The role of decentralization, China/US break down & more with Bestie Guestie Balaji Srinivasan

The host introduces Balaji as an expert in everything and notes that he is used to one-on-one interviews, having appeared on the host's own podcast a couple of years earlier. Today he will have to share the floor with five people "passing the ball". Balaji answers that he will pass, with 20% each, and the host promises a thorough breakdown of airtime statistics.

The group then trades basketball jokes about who should shoot and who should pass. One speaker tells the host he should be a non-shooting point guard, and the host answers that another regular has about 24% of the airtime, while that speaker replies that a quarter share is what he is statistically supposed to take. These are jokes and the percentages are not documented here.

The next lines are an intro tag and sign-on that the transcript renders in garbled form, followed by the host welcoming listeners to another episode and naming Chamath and Friedberg.

A speaker invites another to touch his sweater and describes, in a deadpan comic riff, a material made from the chin hair of a baby goat, harvested by a Tibetan Sherpa who must use lotion to keep his hands soft. It is a joke, and nothing in the exchange is meant as fact. The host adds that it is available "right now" at a low price.

The host then asks Friedberg about his office being hit by a skunk. Friedberg says his windows were open, that it is baby skunk season in Northern California, and that he is getting used to the smell. A speaker makes a crude joke about the smell being his investment returns, the others say it is too soon, and the host moves on.

The host says the next speaker is joining from a nondescript motel in Texas, and Sacks confirms he happens to be there, noting that it is a tax-free state, with no coincidence. Others joke that Texas is a state where you can now carry a gun and where, in one speaker's sarcastic phrasing, women are no longer allowed to make decisions about their own bodies, so that two out of three is not bad. The remark is a sardonic joke about Texas laws and is not examined.

Asked whether he is considering moving there, Sacks says he is open to it. He says he recently ran a Twitter survey asking Miami or Austin, and that Miami won by roughly 52% to 48% with over 10,000 votes. He personally likes Miami, where he already has a place, but is checking out Austin for diligence. The others tease him that it may be easier to list the cities where he does not have a home. The poll figures are his own.

The host explains that people on Twitter had been urging the show to have some "bestie" guests, so they invited Balaji. He asks whether he has the name right and admits he has been pronouncing it wrong for years. Another speaker teases him and says Greek names are hard to pronounce, and Balaji says it is fine.

The next stretch is a long chant of the guest's name that the transcript renders as many repeated variants. It carries no content beyond the joke, and the lines are not quoted here.

Afterwards the speakers compare name difficulty. One says he has been training the world to say Chamath's surname for years, adding that Sri Lankan names are the only ones harder than South Asian names. Balaji notes that Tamil names are pretty brutal, that they add a syllable or two, and that they end in a consonant while others end in a vowel. Another asks them to drop a few syllables, and the answer is that they could but do not. All of this is banter.

A speaker begins to set up a news item about a big tech backlash and a poll, but the line is cut short by interruptions. The host instead asks Balaji a question first. In his opinion, the host says, Balaji is one of the most well-read and thoughtful commentators in tech and in society generally, and he wants to know how he became such a polymath, how he grew up and how he spends a normal day.

Balaji says he tries to learn from everybody. Where others go out to clubs, he reads math, history and science books for fun, and he also walks and works out. He says he remembers a moderate amount and cites it. The other speakers joke about the word polymath. One suggests that Chamath would be like Balaji if he stopped going to the club. These are jokes and self-descriptions, not checked.

Balaji adds an observation. In his view some people are great at business and learn tech because it is necessary, while others are fundamentally scientists or academics who go into business to advance technology. He puts himself in the second group, saying he is an academic at heart who spent almost the first three decades of his life on mathematics and came to tech relatively late.

A host recalls the guest's earlier companies, naming earn.com and 21.com. A speaker, apparently Balaji, says that Coinbase Earn is on track for 100,000,000 in revenue and is much more in terms of gross merchandise volume, and that it is broken out in Coinbase's quarterly filing. He also says the assets added after he joined are more than 50% of Coinbase's revenue, that Coinbase custody and all its assets come from Rosetta, and that USDC, launched while he was there, is at about $100,000,000 a day. He invites listeners to check these claims against the filings. None of these figures has been verified here.

A speaker, noting that Balaji was Coinbase's CTO for a while, asks what he made of the Lend product. His question is that the SEC stepped in and asked for a bunch of information, and Brian Armstrong and Coinbase then announced that they would not launch the product. The source breaks off after the question.

Asked for his take on Coinbase dropping its Lend product after the SEC stepped in, Balaji says he does not speak for Coinbase and is answering in a personal capacity. He argues this is the beginning of an era in which the alphabet-soup regulatory apparatus will be rolled back. The transcript attributes its creation to "FTR", a name that looks garbled.

His reasoning is that the SEC was built to go after firms like Goldman and Morgan, just as the FAA was built to go after Boeing and Airbus rather than millions of drone developers, and the FDA to go after Pfizer and Merck rather than biohackers. The problem, he says, is not any one actor such as Coinbase or Kraken but that technology has shifted and regulators now face many individuals who are more risk tolerant than companies. He predicts the statutes being cited will be knocked down in court or technologically invalidated, that there will be sanctuary cities and states for crypto or international entities such as what El Salvador and Switzerland are doing, and that there will be a big conflict. All of this is his prediction.

A speaker pushes back by asking how it is different this time. People said the same during the Napster era, he says, when peer-to-peer sharing of copyrighted files was widespread, and then the DOJ stepped in and arrested a couple of hundred young people as an example, which drove people away from the market. He suggests something similar may be happening in China now, and asks whether a targeted make-an-example approach could scare people out of the frenzy instead of going after the platforms. The "couple hundred" arrests figure is his recollection and was not checked.

Balaji says 2021 is different from the year 2000 because China is an absolutely ruthless and very competent state. He uses a Dungeons and Dragons analogy: the Chinese government is lawful evil, organized, planning ahead and executing across the whole of society, whereas the 2020 US government is a shambolic, chaotic mess that cannot do much and is optimized for PR and yelling online. He adds that this does not mean it will not try with what it has. These are his characterisations of two governments, offered as opinion.

On Napster, he says there was thesis, antithesis and synthesis. Napster led to Kazaa and LimeWire, the people behind it went on to Skype, and, more importantly, it led to Spotify and iTunes because the record companies were forced to negotiate. A speaker starts to add a waypoint, and the transcript around it is interrupted.