Cryptocurrencies In Ten Years: Institutional Money and Future Benefits Of Blockchain-Caitlin Long

hello everyone and welcome in to crush the street calm I'm Kenneth Emery and I'm joined today which we are going to get into here shortly with Caitlyn long and we had a great discussion on the future and what has been going on in blockchain she's been an evangelist in the space for many years now and has a lot to bring to the table and what's especially interesting in this discussion is we discuss blockchains use cases in areas that are valuable and maybe other areas which are more frivolous and we're just used as hype during the 2017 bull market so stay tuned for that if you want some more information on where we are in this crypto bear market and how I see this playing out visit crush the street comm forward slash crypto hello everyone and welcome in to crush the street calm I got an exciting interview for everyone today we have Caitlyn long on the line her website is Caitlyn – long calm we'll have it in the description area she's with the Wyoming blockchain coalition and she's got a years of experience in the crypto space many people say that you know if you've been in the space prior to 2017 you're considering a veteran or you know somebody who's an authority in the space because of how fast things move in crypto especially last year it seemed like a week in crypto felt like a month and a month felt like a year with all that was going on in the space so she's been in it for very many years she's been a crypto evangelist and I'm very excited to get her thoughts on where we are right now Caitlyn thanks for coming on crush the street with me today yeah it's my pleasure thank you very much and I love the the Raging Bull in the background we have horses behind me you've got the Raging Bull behind you I literally used to work right outside where the where that statue is located in New York City so well it's exciting I love exciting bull markets but you to take the ball with the bear I should have maybe behind me right now so I'd like to get you get your thoughts on this brutal bear if we could I know you've been very influential in helping fortune 500 companies understand the value of blockchain so help us remind us remind us please of the benefits of blockchain here in 2018 in light of what we're seeing right now well I've always thought that price is the least interesting aspect of this technology I realize that you know the hype cycle is fun and a lot of folks got caught up in it but we also have a lot of folks that lost a lot of money in it and I wouldn't encourage anyone to think of these as speculative assets I would encourage everyone to think of these in their applications and and the biggest one ultimately is monetary sovereignty but in more practical terms if you don't want to get philosophical it comes down to essentially improving the transparency and reliability and I would say stability of the financial system now course blockchain can be used in lots of applications outside of finance I happen to think that's the killer app for it but there are very successful companies that are using it for supply chain tracking and any other sort of multi high party in IT system where shared data doesn't have to be duplicated and reconciled in order to get value for the data when multiple parties are sharing the same information there's no reason why they shouldn't share it on a blockchain now when they want to use the information for proprietary regions they wouldn't want to share it on a blockchain but for shared data that multiple parties use and rely on right now all across the economy and especially in financial services that data is duplicated and reconciled and not just all katelyn so you've been in the space now for a number of years evangelizing crypto and blockchain how has your message evolved over the years since the early days and here now in 2018 well in the in the early days I had to keep my head down because I was working on a big Wall Street firm and you know when Jamie Dimon last year said he would fire anyone working at his company was involved in Bitcoin I definitely had that sense even though it had certainly not been articulated at that time this was back in 20 I discovered it in 2012 which was not early by the Bitcoin standards but it certainly was early by Wall Street standards and it wasn't until late 2013 really early 2014 I sort of came out inside my my firm I was running that pension business and and ultimately felt comfortable enough to do that and then the ball got rolling and the message at that time was blockchain not Bitcoin and we've come full circle I like to point out Jimmy song has as well having tried Enterprise flatten and having tried to apply open black chains or even enterprise proprietary block chains to problems for which existing regulated financial markets are trying to solve it just don't fit well together and like Jimmy for independent reasons he's of course a developer I'm not we both came to the similar conclusion at about the same time that really maybe the power is in these open block chains now that's not to say there aren't going to be real improvements that come from enterprise block chains I'm still a fan of some of those applications but ultimately what we're now seeing is instead of trying to fix the system from within where enterprises are trying to rip out old inefficient unfair systems and replace them with blockchain based systems we're now seeing the blockchain industry do an end run around the the traditional system and and coming at it with brand-new products the best example of that I can point to is many of the banks have been trying since 2015 now three plus years to create what is effectively a stable coin it was called I was sponsored by UBS many banks involved and it was called utility settlement coin and they not project three plus years in has it produced anything useful for the financial industry and then here comes stable coins you know from from from outside entirely outside of the financial industry and now the financial you know some regulated financial companies are starting to use them for exactly the same reason utility settlement coin got started three plus years ago and it took stable coins a lot less time and I think we're going to see that again and again and again the next area where I think we'll see that as in the area of security tokens interesting well this is a very significant topic and I think it lends itself to your background you know institutional investor list of most influential people and pensions that's you you know this this was you your title so I'm in asking you about pension funds as it relates to blockchain in the use of it and I know a lot of us are expecting the big money to enter the space and to really make the difference in terms of its use case obviously if we get just a small percentage of pension funds hedge funds and the Wall Street money into the crypto space I think the the overall market cap would have to skyrocket from here and I think a lot of people are waiting on that unless you just not a believer in block chaining you think it's a beanie baby face so what is your thoughts as it relates to the institutional money coming in and your background with pensions well so far we haven't seen pension money come in certainly not anything very public or in a big way I've seen a Down mcmoney come in it was a big deal when Yale announced I knew about it as of last summer but but it wasn't announced until I believe October of this year that now invested in the – and really there are only two institutional quality crypto / blockchain investment funds one we started by andreessen horowitz and another by Sequoia annex acquire partner and Yale and Harvard and MIT and Stanford another day and all came into those funds and and so there have been of course a number of VC funds that have been started that have had institutional support that list is too long to to go through and that's been true for years but BC is different than a crypto hedge fund and I think what most folks are waiting for in the institutional world is the big hedge fund type any investment money coming in not BC early-stage companies but actually investing in the Kryptos themselves that I think is going to take some more time especially given what's happened with the market correction but we've got to solve something big first and that is that the custody arrangements have to be clarified and the SEC has not they've essentially said that there aren't qualified custodians in the crypto space now there are a number of companies like the NGO and Kingdom trust and of course Gemini and coinbase that are starting institutional quality custody firms and the interesting question is will any of them be blessed by the FCC's holy water so to speak as being a true institutional custodian why does all this matter because institutional investors and once they reach a certain level there are lots of rules around this but but the gist is they have to hold their their assets in a third-party custodian to prevent any mischief and how do you define custody in crypto assets is very difficult a lot of folks say well it's it's just the private keys it's whoever custody is the private keys but the private keys are not the same thing as the coins themselves so trust me I'm knee-deep in this right now I'm working with the legislative attorney in Wyoming who's looking at this issue we're trying to clarify this under under Wyoming's laws so that there is a state in the country that has true clarity legal clarity on the exact status of crypto assets currently there is not a single state in the country that actually can give folks that clarity so everybody's sort of making it up as they go along and we'd like to actually create that clarity all that said I do think there's room for more institutional investment funds but I think it's going to take time even before that that when I say there's room for it other institutional investment funds I mean the custody issue doesn't necessarily have to be solved because the fund itself might self custody right if you go back and look at some of the early articles that were written about fortress and drw getting into the space they were self custody in the assets so they can handle it themselves but I think for big widespread institutional acceptance that custody question has to be it has to be solved so Kaitlyn to what extent is blockchain and and the technologies and the underlying crypto is dependent on a loosening of the regulations and at what point does it matter if there's this regulatory environment that is trying to keep a lid on crypto is there a certain amount of free market natural forces that are going to keep this technology moving along despite what governments do well sure folks will always just go go do what they want to do right this technology knows no borders the challenge is if you actually want to bring it into regulated institutional investment markets like you asked me about with institutional investors they're going to care about the legal structures they do have to have clarity and so one of the things I've been doing in Wyoming working with the Wyoming watching coalition and the very wise Wyoming legislators who understand that this is a real opportunity for the state of Wyoming to diversify its economy while also solving problems for a nascent industry that needs a home so it's a win-win for both Wyoming in the blockchain industry we're working hard to provide that back clarity it's in legislation and clarity not restriction and prohibition at the federal level too too often it's turned into restriction and prohibition but a lot of that I do think the SEC and CFTC get a bad rap and a big reason why is they can't make the rules they just have to enforce them so you've now just in the last week seen a number of bills introduced in Congress I'm not holding my breath that's just for any of those bills to be enacted but I think it at the federal level it is clear that Congress is going to have to step in and answer some really important questions that have practical significance like do we literally have to record capital gains and losses every time we buy a cup of coffee with a crypto asset technically right now that seems to be what the auditing and accounting profession is advising based on the IRS previous pronouncement there's an effort in Congress to create a $600 exemption and I hope that pieces because practically speaking that would make it a lot easier for people not to have to actually track every single transaction for tax purposes Wow dad yeah that is a nightmare I know a lot of us were scratching our heads about in terms of clarity on the subject matter well it's it's really interesting so where is your focus now I know you're working with the Wyoming blockchain coalition do you have any specific cryptos that you are particularly passionate about and see a major future going forward here with well I don't speak about individual projects so I've been very careful not to criticize and not to support I'm obviously a big fan of open block change that are truly decentralized and that's clear as much as to what those what those phrases mean to be honest the degree of decentralization is something about which very very smart people will fight for decades and never agree how to precisely to define that but but the whole sector I've not gotten in the scrum of the fights between the developers hey I don't have the skill set to do it and B I think there's I love the fact that there's competition in kryptos and that new technologies are being tried all the time and innovation is accepted and it's okay to fail it's okay to put something out there and maybe if it is better technology it still won't necessarily win the network effects are really what I'm passionate about and the impact of the application of this technology to building big decentralized networks it is incredibly impressive what has taken place and five years so now will we continue to have big point in a theory and B but leading platforms I suspect so but as I said before I think that we won't recognize necessarily what they look like 5 10 15 years down the road because they will have ultimately been rewritten and upgraded and improved along the way we'll still call them acquainted if they're in but they will be they will continually be improved and I love that and a lot of folks you know kind of going in their respective corners of the debates and say it's either Bitcoin or nothing or you know a lot of the technologists who rightly see improvements on the technology think it's it's their latest version that's actually going to take off that's me – all of you I think that this innovation is great and if there are great breakthroughs I think they will be adopted into the main cryptocurrencies which have clearly got big decentralization advantages in the networks that they've built up nobody's going to be able to touch those early ones I think yeah I can agree the first mover advantage that some of these have are extremely powerful and more powerful than I think most people will will truly understand initially this site may be superior use cases with future ones that come up so katelyn having said that what are some of the most interesting use cases for blockchain that you've seen maybe it's just the clear ones that we we've now come familiar became familiar with but my question is you know are there are other ones other use cases that just came up that really don't make a whole lot of sense we don't necessarily need the centralization but you know in 2017 it was the coolest cool thing to decentralize every single aspect of our life because of the bull market that we were in so some thoughts on that well I think the biggest the coolest use case for this technology is the most basic which is money creating a medium of exchange that different folks can use and it may be only ever a niche product I think Bitcoin right now has turned into a high-value transfer system and all the experimentation around second layer solutions like lightning are all about figuring out how to still anchor your small value transactions to the main chain but if you want an actual blockchain transaction where you can prove every single time that that value transfer took place and it's recorded on the main Bitcoin blockchain base layer then you're gonna pay more for that and and ultimately that's how that system is evolving and I think that's great is it going to remain a niche system I hope not but it's clear that it has scalability issues and so it's a high-value transfer system right now there is no cheaper weight and faster way to transfer high value with small bit offer spreads around the world than Bitcoin right now so again something else may supplant it we'll see I tend to think that if something else better comes along it will be adopted by the Bitcoin core developers into the Bitcoin software itself so so we'll see there have been a number of financial services applications that have been shelved a lot of projects start with a great degree of fanfare and then you never hear anything about again what I'm thinking about is the repo project for the Depository Trust Company which was a digital asset endeavor that has been shelved and why is it that it that the project got shelved because they ultimately concluded that even needed watching if there were going to be centralized pieces of data among multiple parties that parties wanted to play hide the ball with then using a blockchain for that is not actually the best application and so that project was shelved without a lot of fanfare I don't mean to single that one out because that's one of many it's just the one that comes to mind right now and there are definitely a lot of those applications now that said I think there just says that have been shelled there are just as many though on the flip side we're watching isn't necessary but it became the impetus for a discussion to change how business is done and a perfect example of that is beef chain which is a Wyoming company that is handling supply chain provenance for Wyoming beef that's solving a basic problem which is that why he doesn't have its own USDA approved slaughterhouse for cattle and so Wyoming cattle when they go to market end up being mixed in with Colorado cattle if it's Denver and South Dakota cattle if it's Rapid City and etc right so the Wyoming ranchers who generally grass feed their cattle are because you know there's why we've got lots of open space it's easier easier to grasp feed cattle there and and and yet they can't command a premium at the market because the cattle gets its mixed in with other cows well do you need a blockchain to trace the provenance of Wyoming cow no you can create an immutable centralized database but what's it well what has happened is that this has captured a lot of imaginations and now you actually have transactions that are happening that are cutting out middlemen that made it more difficult for Wyoming ranchers to sell their their cattle at a premium price reflecting the fact that it you know these cattle is as senator Ogden driscoll and said these cattle have never had a roof over their head and a lot of people like eating eating their food that way knowing where it came from and knowing that it was ethically raised without you know additives antibiotics you know not in a confined animal feeding operation that sort of thing right so so this is a pretty simple basic problem that blockchain isn't required to solve but it certainly helps solve it so I don't want to imply that a lot of these projects have don't have any real use even if they don't need a blockchain just changing the conversation has had an incredibly positive impact in a lot of Industry supply chains being one so Caitlyn it really was the end of 2017 when we really saw the mainstream media really start to cover it in a big way and now you know people who got in and late 2017 are probably hating blockchain because you know as much as we try to disconnect ourselves from Christ's price ultimately does matter if you spent your life savings getting into Bitcoin at twenty thousand dollars that might represent many hours and labor and you know hours of calories and energy that went into purchasing that price at a nominally very high value to be looking at it now at $3,500 Bitcoin per se and that's why we always you know encourage people not to invest more than they can afford to lose you know the whole gamut but having said that you know what are your thoughts on this bear market that we're seeing the brutality of it you know how long it could take for us to really cycle through these harsh times harsh news and for us to get on the upswing again because one thing I like to point out is bear markets tend to be worse than what people will ever anticipate because you know in the hype of the ball market it's hard to even anticipate or imagine the community being like this only a few months later because you you just feel like nothing can stop this right but then when you do get into it like cascades on top of itself so some thoughts on this well ya know I lived through a couple of these incredible bear markets in their heart I mean I sat for a long time with a big loss on on my crypto because of the timing that I got in but like he said I didn't put a majority of my savings in it and so it was a bummer but but I got through it and I think many many will obviously feel very badly for those who made a bad decision to put with too much of their savings into this and and unfortunately you know that's the reality pretty much everybody all the industry veterans were warning as you said basically it's the when seska's aris philosophy you wrote a great medium post i don't know three four years ago that essentially said here's how much you should put into these assets it's how much you think you can lose because guess what these things could still go to zero and you know what they could but I also say so could the shares in your brokerage account and and frankly folks don't think about it but so could your US dollars history shows that fiat currencies always go to their intrinsic value which is zero and it can take centuries for that to happen but the way I've always tended to think about it is think about what percentage of your assets you can afford to take a swing for the fences approach with think about what percentage what probability you think they the mainstream financial system is is going to have a major crack during your lifetimes that's going to cause you to be grateful that you took some of your assets out of that system neither one of those the answers to either of those questions is either zero or 100% right and I tend to think in probabilities and frankly so so do so does Bitcoin bitcoin is a probability based system most of these systems are probability based systems it's nothing it's black and white and once you get yourself out of that philosophy of black and white then you can start to answer the questions and I've never given investment advice but for my own personal philosophy I didn't think of it as follows as long as my return on assets is outpacing my inflation rate then I'm okay and even in a massive correction right we had one in the stock market in 2008 we've had many of those in history there will be more this financial system is fundamentally unstable and there will be more and and the way I think about it is as long as my assets thrown by less then my cost of living then I come out ahead so stop thinking in nominal terms start thinking in real terms start thinking in probability terms what's the probability that you really want that tail risk scenario insurance and and how much could you afford to lose if it goes to zero those are the kinds of questions that I would encourage everyone to ask instead of making investment advice start thinking in in slightly different terms and and then you'll be comfortable I like most of the veterans in this industry this is an uncomfortable situation with the bear market but it's definitely something that I've seen before and frankly we're gonna see it again and frankly we're gonna see it in mainstream financial markets during our lifetimes – Caitlyn you're a rock star and I appreciate you coming on the show with us today and sharing your thoughts and encouraging us to you know be interested in the blockchain space and you really gave us some things to to challenge our minds and and I think you expanded it greatly in your disk in this discussion we had so I appreciate that if people want to learn more about you and the work you're doing where can they go and what what can they expect the fine Oh Caitlyn – long comm I'm also right around works calm and pretty heavy user of the crypto Twitter and also LinkedIn Thank You Kaelin for your time here across the street thank you

20 thoughts on “Cryptocurrencies In Ten Years: Institutional Money and Future Benefits Of Blockchain-Caitlin Long”

  1. How about that we deal with today's reality with bitcoin struggling to stay above $3,100?
    10 years down the road we may not be here?

  2. The Blockchain elephant in the room that I have not heard addressed is what happens to your Blockchain when the institution processing it drops it, stops processing the chain because it became unprofitable or obsolete?

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  4. Great assessment……….Look around, people with massive debt are not only at zero they are compounding into the negative,probably driving a car which is compounding even more negative value…….all sat on a student loan and a marriage that may go to zero …..or worse, so having a dip in cryptos is nothing compared, if you dont sell you havent lost anything.Plant trees sow seeds.

  5. With all do respect , while you may not need a block chain for a centralized industry like cattle, Is not the ability of a ledger that can not be "fixed" and is trust less , one of the major draws ??

  6. Needs to be standards " so there's no funny business in the industry"?
    You mean like when Wells Fargo just hi-jacks user info to commit massive fraud, and 5000 minions get axed as senior management gets rich…….that kind of funny business?

  7. All we need now to break free from the current criminal system is just one additional layer to all the blockchain projects – Decentralized Escrow Peer-to-Peer protocol. The language of blockchain that's what we need.
    Something like TCP/IP was to Internet the decentralized Escrow protocol option shipped by default will turn any blockchain to a market place in itself – able to swap values between other markets/blockchains. Any type of values and all of it goes p2p. Real estate, services, voting in any form… or whatever you'd like to digitize as some form of token and declare it as value.
    You create value and you declare it and see if the market accept it as a value.
    It's a declaration protocol, the one that always come before the actual deal. We need that intermediate layer before the actual swap of values.
    The nodes operators get the fees, which will insensitive nodes proliferation of any given blockchain due to competition for best security & speed with other crypto, while week and bad blockchains will die out in natural selection process.

  8. Love Caitland’s intelligence and her passion for the space. I’ve seen her give interviews on a few different channels and she’s always bringing something new and relevant to the table.

  9. anyway don't believe her USDC is the new dollar Goldman sachs started and based on that setlcoin patent
    Coinbase got Red-D so it has custody… Oh and USDC is on it. Plus most of these scumball banksters are buying this shit by the ton on the OTC market and NOT of retail exchanges. Check Whale alert on twitter

  10. Do your math: it takes just 11 days to process all the circulating BTC…according to Coinmarketcap. It takes just a 3 or 4 days to process ALL the LItecoin… by just two (!) Chinese exchanges. Really?????
    THIS MARKET IS A TOTAL FAKE – grab a calculator and check for yourself.

  11. This is one of the most informational interviews I've seen in a long time. If you can bring in more of these industry leaders it will really help us better understand this environment.

  12. Great interview with a great guest. Enjoyed this show a lot. I would like to see you bring back two blast from the past. The first being Daniel Amerman author of the secret power within your mortgage and Wade Cook the CEO of Nevada Gold exploration. Haven't heard from either one of them for years. How about an update sit-down with them

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