAKER_01]: Spank to have it get to 20 core by 70s a lot chain and name Boughting tree is versus that was signet right I was sign and so if I'm like my claim to pay To that day to the next will be my please god thing claims. 06:53.586 --> 07:01.973 [SPEAKER_01]: Yeah, there we go But was You know, I was the creator of the first 24 by seven black chain 07:03.494 --> 07:03.854 [SPEAKER_00]: Thank you. 07:03.874 --> 07:08.138 [SPEAKER_00]: It's a thinking system, which was an enormous, everybody used it. 07:08.478 --> 07:08.899 [SPEAKER_00]: Everybody. 07:08.959 --> 07:15.144 [SPEAKER_00]: Every hedge fund, every, you know, payment processor, that was the de facto, payment setups. 07:15.484 --> 07:16.305 [SPEAKER_00]: It was to pay this. 07:16.385 --> 07:16.905 [SPEAKER_00]: I can't do it. 07:17.005 --> 07:18.787 [SPEAKER_00]: I thought it was too big to fail to be honest. 07:19.027 --> 07:21.629 [SPEAKER_01]: Well, you know, at the government's free. 07:21.789 --> 07:23.551 [SPEAKER_01]: We'll get to that a little bit later. 07:23.591 --> 07:24.732 [SPEAKER_01]: But I both say this. 07:26.313 --> 07:31.718 [SPEAKER_01]: The funny thing was, I made a point of having an introduced 12 or 1 a.m. 07:32.792 --> 07:38.437 [SPEAKER_01]: on January 1st of 2019, when the banks were closed and it was in the middle of the night, I see. 07:38.457 --> 07:41.080 [SPEAKER_01]: We opened it then, and did the first transit actions. 07:41.100 --> 07:45.063 [SPEAKER_00]: We're Travis, you know, oh my, this is the start of the system. 07:45.103 --> 07:52.630 [SPEAKER_01]: Yes, this was the, you know, I really, I really thought this was sort of the poetic, poetic justice. 07:52.710 --> 07:55.793 [SPEAKER_01]: Yeah, you know, yeah, emphasis sells. 07:56.434 --> 07:57.815 [SPEAKER_01]: And you know what the funny thing was? 07:57.835 --> 07:57.895 [SPEAKER_01]: Oh. 07:58.996 --> 08:01.417 [SPEAKER_01]: the first six months people really didn't know what they knew with it. 08:01.597 --> 08:01.858 [SPEAKER_01]: Yeah. 08:02.358 --> 08:19.067 [SPEAKER_01]: So, until chill, I really, you know, I got, I had a lot of street cred with the board, so yeah, lived with it, but I mean, they were scratching their heads like, what did we just spend, you know, tens of, you know, what do we spend all this money out, tens of millions of dollars? 08:20.648 --> 08:22.749 [SPEAKER_01]: And, you know, we sold it, sold it, 08:24.288 --> 08:30.191 [SPEAKER_01]: explained it to people and to make a log story short by the end of by July was taken off. 08:30.291 --> 08:35.534 [SPEAKER_01]: Yeah, by the end by the end of 2022, the end of 2022 we had to have it. 08:35.794 --> 08:39.496 [SPEAKER_01]: We had a trillion dollars plus over with no double counting. 08:39.596 --> 08:43.759 [SPEAKER_01]: Yeah, while I remember we weren't dealing with JP Morgan in the big bank system. 08:43.779 --> 08:45.780 [SPEAKER_01]: So this was everybody else. 08:45.840 --> 08:47.581 [SPEAKER_01]: Yes, it wouldn't want to be on those systems. 08:47.661 --> 08:49.562 [SPEAKER_01]: Yeah, it was really humming. 08:50.042 --> 08:51.923 [SPEAKER_01]: It was hugely profitable. 08:52.123 --> 08:55.927 [SPEAKER_01]: You look back at the board, you're like, see, see what we spent all that money on? 08:56.107 --> 08:57.108 [SPEAKER_01]: Yes, exactly. 08:57.248 --> 08:58.970 [SPEAKER_01]: And they, they, I think they got it. 08:59.010 --> 08:59.570 [SPEAKER_00]: They got it. 08:59.911 --> 09:00.551 [SPEAKER_01]: They got it. 09:01.352 --> 09:07.899 [SPEAKER_01]: And so we were just tuteling signature made like close to 2 billion free tax. 09:07.919 --> 09:08.820 [SPEAKER_01]: To, I do. 09:09.320 --> 09:10.581 [SPEAKER_01]: On the strength of... 09:11.682 --> 09:16.805 [SPEAKER_01]: uh, sick that thing that and those, those, those, those, those, it is fertility. 09:16.825 --> 09:18.525 [SPEAKER_00]: You're about to get to the fertile part of this. 09:18.706 --> 09:19.146 [SPEAKER_01]: Let's go. 09:19.586 --> 09:21.067 [SPEAKER_00]: I hope this weather's okay for you. 09:21.167 --> 09:23.568 [SPEAKER_00]: And we, yeah, I know our audio is going to be just fine. 09:23.608 --> 09:25.389 [SPEAKER_00]: So we got audio pros mixing it. 09:25.689 --> 09:26.969 [SPEAKER_00]: We're going to keep charging through. 09:26.989 --> 09:28.190 [SPEAKER_01]: Good, good, good, good. 09:28.690 --> 09:36.978 [SPEAKER_01]: So to make so to dance to your question, that's where I saw this just enormous potential I showed in directing the question. 09:36.998 --> 09:41.662 [SPEAKER_01]: Yeah, because I talked We need to reinvent the banking rails. 09:41.802 --> 09:46.446 [SPEAKER_01]: Yeah, and I gave I actually was trying to convince the rest of the industry to do this. 09:46.646 --> 09:51.931 [SPEAKER_01]: I was Vice Chairman of this he called the mid-sized bank coalition of America. 09:52.111 --> 09:52.271 [SPEAKER_00]: Okay 09:54.030 --> 09:54.610 [SPEAKER_00]: All right, everybody. 09:54.650 --> 10:01.334 [SPEAKER_00]: So I know that was a little bit of a hard stop when we, the rain started coming down way harder than we anticipated. 10:02.074 --> 10:05.496 [SPEAKER_00]: We've got joint notifications of a tornado warning. 10:05.536 --> 10:08.197 [SPEAKER_00]: So at the whole summit, moved inside. 10:08.218 --> 10:09.378 [SPEAKER_00]: We are no longer out east. 10:09.418 --> 10:10.859 [SPEAKER_00]: We are inside east. 10:11.439 --> 10:14.221 [SPEAKER_00]: But we're going to pick right back up with the conversation left off. 10:14.261 --> 10:15.341 [SPEAKER_00]: Thank you for bearing with us. 10:16.022 --> 10:16.482 [SPEAKER_00]: Scotch-A. 10:16.942 --> 10:36.303 [SPEAKER_01]: Okay, so when we were interrupted, yes, we I was saying I was I was involved in some of the trade associations one in particular the mid-sized bank coalition of Ameri and right and I was talking about the fact that and a little bit more off when we were off camera that 10:37.704 --> 10:45.189 [SPEAKER_01]: We had, I was a real evangelist for getting mid-sized banks into the blockchain arena. 10:45.289 --> 10:45.569 [SPEAKER_01]: Yes. 10:46.510 --> 11:00.079 [SPEAKER_01]: And I gave one time a talk to, I want to say, the 240 COCFOs banks in the coalition and trying to really 11:02.340 --> 11:03.741 [SPEAKER_01]: evangelize if you will. 11:03.921 --> 11:04.621 [SPEAKER_01]: Yeah. 11:04.941 --> 11:11.904 [SPEAKER_01]: What the blockchain could do because everybody was on at the time F. I. S. Bicerv. 11:12.604 --> 11:13.664 [SPEAKER_01]: Jack Henry. 11:13.684 --> 11:17.286 [SPEAKER_01]: Who are all good names, but if you go back into the code. 11:17.986 --> 11:24.290 [SPEAKER_01]: you know, a lot of people who are coding that today weren't even born when it goes go ball, see plus plus old. 11:24.590 --> 11:25.970 [SPEAKER_00]: What was your main selling point? 11:26.030 --> 11:36.136 [SPEAKER_00]: Was it just like, hey, this is our chance to upgrade the banking system or was it really on like the the finality, the instant settlement, the global span of it all? 11:36.536 --> 11:39.878 [SPEAKER_00]: What was when you were evangelizing, if you could recall back, what was the main selling point? 11:40.518 --> 11:41.319 [SPEAKER_01]: All of the above. 11:41.399 --> 11:41.619 [SPEAKER_01]: Yeah. 11:42.339 --> 11:46.222 [SPEAKER_01]: And basically the pushback was we've been doing it this way. 11:47.771 --> 12:00.925 [SPEAKER_01]: And so already then, and this ties into next, already that in my head, I was thinking, we have to build a bank that has a corroborating system that is a blockchain. 12:00.945 --> 12:02.887 [SPEAKER_01]: Sure, because even signature. 12:03.908 --> 12:18.237 [SPEAKER_01]: even signature, and it's true now of virtually every trad-fi crypto partnership is essentially like staple in paper to a cardboard container. 12:18.477 --> 12:20.938 [SPEAKER_01]: You know, it's like the what you got with shirts or something. 12:21.058 --> 12:27.002 [SPEAKER_01]: You know, you can staple k-paper to cardboard, but it doesn't work so well. 12:27.062 --> 12:28.503 [SPEAKER_01]: It's really fragile. 12:30.151 --> 12:43.479 [SPEAKER_01]: So already then I'm thinking, and again, a huge precursor to next, even though I didn't have an in mind at the time, was mean to build a core operating system that is a blockchain. 12:43.499 --> 12:45.360 [SPEAKER_01]: It will be so much more flexible. 12:45.720 --> 12:56.146 [SPEAKER_01]: It will be so much more adaptable, yep, to clients, not APIs where you have to do unnatural acts 12:59.268 --> 13:14.835 [SPEAKER_01]: programmatic and that yeah that just you know it's it's like a hand in a glove is opposed again trying to get your hand in a you know a square pack yeah and so um yeah that's so I was I was definitely an early uh 13:16.135 --> 13:24.820 [SPEAKER_00]: And I'm curious if at this point did, you know, everybody who's in crypto kind of knows the concept of fractional reserve banking, right? 13:24.840 --> 13:37.907 [SPEAKER_00]: Everybody kind of gets in first through Bitcoin because they're like, oh, it's, you know, it's an asset that's not backed by, you know, fractional reserves and it's not a debt based system whereby if I put a hundred dollars in the bank. 13:38.247 --> 13:56.246 [SPEAKER_00]: They're going to go lend out $90 or $99 and keep one of my dollars in there, and as far as I understand about next your bank, you don't do fractional reserves, you do full reserves, and is that something that A is an accurate statement and B is inherently enabled by blockchain? 13:56.767 --> 13:57.487 [SPEAKER_01]: Yes, okay. 13:57.507 --> 13:58.208 [SPEAKER_01]: Yes, and yes. 13:58.308 --> 13:58.529 [SPEAKER_01]: Okay. 13:58.869 --> 13:59.209 [SPEAKER_01]: So, 14:00.070 --> 14:22.323 [SPEAKER_01]: First of all, crypto 101, banking 101, everybody who took first economic class learns about money creation, borrow shortments as long well not even that I put in $10 in the bank you put in $10 in the bank your producer puts $10 in bank those two people put in $10 in the bank or at the bar they don't even know it, but we all think 14:23.223 --> 14:38.756 [SPEAKER_01]: that our $10 is in the bank in reality 40 has been lent out right it's not even it's worse than lend long and and and you know for the positive that if everybody calls up and says they want their money well 14:39.717 --> 14:40.718 [SPEAKER_01]: It's not all there money. 14:40.918 --> 14:53.326 [SPEAKER_01]: It's being lent to, it's being a lent against the wine, uh, the wine, library here at the out east, or it's being lent against his building, or it's being a lent against securities, or it's being, it's not there. 14:53.366 --> 14:54.907 [SPEAKER_01]: It's being lent to God at our house. 14:55.428 --> 14:56.508 [SPEAKER_01]: It's got a 30 year mortgage. 14:57.109 --> 14:59.350 [SPEAKER_01]: So it's essentially not there, which means every 15:08.581 --> 15:30.921 [SPEAKER_01]: When you need a lender of last resort and you need an insurer, you enable, you empower, you actually almost beg for, show point 1.0's 2.0's and 3.0's because you give the, you put essentially the entire banking system into the hands of those who regulate. 15:31.141 --> 15:31.341 [SPEAKER_01]: Yep. 15:31.742 --> 15:32.863 [SPEAKER_01]: If you're a regulator, 15:33.768 --> 15:38.752 [SPEAKER_01]: And you don't like the fact that the bank made a loan to that person over there that industry over there. 15:38.792 --> 15:44.095 [SPEAKER_01]: All you have to do is say, you know, you have a really nice bank. 15:45.136 --> 15:48.999 [SPEAKER_01]: And you know, you're lending money to, you know, Joe or Jane over there. 15:50.380 --> 15:52.081 [SPEAKER_01]: We think they have reputation issues. 15:52.401 --> 15:54.182 [SPEAKER_01]: You may not think they have reputation issues. 15:54.222 --> 15:56.004 [SPEAKER_01]: We think they have reputation issues. 15:58.125 --> 16:01.708 [SPEAKER_01]: By the way, we're working on, we're looking at your loan portfolio, looking a lot of other stuff. 16:01.728 --> 16:05.090 [SPEAKER_01]: Did we mention by the fact that Joe and Jane have reputational issues? 16:06.031 --> 16:19.602 [SPEAKER_01]: And you essentially are in the state where you, the decision of whether the bank opens every day is in the hands of the regulator, because 16:20.863 --> 16:27.988 [SPEAKER_01]: without deposit insurance without a lender of last year or no bank in the United States can exist. 16:28.089 --> 16:28.329 [SPEAKER_00]: Right. 16:28.749 --> 16:31.451 [SPEAKER_00]: You've got the FDIC for the insurance. 16:31.471 --> 16:33.953 [SPEAKER_00]: You've got the Federal Reserve as a lender of last resort. 16:34.233 --> 16:37.175 [SPEAKER_00]: You've got the OCC as the controller of the currency. 16:37.295 --> 16:45.542 [SPEAKER_01]: So now the exception to that is if you have full reserve because if you're a full reserve bank, 16:46.577 --> 16:50.598 [SPEAKER_01]: You don't need insurance because what we've done, so two things. 16:50.638 --> 17:06.941 [SPEAKER_01]: Wow, what we've done is those five you deposit the money with us, the other four people deposit the money with us, we take all that money, we put it in, you a short U.S. treasuries, not repo, we're much more concerned than a money market fund. 17:07.001 --> 17:09.882 [SPEAKER_01]: Okay, no repo, no nothing other short. 17:11.963 --> 17:16.825 [SPEAKER_01]: direct obligations of the government, you know, sort of one month the obligations of the government or less. 17:18.825 --> 17:22.867 [SPEAKER_01]: And those yield, uh, that a lot because it's the safest, sure. 17:22.987 --> 17:29.809 [SPEAKER_01]: You know, least risk, um, uh, but is it like where the Fed, uh, the EFFR, the federal funds race? 17:30.010 --> 17:30.870 [SPEAKER_01]: Could he less or less? 17:30.930 --> 17:38.092 [SPEAKER_01]: Okay, because there's a little bit of risk in, in those instruments, too, because they're passing through a layer. 17:39.953 --> 17:46.718 [SPEAKER_01]: just direct instruments of the U.S. government that we keep in custody, that we have a safe keeping receipt. 17:47.118 --> 17:55.564 [SPEAKER_01]: So even if the G-sibs go under, we still have a receipt on that Q-sib and can't give it directly to the government and get dollars. 17:55.624 --> 17:55.884 [SPEAKER_01]: Wow. 17:56.645 --> 18:01.548 [SPEAKER_01]: So what makes a full reserve bank and what makes us different than every other bank in the world. 18:01.608 --> 18:04.830 [SPEAKER_01]: And here's just like such a critical point 18:08.745 --> 18:14.251 [SPEAKER_01]: from the moment I read Satoshi's first paper, I thought we got to do this with the dollar and we sort of, and now we have. 18:14.371 --> 18:18.655 [SPEAKER_01]: Yeah, is it Satoshi said, he didn't like the banking system. 18:18.675 --> 18:25.242 [SPEAKER_01]: It came out of 2007, 2008 crisis because you were passing along promises to pay. 18:25.402 --> 18:27.604 [SPEAKER_00]: Right, promises of a promise of a promise. 18:27.624 --> 18:31.488 [SPEAKER_01]: It was a daisy chain, all intertwined, all interconnected. 18:32.764 --> 18:43.090 [SPEAKER_01]: What he wanted to do is say, here's this thing, it may be a, it may be a, a thing that exists on cyberspace, but it is a commodity. 18:43.110 --> 18:43.910 [SPEAKER_01]: It is a thing. 18:43.970 --> 18:48.173 [SPEAKER_01]: I'm using it, we were thing just to make it, you know, as broad as possible. 18:48.953 --> 18:50.874 [SPEAKER_01]: And you transfer it to me. 18:51.335 --> 18:53.656 [SPEAKER_01]: Once you transfer it to me, it is immutable. 18:59.359 --> 18:59.919 [SPEAKER_01]: we did it. 19:00.099 --> 19:00.679 [SPEAKER_01]: It's done. 19:00.960 --> 19:01.820 [SPEAKER_01]: Nobody can take it. 19:01.840 --> 19:02.600 [SPEAKER_01]: There's no copies. 19:02.960 --> 19:03.140 [SPEAKER_01]: Right. 19:03.160 --> 19:04.061 [SPEAKER_01]: There's no copies. 19:04.661 --> 19:10.963 [SPEAKER_01]: So we've done with the dollar is essentially we've said we're taking everything out. 19:11.043 --> 19:17.885 [SPEAKER_01]: So all of these bridges and whenever you're interoperability, just then complexity, we've eliminated the complexity. 19:18.605 --> 19:22.946 [SPEAKER_01]: Here's the dollars, the US treasuries, direct obligations on one side. 19:23.467 --> 19:25.027 [SPEAKER_01]: Here's the digital 19:28.563 --> 19:32.111 [SPEAKER_01]: And we're saying, okay, now you moved a dollar to me. 19:32.853 --> 19:35.860 [SPEAKER_01]: Bryce moved the dollar to Tivo or Bryce moved the dollar to me. 19:36.616 --> 19:37.136 [SPEAKER_01]: That's it. 19:37.637 --> 19:38.197 [SPEAKER_01]: You're done. 19:38.437 --> 19:39.198 [SPEAKER_01]: It's immutable. 19:39.438 --> 19:40.278 [SPEAKER_01]: You use stone it. 19:41.039 --> 19:41.919 [SPEAKER_01]: Congratulations. 19:42.119 --> 19:42.479 [SPEAKER_01]: I own it. 19:42.499 --> 19:43.360 [SPEAKER_01]: Congratulations. 19:44.000 --> 19:48.423 [SPEAKER_01]: It's like trading, you know, passing George Washington's, if you will. 19:48.443 --> 19:48.623 [SPEAKER_01]: Yeah. 19:49.383 --> 19:54.907 [SPEAKER_00]: It does does your bank make money on that transaction because how do you keep the lights on? 19:55.347 --> 20:00.550 [SPEAKER_00]: If it wasn't for that net interest income where you're doing all the lending with customer deposits. 20:00.970 --> 20:09.535 [SPEAKER_01]: So that's an excellent question because we are definitely a low margin business, low margin business where a low margin business that we need by volume. 20:09.635 --> 20:13.317 [SPEAKER_01]: And that's why we started with B to B because we need bigger transactions. 20:13.337 --> 20:19.120 [SPEAKER_01]: You cannot make, we would lose money on the electricity if we did that, you know, per out, you know, everywhere, every place. 20:19.200 --> 20:19.380 [SPEAKER_01]: Yep. 20:19.820 --> 20:24.703 [SPEAKER_01]: So we need, you know, serious size transactions, but we are made. 20:25.343 --> 20:30.246 [SPEAKER_01]: if you're in transferring five million dollars, you don't have FDIC insurance. 20:30.486 --> 20:30.707 [SPEAKER_01]: Sure. 20:30.887 --> 20:38.271 [SPEAKER_01]: With us, you have actually something that's a period FDIC insurance because there's no political as a real, the real, the real, the real, the real McCoy. 20:39.032 --> 20:40.073 [SPEAKER_01]: It's just pure treasuries. 20:40.953 --> 20:43.295 [SPEAKER_01]: So that's critical 20:48.703 --> 20:56.808 [SPEAKER_01]: the high yielding part of the capital markets where people are making loans that you have no idea you've lent to the wine library here. 20:57.909 --> 20:59.210 [SPEAKER_01]: When you made your deposit. 20:59.230 --> 20:59.450 [SPEAKER_01]: Yeah. 21:01.362 --> 21:11.047 [SPEAKER_01]: Those people should earn our higher yields and we want to put them on our platform and we've already, we haven't done a yet, but we already even talked to one who would make loans from our platform. 21:11.067 --> 21:17.990 [SPEAKER_01]: They could be for five minutes, five hours, five days, five years, but you do it on the platform. 21:18.010 --> 21:21.892 [SPEAKER_01]: You do it on the platform transferring immutable dollars. 21:24.088 --> 21:30.112 [SPEAKER_01]: the people who put the money up, they deserve the higher spread, they're not taking that risk. 21:30.152 --> 21:30.392 [SPEAKER_01]: Yeah. 21:30.832 --> 21:39.497 [SPEAKER_01]: But the problem with banking is you can flate, and this is what I learned, you know, being a banking nerd, you can flate so many things in the bull you base. 21:39.857 --> 21:47.402 [SPEAKER_01]: You can flate payments, which is essentially when people say demand deposits or payments, think free financing for loans. 21:48.618 --> 21:53.922 [SPEAKER_01]: Then you have people who are, you know, you have a whole rest of your capital structure with powers. 21:54.182 --> 21:55.543 [SPEAKER_01]: We borrow no money. 21:55.783 --> 21:57.785 [SPEAKER_01]: Wow, we landed no money. 21:58.085 --> 22:05.511 [SPEAKER_01]: Remember, we want nothing to do with this intermediate, the dollar from the movement to the dollar. 22:05.611 --> 22:07.172 [SPEAKER_01]: Right, all those things do that. 22:07.752 --> 22:13.697 [SPEAKER_01]: So the banking industry has on the other side of the balance sheet, 22:17.099 --> 22:38.902 [SPEAKER_01]: long-term treasuries it has risky assets as a shorter you don't know you just literally don't know you're trusting a third party to say that's okay in which is why if that third party says just because for any reason they don't like the you know that the you know whatever they're doing or whether you're not like their fashion choices yeah 22:40.095 --> 22:46.756 [SPEAKER_01]: They have complete power to say, oh, um, you know, you're unsafe and unsigned because we don't like the fact that you're where you yellow ties. 22:47.985 --> 23:00.474 [SPEAKER_00]: It seems to me that the thought that just came to my head is that what you're doing is is obviously revolutionary yes, but it's almost like Martin Luther status of revolutionary where he came in and did the whole Protestant reformation 23:14.724 --> 23:29.177 [SPEAKER_00]: become now in event you said evangelist that's what kind of made me think of it for blockchain it and what is it like one thing if you had to boil it down something that you used to believe about banking that through your experiences and what you're building now you no longer believe 23:31.863 --> 23:35.408 [SPEAKER_01]: So in the beginning, I didn't think banks were essentially political mechanisms. 23:35.728 --> 23:36.729 [SPEAKER_01]: You do not think it is. 23:36.769 --> 23:37.590 [SPEAKER_01]: I did not think it is. 23:37.650 --> 23:39.793 [SPEAKER_01]: And they are political in your view, they are political mechanisms. 23:39.973 --> 23:40.854 [SPEAKER_01]: We have the brief text. 23:41.055 --> 23:45.860 [SPEAKER_01]: Yeah, I mean, we had choke point 1.0, we had choke point 2.0, 3.0 and of course. 23:48.174 --> 23:51.477 [SPEAKER_01]: Um, the seizure of signature, which was wrong. 23:51.597 --> 23:54.720 [SPEAKER_01]: Yeah, unjust and never should have happened. 23:54.800 --> 23:55.020 [SPEAKER_00]: Yeah. 23:55.481 --> 24:09.513 [SPEAKER_00]: And now it looking back, because that was the prior administration has the current administration commented on any of those wrongdoings and said, that was wrong and offered you any amends or so, you know, 24:11.541 --> 24:14.343 [SPEAKER_01]: I'm a big believer in you go forward. 24:14.783 --> 24:17.084 [SPEAKER_01]: You've got to keep moving forward. 24:17.224 --> 24:19.786 [SPEAKER_01]: I mean, what I think you learn from everything. 24:19.866 --> 24:21.226 [SPEAKER_01]: I believe I've learned a lot. 24:21.286 --> 24:22.407 [SPEAKER_01]: Yeah. 24:22.467 --> 24:23.348 [SPEAKER_01]: I know I've learned a lot. 24:23.388 --> 24:25.909 [SPEAKER_01]: Some of it, if I took up my shirt, you could see the scars. 24:27.430 --> 24:32.392 [SPEAKER_01]: So I would say that hasn't been this administration's priority. 24:34.334 --> 24:36.515 [SPEAKER_01]: I think what people under index, 24:38.124 --> 24:44.767 [SPEAKER_01]: is and and this is relevant to your question is January 20, 20, 29 will come one day. 24:44.967 --> 24:46.607 [SPEAKER_01]: Yeah, we're going to do brand. 24:48.148 --> 24:52.029 [SPEAKER_01]: Start all over your life can change in terms of the political side. 24:52.790 --> 25:00.953 [SPEAKER_01]: So, I'm a book believer that banks should actually revolutionary thought banks should not be revolution, function not be political. 25:01.513 --> 25:04.594 [SPEAKER_01]: They should just make sure that your money gets to the other 25:07.893 --> 25:10.815 [SPEAKER_01]: And I don't think there should be any politics involved. 25:10.835 --> 25:14.458 [SPEAKER_01]: The fact that they were depolitics involved in the past. 25:14.558 --> 25:30.709 [SPEAKER_01]: And you know, unfortunately, um, starting in like 2012, um, maybe in a little bit before, um, I think was a major, I think it was a tragedy for the financial system. 25:30.909 --> 25:31.110 [SPEAKER_01]: Yeah. 25:31.170 --> 25:32.991 [SPEAKER_01]: And what I'm here to do now, look, 25:34.163 --> 25:35.204 [SPEAKER_01]: I could be doing something else. 25:35.244 --> 25:38.246 [SPEAKER_01]: I could actually be just hanging on and tasting those lines. 25:39.087 --> 25:53.419 [SPEAKER_01]: But I'm really, really, I mean, using this overused passion, but I just think that on a personal level if my co-founders and I, I just have to give them a shout out to Jeffrey Wallace, my partner. 25:54.099 --> 26:02.946 [SPEAKER_01]: Kyle had done on my partner, a rebel, and now my partner in a fantastic team, we are so totally dedicated to bringing this revolution to the world. 26:03.386 --> 26:06.609 [SPEAKER_01]: And if we do, it's going to be a better financial world. 26:06.829 --> 26:07.049 [SPEAKER_01]: Yeah. 26:07.329 --> 26:09.671 [SPEAKER_01]: I mean, more safe, more sound. 26:09.691 --> 26:15.455 [SPEAKER_01]: How more safe, more sound, and there won't be people taking huge margins. 26:16.382 --> 26:17.443 [SPEAKER_01]: where they shouldn't be. 26:17.543 --> 26:21.206 [SPEAKER_01]: Yeah, where there's just, there's just no good reason to other than greed. 26:21.687 --> 26:22.968 [SPEAKER_01]: No justification for it. 26:22.988 --> 26:30.414 [SPEAKER_01]: So people look at the S&P 500 and see that the percentage of the financial sector is grown. 26:30.854 --> 26:34.097 [SPEAKER_01]: Actually, I think of where successful, the financial sector 26:53.515 --> 27:01.899 [SPEAKER_00]: You know, some of the key metrics of success, but that's a great one is like the financial services industry should be losing market cap dominance, as opposed to growing. 27:02.779 --> 27:04.400 [SPEAKER_00]: Look, Scott, this has been awesome. 27:04.880 --> 27:10.383 [SPEAKER_00]: Where, where could people find out more about you, but more importantly, what's next for next? 27:11.103 --> 27:11.363 [SPEAKER_01]: Great. 27:20.588 --> 27:26.709 [SPEAKER_01]: but so right, so we started the bank when we launched all transactions within the bank. 27:27.370 --> 27:29.370 [SPEAKER_01]: So you know, you just transferred money. 27:29.470 --> 27:33.791 [SPEAKER_01]: It did you do the speed of, at the speed of electrons. 27:34.671 --> 27:44.894 [SPEAKER_01]: And you could do the enthastic payments 10x better than in faster, more robust and prettier than Sigmund ever was. 27:45.988 --> 27:53.073 [SPEAKER_01]: but we've done now is we've moved the ability to transfer money onto the public Ethereum blockchain. 27:53.513 --> 28:04.720 [SPEAKER_01]: So that means that if that's cool, very, very cool because if you want to transfer money to the Tivo and you want other people to know that, then it can be seen. 28:04.840 --> 28:07.482 [SPEAKER_01]: So this would be valuable. 28:08.040 --> 28:12.003 [SPEAKER_01]: when we're talking about revolutionizing the financial system. 28:12.683 --> 28:19.007 [SPEAKER_01]: This means that if you're first brands and someone is lent you money, I was talking about lending. 28:19.347 --> 28:23.630 [SPEAKER_01]: You can actually see the lenders can see that you paid your counterpart. 28:23.670 --> 28:28.913 [SPEAKER_01]: Yeah, it was right now they're just taking your word forder, accepting falsified statements, right? 28:29.114 --> 28:32.256 [SPEAKER_01]: So this big brings a whole new level of transparency. 28:32.696 --> 28:35.358 [SPEAKER_01]: So we put NDD, next digital dollar, 28:36.038 --> 28:39.340 [SPEAKER_01]: out on the Ethereum blockchain with planning to do more with it. 28:39.720 --> 28:47.064 [SPEAKER_01]: I'm really excited about it because ultimately, ultimately, our vision is to get this as far out as we can. 28:47.945 --> 28:52.187 [SPEAKER_01]: And that's what's, you know, that's some of the things we're working on. 28:52.227 --> 29:00.351 [SPEAKER_01]: In terms of finding us, joining us, we've really tried to make it as easy as we're still a regulated bank. 29:04.352 --> 29:14.860 [SPEAKER_01]: for account holders, but you just can go on our site n3xt.io and you can, click, you can read about us. 29:14.920 --> 29:19.824 [SPEAKER_01]: We have a whole information, but you can put your money in the safest place possible. 29:20.064 --> 29:21.905 [SPEAKER_01]: Really, I believe it's safer than a G-sip. 29:22.025 --> 29:22.226 [SPEAKER_01]: Yep. 29:22.806 --> 29:24.668 [SPEAKER_01]: You just click to open your account. 29:25.149 --> 29:26.430 [SPEAKER_01]: Any right now, again, B2B. 29:26.951 --> 29:29.834 [SPEAKER_01]: So you've got to have a 10, not any, not a Social Security number. 29:29.874 --> 29:37.382 [SPEAKER_01]: OK. And then you can follow us on N3XT Ink on X. 29:37.782 --> 29:38.763 [SPEAKER_01]: You can follow us on LinkedIn. 29:38.783 --> 29:40.005 [SPEAKER_01]: You can follow me on LinkedIn. 29:40.665 --> 29:44.128 [SPEAKER_01]: I, you know, write a little bit occasionally, just wrote something about Swift. 29:44.348 --> 29:44.688 [SPEAKER_01]: Great. 29:45.268 --> 29:48.771 [SPEAKER_01]: Um, so catch you on the next C-span, uh, congressional hearing. 29:49.131 --> 29:55.475 [SPEAKER_01]: Well, I was on C-span, but just recently, but not for a, I was gave a ulogie for, uh, Barney Frank. 29:56.096 --> 29:58.978 [SPEAKER_01]: Oh, who, uh, actually I was, uh, I started with it with, yeah. 29:59.558 --> 30:03.020 [SPEAKER_01]: Um, so I just literally, uh, C-san, C-span posted. 30:03.080 --> 30:03.301 [SPEAKER_00]: Wow. 30:04.042 --> 30:06.643 [SPEAKER_01]: Posted it was a hole and I wasn't the only speaker up. 30:06.663 --> 30:08.283 [SPEAKER_01]: Yeah, but I was just done. 30:08.323 --> 30:08.784 [SPEAKER_01]: She's done. 30:09.124 --> 30:09.424 [SPEAKER_00]: Awesome. 30:09.604 --> 30:12.405 [SPEAKER_01]: Yeah, so anyway, not to leave it on the note of all Geology. 30:12.445 --> 30:18.667 [SPEAKER_01]: I want to leave it on a note that we're really gonna you know flourish and I really really excited to bring this 30:20.268 --> 30:20.949 [SPEAKER_01]: into the world. 30:21.749 --> 30:24.472 [SPEAKER_01]: And the team is almost bubbling over all of the next team. 30:24.852 --> 30:30.137 [SPEAKER_01]: I wish I could convey that, but they just, everybody has, you know, sort of the knife and the teeth. 30:30.417 --> 30:30.738 [SPEAKER_00]: Love it. 30:31.539 --> 30:32.299 [SPEAKER_00]: Love it. 30:32.439 --> 30:34.141 [SPEAKER_00]: Scott, thank you so much for joining us here. 30:34.401 --> 30:36.663 [SPEAKER_00]: Thanks for being flexible with the venue. 30:36.703 --> 30:37.284 [SPEAKER_00]: Well, that's it. 30:37.664 --> 30:38.305 [SPEAKER_00]: We had a lot of fun. 30:38.325 --> 30:38.965 [SPEAKER_00]: Everybody's stay tuned. 30:38.985 --> 30:41.508 [SPEAKER_00]: We're going to have some more great guests coming up just shortly.