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0:46

does consumer crypto work? Why

0:57

a lot of these things are going to be

0:59

successful and how does consumer crypto work? It's

1:02

not trying to build from zero to

1:04

one in a linear fashion. It's embedding

1:06

into existing social networks. Going back to

1:09

your original point of why there's value.

1:11

Similar to Elon trying to build this

1:13

X super app. He's consolidating the people

1:15

and building essentially these three-sided marketplaces. All

1:24

right, everyone. Welcome back. Good morning. Good afternoon.

1:26

Good evening. You're listening and watching another epic

1:28

episode of the Charlie Shrum show, where together

1:30

twice a week, we dive deep with some

1:32

of Bitcoin and crypto's most influential leaders to

1:34

truly understand how this movement came to be. We're

1:36

educating you. We're teaching you a lot of different

1:38

things. I really enjoy my listeners. I really love

1:41

you guys so much. I just gave a

1:43

talk in Naples at a Bitcoin meetup earlier

1:45

this week. There's about 50 people. There was

1:47

at least four or five people that came

1:49

up to me and said, Charlie, I love

1:51

your show. Thank you. And I still have

1:53

this like imposter syndrome sometimes. What the best

1:55

part about it is getting feedback. So I was

1:57

just talking to our guests. I'm going to introduce

1:59

them. to in a second. But you guys

2:02

know we really focused on the audio in

2:04

this show, on the production and writing these

2:06

shows and kind of bringing you the best

2:08

content not based on a popularity contest, but

2:11

rather like this content is information, it's debate,

2:13

it's discourse, it's with friends. There's nothing surrounding

2:16

these conversations that you have to worry about

2:18

bias or like, why are they teaching me

2:20

this, blah, blah, blah. You know, I've been

2:22

in the Bitcoin space since day one. I've

2:25

always been steadfast in my commitments and my

2:27

vision and where I think things are going

2:29

to be. When I'm wrong, I admit it.

2:31

And when I'm right, I teach it to

2:34

you guys. But we've been

2:36

doing this show for the past six years. And

2:38

so all the new listeners, because I see we've

2:40

been getting a lot of new listeners lately, thank

2:42

you guys for just joining. All the older episodes

2:44

are super not timely. So all the older episodes

2:46

are phenomenal. You can listen to them. It doesn't

2:48

matter when they were recorded. The older episodes is

2:50

actually where you'll, you'll get the most alphas when

2:52

you learn the most things. But I want to

2:54

introduce to you guys, Nick Cote and Omar Shaqib

2:56

from Second Lane. Thank you guys so much for

2:58

coming on the show today. Thank you. Thanks for

3:00

having us, man. Great to talk to you. You

3:03

guys are a really interesting company

3:05

because there's the front end of

3:07

crypto that everyone sees, you know,

3:09

the decentralized exchanges, the public markets,

3:11

the VC raises that you see

3:13

on all the different tech sites.

3:16

And there's all the alpha we go on,

3:18

we go on the Sari, we go on

3:20

the research, we can follow. But there's this

3:22

whole layer too, if you will, of the

3:24

crypto industry and trading that's happening, you know,

3:27

behind the scenes as to not affect liquidity

3:29

on either side, or there's sometimes different types

3:31

of products are meant for different types of

3:33

people. How would you guys describe Second Lane?

3:36

I would describe it that we're building

3:39

the mycelium network for private markets. There's

3:41

a lot of connectivity amongst service providers,

3:43

liquidity providers and how all that moves

3:45

underneath this stuff. And typically, a lot

3:47

of people only, you know, look at

3:49

the listings that are coming out into

3:51

spot markets. But even before projects get

3:54

the TGE, there's a lot of transactions

3:56

that are happening on the back end

3:58

of this amongst investors, perhaps additional

4:00

primary offerings from these issuers, I

4:03

mean, it's foundations, treasuries, startups, et

4:05

cetera. And our role is to kind of

4:08

act as a switchboard between quality

4:10

investors, whether that be institutional,

4:12

credit investors in different regions

4:15

and different service providers. I think

4:17

there's a lot of missing knowledge that people

4:19

have that all the work that goes into

4:21

actually launching one of these protocols. It's not

4:23

just some amazing technology with great people leading

4:25

the charge and building kind of the

4:28

personality around some of these figureheads. There's

4:30

custodians, there's market makers, there's auditors, there's

4:32

fund administrators. And all of this stuff

4:34

needs to be put together before you

4:36

kind of get to these TGE events

4:39

or fund launches, and that's the final

4:41

product. And we kind of fulfill that

4:43

by acting as the switchboard operator. There's

4:46

this whole backbone that happens behind the scenes when

4:48

these tokens are all over the system or it's

4:50

like equity on a company. A lot of people

4:53

struggle to be able to tell the difference between

4:55

some of these good and these bad ones. You

4:58

guys have to do this due diligence because you're

5:00

helping people in the secondary markets, especially what are

5:02

some things that people can look for to know

5:05

like that? What do you guys look for? Like

5:07

when you're looking at a project, what is your

5:09

alpha? What is one of the first things that

5:11

you look for? I think we're

5:13

a little bit more agnostic to the

5:15

underlying project. Consider us more of like

5:17

that three-sided marketplace. We have supply, we

5:19

have demand, and we have service providers.

5:21

And what stands out most is

5:24

kind of a quote from Santiago. When you get on

5:26

a call with these founders, how clearly can they communicate

5:28

their vision? You wanna be able to, working

5:31

with people have a very clear plan.

5:33

And then from there, they can kind

5:35

of articulate, well, what are they looking

5:37

for? And with that information, we can

5:39

be a better service provider to them

5:41

by understanding the filter and understanding their

5:44

requirements. We can then go back to

5:46

our list of clients and match them

5:48

appropriately. So it's all about creating greater

5:50

efficiencies. And the people who can communicate

5:53

what they need the most tend

5:55

to have the most success in our experience. On

5:58

our end, in second lane, we have to... to

6:00

not only reach out to, let's say, the founders

6:02

have a chat with them, but also to the

6:05

investors and learn from them why

6:07

they have invested in a certain project. What's

6:09

the reasoning behind it as well? So

6:12

that should give you an idea. We have a

6:14

clientele, over 5K clientele, these are

6:16

VCs, angels, whatever you know. And

6:18

that makes us easier to do these due

6:21

diligence processes because we just go and ask

6:23

them like send your soft over so that

6:25

we can see if you have invested in

6:27

a certain project, yes or no. And then

6:29

they do it based on the trust that

6:31

we have built in the last couple of

6:33

years in the space. I'm

6:35

a big fan of your Telegram group and now

6:38

you're launching a newsletter I saw this morning that

6:40

I signed up for, what's going on there? The

6:43

core of our business is data. We've

6:46

been in a privileged position, myself kind

6:48

of operating an OTC network for the

6:50

past nine years. My other co-founders have

6:52

been in a similar position as LPs

6:55

running a small VC themselves and kind

6:57

of managing these OTC networks as we've

6:59

moved from fragmentation to consolidation, kind of

7:01

on the tailwinds of institutionalization. And that

7:04

data provides a lot of insights into

7:06

how people are thinking about deploying capital,

7:08

which is a huge signal in itself,

7:10

right? What are the narratives that the

7:13

industry and asset allocators are kind of

7:15

circling around? Our strategy is

7:17

to make that data as visible

7:19

and transparent to the broader ecosystem

7:21

as possible. We want to improve

7:23

market efficiencies. We want to improve

7:25

data efficiencies and just improving the

7:27

ability for retail investors and credit

7:29

investors to make the most informed

7:31

decisions. Kind of in this process

7:33

of aggregating this newsletter and databases

7:35

in general, we have the

7:37

ability to kind of do massive data scraping,

7:40

whether it be from the crunch bases, the

7:42

pitch books. How are you using all this

7:44

data? Because you do have, and it's very,

7:47

very important. It's like foundational importance right here.

7:49

So how are you kind of using that

7:51

data? Well, the biggest thing is

7:53

just validating the data that's out there initially.

7:56

And our takeaway is that a lot of it

7:59

is... He

12:00

figured out a way, I don't want to like

12:02

blow his, his invention, but like he figured out

12:04

a way to use these old GPUs

12:06

to do AI compute, but like to the

12:08

efficiency, like 10 times what they currently do

12:11

now. And he's, you know, down here in

12:13

Florida and there's so much more to what

12:15

I just said. And it's, it was crazy.

12:17

Like he had me, I was just completely

12:19

shocked and awed, but I think there's any

12:21

value to like any GPU mining these days.

12:24

Like what has anyone mining any altcoins anymore?

12:26

I mean, there's always obvious, for sure. Right.

12:29

Like, you know, on a ore project just launched with

12:31

some type of like mining components, it doesn't look too

12:33

deeply into it. I am a big believer in proof

12:35

of work. Obviously a big believer with that with Bitcoin,

12:37

etc. There's definitely a

12:40

misconception that, you know, the Bitcoin mining

12:42

and HPC worlds like

12:44

have composability, like the form factors

12:46

are completely different. Right. And

12:48

what we're seeing here on the technology side, I

12:50

mean, we're going to see continuously new iterations of

12:53

this stuff as well. And what I like about

12:55

what I just heard, it's about efficiency and being

12:57

able to take the existing hardware. Well, how can

12:59

we make it better? You know, if we have

13:01

the lowest energy input costs, what can we, you

13:03

know, how do we overclock this thing essentially? Otherwise,

13:06

yeah, there's going to be some supply constraints,

13:08

even though I think that's a short sighted

13:11

problem. It was just such an initial large

13:13

demand, like it gets sorted, right? But you

13:15

saw a lot of companies spin up, oh,

13:17

we're going to consolidate all the unused GPUs

13:19

and stuff like that. But then you have

13:22

15 people trying to do the same thing.

13:24

So it creates massive fragmentation when that happens.

13:26

And I think that's pretty core to, you

13:28

know, pretty much every narrative in this space,

13:30

fragmentation. Nowadays, also, I think Charlie is some

13:33

of these projects are setting up rounds which

13:35

are validator node rounds. So they sell those

13:37

rounds to new investors because they want to

13:39

have a decentralized model set up. And that's

13:42

a new type of thing which we haven't

13:44

seen in the last couple of years, but

13:46

it erupted in the last, I would say,

13:48

six months, eight months, maybe probably. And that's

13:50

that's a new kind of I

13:53

like that style, though. It's kind of like

13:55

the masternode type of strategy. Yeah, it is.

13:57

It is. Yeah, definitely. I

14:00

was going to ask you, how did you guys

14:02

get into the space? I

14:06

know you've both been around for a while. Nick, you

14:08

first. I want to hear the backstory. Yeah, I mean,

14:10

my origin story begins kind of late 2012. I

14:13

previously work in the oil and gas industry

14:15

doing project management. There's obviously laws in between

14:17

works. I found Bitcoin friend was kind of

14:19

raising some capital for an esports betting platform

14:22

at the time, and he was going to

14:24

be using Bitcoin as the payment medium. So

14:27

that was my initial interest. And then I

14:29

made some money in Dogecoin and realized, wow,

14:31

you can make money for yourself online. I'm

14:33

never going back to a physical office or

14:35

working for other people. And then I just

14:37

kind of dove into the zeitgeist from there.

14:40

I'm familiar with how money creation, debt slavery,

14:42

all of that. And this seemed to be

14:44

like a good plan B, should this experiment

14:46

ever take off? And the rest

14:48

is history. Since then, I've kind of operated

14:51

as a passive investor and operator in the

14:53

space. I've done a lot of stuff with

14:55

exchanges, managed a project called HC back in

14:57

2013, which was already

15:00

working on all of the things that

15:02

are big today. Identity, tokenization, privacy. Tokenization

15:04

probably being the biggest thing. We had

15:06

tokenized a couple real world small businesses

15:08

in their cash flow back in 2013

15:11

to prove concept that this is a way

15:13

to democratize and distribute more

15:15

efficiently into a broader base for fundraising.

15:18

I think that's one of the killer

15:20

features of crypto is democratizing services that

15:22

are otherwise kind of on a top

15:24

shelf to a select class, right? The

15:26

financial world. But when you make

15:28

that more accessible, humans are very

15:31

innovative and ideas don't necessarily good

15:33

ideas don't necessarily always come out

15:35

of just like high academia networks.

15:37

They're all over. No, they don't.

15:40

Good ideas happen on farms

15:42

in Florida and ranches in

15:44

Wyoming and beaches in

15:46

California and beaches in Indonesia

15:49

and in China and all

15:51

over the world, like everywhere

15:54

Africa. That's the beauty

15:56

of our industry. It's proof of brain. It

15:59

doesn't matter. like where you're from or who

16:01

you are, what you contribute to our industry

16:03

is what's most important and what you get

16:05

judged on first. Omar, what about you? I

16:08

would say 216, when a couple of friends of

16:10

mine reached out to me and said, you know, you should buy XRP.

16:13

I have sold this story a couple of times

16:15

already. And I was like, what is XRP, to

16:17

be honest? And then they were like, have a

16:20

look at coin market cap. And then I dived

16:22

into it, bought XRP at 20 cents, I would

16:24

say sold it at two, two-ish and made a

16:26

bit out of that. And then I started diving

16:28

more into the space. And then one of the

16:31

first OTCs that I did, Charlie was, I don't

16:33

know if you noticed one, but Thunder token. Which

16:36

token? Do you remember that one? Thunder token. Oh,

16:38

yeah. I don't gonna say

16:40

shit coin DC thing, but back in the

16:42

days they bought it, they sold it, the

16:45

team left the whole thing. But during that

16:47

time, I met

16:49

guys like Andrew Kang, for instance, he's still

16:51

a good friend. And I learned a lot

16:53

from him as well from OTC Brokering, met

16:55

Nick as well, met a couple of other

16:58

guys. And since then I've just sticked to

17:00

the OTC. I was

17:02

something like, this is an

17:04

interesting space. It needs to mature, it

17:07

needs to grow, it needs to become

17:09

transparent, because we do have all the

17:11

means for it to make transparent, but

17:13

nobody's just doing it because so many,

17:15

everybody's actually focused on making gains and

17:17

moving on. That's it. And that's the

17:19

thing that we had at some point,

17:21

I would say probably roughly one and

17:23

a half, two years ago, when we

17:25

joined Forcent and we were like, you

17:27

know what, let's make this one thing

17:29

and broaden it for everybody so that

17:32

everybody can enjoy and having the perks

17:34

out of it. Most

17:37

of these products that launch that are related

17:39

to finance or DeFi are related to like

17:41

social media, not social media, that's a different

17:43

category, but things that are related to like

17:45

more in the financial space or like kind

17:48

of products that are very high tech crypto

17:50

that the normal person is not involved with.

17:52

I understand how you could experiment with a

17:54

lot of that, but like if you were

17:56

to launch a new crypto product that

17:58

kind of deals with the market, Imagine

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capella.edu. end

38:00

of a wallet on the technical,

38:02

which really, really great, but it

38:05

needed a good UI-UX lift.

38:08

And so we did that. And right

38:10

about the time that we got ready

38:12

to release that and promote it is

38:15

when they started arresting people and issuing

38:17

warnings about money services

38:19

businesses and MTLs and all of that

38:21

and reinterpreting how Lightning is working. And

38:23

we saw all of these companies leave

38:26

the United States, the US market. So

38:29

we had to, I don't want to

38:31

say hit pause on that, but we

38:33

sort of had to slow roll it

38:35

right as we were getting to fast

38:37

track it. We had to hit pause.

38:40

And so we're fighting that kind

38:42

of behind closed doors. I

38:44

am trying to, within Bite Federal, I'm

38:47

trying to get everybody to agree to

38:49

make some of this more public because

38:51

I think it's good for people to

38:53

know how much you have to fight

38:55

just to get basic products out. And

38:57

of course, some of the legal and

39:00

compliance stuff we can't really discuss. So

39:02

we're doing a lot of fighting, unfortunately,

39:04

with regulators and alphabet agencies

39:07

and alphabet regulation and all of

39:09

that. And then we also have

39:11

the merchant side, which I

39:13

know you're familiar with. And it was kind of

39:15

a similar thing where we rolled out this beta

39:18

program and it was super exciting. We

39:20

did like some gasoline transactions, like there's a

39:22

gas station in Sarasota where you can go

39:25

use Bitcoin over Lightning to buy your gas

39:27

or candies or whatever. And that was a

39:30

big win for us. We were really excited

39:32

about that. And kind of as we were

39:34

coming out of beta and getting ready to

39:36

ship that fully, some of these regulatory things

39:39

kind of came in even

39:41

more aggressively. So again, we've kind

39:43

of pivoted there. We're fighting on one

39:45

hand and we're also pivoting on the other

39:48

hand. We have taken that and

39:50

had an opportunity within the real

39:53

estate environment. We have a really

39:55

big opportunity that we're getting ready

39:57

to announce. So we're super

39:59

excited to announce that. and that

40:01

is unaffected by all the other

40:03

regulatory things. So we're excited to

40:06

be giving that resources. Yeah. I

40:08

would say lastly, like

40:12

the other thing that we're doing, which is really

40:14

exciting, is that we're looking to expand

40:17

internationally, which is exciting, but

40:19

it's also- That's

40:21

the key. It's the key, but

40:24

not to put the doom or spin

40:26

on it, but we have to look

40:28

at expanding internationally, right? Because if things

40:31

don't change in the US, I don't

40:33

know what might happen. So while on

40:35

one side, it's very exciting and we

40:38

would probably be doing it either way.

40:40

It's also like a geopolitical

40:42

hedge because we don't know

40:45

what might happen. But it's

40:47

cool. We're down in

40:49

El Salvador, we're going to Dubai,

40:51

we're talking to Maya in Suriname. So we

40:54

have a lot of exciting things

40:56

that are going to get announced there. Why

40:58

is it important to be working with these

41:01

alternative governments? I guess whenever I'm

41:03

speaking to a room of people,

41:05

they always think too much, I'm

41:07

in America. So America is not

41:09

the whole world. So

41:12

whenever you're thinking, yeah, explain that please.

41:15

Yeah. It's interesting. I

41:17

think I learned this living abroad, especially

41:20

the time frame when I was gone, but

41:23

no, the US is

41:25

not the whole world. I think there's

41:27

a couple of factors at play. Unfortunately,

41:30

America is a huge country and there's

41:32

lots of beautiful places. So a lot

41:34

of Americans tend to travel within the

41:36

country. They don't necessarily go travel abroad.

41:39

So they are disadvantaged in

41:41

that they don't get the new

41:44

perspectives of being elsewhere in the

41:46

world. Geopolitically, the United

41:48

States has been a dominant force

41:50

within the world for a long

41:53

time. You have the petrodollar, which

41:55

by the way has expired. I think

41:58

that's an interesting conversation. And

42:00

so the US has really dominated like financial

42:02

markets, geopolitical moves over the past, you know,

42:04

probably 20 years, maybe 30, I don't know.

42:07

But we're sort of starting to see

42:09

that not completely fall apart, but get

42:11

close, you know, our debt is spinning

42:13

out of control. Brix

42:15

is expanding the

42:18

petrodollar agreement. But

42:20

such a beautiful tie in is that everyone

42:22

thought like, you know, Rome didn't fall in

42:25

a day. Yeah. And

42:27

not to say that the US is falling. I love this country.

42:29

It's a big asset to succeed and everything. But there was never

42:31

like an opt out. Right. There

42:33

was never a way to like, choose to not

42:35

be part of that. Yeah. You

42:38

had to keep your assets somewhere. And now there's

42:40

that. Yeah, now we... It's a beautiful

42:42

thing. It is. We have Bitcoin and

42:44

we have other countries

42:46

that are vying for

42:49

citizenship and promoting

42:51

freedoms. You know, the United

42:53

States used to be the beacon of freedom. And

42:56

I hope that we can bring that back. But

42:59

it's certainly in a precarious place

43:01

right now. So, you know,

43:03

I am all for saving

43:06

freedom in the United States. But

43:08

I also think it

43:10

is ill informed not to be kind

43:12

of keeping an eye on some of

43:14

the other places that are maybe moving

43:16

upward. And, you

43:19

know, yeah. Michelle, thank you so much for

43:21

taking the time and coming on the show

43:23

today. I really appreciate it. Yeah. Thank

43:26

you for having me. It's great to talk with you. And,

43:28

you know, I look forward to seeing you guys soon. Keep

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up the good fight. Thank

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you. Thank you very much. Imagine

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earning a degree that prepares you with

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real skills for the real world. Capella

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University's programs teach skills relevant to your

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make a difference in your life capella.edu.

43:55

at capella.edu.