Our main conversation features Race Capital’s Chris McCann.
Chris was previously the founder of Startup Digest, building it to 1 million subscriptions long before email newsletters were a thing. He spent four years building the community program at Greylock before launching his own venture firm.
In this conversation, Chris and NLW discuss:
The relationship between monetary policy and startup finance
What changes in startup financing have followed COVID-19
What the emerging fintech stack looks like, outside of crypto
There is perhaps nothing more important or contentious in macroeconomics right now than the question of inflation.
On the one hand, there is a growing concern that rapidly growing money supply and increasing central bank balance sheets will inevitably lead to inflationary pressures.
On the other, critics of that point of view point to significant countervailing forces such as the 10% unemployment rate and growing savings rate among consumers.
So who is right?
What are the specific narratives trying to say?
What is the evidence and data actually telling us?
And how are real people experiencing inflation today?
From how mobile devices offer the primary point of access and social media groups offer local liquidity, Cuen and Diop explore what cryptocurrency adoption actually looks like in emerging markets like Senegal.
Like many bitcoiners, Diop got his start in the crypto industry working for token projects in 2017. From there, he got involved with the Oakland Blockchain Developers Meetup, and eventually took that experience back to Senegal when he moved back to his hometown to be with family during the COVID-19 crisis.
“I started with Ethereum because it was easier to have access to...Philosophically, I no longer align with the Ethereum ethos,” Diop said. “The first thing I did when I started here [Dakar] with the meetups was I gave away about $1,000 in bitcoin.”
As a dual citizen of the U.S. and Senegal, with an American bank account, Diop can use mainstream bitcoin wallets like Cash App to use bitcoin as a currency anywhere in the world. This came in handy when Diop unexpectedly needed to stay in Senegal throughout 2020. For people with only Senegalese accounts, he recommends the Lightning-friendly Wallet of Satoshi.
Now, with the support of organizations like Chaincode Labs, he freelances from Senegal teaches aspiring bitcoiners like Bineta Ngom, who have a high level of technical understanding yet aren’t fluent in English. As such, she struggled to find the right materials to learn about bitcoin.
“I’m super happy to find out there was a bitcoin community here in Senegal. I never heard of it spoken of before here. I didn’t have anyone to talk to, exchange (ideas) on the subject. This was a chance for me to meet enthusiasts,” Ngom said.
Ngom, who studied computer science and now works at a local university, said she hopes to use bitcoin to buy something someday. In the meantime, Diop is focused on translating information from English into local languages like French and Wolof. Plus, he said most people in Senegal only access the internet through their Android mobile devices. So they need information about how to use mobile apps and understand whether something is a scam.
“We also have peer-to-peer trading through WhatsApp and Telegram,” Diop said.
Until Diop started the local bitcoin meetup, Ngom said the only other sources she knew for cryptocurrency projects were a few “scams” her friends invested in during the 2017 token boom.
“Places that are English-speaking are moving way faster than their French counterparts,” Diop said, comparing English-speaking Ghana and Nigeria to French-speaking countries in West Africa. “I don’t understand how the bitcoin community doesn’t target more (African) universities and do more hackathons.”
He added the small yet highly curious community in Senegal now uses bitcoin for speculative trading and remittances.
“I have people who are highly, highly technical when it comes to cryptography, per say, but they don’t understand how bitcoin works,” Diop said. “I believe this technology is groundbreaking. It could help a lot of people.”
After a Winklevoss encounter highlights Elon Musk’s space mining dreams, maybe we should remind ourselves of the right-here-at-home benefits bitcoin brings.
Earlier this week, the Winklevoss brothers introduced Barstool Sports founder Dave Portnoy to bitcoin.
One of the notable parts of the recap video was a discussion of how Elon Musk was set to destroy the value of gold on Earth by mining gold from asteroids.
While much meme fun was had, on this week’s Long Reads Sunday NLW has chosen a selection that looks at how fiat beat out gold and how gold beat out silver to provide some – ahem – more immediately relevant lessons on how to explain the benefits of bitcoin.
Caracas-based bitcoiner and journalist Javier Bastardo covers the crypto scene in Latin America since 2017 and has been living partially off bitcoin, thanks to BTCPay server and a variety of employers that pay in crypto, like CoinTelegraph Espanol.
“Even when I’m trying to report in an unbiased way, I’m really bullish on crypto,” Bastardo said. “Bitcoin could be useful to other Venezuelans.”
Beyond holding it as savings, many Venezuelansuse cryptocurrency as the fastest way to obtain dollars. Bastardo said there is more in common between crypto readers across the Americas, both Latin America and North America, than similarities within local geographies.
“We’re talking to a very specific audience, even if I’m writing in Spanish and you’re writing in English,” Bastardo said, referring to CoinDesk writers in New York and California. “We are more connected than I would be with a person who writes about politics in Venezuela...The way they [crypto audiences] look for information is very particular to the types of viewers that we have.”
When it comes to the media, in Venezuela it is more clear to readers that journalists can be activists and that corporate media is often governmentpropaganda. According to the Committee to Protect Journalists, at least five journalists were murdered for doing their jobs in Venezuela over the past few decades. In this context, censorship isn’t merely about ad policies or social pressure. It comes from the government and is applied directly to the communications infrastructure.
Despite the struggle to identify reliable narratives, many readers make financial decisions based on media reports and social media trends. Media production and financial markets have always been intertwined, for better or worse. This is especially true of cryptocurrency markets.
“They [crypto readers] are already against journalism, against the information industry. They have more anger about the information,” Bastardo said, describing the challenge of making media for this niche audience. “They need the narrative to keep going about adoption, about mainstream, yea, bitcoin will save us. It’s weird, because we have an active scene but it’s little.”
While the outrage associated with crypto coverage may be unique, the dynamic of media-driven markets is hardly new. After all, the financial outlet Bloomberg reportedly gave bonuses to reporters for “market-moving” stories and many American outlets offer bonuses for web traffic, which may incentivize sensationalism. These policy decisions come from the top, as with most business models, and rarely originates from the newsroom itself.
From his perspective, Bastardo said it’s unclear whether North American media, including but not limited to crypto journalism, is deliberately biased.
“I really don’t know if the things we see on CNN or CNBC are identified with some party,” he said. “We have those narratives that show Trump is a really good narratives and others that show him as a really bad President. This is a problem in the whole media industry.”
In particular, he said some crypto content creators might be “aligned” and “trying to push some agendas,” but that it’s unclear what is really going on with the overlap between journalism and cryptocurrency marketing. For example, he said people overhype and sensationalize stories of bitcoin usage in Venezuela, which can be both dehumanizing and misleading. It becomes even harder for readers to decipher because some of the most trusted sources in the crypto industry are individuals without journalistic training or oversight. This creates even more opportunities for freelancers with bold personalities, but a more challenging environment for readers seeking relatively objective information.
“We have a similar way to get information in Venezuela, but it’s worse, because we don’t really have open media,” he said. “But the crypto-related media, I don’t know if the writers are biased...I don’t know if this is true. This is only an opinion.”
On this edition of The Breakdown’s Weekly Recap, NLW looks at the strange melange of realities interacting in the new emerging bull market.
On the one hand, bitcoin has found narrative relevance and technical importance in a world of social unrest and increased state involvement in economies and citizens’ lives.
On the other, insane financial engineering experiments are seeing three-quarters of a billion dollars in value locked up within hours before a bug sees it all go away.
In the middle, agents of chaos like new bitcoiner (and LINK-holder) Dave Portnoy.
This is going to get weirder before it gets more normal.
The prominent podcaster and bitcoin advocate joins The Breakdown to explain why we’re seeing a phase shift in the corporate and institutional relationship with BTC.
The Investor’s Podcast Network cofounder Preston Pysh last recorded with The Breakdown on Black Thursday in March. As NLW and Pysh discussed the potential of future currency crises, bitcoin smashed all the way below $4,000.
In the five months since, bitcoin has risen 200%. It has attracted the devotion of leading hedge funders such as Paul Tudor Jones II and more recently has become the reserve asset of choice of at least one publicly listed company.
Preston and NLW discuss:
The significance of halving coinciding with central bank printing
The inevitability of negative interest rates
Why it’s the dollar, not the stock market, that is inversely correlated with the price of bitcoin
Why Preston believes in the stock-to-flow model
Who pays the price for inevitable currency debasement
Why we’re dramatically underestimating the precedent set by MicroStrategy’s $250,000,000 cash-for-bitcoin reserve switch
Why MicroStrategy will be worth 10 times what it is today a year from now
