Untold Stories: Yoni Asia on Financial Autonomy For The Masses

Join Charlie and eToro CEO Yoni Assia, who at 25, founded the company that leveled the playing field for investors, eliminating the need for middlemen and giving regular people the tools to grow wealth. Yoni has an idea and a vision for a new future of wealth in which blockchain and a crypto-backed universal basic income play a role. He is an oracle on the topic of global wealth and income, having seen the current state of the global economy long before others.

In 2008, he wrote about a transparent, digital financial system and even predicted the negative interest rates we’re seeing now. Yoni wants to solve the problems that will inevitably come from growing wealth inequality and believes a tearing apart of the state and money — like the separation of church and state — will advance human rights.

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Charlie Shrem
Hey everyone, this is Charlie Shrem and you're listening to Untold Stories. This is a show where we dive deep into the lives and personal histories of some of Crypto's most influential leaders and find out how the crypto movement truly came to be. Let's dive in.

I really enjoyed doing this episode with Charlie Lee the creator and founder of Litecoin. We talked about what it was like 2011 to start an altcoin and actually that he coined the term altcoin to be alternative to Bitcoin. And the creation of altcoins back then was very different than the creation of altcoins now. And then Charlie went on to actually work at Coinbase and be part of the founding and executive team there. We kind of go into all the stories behind the who, the what, the where, the why and the when, the people Charlie met along the way and the fascinating stories. Have a great listen.

I'm so honored that Untold Stories is sponsored by eToro. eToro is the smartest crypto trading platform and one of the largest in the world with over a trillion dollars in trading volume per year. What I really love about eToro is that the CEO has been around the Bitcoin space since 2012. So they really put their money where their mouths are. US customers, myself included, we can trade the most popular crypto assets, in fact, almost all the ones that you want to trade with low but transparent fees. So you actually know what you're paying for everything. That's really important. So if you're not ready to trade yet, you can practice building your portfolio with the eToro $100,000 virtual trading feature. So you can create this whole portfolio without trading with any real money to see how you'll do and you can learn all the different ins and outs without using any real money yet. And then once you're comfortable, you could enter the market and start buying and selling crypto for real.

Best of all, one of my favorite features is that you can connect with 11 million other eToro traders in the world, myself included, and we can talk trading, charts and all things crypto. So listen, head on over to eToro.com. Links are in the show notes and build your crypto portfolio the smart way.

This episode of Untold Stories is sponsored by Scott Offord the creator of crypto mining. Scott was my first sponsor for Untold Stories and really called me up and said, "Charlie, I love what you're doing. I really want to sponsor your show and further the education." Scott Offord is the super czar of crypto mining. He's a broker of ASIC mining gear. Helps people buy and sell their miners. So if you want to buy mining tools if you want to buy miners, if you have any questions on how it works, if you want to sell your miners or even just broker them, Scott is the guy to call. Not only that, but he created a free Bitcoin mining profitability calculator at cryptomining.tools. That's the website. And it also has an interactive ASIC hardware comparison chart.

What that means is, he has all these different fields where you could enter data like the cost of your miners, the cost of your electricity and it takes in things to comparison, like the impact of the Bitcoin block reward having and it gives you things like how many days until your return on investment? Is it even profitable for you to be mining? All these other type of information which products to get? It's your one stop shop for learning how to actually mine for Bitcoin, or any of the other altcoins that have mining built in. Give Scott a call, send him a message. You can follow him on telegram and at Twitter @OffordScott that's O-F-F-O-R-D-S-C-O-T-T. Of course the links are in the show notes.

Untold Stories wouldn't be here without the amazing production company BlockWorks Group. A few months ago, I approached BlockWorks Group and I said, "Hey guys, I want to do a show, Untold Stories, can we make it happen." And these guys are the only event and podcast production company that I trust. Really the show is powered by them. And it wouldn't be here today without the amazing work of a BlockWorks Group team. So for access to all the premier digital asset conferences, and to check out their other podcasts in their network that they produce. Check them out at blockworksgroup.io that's blockworksgroup.io. I promise you will not be disappointed.

Hey, everyone, this is Charlie Shrem and you're listening to Untold Stories. You've all heard of the printing press right? Well, if you haven't then you're living under a rock. But basically, the printing press fundamentally changed how information spread around the world. We're going back like I think like thousands of years ago, the Gutenberg printing press was invented and actually banned for the first few hundred years. And in fact, if they caught you with a printing press, you'd be hung, you'd be burned at the stake basically. What the printing press enabled people to do was to take information and mass produce it. And before the printing press was invented, books and information was only controlled and distributed by the church and by the state. And they were always work together. So you had basically the King of England, and the Church of England, and the monks were the only ones who knew how to read and write.

So I think in those days, the literacy rate was just insane, where like, only one or two people out of 10 actually knew how to read and write. And I actually doubt that even number is accurate. Most people never learnt to read and write just because they never needed to. The information came from the church, came from the monks and those scenes from those old TV shows where you have like monks sitting in these rooms rewriting the Bible and things like that. And basically, information was controlled and then the printing press came out. And all of a sudden you'd have free information. And interestingly enough, the book in history that's been reprinted the most is the Bible. How funny is that? So basically, you have the Bible, which was the book that the church was spreading, was printing, that was the book that if they caught a Bible in your house that wasn't printed by the church, rather, it was printed by an illegal printing press, you'd be killed, you'd be hung.

And it never made any sense to me until I finally understood how information is so powerful. And now we're living in a world where money is power, controlling your finance and your financial world and your money is power. And there's no better person to talk about this than the CEO of eToro, Yoni Asia. Yoni thank you for so much for coming on the show.

Yoni Asia
Thank you very much for having me. What a great opening.

Charlie Shrem
Yoni, I have to say, also, thank you for sponsoring Untold Stories because this is such an important mission for me. And you're helping me further this goal. So I just want to say thank you.

Yoni Asia
We're very happy to promote Untold Stories to the world.

Charlie Shrem
So for those who don't know, eToro is a social investment network and I actually didn't understand what that term meant. And you only will explain it. When you think about it, it's so mind blowing, you almost ask yourself, "Why did Yoni invent it and why did no one do this before?" eToro allows its users to watch the financial trading activity of other users, copy them and make their own trades. So essentially, when you're a user of eToro, and you're a good trader, you allow your trades to be uploaded in real time onto the network and you can allow people to follow your trades, you can trade and follow other people. And it's a whole social network. So it combines finance, but also it combines information. And like we talked about earlier, those two are so important. And this was pre-Bitcoin. This was stocks, currencies, commodities, you launched this ... Yoni when did you launch this company?

Yoni Asia
So we started eToro in 2007, with a vision of opening the global markets for everyone to trade and invest in a simple and transparent way. I started trading when I was 13 and I was passionate about capital markets. I still remember today, my first trade when I clicked a trade through my Israeli bank account, and actually could see suddenly the trade happening on Yahoo! Finance on the blotter of trades on NASDAQ. I could see suddenly my trade going from my Israeli bank account into Wall Street. And that feeling is exactly the same feeling I had when I made my first couple of Bitcoin transactions. That feeling that something is moving around the world from one place to another through technology. And that made me so passionate about capital markets, which eventually led me to found eToro with vision of opening the global markets for everyone, because still today in most places around the world where you talk to people around investing in stocks, or investing in the markets, they think investing in finance in general, is complex, it's intimidating, it's boring.

Again, taking to your great opening, people probably thought that education and information is complex and other people should do it and people still today think finance is complex and intimidating, and other people should do it. And when we started building eToro, and we focused at first at simplifying just the user interface of accessing the global markets, we realized that people don't need only simplified access, they need also a simplified way of making decisions and consulting with others. And this was just when Facebook and Twitter really started. So social networking was really still at the beginning. And we created a social network where every person in eToro, who basically funds their brokerage account with eToro. Every trade they do gets published online, and everybody can actually see, follow and automatically copy top traders from all over the world.

So with 11 million users now, we're the largest social trading network in the world where people can really see what other people are doing from all over the world and in my personal portfolio, which is by the way public so people can see it, I'm copying 45 different people on the platform, which means I have a portfolio that the part of it is myself managing it. So you can see I'm holding Bitcoin and Ethereum which are sort of my own trades and Google and Facebook and Apple, but I'm also pumping 45 people which means 45 different people are managing my account and every trade they do, gets transacted in a proportionate amount with the same time, the same price in my account when they transact.

Charlie Shrem
I'm just curious, do you remember what your first trades were? I mean going back to that time when you were ... You said that feeling, that adrenaline feeling of when you made your first trades, do you remember like what you were trading? Was it commodities? Was it stocks?

Yoni Asia
No. It was definitely stocks. I don't remember the exact first trades. By the way, probably I do remember, I used to look a lot at AMD and Intel at the spread between AMD and Intel back then which is why it was so funny for me to see how AMD connected to the crypto industry.

Charlie Shrem
Oh yeah, down the road. That crazy, right?

Yoni Asia
Became correlated to people just buying the graphic cards to mine Ethereum because those were a big part of my first trades. And then I just traded a lot of tech stocks throughout the sort of pre or the dot-com bubble area pre-crash. That was the majority of my trading back then.

Charlie Shrem
I found a tweet in ... I was just randomly, I don't know where it came from. But I found a tweet that you and I were tweeting about Bitcoin going back to 2012. And I want to get to that in a second. But, you understood very early on how Bitcoin and how crypto was going to kind of up and transcend the global economy in such a fundamental way the global financial markets. But let's go back to pre-Bitcoin to pre-crypto. You mentioned complexity, right? Complexity ... I don't understand. Well, I do understand but complexity is a business model. I mean, that's why you have Raymond James, you have Cumberland Advisors, you have Goldman Sachs. You have all these major billion dollar companies, that their business model is the fact that the financial markets are complex.

If you look at any sports game on TV, you look at any TV show, you'll see a commercial for a financial advisor. And their commercials have an underlying fear basically saying, "Financial markets are complicated." And everyone knows what I'm talking about. "Financial markets are complicated. Let us do it for you." You basically decided in 2007 to totally change that narrative. Did you get pushback from these large companies?

Yoni Asia
We got a lot of pushback. By the way, we still get pushback on that specific narrative. So when new employees join eToro, I do like a crash course in like fintech in capital markets. And I tell them, that the business model of money management is still very much based on face to face relationship where the basis of that relationship is, trust me, I know better what to do with your money. And the other part when you have an entire business that is based on face to face relationships, is if you think about the cost of the business, the underlying cost is basically the human capital and the time of people spending time with their customers. Which basically means two things. One, you want to minimize as much as possible. So if you're in business, if you're in financial services and in your businesses you have a lot of the thousands of advisors, you actually want to minimize their time with their customers, because that's your most important sort of cost basis, the time of your employees, right? So you want to have as little engagement as possible with the customers. And-

Charlie Shrem
It's completely the opposite though.

Yoni Asia
It's the complete opposite from what an internet company would want. Right? An internet company like eToro, would ... I want our customers to engage with our product every day. To login every day, to look at their portfolio, to ask questions. But with a traditional financial services company, they usually want to do the opposite. And how do you create that opposite? You want to tell them that they don't necessarily need to check up frequently. They don't necessarily need to understand what you're doing, right? In the second part is you really, and again, nobody would generally, openly admit this but as you've suggested before, you want to create that gap that you know what to do significantly better than your customer. Which I don't think is necessarily always the case especially today with a vast amounts of information out there. I think a lot of eToro's customer know more about specific markets significantly more than we do.

Charlie Shrem
And look at the analogy I just told you, information is power. And like you just said that when they control the information or basically convince you that they have better information or better understanding that, then you give them your power.

Yoni Asia
Exactly. And I think nobody necessarily ... The status quo works very well for those in power today, and I think nobody's going give that up very quickly. But I do think that there is a new generation now that have different user expectations. There is two very big transformations happening. One is a generational transformation of wealth. So the Gen Y is going to get about $1 trillion a year. Get richer by $1 trillion a year, in the next 20 to 30 years. That's a magnificent number.

Charlie Shrem
Can you say that again?

Yoni Asia
$1 trillion a year, are trickling down from older generations to newer generations and that's roughly how general ... The amount of wealth being accumulated by Generation Y every year from now, for the next 20 years. Again, these are very big numbers or very rough numbers. But Gen Y is supposed to become the richest, wealthiest generation or [inaudible 00
18
23] of people on the planet within the next 10 years. And I think our expectations of how to access the markets, what is the product, we expect things to be a mobile app not a spreadsheet on a PDF. When you talk to traditional finance people and they tell you they have a product for you, they send you a PDF and they say, "This is the product." It's a definition of a structure or a fund where when we say product, we mean an app, whether it's the social trading app of eToro or the wallet app. It's all around the user experience and the features of a specific experience.

Charlie Shrem
It's insane that you've said that.

Yoni Asia
So there's a huge generational transformation of wealth. And that transformation will also include to a very large extent technology. Now, in parallel, I've been dealing with trading technology since I was about 19. And I realized relatively early on when we've built eToro, how broken the system is. And you really need to be in the computer sciences world of financial services to understand how broken things are, and understand what is T-plus-1 and T-plus-2 and why do things take two days for things to settle basically. For a simple movement of US dollar from one country to another it takes two days-

Charlie Shrem
I'm still waiting for an ACH transfer from last week.

Yoni Asia
By the way, and if you think about things that aren't that complex, like moving your stocks from one broker to another, that potentially could take two weeks. Now if you think about moving foreign stocks, if you'd had Japanese stocks to move them from one broker to another, potentially impossible. So, financial assets in general, are today nontransferable or it's very hard to transfer them through technology. Some financial assets by the way, are almost not transferable. And that is because the underlying technology is really broken. And it's going to take a long time to fix that infrastructure. And I have zero doubt that blockchain technology is a paradigm shift in how fintech solutions will be build and will be utilized, and that will see the greatest transformation of wealth moving into blockchain assets over the next 10 to 20 years. Now-

Charlie Shrem
Tell me about that because I've said Bitcoin is probably one of the largest socio economic experiment the world has ever seen. And I've read that you said somewhere, that this is a social revolution. So let's talk about that word, because that implies human beings. Tell me about that.

Yoni Asia
So first of all, we need to remember that finance is social interaction, right? Money in social interaction. It's just a very efficient form of human communication, which basically answers very quickly, how much do you think this is worth and how much are you willing to pay for it? But if you think about sort of different processes, if they're are simplified into something as simple as one number, they become super efficient. And that is money markets and eventually capital markets. It's a super efficient way to communicate value and because of that, to transact with value. But the underlying technology is compared to what we understand is possible, today is broken. And that is the very simple feature which I think is the biggest revolution eventually of Bitcoin and what got my eyes to sort of open up is two very simple features. One is, you can hold the assets. So, any entity can hold the assets, so, you can be your own bank or custody. And second is, by definition it has a feature that it is transferable to anyone else with a wallet and that always works 24 seven.

And of the $140 trillion of assets in the world right now, I would say a very small amount of financial assets actually have those two features which enabled me to say, "Hey, I want to hold my own stock or gold or mortgage or bond, I want to hold it on my own without a financial intermediary." Right? So if you'd go to your broker and you tell them, "Listen, I own some Apple stock with you, please send me the share certificate. I want to keep it in my safe." They wouldn't really know how to handle it anymore, right?

Charlie Shrem
Yeah, it's so funny, they don't even know what that is.

Yoni Asia
So being able to tell your financial intermediary, "I want to hold it on my own and that I want the ability to transfer it to whomever I choose." Those are technical features that in my opinion, will become standard in every single financial asset in the future. Now, it might take time, there might be regulatory sort of obligations around it, but that is the digitization of capital markets of the financial markets. And I think we're really at the beginning of this process, very similar to how in '98 '99 when I traded stocks for the first time around the dot-com bubble, I looked at the Internet and I said, "That's eventually how information is going to flow. Everything is going to move to the internet. We'll be able to communicate with everybody all around the world." And of course, they were a lot of naysayers saying, "Everything is going to stay the same. And the same media companies will control the world." And eventually it took around 15 to 20 years from the dot-com bubble burst through the internet to become what it is today.

Charlie Shrem
eToro is crypto trading made easy. It's one of the largest and smartest trading platforms in the world with extraordinarily low and transparent fees, join myself and 11 million other traders and create an account at eToro.com. Link's in the show notes and build your crypto portfolio the smart way. As a mining equipment broker Scott Offord wants to make sure his clients are well informed in making data back business decisions. Scott created the only free online tool for calculating profitability and days to ROI for miners. It's a better way to compare the efficiency of various models of ASIC miners and to see how the price of the miner and the efficiency impacts your mining profitability. So check it out at cryptomining.tools and find Scott on telegram and Twitter @O-F-F-O-R-D-S-C-O-T-T. That's O-F-F-O-R-D-S-C-O-T-T.

You mentioned Generation Y earlier and a trillion dollars are trickling down, are young people investing? Like what type of demographics do you see with eToro? And are you seeing like a shift from investing in stocks to now more people are buying and selling and trading cryptocurrencies?

Yoni Asia
So first of all, yes, we see a lot of younger people trading on eToro. The average age on eToro is about 37. If you compare that to some of the more traditional brokerages or investment houses that's 20 to 30 years younger than their average age, and so definitely see younger generations coming in. We also see a very ... So we have, I think, a lot of people on eToro that came to eToro to trade crypto, actually answered in a survey that this was the first time they've ever traded online-

Charlie Shrem
Really?

Yoni Asia
-then have continued to trade stocks on eToro. And I think the former CFDC Chairman said something very similar. He said, "We're seeing new generations who are interested in this new type of asset class which I believe is again a generational asset class and that we need to make sure that we enable innovation to create access to those assets."

Charlie Shrem
It's so insane, not insane but it's so enlightening to hear that information because I think I heard a radio program a few weeks ago saying that people are worried that the stock market is drying up. That younger people are just not interested in trading stocks and actually the news program didn't even mention cryptocurrency. It was just a "Hey, like the volume over time of the stock market is just declining because the younger generations just aren't interested in trading, they don't really understand it." So you don't see that?

Yoni Asia
I don't see that. And when we look, but again, obviously, I live in my own echo chambers surrounded by our users.

Charlie Shrem
It's hard one. I'm happy about that.

Yoni Asia
But when you look at the portfolios of a lot of our users, you'll find something super interesting. You will see that they're investing in stocks that you would be familiar with 90% of the stocks that they're investing in. So they're investing in companies, they are investing in products that they use, right? When you invest in McDonald's-

Charlie Shrem
I fucking love McDonald's.

Yoni Asia
-or Coca Cola or Starbucks or Apple or Google or Tesla you don't necessarily invest in a company's and its financials only, you invest in a theme that you invest in what you believe in, you invest in a company you believe in, you invest in a product that you consume. And when we ask our users around it, they have an understanding of the company's financials. Some of them even join investor calls, the quarterly earnings calls, which is super interesting because you suddenly see more people joining investor calls. But really their first pick of the companies that they want to invest in are companies who they understand their product.

Charlie Shrem
So Satoshi came out with the white paper in 2009, you had the first version of Bitcoin in 2009. And that was at the heels of the financial crisis. In fact, I think the worst two years of the financial crisis here was 2010, 2011. You launched in 2007. So you were still a very young company. We've been talking in very macro bring me down to like, what did it look like in 2008, 2009, 2010? You have a very keen insight that I don't have and most of us don't have, take me down to like a very specific, tell me some stories of like things were things that were happening in those like two to three years.

Yoni Asia
So I think what's interesting is to understand really what happened in 2008. Without going to the entire explanation of exactly why it happened and probably going to happen again. When shit hit the fan, that's where you could clearly see back then from my seat as a founder and CEO of a financial services company, that something is broken because the systems, the trading sort of halted, right? Think about, I think there's a good scene probably from the matrix and x men and some others where you're standing and everything pauses and suddenly everything freezes, the cars freeze, everybody freezes in their motion. When Lehman Brothers and Bear Stearns defaulted, a lot of the financial services systems stopped working. And the way that when you-

Charlie Shrem
What does that mean?

Yoni Asia
-think about what that means. Since then I've seen that happening several times. I've seen that happening with a Swiss franc devaluation we've seen that happening with the Cyprus bailout. What that means is that you as a ... By the way, not necessarily consumers, but I learnt a lot of times this is hidden from consumers. So you as a financial institution, try to access funds. And the banks basically tell you, "Listen, you can't right now access those funds." Or you have a trade and you want to sell that trade. And they tell you, "You can't really sell that trade. The market doesn't exist anymore right now, please wait till markets reopen." Right? So suddenly, all of the assets freeze. They're non transferable, they're non sellable, the markets just freeze. And that doesn't happen a lot. But when that happens, it's a very scary moment. And the moments before that, people start panicking to the point ... So people who understand money understand that their money in the bank doesn't really exist, and that if their bank defaults, there is a very good question of, will they get their money back.

Charlie Shrem
Yoni, I don't think the world understands that though. I really don't think a majority of people really understand that concept.

Yoni Asia
So, I can try and explain it. But it's not that difficult. So, traditional financial services, a bank, you deposit a million dollars into a bank. And basically, the bank can then take your million dollars and then lend them to someone else, right? So, that someone else now has your million dollars. All you have is an IOU from the bank that they owe you a million dollars. So you login from the computer, you will see that you have a million dollars there, but they actually lent the million dollars to someone else. Now, that's a very simplified view because obviously, the whole process of regulation is around how does the governmental regulators make sure the bank can actually pay you back the money that they owe you. So when you want to withdraw the funds, they have enough resources to actually give you back the money. So there's a lot of complexity around how that functions. But generally, when you see your numbers ... In a bank, it's basically, they owe you money. It's not that they keep that money reserved in a safe somewhere.

So, if there is a risk of your bank going bankrupt, that means there is a risk of you not seeing your money back. Because they owe you something but if they went bankrupt, they won't be able to pay it. So what happens near financial crisis is people need to start distributing their money across many banks, right? Because you say, "Okay, I don't know who is going to default and when." But you understand that defaults are coming. So people who had money in Lehman Brothers and Lehman sort of went bankrupt, lost their money. Right? So when a bank, when a financial institution defaults, in theory, it should have sufficient amounts of money to pay back their customers. In practice, in a lot of cases that's not the case.

And when you are within the industry, and you start seeing how that works, people start ... In 2008 was the first time I realized that if there is a big financial crisis at the size where financial institutions start going bankrupt, the most important thing you need to do is take your money and distribute it in as many banks that are high rated and start understanding their rating and sort of what's their risk. Because you have no ability to tell them, "Okay, I have $5 million. Please send it to me in a suitcase in cash. And I'll keep it in my office." That doesn't work.

Charlie Shrem
There was a movie where that happened. Do you remember? There was a recent movie, I forget which one it was. And-

Yoni Asia
The Big Short is a good example of that.

Charlie Shrem
Is that one he showed up to the bank and he said, I need like $2 million in cash?

Yoni Asia
No.

Charlie Shrem
So there is a movie recently, and he showed up to the bank. And he's like, "Listen, I need $2 million in cash." And like, he had plenty in his account. And everyone was trying to talk him out of it. And they're like, "We can't do it." And he's like, "What do you mean you can't do it? It's my money." And he's like, "You have a week to get it." And it was like a whole argument, a fight. They thought he was being scammed. They had the FBI there to like is someone holding a gun to your head, like they couldn't fathom the concept that this guy would want $2 million in cash. And he did to prove a point. And so that was like ... You try to-

Yoni Asia
Interesting.

Charlie Shrem
Yeah, I forget which movie it was. I'm going to look it up after the show. So then Bitcoin came out. And-

Yoni Asia
And I think, by the way, which leads me to Bitcoin and what I think is a possible scenario, which is potentially the biggest bank run in history. So a bank run is when people come into the bank and say, "Okay, I want to withdraw my money." At some point, the bank doesn't have enough money to give. So by definition, this is how bank works. They don't have all of the money that they owe all of the customers, right? Because some of it is in outstanding loans. So, if everybody go to their bank and say, "Hey, I want to withdraw my money because I want to buy bitcoin." And that becomes a phenomena. As a phenomena, this might actually lead to bank runs and to banks defaulting. And that is the biggest fear for sort of the system stability around crypto is that it actually has a potential impact of creating a real bank run, and to actually create real sort of destruction to how existing financial services work.

Charlie Shrem
It's a real fear. The concept of a bank run ... So there's a movie that I think every youngster in this country in the Western world probably has seen. It's a Christmas movie and come every Christmas like, it's on TV all over too. I think it's called Life Is Beautiful. Or Wayne, what's that movie called? Life Is Beautiful. And it's basically about like a guy who owned a bank. And there was a bank run it was with The Great Depression. So the concept of a bank run, I think every American ... Every probably global citizen knows about what a bank run is. But the concept of actually happening again, is unfathomable. Like, I don't believe it and no one really believes it. Because it's such a scary thought that it can actually happen.

Oh, it's A Wonderful Life, not life is beautiful. Sorry. So Bitcoin comes out in ... Satoshi, launches a concept of Bitcoin at the heels of this crazy financial crisis. And you started publicly tweeting about it from what I see in 2012. Maybe it was earlier, that was very early. That was maybe a few hundred people and known about Bitcoin back then. How did you hear about it? What did you think about it? And have your thoughts kind of changed as the years went on?

Yoni Asia
So I started writing about digital currencies in 2008. As the financial crisis sort of was happening, I realized something is really broken in how the system works. And I wrote The Visible Hand, a blog post called The visible Hand, which actually now relates to a product that we're launching or a project, a nonprofit project called The GoodDollar. And in that blog post in 2008, I said that there's a need for a transparent and open money system. So when one person sends another person or one company sends another company a transaction, all of those transactions should be public. And by being public, that means that one, the system will work more efficiently, because everyone will see all of the transactions. And second, it will make money good because people won't be able to use money for bad things if everything is public.

And the second part, which we can tackle later, is back in 2008. I also assumed that interest rates are going to get lower and lower and that therefore eventually become negative. But the current financial services infrastructure really doesn't support the [inaudible 00
41
17] of interest rates going negatives. And a part of that, what I described is that the more money you have, in theory, you should have higher negative interest rate or the less money you have, you should actually get more interest rate or more positive interest rates. So, personalization of interest rate, which later on by the way from a thought process, I realized or we realized in our research is something very similar to what's called UBI or a universal basic income is sort of what led me to realize that there is a need for a blockchain back then, blockchain based money. And this was pre-Satoshi, pre-Bitcoin. And there were a few people that I used to send information around this, including my brother. And then when Bitcoin sort of starting to emerge, actually in 2010, I started looking at Bitcoin. I was, "Wow, this is exactly how I envisioned this. This is exactly how money should work." And I immediately fell in love in the concept of Bitcoin.

Charlie Shrem
So what did you do next? I mean, did you study it? Did you think about it? I mean, you started writing about it? Explaining about it?

Yoni Asia
We started actually, internally in eToro, sort of figuring out how do we operate with this? So we set up the node. We started mining a bit. We started trading with Mt. Gox back then. So we started buying bitcoin for like $2 $5-

Charlie Shrem
My favorite company.

Yoni Asia
-and we started experimenting with the technology then. In 2012, and again, I still really believed and still really believe that you need to change more in Bitcoin or in sort of digital currencies for them to really create positive social impact. So I'm really concerned about the social impact of crypto as it is today. So-

Charlie Shrem
Why are you concerned?

Yoni Asia
Because I think that generally inequality is one of the biggest problems in the world, that we in theory, live in a world of abundance where everybody in the world can actually enjoy sort of the basics of food, electricity, maybe today also internet and water. But that wealth distribution in how, basically, there are over 2 billion people who are unbanked. People in the world own more than the poorest 50%. So the poorest three and a half billion people in the world. And that eventually leads to [inaudible 00
44
23]. So I do very much believe in free markets. I very much believe in capitalism. But I just think that this system doesn't work well. And because of that, inequality constantly increases. And if you look at crypto, I think inequality is even worse than the traditional financial system. And that's a problem because you would want to use new technology or smart money to actually solve that problem or improve the ratio of inequality. And again, that's our research around The GoodDollar, is how do you create money that, by definition, creates a more equal ecosystem?

Charlie Shrem
How do you solve that problem, though? Like, inequality in crypto words, inequality in the world, how do you solve that problem? How do we even start?

Yoni Asia
So again, from a mathematical point of view, I believe the solution is actually very simple. And that's what we've been researching in The GoodDollar project. So, you'll get this very quickly because you're in crypto and blockchain, so think about cryptocurrency, right? That's the whole concept around The GoodDollar, which also has a unique identity connected to it. So a single identity can only have one wallet. And basically think about a formula that whenever you want, you can claim one good dollar a day. Right? So you can basically mine, you have your identity, you have Charlie or a number that represents Charlie, and every single person can mine, one good dollar a day. So two things that happened that are interesting. First of all, people who would login and mine their one good dollar a day are people who feel the need to do it, right. So let's say one good dollar is worth one cent or five cents, most people won't necessarily login and do the process of mining or claiming if they don't need it, but people who need it will actually do that process. So that's a natural selection to how many people actually claim it.

Now, if you think about sort of, okay, there's a billion people, each of them can claim one good dollar a day, how does that look from an inflation point of view? Eventually, it actually gets to 10% or less yearly inflation. So, the only thing you did is instead of managing inflation the way it is today and managing it through interest rates, and again, the problem with interest rates, is it manifests the rich get richer and the poor get poorer, because the ones who are able to get high level of interest rates with very low costs compared to the interest rates are those that have a lot of money aggregated. And the rest usually have actually loans, which means the interest rates are actually costing them money, and not the opposite. So if you replace interest rate and inflation with a mechanism that basically gives one good dollar a day for everyone, you're creating something that actually creates equality. So constantly, I don't know if you know what a Gini coefficient is?

Charlie Shrem
No.

Yoni Asia
So a Gini coefficient is as a way to measure inequality. And there's a lot of efforts to try and improve the Gini coefficient around the world. And those efforts are a bit futile because they're not capable of really moving the needle. And that's what we've done in our research, we're going to publish some of that research very shortly. If you create an ecosystem where every person can claim one good dollar a day, you constantly improve the Gini coefficient in rates that would take maybe traditional finance in the world, 50 years, would happen in a year.

Charlie Shrem
How do you create value for the GoodDollar?

Yoni Asia
That is the project research. So we're building the app, we're building the cryptocurrency, and we call it The GoodDollar experiment. The big question is, how do you hack value into The GoodDollar? What is the value of The GoodDollar, right? So if you think about this from a macro perspective, what is the value of Bitcoin? We know today, it's $10,000, because people are willing to buy and sell it for $10,000. But I think my first tweet on Bitcoin was when it was 26 cents. And I went through this process for the past nine years. When people talk to me about Bitcoin, it was like, how much is it worth? Why are you buying it? It's worth nothing. It has no intrinsic value. Right now people understand it is worth $10,000 today, it might be worth 30,000 tomorrow, but people understand that it has value. And that value is measured by market forces, how much are people willing to pay to buy it or to sell it for?

And the same goes for any cryptocurrency, as an example of The GoodDollar. And the concept around The GoodDollar and what we're trying to convey is if we can create a better world, a more equal world, through basically inventing money, that has a better wealth distribution into it a smarter wealth distribution into it, and still works in potentially a very capitalist free market's approach, right, you can either have GoodDollars or not have GoodDollars, whoever is willing to sell things for GoodDollars is actually doing good. So if you're willing to sell ads on your podcast for GoodDollars, you're actually promoting GoodDollars, because you're creating value-

Charlie Shrem
I see your point.

Yoni Asia
-the minute you're willing to sell something for The GoodDollars. So there are people now who have GoodDollars in their wallets, because they can claim every day. All you need now is people who are willing to sell goods and services for GoodDollars. And every person who does that is doing good.

Charlie Shrem
Do you think that doing good is enough of an incentive for people to accept GoodDollars over another currency? Because we human being-

Yoni Asia
I think it's really about So first of all, and this is why we call it The GoodDollar experiment. So I'm not here ... Shrem, this is truly a nonprofit project, there's no ICO.

Charlie Shrem
No I love this, because-

Yoni Asia
It's really about proving a point and sort of potentially may be inspiring future projects to understand that point. And the point is, you can do good and make money. And I believe that doing good and making money at the same time is a better way of making money. And that the more people who want to make money, and people who make money, basically, if money runs the world, then people who make money are making the world run. If all of them would say we want to also do good by making money and therefore use GoodDollars, then I think, yes, we have an opportunity to truly change something. Maybe in the small scale maybe in a large scale. But I think it's super important.

I think, by the way, when you talk to very wealthy individuals, they already understand that they have a responsibility to give back. I think that's a very interesting and great trend happening. I think Founders Pledge is a great example of that. And you see people like, whether it's Mark Zuckerberg, or whether it's Warren Buffett, and Bill Gates around that, that you understand that, very wealthy individuals want to give back and want to create positive social impact. I don't think there is a good enough sort of funnel for that. And I think that creating a new version of money which is better, potentially create that construct, right? So what if you could create a construct The GoodDollar, where people could actually donate a billion regular dollars, transform them into 10 billion of GoodDollars, buy it, it has more value.

Charlie Shrem
I'm a big fan of this, because if anything, I'm a student of socio economics, it's what I studied in college, it's what I've always done. So, the concept of you having basically a research and development center, and a nonprofit studying how to increase equality around the world, and then you doing it with a very naval approach. I love it. And I'd love to be a part of it somehow, it's so intriguing. So thank you for telling us about it. And I know that because Wayne is looking up Gini coefficient right now, a lot of our listeners are going to be looking up all these different terms and concepts that you've taught us.

Yoni Asia
So by the way, you are more than ... It's an alpha, the alpha already is working, you can go to the website, gooddollar.org, you can read there a lot of information. We are trying to publish. Everything by the way is open source, in GitHub, all the code, and we're trying to publish as much as we can our research on it. And again, this is something I've been passionate about for the past 11 years. I started writing about it in 2008. And then when the crypto rally happened in 2017, I said ... Before the crypto rally happened I said, "I can't talk about this with anyone because everybody sort of assumes I'm crazy, if I'm talking about creating a new type of money."

Then after the crypto rally happened, people were suddenly opening to hear about it. And to think about it, like the level of acceptance that there is to such concepts today are probably 1000 times higher than they were two years ago. And that alone for me is worth the entire sort of crypto hype and the entire Ethereum ERC 20 utility tokens expansion back in 2017 because it enables people to think around new constructs of money. Around new utilities of money and tokens, whether it worked or not or whether there is real proof or not. Proof is still in the pudding, I guess. But it does enable people to understand that there is something coming and that there's an opportunity to really transform what money is. And again we're very happy for you to join the alpha users now with the alpha of GoodDollar.

Charlie Shrem
Thank you. And that's it. So we're on your website right now gooddollar.org. And you have a quote, The 42 richest people on the earth have more wealth than the poorest 3.7 billion. That is just a staggering number.

Yoni Asia
And I'll tell you something that I meet some of those 42 people and a lot of them would want to change that. So they actually do want to give back and they want to improve the lives of the 3.7 billion. There is simply the technology or construct or concept isn't there to make something scalable?

Charlie Shrem
Do you think that crypto like five or 10 years from now we'll have more of these branched off socio economic experiment, coin, tokens type of things?

Yoni Asia
Different type of things.

Charlie Shrem
Okay.

Yoni Asia
Yeah. Again, I think, money is changing form. I think there's a big ... I think there's now a struggle between four very powerful forces.

Charlie Shrem
What are those forces?

Yoni Asia
And those forces are, let's call them the keepers of the status quo, who are governments and regulators, who have currently the monopoly of printing money. And that's the monopoly that you generally you don't give away so easily. Referring back to your opening, I do believe that we are at a time where the separation of state and money is very similar to the separation of state and religion, which is exactly what you talked about, right? So I come from Israel, born and raised in Israel, and the separation of state and religion is still an issue being discussed. Here in the US, there is a clear separation of state and religion. A separation of state and money is a very big sort of social revolution on what is the purpose of state in our lives. So, government control over the monopoly of printing money and sort of monetary policy, that's one big force. By the way, its power mostly through regulation.

The second one is the keepers of money, banks. And by the way, those are the keepers of the status quo, sort of regulators and banks. Banks have gotten from regulators the license to basically keep money for people and to digitize money, right? So the government, in theory prints it, but the keepers of money are institutions who are regulated by the government, and the big ones are very powerful institutions all around the world. And they wouldn't want to have that go away. And on more than that, by the way. And I'm sure that's what they're whispering in the ears of regulators, if they lose their ability to keep the money, then they also lose their ability to lend money.

So again, leading us to the bank run issue, if everybody would suddenly move their assets from the banks to whether it's by the way, Bitcoin, GoodDollars or just their own safe, then the banks wouldn't be able to give any more loans to businesses, and then businesses wouldn't be able to finance themselves. And that's why banks would tell the regulators, "You have to protect us from this new technologies to make sure we can stay the keepers of money. So we can give loans to small businesses."

Charlie Shrem
Who should be the keepers of money then? Because you have Facebook and the Libra organization believe they should be.

Yoni Asia
Right. Which leads me to the two other forces. One is, as you mentioned, the Facebook's, the Libras, and these are the, let's call them, the tech giants, whether it's WeChat in China, or Facebook from the US, or many others coming, I'm sure we'll see a coin coming from Amazon as well.

Charlie Shrem
eToro is going to be a tech giant.

Yoni Asia
Tech companies or fintech companies, obviously want to take a part, a lucrative part of bank's businesses, and we do want to change the status quo, because when the status quo changes, then money flows. And again, eToro's first year of operation was 2009. This was the financial crisis. In the midst of the financial crisis, we launched the platform and had actually a very good year, because people were afraid of what's happening in the markets. So they looked for alternatives of what to trade and where to invest. And then the fourth force is an interesting one, we somewhere we're in the middle between sort of the tech companies or tech giants and the crypto community or cyber punks, or crypto hackers.

So the cyber punk movement is a very libertarian community that believes in open source, that doesn't believe in sort of for profit. A lot of the crypto community really don't like what Facebook are doing with Libra, and wouldn't want that to succeed, right? So there is a very big difference, by the way, regulator's job is to protect consumers, it's not to keep the status quo for banks. So there is a lot of tension also between regulators and banks. And so these four forces are all now in motion to see who eventually controls or will control the future of money.

Charlie Shrem
I think that Libra ... I'm still very against Libra, but I think that the whole Libra thing is a good distraction for regular ... So you know that quote, I think it was Gandhi who said it that first day, they ignore you, then they laugh at you, then they fight you and then you win. It's so funny how for like 10 years, the government dismissed Bitcoin, still does, governments around the world. Some of them do certain things, but then Libra doesn't even launch but it just gets announced, but it's seen as such a threat to the world order that they're doing hearings and senate hearings and the global world governments are at Trump and everyone is just immediately coming down on it, because they see it as a threat, but they still ignore Bitcoin, not even comparison to Libra. So I guess now I'm like, "You know what, let them go and fight Libra, because Bitcoin and crypto is the real threat."

Yoni Asia
Right. But by the way, the crypto community should be concerned by the ability of government to slow down the adoption of crypto as a mass market through regulation. I think crypto community underestimates the big government's abilities to do it. Smaller ones might not be able to do it. Because again, the peer-to-peer nature of Bitcoin says that you can always buy bitcoin from someone on the street for cash. But what when cash disappears, and it is on the path of disappearing?

Charlie Shrem
There's a big war on cash right now.

Yoni Asia
There is a big war on cash. And if you think that cash ... And that war will be won by governments, and all your money will suddenly be digital money controlled by either banks or tech companies, then they're able to really halt the process of Bitcoin. By the way, Israel is a very good and bad example for that. There's a very big blockchain community in Israel, a lot of crypto companies in Israel. But consumers are stuck because banks simply do not enable anyone to transfer or receive dollars from crypto companies overseas. So if you are an Israeli, you receive Bitcoin, you put it in crack and you convert it to dollars and you send it to your bank, the bank in Israel would block that transaction. You will not be able to get that money into an Israeli bank period.

Charlie Shrem
So how do people buy and sell Bitcoin in Israel then?

Yoni Asia
Generally, through one or two specific companies were the only ones who have bank accounts. And the reason is because they went through a process of suing the banks and winning in Supreme Court. So they forced the bank to keep their account open. So there are many, by the way, lawsuits of consumers now against the banks around this. And other than that, it is practically impossible. And of course through eToro.

Charlie Shrem
Wow, Yoni, how can people start trading on eToro? How can someone who's nervous about trading anything whether it's crypto or commodities, or stocks, how can they get started on eToro? Is it difficult or is that easy?

Yoni Asia
It's super simple. We just launched eToro in the US. So across the globe, we offer people from 100 countries to trade, stocks, equities, markets, commodities…and crypto. Here in the US, we just started four months ago, we started first by offering our crypto trading platform, you just go to etoro.com. Within five minutes, you can open an account and fund your account through ACH and we'll add debit cards very soon. So you can open an account and fund an account within five minutes basically start trading 15 cryptocurrencies

Charlie Shrem
I know your time is so valuable. So I just want to say thank you again for taking the time. You basically live and work out of two different continents, you're all over. Thank you again for that. And thank you for sponsoring this show. It really means so much to me, and I can't wait to release this episode.

Yoni Asia
Thank you very much Charlie. It's been awesome.

Charlie Shrem
Hey, everyone, thanks for listening. This episode of Untold Stories is sponsored by Scott Offord, the creator of crypto mining. Scott's a broker of ASIC mining gear and helps people buy and sell their miners. He created a Bitcoin mining profitability calculator and an interactive ASIC hardware comparison chart that you can find at cryptomining.tools. It's the only free online tool for calculating profitability and days to ROI, that includes the impact of the Bitcoin block reward having. The calculator lets you put in your estimated up time to give you a more realistic profit projections. So check it out and find Scott on telegram and Twitter @O-F-F-O-R-D-S-C-O-T-T. New episodes go live every Tuesday at 7am EST, links to our Apple and Spotify channels are in the show notes. You can also follow me on Twitter, Charlie Shrem to continue the conversation. See you next week.