Erik is joined by two very exciting guests for this episode — Bill Tai, venture capitalist and director at Bitfury, and Derek Hsue (@derek_hsue), investor at Blockchain Capital.

The three have a very engaging discussion about the mining landscape in cryptocurrencies, the similarities and differences between now and the early growth of the semiconductor industry, as well as the issues, obstacles and misconceptions standing in the way of new entrants to the mining sector.

They get into the details on mining operations, how the architecture of certain coins impacts the equipment that mining can be done on, and how the underlying math is different between Ethereum and Bitcoin.

There are also a number of impromptu history lessons courtesy of Bill, including how Wall Street got its name and went from a place to trade furs to the NYSE of today.

They also discuss the future of exchanges, why buying into an ICO means buying into a community and a belief rather than something immediately valuable, and why we are headed for a massive reset of capitalism.

Quotable lines from this episode:

“In the start it’s kind of like riding a little bicycle and you see a pothole, you just go around it, but pretty soon you’re driving a freight train on a track and you can’t get off.” - BT

“You’re going to have to come up with a check for 50-100 million dollars to be noticed by a semiconductor fab.” - BT

“An upstart two years from now is probably going to have to take down 1000 megawatts just to start.” - BT

“It’s really hard to get a venture type return from a mining operation, unless you’re really early on in a chain, or just extremely, much better than everyone else at producing hardware.” - DH

“It all boiled down to, can you bribe a politician with an empty city in China to give you his power plant for a bit of money every month? …It turns out that Ethereum is a more concentrated mining ecosystem than Bitcoin.” - BT

“Programming in Bitcoin is a bit like programming in assembly or DOS, where Ethereum is like programming in a high-level language that anyone that has done an iPhone app can work with.” - BT

“If you look at the largest asset managers in the world, they don’t have a huge incentive to trade in a peer-to-peer manner.” - DH

“It’s not about creating a product that is tailored to the world’s current behavior, it’s about providing that option for non-custodial and a trustless financial interaction.” - DH

“We’re at that point today where we’re all standing under that buttonwood tree with our virtual assets, trying to figure out where to go.” - BT

“The total of all debt in the world is 275 trillion, which is 3.18 times world GDP, it’s growing at 25 trillion a year, and is growing way faster than world GDP is growing.” - BT

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Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.

Check us out on the web at villageglobal.vc or get in touch with us on Twitter @villageglobal.

Venture Stories is brought to you by Village Global and is hosted by co-founder and partner, Erik Torenberg. Shawn Xu is our researcher, Colin Campbell is our audio engineer, and the show is produced by Brett Bolkowy.

Crypto Stories: Bill Tai and Derek Hsue on Mining, Exchanges and the History and Future of Money

Village Global Podcast