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  • (bright upbeat music)

  • - We're about to go through the fastest period

  • of technological growth and adoption

  • in all recorded human history in the next five to 10 years,

  • and nobody is prepared for it.

  • Humans are simple creatures.

  • We think in linear terms,

  • we can't understand exponentiality,

  • it's just not something that suits our brain.

  • Bitcoin stops the whole process.

  • And then everybody realises this business model

  • of tokens network effects

  • and all of the technological benefits

  • work for almost everything.

  • And that's the rise of NFTs, that's the rise of DeFi,

  • that's the rise of social tokens.

  • That's the rise of so much, that's all going on so fast.

  • It's hard to keep up with.

  • - I would guess if you speak to most people in the public

  • and say, "Is crypto bigger than the internet?"

  • Even investors they'd probably say,

  • "Bigger than the internet."

  • I mean, that's the biggest thing ever,

  • the adoption of the internet, but it's not, right?

  • - This is like hyper-charged new version of the internet.

  • I don't know how big this is gonna be,

  • but it's a lot bigger than anybody thinks of it.

  • When I was in the city, back in the '80s,

  • we had something called the Big Bang.

  • When investment banks and commercial banks

  • were allowed to be the same thing again,

  • this is that moment, there's another Big Bang,

  • but it's the entire architecture of the financial system,

  • that's about to happen.

  • They all know it's coming and they're all working on it.

  • - This is a whole different way of looking at things.

  • - The computers are coming after your job, understand that,

  • understand multiple streams of income,

  • embrace this new future crypto stuff like this,

  • there is an opportunities here.

  • (bright upbeat music)

  • - [Announcer] The world is changing.

  • Inspiration is everywhere.

  • It has never been so easy to connect, share,

  • and bring people together.

  • We're learning from others

  • and finding the best in ourselves.

  • Challenging our beliefs, sharing our vulnerability,

  • overcoming our fears,

  • transforming ourselves so we can transform the world.

  • How far can we go.

  • - This London Real, I am Brian Rose.

  • My guest today is.

  • (bright techno music)

  • This is London real, I am Brian Rose.

  • My guest today is Raoul Pal, the British educator,

  • investment strategist, broadcaster and entrepreneur.

  • In 1997, you became the head of European hedge fund sales

  • at Goldman Sachs before becoming a portfolio manager

  • at GLG Partners, one of the largest hedge funds

  • in the world.

  • Then in 2005, at the age of 36,

  • you left the world of mainstream finance

  • to start Global Macro Investor,

  • your own advisory publication.

  • You first got involved in cryptocurrency

  • by investing in Bitcoin in 2012, calling it quote,

  • "The best trade you've ever found."

  • And doubling your money in a month.

  • In 2014, you co-founded

  • the financial analysis streaming network, Real Vision

  • with the aim to quote, "Disrupt the whole damn system

  • and change the face of financial media."

  • Raoul, welcome to London Real.

  • - Great to be here.

  • - Hey, it's great to have you here.

  • It's gonna be a fantastic conversation.

  • I can't wait to jump into a bunch of your ideas.

  • We both have a background

  • in centralised finance and in banking.

  • So I think it's gonna be really interesting.

  • I started banking in New York City back in the 90s

  • in fixed income derivatives.

  • I went to Chicago, I went to London.

  • It was in the credit default market for awhile,

  • but 10 years ago, I got jaded.

  • I started broadcasting London Real,

  • but we weren't just doing finance.

  • We were doing all sorts of different things,

  • but funny enough Raoul, we dipped our toes into crypto

  • over the years because it was current.

  • So I had Max Keiser here, here back in 2013,

  • screaming at the top of his lungs.

  • I had a Andreas Antonopoulos here in 2015.

  • Then he came back in '17, then he came back in '19, Raoul

  • and he was talking about the internet of money, the future,

  • but we couldn't see it happening yet.

  • So it was kind of weird, he was talking about it,

  • but it wasn't there yet.

  • Then last year we got really busy

  • fighting for freedom of speech,

  • went head to head with YouTube.

  • This year, we ran to be mayor of London.

  • And then after all that was over,

  • I looked at the DeFi space and I was like,

  • "What is going on here?

  • I've never seen this rate of innovation,

  • this rate of adoption."

  • And again, I was in the dot com startup

  • in New York city as a CFO.

  • And I was like, I gotta be involved in this.

  • There's something special happening here.

  • And so we just decided to go all in.

  • I started the DeFi Academy.

  • We got hundreds of students going through

  • and just trying to get involved in this market.

  • I find it super exciting.

  • And I wanna get your thoughts on it.

  • Your video from back in April 30th of this year,

  • called, "Raoul Pal's Introduction to the Exponential Age."

  • It's got over a million views.

  • And I encourage everybody to watch it because Raoul,

  • I think you were channelling some kind of higher energy

  • on that day.

  • I mean, like, I don't no but for 90 minutes you were flowing

  • and you were dropping some terms I'd never heard before.

  • Things like pristine collateral, being irresponsibly long,

  • crypto being call options on the future.

  • And maybe we start with you talking about

  • this exponential age, because Raoul,

  • you felt almost like you had surprised yourself.

  • Like you already knew this market was big,

  • but it felt to me like you were saying,

  • "Wow, this is maybe even bigger than I thought it was."

  • So tell me, first of all,

  • am I wrong on some of those observations of you?

  • And maybe you can walk us through this concept

  • of the exponential age.

  • - Yeah, this whole thing.

  • The more time I spend on it, the whole crypto space,

  • and there's the same is happening with technology

  • at the same time,

  • which is what the exponential age thesis is built on.

  • It's like, we're about to go through the fastest period

  • of technological growth and adoption

  • in all recorded human history in the next five to 10 years.

  • And nobody is prepared for it.

  • Humans are simple creatures.

  • We think in linear terms,

  • we can't understand exponentiality,

  • it's just not something that suits our brains,

  • but let me explain what's going on in crypto

  • 'cause that's our focus for today a lot,

  • is the internet between 1990 and 2000 grew at it.

  • That's the fastest period of growth for the internet

  • 'cause it went from zero or low numbers to large numbers.

  • That period, the internet grew at 63% a year.

  • It was the fastest adoption of any technology

  • in all recorded human history,

  • much faster than the mobile phone that came before it.

  • And the telephone became forward.

  • These are network businesses

  • and I'll come onto that in a bit.

  • 'Cause its really important concept.

  • So, okay, how's crypto doing?

  • Crypto is growing at 113% a year.

  • It's the same number of users as the internet had in '97,

  • just before you've decided to leave the world of finance

  • and jump head first into it.

  • People told you on my God the dot-com crash.

  • It was disaster.

  • Well, it wasn't,

  • 'cause out of that came Facebook, Amazon, Google.

  • I mean, you name it.

  • It was the start, it wasn't the end.

  • So we're growing at 113% a year.

  • So this is double the faster adoption of any technology

  • in all recorded history.

  • Okay, that is exponential growth.

  • So we're at about 140 million users as of today

  • of crypto worldwide.

  • If you lower the rates of growth to 83%

  • to be slightly conservative,

  • you're a billion people by 2024.

  • That's three years.

  • It's like, "Okay, I can't get my head around this."

  • But that's how fast it's growing.

  • And it gets you to about three and a half billion

  • by about 2027.

  • So basically you're gonna get to half of the world

  • by the end of this decade.

  • So that is truly extraordinary.

  • What is that?

  • What is this adoption?

  • The adoption is a network of money and all of finance.

  • In fact, it's a network of value

  • that sits above the internet

  • that connects all of this digital world

  • into a way that the value is transferable, storable,

  • ownable, recordable.

  • And we'll get onto a lot of this stuff later,

  • but this is the world of everything from Bitcoin,

  • which was really clever.

  • Why Bitcoin is a big breakthrough was because,

  • we've developed a new business model

  • that mobile phones have brought

  • and stuff like that these are network models.

  • It's in fact, a guy called Metcalfe, wrote Metcalfe's law,

  • which is you value a network

  • according to the number of users

  • and the kind of interconnectedness

  • they have with each other.

  • And that was mobile phone companies.

  • You'd be able to all of the mobile phone networks

  • in the world added together.

  • You've got a multiple trillion dollar business.

  • Which don't think of it that way, 'cause it's fragmented.

  • Then you had the network business models of Facebook,

  • where they started and Google and Twitter and Reddit

  • and you name it.

  • They started using behavioural economics

  • combined with this data and creating a network of people

  • that were incentivized to post more, share more like more,

  • do things more.

  • Now for us as users of those networks,

  • we got the benefit of finding our old school friends

  • and keeping contact with your cousin

  • and all this stuff that we use social networks for.

  • The shareholders got rich, we didn't, in fact,

  • they took the economics from us.

  • They monetize our eyeballs and our attention.

  • Then comes Bitcoin in 2008.

  • And you've got something super powerful

  • because what you've got is a network

  • where the users of the network have Bitcoin.

  • The value of the network is Bitcoin.

  • So it becomes a network like no other

  • with all behavioural incentives aligned where everybody

  • is incentivized to grow the network.

  • This is why it grows so fast.

  • So Bitcoin starts the whole process.

  • And then everybody realises this business model

  • of tokens, network effects

  • and all of the technological benefits

  • work for almost everything.

  • And that's the rise of NFTs,

  • that's the rise of DeFi, that's the rise of social tokens.

  • That's the rise of so much that it's all going on so fast,

  • it's hard to keep up with.

  • So that was a long answer to your short question.

  • - Yeah and it's funny 'cause right before I sat down here,

  • I wrote myself a question to ask you,

  • "Is this bigger than the internet?"

  • And funny enough,

  • you answered it without me even asking you,

  • but I would guess if you speak to most people in the public

  • and say, "Is crypto bigger than the internet?"

  • Even investors, they probably say,