Transcription Episode 10

Hello everybody, welcome to Living on Blockchain. Today we have a really interesting interview lined up for you. So we are today interviewing Camilla.

She has founded The Defiant, which is one of the leading newsletters on DeFi in this space. She’s also written a book which is coming out in July. It’s called The Infinite Machine, The Untold True Story of Ethereum and How It Wants to Revolutionize the Internet and Money.

So the launch date is July 14th for that one. And previously she was working with Bloomberg in taking care of business and in the fintech space. So this one is going to be really interesting, guys.

Let’s deep dive right in. Hi Camilla, thank you so much for talking to me. And how are you doing today? I’m doing well, thanks so much for having me.

It’s been an absolute pleasure. You’re such a prolific journalist and with your background, it’s the honors all mine. I’m hoping that the next half an hour will be very, very insightful.

So tell us a little about your background. Sure. So I’m a financial journalist.

I’ve been covering markets for around 10 years now. I was at Bloomberg for eight years, started in New York with an internship, then went to Buenos Aires to cover Argentine markets there with Bloomberg. I was there for four years covering mostly bonds and effects, currency controls, inflation, that sort of stuff.

That’s where I wrote about Bitcoin for the first time in 2013. I was just fascinated to see how Argentines were using Bitcoin to protect against inflation and currency control. So that’s kind of what sparked my interest in cryptocurrencies.

After Argentina, I went to Spain, to Madrid to cover European stocks. Then I came back to New York to cover mostly emerging markets and then crypto. And then left Bloomberg beginning of last year to finish the book I wrote about the history of Ethereum with HarperCollins, which will be out in July.

And then in June last year, I launched The Defiant, which is a newsletter focusing on decentralized finance and looking at a broader content platform for the open economy. So that’s what I’m building it out into right now. This is super, super exciting.

Tell me a little more about this book. It’s called The Infinite Machine. It’s being published by HarperCollins and it’s coming out in July of this summer.

How excited are you? And tell me a little about that book. Yeah, I’m super excited. I’m just looking forward to the launch in July.

You can pre-order right now on Amazon. So it’s the first book on the history of Ethereum in telling the story of how Ethereum was created from the very early days of Vitalik and Nihai starting Bitcoin Magazine and then how Vitalik went on a trip around the world. He wrote this white paper, which encouraged a group of people from all over the world to join him in building this very ambitious blockchain.

And how that unfolded and the different difficulties they faced. They overcame how large Ethereum basically blew up overnight in 2017 with the crypto boom and then the bust. So it’s really a rollercoaster of a book.

Hopefully, it makes for an interesting story whether you know about Ethereum and blockchain technology or not. Wow. Okay, that sounds lovely actually.

Okay, so now that the book is coming out and you have this newsletter. So how did this newsletter come about and what exactly do you usually post in it? If I’m not wrong, it’s a weekly newsletter, right? No, it’s semi-daily. Oh, okay.

Yeah, I publish around four times a week. Okay. Four to five times.

So yeah, it came about with me researching for my book on Ethereum. I obviously was very deep into the Ethereum community, going to many of the hackathons and conferences and interviewing people every day. And so obviously, I saw this emerging ecosystem of financial applications being built on Ethereum.

And I thought it was really fascinating how these applications were actually delivering actual value to their users. And there were users on top of using them. There was actual money being transacted with growing volumes, growing activity.

I thought it was just incredible what these protocols were able to achieve in such a short period of time. I mean, it’s something that’s only been around, I don’t know, two years. Yeah.

And so this was back in mid last year, I had just turned in my first draft of my book and saw this ecosystem. And it was really doing what uncensorable money is supposed to do, just like lowering the barriers of entry for anyone in the world to different financial products. And it went beyond Bitcoin value transfers from point A to point B. It was more than that.

It was exchanges, it was lending, it was also payments. Yeah, it’s a smart contract. The opportunities that opened up were so many.

And that actually kind of, I think, made people look beyond Bitcoin. So I think that is absolutely brilliant. And there are so many people who are batting for decentralized finance.

And rightly so. I think more than ever now, I believe, with these economies failing and banks failing, and currencies being devalued, it’s more important now than ever that people actually gain control of their finances. And decentralization would take them a long way, not just with their finances, but with other stuff as well.

Yeah, no, I agree. I wrote about this on the Defiant, a column on how times of crisis really highlight the need for a more decentralized future. Because it’s in times like these where we see how governments, corporations, and central banks react in extreme times.

And what we’ve been seeing around the world is how governments are increasing their control of people and sometimes overreaching that control. How central banks are printing money, devaluing their currencies in an effort to stimulate the economy. It’s debatable whether that kind of stimulus works or doesn’t.

We’ve seen companies censor their users with Medium taking down posts on coronavirus and Twitter doing that too. And even banks limiting withdrawals. So it’s really in times like these when you get a sense of how much control these institutions have over individuals.

And so it really highlights why it’s important to have an alternative. And I think with Bitcoin, but really with a more complex financial ecosystem like what DeFi is starting to build, you really can get that alternative. You can get a viable alternative financial system.

And so that’s incredibly fascinating to me. Absolutely, it’s incredibly fascinating. So what has your experience been like? You’ve been working as an independent journalist and covering stories from Argentina, as you said.

How has the adoption of crypto been in Argentina compared to other nations perhaps? I haven’t been living in Argentina for a while now, but what I saw there is that people were actually using Bitcoin for what it was meant to be used for. Crypto does get a lot of speculation around it, but the reason why it was created was to have this uncensorable money. And why do you need uncensorable money? You need it for places such as Argentina where the government is telling you what you can and you can’t do with your own money.

So it happened to me. I was earning my salary in pesos. And of course, with inflation, the first thing you do is you buy dollars.

As soon as I moved to the office in Buenos Aires, my colleagues told me, as soon as you get your salary, just buy dollars right away. So I had been doing that, and then Cristina Fernandez got reelected. And I think it was like a day or a couple of days after she got reelected, she banned foreign currency purchases.

So you couldn’t buy dollars with your pesos anymore. And it was as simple as that. She just went on TV and said, okay, you can’t buy dollars anymore.

I went on my back, and the option to buy dollars just wasn’t there. And I stuck with my pesos, which were devalued. So that’s why it’s so important to have this monetary system that’s independent from government and central banks.

So it’s in countryside like these where adoption really picks up faster and more people understand the value of cryptocurrencies. More than maybe in developed nations that don’t really have these problems and haven’t had bad experiences with their governments. But in Argentina, Venezuela, and so many other places in developing markets especially, people get it right away when you say, oh, it’s money that can be seized and isn’t affected by any central bank.

They get it because they’ve been impacted by this. So I actually find that a little surprising, as you said, that people in the countryside tend to understand this. And perhaps the developed nations, I agree that they haven’t seen those kind of problems.

But I seem to feel that, at least in the subcontinent, there is a lack of financial literacy. So people do not really understand. They don’t even realize that the money in their bank is not really safe.

The gold standard has long been abandoned. And those are the kind of arguments that I have heard against cryptocurrency. That it’s an asset, but it’s not backed by anything.

At least a fiat is backed by gold. And then I have to tell them that a fact check, that was abandoned years ago. So financially, I think, has a huge part to play.

What do you think about how can we make people more financially literate? And especially not in the developed nations. I think they still might be a little better at it than how we are doing. But in the developing nations, I think financial literacy is really lagging behind.

Yeah, it’s a shame. But it’s hard to kind of expect people to really understand every intricacies of the financial system. Just kind of the task of expecting to educate everyone before they can use these currencies.

It’s a lot. It’s a really high bar to set to expect the whole population to know everything about finance and how money works. I think the way that people start using these tools and start to learn about them is when they see a benefit.

If you’re seeing your savings being eroded by double-digit inflation, you start to find an alternative. If you have a friend that says, actually, I bought this digital currency that’s pegged to the dollar. And it’s not issued by our government or central bank.

It lives in the internet. I think that’s basically all you need to understand to say, okay, maybe I should put some of my savings on this digital dollar. And then you can start to say, okay, so what is this? It’s backed by this and that.

And then you can start to learn more. But I think people will be drawn in to crypto and to these platforms first by the benefit that they can get. And so same thing, like another example is, why would someone in the developed markets be attracted to this? Well, the answer with DeFi has been high deposit rates.

So in the developed world, because central banks are printing so much stimulus money, they’ve been pushing rates down. What you can get for your deposits in a bank is nothing, is maybe 2%, if you’re lucky. Under 1% is most common in Europe.

Standard, yeah. Right. So if you get this system where you see 6% return on your deposits, or earlier in the last year, I think it was closer to 10%, that’s something.

So it is obviously extremely risky. We’ve seen all these exploits. It’s a very new system.

It’s a new technology. But it’s still an alternative. But with any risky investment, it’s maybe worth looking at and putting in a really small amount of your savings.

And I think that’s how people will get drawn in. Yeah. So they don’t really have to know how MakerDAO works or what Ethereum is, but they do know, okay, this gives me 6% on my deposits.

It’s risky because it’s crypto. So maybe I’ll put in 5% or 10% or 2%, whatever, a small amount of my savings in and get a little bit more. Yeah, I agree.

I actually completely agree. I think a lot of it would come from word of mouth that people can just start perhaps diversifying their investment. And look into it as another asset class in which you are just putting your money in and seeing the better return.

Perhaps that is the way for greater adoption. Because one of the greatest arguments that people have against crypto tokens is, okay, it’s just used for speculation. Again, which is not true.

It’s just the lack of information that is being disseminated. So they don’t really understand that it’s not just exchanges and there are smart contracts. And as you said, there is lending, there is P2P, there are the opportunities are immense.

But again, I think information that is sort of going out, I think mainstream media is a little bit blamed here. Yeah, but no offense, but I think the big media houses have painted a very demonic picture of cryptocurrency in general. Well, I think the reason is because coverage comes when there’s big price movements.

That’s usually what will catch the attention of editors and journalists in mainstream media. They won’t cover the day-to-day of crypto. They will rarely cover just developments in more kind of the grassroots activity, what’s happening in DeFi and that sort of thing, which might give you an idea that it’s not only about the price going up and down.

There’s actual innovation going on. But I think because mainstream financial media and just broader media, their beat isn’t to cover crypto. Their audience isn’t there to read about crypto.

They’re there to read about general news, they’re there to read about what’s going on in politics and big financial stories. I mean, if you think crypto is still a niche kind of thing. And they don’t get those TRPs if they’re discovering a niche.

I think it’s a very valid point. It’s rationalizing why crypto is painted badly because only the big things kind of make the news, as you said. So do you think ICOs, there was an ICO boom in 2018, 2017, even a little in 2019.

So do you think that they kind of gave DeFi a bad rep? Yeah, I think they did give Ethereum maybe a bad reputation. Because, yeah, it is true that ICOs attracted maybe the wrong kind of people. Many of them were scams.

The incentives, I think, were misplaced by allowing these startups and projects to raise millions of dollars before even having a product. So after these projects got all this money, maybe the incentive wasn’t there to actually deliver. So many investors got burned.

And then with the volatility of crypto, ICOs came about when crypto was booming. And then came this downturn, which left many people who had bought these tokens down 90% from what they had. So, yeah, I think people had a bad experience.

But I wouldn’t necessarily, I don’t like to demonize ICOs. I think they were a great learning experience for the ecosystem. I think if you look at where Ethereum is now and what the projects are doing now, nobody wants to be associated with legal science.

And so I think that this space has really matured. I think we’re seeing a much more kind of down-to-earth fundraising. We’re seeing projects delivering products in line with the money they’ve raised.

We don’t get these billion-dollar races before even having anything. That’s true. I think it was a lot about market maturity.

Because, as you said, this technology is so much in its infancy. There are bound to be people who are scamsters. And there are bound to be people who try to take advantage of the gullible populace.

But the idea, I think, remains that the technology in itself is wonderful. It’s solving a lot of problems. And there are more of us than them.

Ultimately, as long as that number, there is a balance to it. I think the technology in itself, that is something you need to really fall in love with. Because it solves so many problems.

And decentralization, I think, is the way to go. Because it’s a systemic thing. I agree.

I think it’s clear to me that the future will be increasingly decentralized. It’s just a better system that puts power back into the hands of people. It gives people control over their money, their data.

And again, it just works better. It’s more transparent. It’s faster.

It’s easier. It allows you to be more creative. I think we’re just starting to see the tip of the iceberg in terms of what you can do with this technology.

Absolutely. The world’s the oyster for this. And there are so many opportunities, as I keep saying.

And people are actually waking up to it. Now they are not just thinking of it as a scam in its entirety. Crypto at some point, at least in the subcontinent, people thought of it like a Ponzi scheme.

But that has dissipated that perception. Because people are actually seeing some really great blockchain projects come forward. I agree.

Hopefully that perception will start to fade as more and more people start using applications that actually bring value to them. That are more than just speculating on the price. And I think that’s what DeFi is delivering right now.

Right. What is your opinion on asset-backed tokens? Tokens that have some physical asset like precious metals or some other asset backing them. I think they are a very interesting innovation.

In terms of asset-backed tokens in DeFi, what they bring is more liquidity to the space. They bring the ability for investors to diversify. And also the ability of investors everywhere to get exposure to these assets.

Because in the end what you are doing is you are putting a synthetic version of these real assets. To be able to trade them in the internet basically. Digitize a physical asset.

I think they open up access for investors everywhere to get exposure to these assets. Increase liquidity, diversification. So definitely a good innovation.

The only thing to be worried about there is how in DeFi you expect everything to be fully decentralized. Or at least many people, more like purist DeFi people, will expect everything to be on-chain and not depend on banks. When you introduce an asset-backed token, you obviously introduce an element of trust there.

You have to trust that if it’s a token that’s backed by gold, you need to trust that the gold is actually in the vault. And that it’s backed by the exact number of grams or whatever you are measuring. That is something to be wary about.

But I think with the necessary disclosures and ways to verify that these assets are there. I think it can be done and it can be a good alternative. Absolutely.

And especially for people who are conservative, it can be a good stepping stone for them to get into this space. Are there any projects that you are really bullish on or are there any tokens that you are really bullish on? I don’t like to give financial recommendations at all. But there’s obviously so much innovation going on in DeFi.

I’d encourage everyone to take a look, just being very careful and aware that it’s a risky place, a very nascent ecosystem. But it’s worth looking at and investing a small amount of money and just getting a taste of what the future of money will look like. Because I really do believe this is where things are headed.

This is wonderful. Are there any people that you follow in this space, in the DeFi space that you would recommend that our listeners should follow as well? Or any books that you would recommend? Let’s see, people to follow. I follow DeFi Prime.

It’s a good resource. DeFi Pulse also. I feel bad about naming people and then leaving people out.

Spencer Noon is an investor who is very deep into DeFi and has his own newsletter as well. Chris Black has great educational videos. Are there any women on the list that come to mind? Because this is all about shining light on the women in the blockchain sector.

Are there any women that you can perhaps follow who you like and who you think have good content? Of course. A great one is Taylor Monahan. She’s the founder of MyCrypto, a digital asset wallet.

She’s been great in sounding the risks in DeFi. If you’re getting into the space, it’s good to get both sides of what’s going on. Alison, I forget her last name.

The founder of UMA. She’s awesome. She’s heading one of the most interesting projects out there.

Content creators, unfortunately, I think maybe I’m one of the few women. But there are great founders out there. The founder of Melon Protocol is a woman.

I’m kind of spacing out on the names. Yeah, you don’t need to space out on the names. That’s all fine.

It’s nice, I think, that gives us a little space for the listeners to just go and perhaps follow those. So what would be perhaps your two cents for somebody who wants to get into this space? Like blockchain or DeFi in general or Ethereum. What would be your two cents? My two cents would be to really read up, get informed, and try things out.

Just start out with not too much money in your MetaMask wallet. Have a little bit of ETH to pay for gas, have some DAI. And just start playing around with these things and seeing how it works.

Just dip your toes in the water. Because it really is easy. It might seem daunting at first, but once you start kind of digging in and trying out these things, you realize just how easy and intuitive using these protocols are.

Even more so than traditional financial applications, I think. Yeah, absolutely. That’s true.

So are there any resources that you would like to point the listeners towards? Like a book or a course or something that they can read so that they can get their footing in this space? Yeah, so obviously my newsletter. I have to pitch that. It’s an almost daily newsletter on DeFi.

And CoinGecko just wrote a book on DeFi. It’s for beginners. It’s all the basics of DeFi.

So I really recommend that. It’s called How to DeFi. And then the other kind of website that I think everyone kind of looks at is DeFi Pulse.

It tells you the top projects in DeFi and how much value is. The main metric they look at is value locked in this protocol. So you can see how they’re growing.

And the list kind of just gives you a sense of what the major projects are. Yeah, absolutely. Okay, wonderful resources, I think.

Okay, so I think it’s been wonderful speaking to you. Just a few last questions. What does the future hold like for you? What are your upcoming projects or ventures that you’re looking at? We’d love to know.

So right now I’m focusing on the DeFi. I’m growing it, building out a team. Right now it’s just me.

I hope to bring on more content creators. I want to build out the DeFi into a content platform beyond a newsletter. So I’ll be focusing on that for the time being.

Okay, okay. This is wonderful. I’m definitely already subscribed to the newsletter.

I’m looking forward to the updates now. I did that before this call. So this is wonderful.

Congratulations on your book. I think it’s amazing to have something published in such a nascent field. I think at any age or time, it’s wonderful to have a book published.

Congratulations. Thanks so much. Such a great achievement.

And just any last thoughts for our listeners? Sorry? I said any last thoughts for our listeners who are trying to get into this blockchain space? Any last thoughts that you might have about the podcast? Anything? Any two cents? It’ll be great. We can wrap that up then. No, just look forward to seeing you all subscribe to my newsletter.

Start learning about DeFi. And yeah, just start experimenting. And right now, you might not know anything about this alternative financial system.

But know that it’s there and that it’s working independently from all these central banks and governments. And it’s just a good alternative to have, especially in these crazy times. Yeah.

And it’s good to know that there is a choice. People did not have a choice. Now they have a choice.

And it’s good to perhaps look at it and dip your feet in and just, as you said, get a taste of it. Yeah, I agree. Okay.

Thank you so much, Camilla, for speaking to me. It’s been absolutely lovely speaking to you. Thank you so much.

So everybody who’s listening in, please go ahead, go on Amazon and pre-order the book. It’s coming out in July. The Infinite Machine.

Infinite Machine. It’s coming out in July. And I am very excited.

I’m going to pre-order it on Kindle right away. Because right now, we’re not even getting books. We can’t pre-order a book because of these crazy times.

So I’m going to pre-order it on Kindle. And I really look forward to connecting with you sometime in the future as well. For sure.

Same here. Thank you so much, Camilla. Take care.

Thank you. You too.

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