Ryan Selkis: “Too Many Variables” – Understanding the Lasting Effects of COVID19 (#331)

Transcript

hey there Sebastian here you know the podcaster lists in a relationship is too unbalanced you know us a lot better than we know you and we want to narrow that gap so please do me a favor and answer our audience survey it takes four minutes and it will help us to continue producing content that informs and inspires you you can find the survey at epicenter dot rocks slash survey and at the end I'll tell you how you can get a free Kiki Hardware wallet courtesy of shapeshift - thank you for your time so thanks in advance and on with the show this is epicenter episode 331 with guest Ryan sulcus hi welcome to epicenter my name is Savannah Cuchillo and my name is

very fat McClane hey Brian good to have you on the intro for for once in a while yeah I know well we're recording this actually over the weekend so you know it's one of the reasons why we need to record the intro fairly quickly because this is go out actually just in a few days and so today we are doing something a little outside of what we usually talk about which is who talked about the corona virus and because it's sound everybody's mind of course and well who better to have on the show in the crypto space to get that corona virus crypto overlap then Ryan sulcus who's been quite vocal about the corona virus on Twitter and on his blog and yeah I know I was super I mean I've

been pretty obsessively following this topic now for quite a few weeks and you know been Ryan's news excellent newsletter at mussoorie if people not subscribe you today I highly recommend it it was one of the first there was a few kind of places that I got alerted through his father it was like Jake one of Cosmos who was like very early on started tweeting about this it was Ryan cell case we started writing about it on his newsletter and you know he's done a fantastic job it's kind of like covering this yeah we had Ryan on and could talk about this topic I mean it's super important I think at this point probably most people have realized but it's yeah yeah we do seem to be at a really critical point both in terms of

you know on on a lot of different metrics though in terms of like how the markets have your acted although you know it could go even worse but we've we've seen like a significant effect on the market but also just in terms of how states are starting especially in the West are starting to react so you know in in Europe like where we live and also in the US although to varying degrees of severity I'd say an urgency yeah so in the podcast we really covered a lot of different stuff you know we talk a little bit about why this thing has become you know so deadly what the with the scenario is our you know some of the really negative scenarios here also

talked about containment and why Ryan is actually very bearish on this and thinks it kind of like missed the boat there and there's gonna be or you know there's gonna be a deep pain coming especially in the US where he's focused a lot of his intention on then we talk about what you can do to protect yourself you know we talked about the Fed response government response to markets on data and we talked a bit about what it means for crypto you know what means for crypto startups what it means for the crypto market for Bitcoin and yeah we talked also a lot about what's gonna happen in the long run you know where are the opportunities here how it might drive some change and maybe some good

things coming out of this in the end even though probably what is ahead in the next six months is going to be pretty dark but I think in the end there's always opportunity in crisis and this one will be no different yeah that's true I mean there's always the the light at the end of the tunnel just how long is that tunnel how dark does it get and when do we start seeing the light is I think the question on a lot of people's minds right now I mean like we talked about this during the podcast so this is slightly tied to you know what I talked about on the bonus episode last week about HCC is that well you know a lot of us who were at CCC uh you know are sick or maybe are worried that maybe we've

contracted something and question for me for instance is okay well I'm sick I was taking for HCC I don't have any severe symptoms but at which point do I go outside you know is it when they feel better and at that point how do I know that I still don't have a virus or that I don't I haven't contracted something and I'm not just a symptomatic so there's a lot of questions I think that people have and I think until people's confidence that this is really gone starts to to increase then you know people are just gonna stay indoors and not much will happen on that note there is a because I was at HCC and a lot of you were too there is a spreadsheet that will link to in the show notes which transparently talks about like who has

been contaminated and who's positive and what events they were at and so you can add yourself to this list you should if you have anything to report and also see if you should take the right precautions to protect yourself and your family and friends before we go to the interview I'd like to tell you about our sponsors for today's episode starting with status and I'm so excited to tell you that the status app has been out now in the Apple App Store in Google Play Store for the last few weeks once you've installed it please join the public channel epicenter come and say hi and if you ask us we'll give you some SNT tokens so you can get started with an e & S domain name for example status is so much more than just a messaging

app in fact it's a network of projects with a common goal and that goal is to help build the tools that enable sovereign open socio economies and their team is really driven by this principle I was a TTC a couple weeks ago and I sat down with Corey Petty and Dean eigen Minh both of the Status team to talk about this vision and we talked about all the tools and infrastructure which make up the status network so we talked about the app of course we also talked about key card I have one right here it's a secure contactless open-source Hardware API it fits in your wallet it's like a credit card embark the all-in-one developer platform for building and deploying daps there's subspace the front-end development library they're doing research on implementing

like lines in e 2.0 with Nimbus and there's also vac which is the modular peer-to-peer messaging stack that status leverages so we'll release that interview shortly since we're still going through all the content but if you want to learn more about status and everything that they're building go to status network comm and to get the app just download it in the Apple App Store or Google Play Store we're also brought to you by shape-shift comm where you can get started and trade dozens of crypto assets on the industry's leading non-custodial exchange you know back in the day back in 2014-2015 when shapeshift sponsored the show at the very beginning we used to talk about them as the Google Translate for crypto currencies you know you plug Bitcoin on

one end and you get a theory about the other well it's so much more than that you can trade crypto - crypto but you can also buy crypto with fiat you can trade track and secure your digital assets in one place I don't know if you've seen the new shape shift but it's fantastic user interface it's easy to use you get all your crypto assets in one place and if you sign up at beta shape-shift comm you'll get a hundred Fox tokens what do you get with these Fox tokens well each of these Fox tokens is worth $10 and free trading per month which means you start on the platform with a thousand bucks and free trading I mean that's that's a great deal you can connect your ledger wallet your treasure or your keep key and if you've been

listen to this podcast for the last little while and you know that we're giving you a free keep key Hardware while to anybody who fills out our survey at epicenter dot rocks slash survey so go to beta that shape shift calm to get started and be sure to do our survey to get your free keep key and with that here's our interview with Ryan sulcus we're here with Ryan sulcus CEO of Masari thanks for joining us today right it's a beautiful day in the neighborhood yeah I'm so happy you agreed to join and you know today we're gonna finally speak on this podcast about the topic of coronavirus and code with 19 you know I've been following this topic now I guess intensely maybe

four three - per month or something like that but I also just wanted to thank you you for you know for being really early and covering this topic super well and informing you know the crypto community in your business so readers very well about this so thanks so much and thanks for coming on today sure yeah thanks for thanks for having me on standard disclaimers I'm not a doctor I'm not even that smart but I am smart enough to listen to Balaji when he calls me and he tells me to pay attention to something that could be a global pandemic and late January so all credit there I'm just happy that I was able to provide a bit more of a megaphone and that you know fortunately I've got an audience where some folks have listened to me cool so let's start

a little bit with a background on this when did you start looking into coronavirus and why did you feel you wanted to talk about this publicly it's funny I kind of had this was almost like out of a pandemic horror flick I was I was working out right before a board meeting in mid-january in San Francisco is that one of the one of the gyms right across the street from my hotel and I you know I finished a set of my workout and I look up at the TV I just see the shy run on CNN talking about that the Wuhan coronavirus confirms you know X number more cases or whatever it was at that point me like 20 or 30 because it

was still small numbers and I didn't really think you know much of it but I was you know starting to at least pay attention to it thinking about you know what that might do for the global economy because for a while I think I've been waiting for some sign that we could tip into a recession after a 12-year bull market it's you know what goes up must come down eventually at least at times and a week or so later I had a conversation with with Dan my co-founder where you know he was saying hey are you alright looking at all this you know we might want to come up with some contingency plans for Masari or think about you know work from home policies or one we would

pull the trigger if this thing spreads and at the same time I saw Balaji tweeting about apologies an investor and Masari and and I shot him a note and and said hey your tweets are freaking me out a little bit that's what's going on is this you know how bad is this thing gonna be and he ended up calling me in any man we spoke for about an hour and a half and he kind of walked me through everything that he was reading and and gave me some initial sources to poke through and once I went through the Johns Hopkins - born and some of the other you know off-the-shelf materials that men of the folks who were early to this were thinking through you know Twitter accounts up or smarts you know different you know blogs that were covering this I spent about 24-48 hours just poring

through everything and then kind of quickly went down the rabbit hole and you know frankly a lot of my responsibilities on the I'm sorry Ben and crypto side started to fall by the wayside that week and I you know more or less at the pause button and delegated you know more to the team and communicated that I'd be delayed with with some of the things that I doubt people because I felt this was something you know at not not even as a public service that I did to push but I thought it might be potential Black Swan events that would impact our business that would impact the industry and you know even if it was just a 10% chance case at that time it was gonna significantly impact the plan travel we had since we were thinking about a

trip to Hong Kong - to Singapore and to Beijing in March and early April so I guess the timing was with somewhat lucky because there was business reasons for me to look at this from a travel perspective but it was also you know quite fortunate that the apology had joined our last round and and he was generous with his time I wasn't thick enough to just ignore it and carry on with my day well let's let's die I mean most people that will listen to this or everyone will have at this point kind of like heard a little bit about coronavirus and Chloe at 19 but I think it's still worth if you spend a little bit of time here to just

explain what's going on here and you know why this could have such a massive impact on the world well it already it already has it already has no matter what happens I mean even even if there was a you know miraculous turn of events and this thing just dissipated with the warm weather which you know most health experts seemed to not believe that's one of the case and are planning for the worst-case scenario you know some some hospitals in the u.s. you know the best guess epidemiology of this is that there could be you know half a million deaths from the corona virus in the US but let's just say you know for the sake of argument that this thing dissipates with the warm weather in the

next you know a couple of months and we're kind of nearing the peak of fear in the in the broader market well that doesn't really change the fact that we just did you know one a half trillion dollars of QE and rate and slash race to zero it doesn't change the fact that we've got this you know unprecedented stimulus it's probably gonna be bigger than the than the Troubled Asset Relief Program tarp and in 2008 bailouts it doesn't change the fact that's restaurant workers five and a half million of them in the u.s. median salaries somewhere in the low twenty thousand twenty twenty-five thousand dollar range their jobs are at risk because the restaurant business is down thirty five percent year-over-year this weekend and it's declining and really

falling off the cliff and it doesn't change the fact that's you know a lot of folks are going to be you know massively disrupted because of the unforeseen health care costs there are very much up in the air in terms of how that gets paid for poor child care costs if they're forced to be to work from home or their kids are first home from school so no matter what happens my biggest focus at least initially was one of the one of the economic impacts of this thing of a now unfortunately it also seems like the health impacts could be bad on an almost unprecedented scale if this isn't taken seriously which is you know one of the reasons that I think you know I and and so many other people have been taken this so seriously and it

comes down to health care capacity and the percentage of of critical cases so if you if you think all the way back to you know six whole weeks ago when Lujan in the who Bay Province of China was shut down they had four hundred forty four cases On January 23rd that the city shut down on January 23rd and they took unprecedented measures to quarantine the population there too in strict pretty draconian self-isolation schemes they had fast you know drive-through testing capabilities they're building hospitals within 10 days the Chinese were able to mobilize you know their their national

workforce in the medical community to flock down to Wuhan and really get a handle on this thing and even with all that the case load went from you know 444 into the 80,000 range you know a little bit higher than that with several thousand deaths so they barely averted Christ as I'd say and in the early days the fatality rate of you know this novel throne virus and this flu-like virus it was upwards of six percent now disproportionately impacted the elderly disproportionately impacted you know men probably because there were smokers and there's you know major social imbalances and smoking rates in China but really

what that rate signified was that's the health care system once it gets to overrun there's kind of no turning back in terms of how bad all the critical cases can can get and with this disease in particular every single piece of literature or every single medical expert or epidemiologist that you know I follow it and try to absorb as much information from over the past six weeks in it seems that the critical case rate is is at least 10 percent probably closer to 20 percent of which a good chunk of those are gonna have to spend time in the ICU and that gets especially you know exacerbated if you have you know Co Co morbidities or otherwise more susceptible well to this in the US and the West that's very bad news we've seen

now is happening in in Italy with their health care system you know more or less being overrun and and you know being here in the US has been surreal the last couple of weeks and last week in particular watching you know the national address from from from Trump followed by the the Thursday market sell-off and then the you know inexplicable rebound on Friday it doesn't really seem like many people are are still taking this seriously it's uncharted territory but we'll see and as I felt from day one hoping that I'm very wrong about this and just being a little bit of a chicken little here yeah yeah because I mean just to go sort of the characteristics of the thing that

make it so hard to contain or the one hand we have something that's like extremely infectious something that can be transmitted without people having symptoms but so people spreading it without being aware of it and goes very far and very quickly and then of course yeah it's just a severity as he as you pointed out right a lot of people either die or they have to go to the hospital they have to get medical attention and then as we've seen in China and Italy Iran maybe that yeah that just completely overwhelms the response and then now we have we are now seeing a lot of responses like let's say you know here in Berlin schools are all closed right Kinney cars not all closed like events basically everything's getting

canceled right so this is days now you know they're starting to test like widespread so there is this response coming I guess the key question is going to be and I think that's sort of what you alluded to right with when they started doing that and move on you know whether it's too late and whether the responses are like strong enough like so what's your take that you so your I guess your opinion is that you know at least in the u.s. it's it's too late do you think which countries are gonna be able to kind of still get this on the control versus not I mean I by I have no idea but the thing is I don't think anybody really knows I just the only thing that I can really speak to is my

perception of a lack of seriousness or urgency on the part of many in the West and in the u.s. in particular and I do think a good chunk of that has to do with the political polarization of this being an election year and extremely one of a kind never-before-seen president in the u.s. maybe in terms of the way that he communicates and and you know makes decisions and the the piecemeal approach is maybe the scariest thing because when move on was shut down and the Chinese were able to mobilize you know the thousands of personnel and ship equipment and do these really incredible and been incredibly rapid countermeasures to prevent a broader

nationwide outbreak they were dealing with the epicenter and it started in a city of one in the US and and throughout Europe you're seeing this now there's a chance that multiple cities hit Wuhan like levels at the same time but with nowhere near the flexibility speed or existing capacity to actually keep an outbreak and check once it's actually spread you know what's happening in testing in the u.s. is you know I think it's a national disgrace how slow we've been to roll that out the UK is you know seemingly made its bet that you know the the Brits are going to need herd immunity for this and everybody's gonna get infected and look that that's

probably true but if you get a couple of those calculations wrong and you know the infection rate accelerates and you can't you know quote-unquote flatten the curve then you know the system gets overrun and and your critical caseload instead of it being you know 1% or half a percent fatality rate it ends up being close enough you know three four five percent which which is a lot worse and the thing that you know freaks me out a little bit you know just speaking personally I mean I'm in I'm in pretty good shape early mid thirties but I've had asthma most people don't know how [ __ ] scary it is when you can't catch your breath like they have no idea it's unclear whether even some of the people that fully recover if they ever get

their lungs back because right now the severe cases that have come out of the hospital have recovered you know many of them are still showing permanent damage or at least significant damage that might take a long time to rebuild in their lungs I think there's a also a perception issue with how this affects people at lower risk so I don't know if you've followed this journalist at the New York Times Donald G McNeill he talks about this massive study that was done in China where a large percent of the population was only what they called like mildly affected by this but like the criteria for mild goes all the way up to pneumonia I think like for most people pneumonia is not a mile like mild symptoms are like mild effects of a virus and then the other thing is to

just people that have asthma I might have high blood pressure or diabetes or smokers for instance you know might be affected by this and far worse than then people were sort of better health or you know aren't smokers I'm not sure when this episode is gonna go out but this viral clip that was just out I think yesterday with McNeal on Rachel Maddow on MSNBC and yeah and there's a six minute clip where he talks about tactically speaking what the Chinese did that was so effective and why they were so effective and why some of the Asian countries have really been out of curve on this and it's nine-day Congress in the US has criticized Trump for breaking Friendly's apart up immigrant families well you know the Chinese have done it and they've managed to curb the growth of

coronavirus right Americans are spoiled everybody knows that we come to other people's country and we we're like you know us a rah-rah t-shirts and we're boisterous and obnoxious and I just generally think that we've had it so good for so long that no one has any appreciation for what could be coming hopefully it just disappears and there's some you know key variable that no one really thought of or the virus mutates and it becomes less deadly or you know whatever let's hope that that's the case but so far you know hopes a pretty [ __ ] stupid strategy if it's not backed in in any you know reality and there are ways that you can help yourself instead of just you know relying on blind faith or hope that we're gonna get through the other side what is the best strategy protecting yourself and your family practically

speaking I don't think anybody really knows all the you know science around the transmissibility and kind of you know when you're at risk or who's at most risk or susceptible you know the good news is I have two little boys and this doesn't really seem to be affecting kids that's good news my wife and I knock on wood or are relatively healthy like I said and young so that's good news but I'll just tell you you know from our part we've got several months worth of you know food and provisions I feel like every single week that goes by where things get worse I add a month or two of provisions so we're exponentially growing our provisions as things get worse instead of just like dipping into it like some

people might be tempted to and then just you know self isolating right so the last trip that I have made or have to make one more quick trip today and this is the March 14th we're talking about is just prepping our balcony so at least we have some you know outdoor space where the kids can run around but I'm not anticipating we're gonna be spending much time with other people in the next couple of months that's probably the biggest thing is is just you know we're not going out and it for people during the city that sucks and that's why I think it's gonna be that much harder to contain because the weather getting nicer especially in cities like New York the winters are awful right everybody look forward to spring and just because cabin fever wants to get outside the weather is getting nice it may be the

exact wrong time because now everybody's gonna want to go out and and congregate so you know just staying put where we are is you know probably the best bet and just minimizing you know contact with everybody else the only thing above and beyond that's that we sprung for you know I do have some masks but I didn't poured them I don't have like a zillion of them I have enough in case we need to do like runs or you know my wife's pregnant so I am assuming that we're gonna continue to go to her prenatal OB appointments and if she needs them more I need to take her then we have those our disposal but on that it's just you know having plenty of food and wasting time with anyone except for in virtual reality which we can talk about so I

think this has been sufficiently dark so far maybe let's get darker we can keep getting darker at you know I think the one thing that I'm very happy that I did with respect to our company and team is we brought everybody oculus goes but and a couple of us you know actually sprung for the the quests the the slightly more expensive and I gotta tell you I'm not a gamer I've not been into VR I've played a videogame and probably two decades since I you know started playing sports instead of video games when I was in middle school and they're just wild and the team's loved them so far so we've done some VR hangouts you know so the managers doing one-on-ones and VR just it's a little bit more

interpersonal you are fully locked in when you're you know in the matrix versus you know just being on zoom and then kind of toggling back and forth between Twitter or turning off the screen for a second and like grabbing a snack I think one of the better moves that we made in the camp of okay this sucks but how do we mitigate some of the social losses so we all just don't go nuts or we don't lose productivity and and I think that extends both um you know to the workplace culture but also you know interpersonal yep I'm trying to encourage more of my friends to get these you know VR headsets before there's a shortage and they're just stuck reading books or something catastrophic like that I've done a lot of the same thing so have been like less than three weeks of something basically

had almost no social contact and it's just being at home but the VR thing is it definitely something that's right out I mean we're gonna be hosting a ton of meetups you know we just on Thursday you know did you guys know I used to run coined ask and the built out that consensus series so you know for the last three years I've wanted to get back into the events game because I've done pretty well putting them on and people like the experience from when I was in producer before and bi just know that it's it's you know great for economically they're great if you pull them off in terms of community building business development and information flow there are you know a ton of benefits to being very good at at event production particularly in this industry what I didn't want to do is I didn't

want to fill the calendar with another live event because it's wordy so full of events internationally within crypto in particular this has changed things up a little bit and we were actually planning a small virtual event around block ten week in New York this May coronavirus kind of kicked into high gear and we said well you need to throw some more resources at this eventually things got so out of control that of course now consensus has moved there ethereal summit online and quaint desk has moved their summit online as well so we're gonna actually push that back events but we have a ton of ideas for how to make a virtual attendee experience light years ahead of anything that we've seen so far I think the platforms that are there are

interesting because of this forcing function to get more people into VR there's a lot more that we're going to be able to do in terms of virtual hangouts and meetups as well that aren't just like zoom dial ins if people want to kind of stay up to date here is their website they can go to the main net dot events so main net events for course oh yeah we'll put that in the show notes let's dive a bit more into impact this is gonna have on your on the world economy so something's obvious like right now we see your tourism is basically dead and it's probably going to stay that for I don't know six months at least and then you have other industries right like events concerts

restaurants right so there's a bunch of Industry search and it kind of very obviously hit obviously subside chains as well with China's factory struggling so that it's gonna have a lot of impact what is your take on just like what is ahead of us here you know are we heading for every session or depression on the scale of the financial crisis something even bigger like what do you think they are they're gonna be the key determinants they're gonna kind of shape how bad this will get well I think first you have to think about the impacts and whether it's already been bad the answer is yes and there's a couple you know major differences between this and the financial crisis you know the financial crisis in in 2008 was entirely the

result of weapons of mass destruction and the financial market right the credit derivatives and credit default swaps and over leverage in the derivatives ecosystem so that was you know ultimately a liquidity issue you've seen some Federal Reserve's stimulus and you're gonna see some more fiscal stimulus in the US and internationally as a result of the pressures the coronavirus but you can't print your way to manufacturing at a greater clip you can't print her way to you no more healthcare capacity you could print your way to financial services companies having capital buffers and sufficient reserves but you're talking about physical versus

digital and 12 years ago it was really about digital and 8 years before that with the dot-com bubble it was it was very much the same it's just you know paper gains evaporating it wasn't cogs of the machine grinding to a halt which i think is is very very different so you know so much of how bad this gets I think ties back to how effective some of the major Western economies are at containing this and avoiding the worst case scenarios or the course the next couple of months and then after that how quickly capacity is able to come back online it sounds like from what I've read and it's actually hard to get good information out of China right now just because all of this the information

groundswell and flood is you know all focused on the West now so I've actually been trying to go out of my way to you know figure out what's going on in China at least from an economic standpoint because if there are people to turn in all their factories and capacity back online and shipments are able to you know start coming back through then at least from an economic standpoint perhaps some of the fallout can be mitigated I think this is at least as bad as 2008 but honestly my guess as good as anyone elses I'm not an economist but they don't know what the [ __ ] they're talking about either and they certainly didn't a month ago so it's very overused term and you know frankly I was a little bit wary to come on and talk about this subject beyond what I've already written which is much

more thoughtful just because I know people are gonna say well you're either a medical professional economist an epidemiologists you know public policy expert you know whatever but with Black Swan events like this no one really knows so everybody's just winging it and trying to use you know common sense to put all the puzzle pieces together and I think the one reason I feel not confident but at least comfortable talking about this is if I'm wrong that's a good thing number one and if I'm not wrong then at least I've been able to take and tie and footnote all of my assumptions and we're all my beliefs are peanut getting informed and and coming from one thing I've been pondering and I would be very curious

what you take is and it sort of ties into like what will happen in China as well so you know we have these social distancing measures now and you know they increasingly getting more severe and stepped-up and you know let's say they will manage to decrease infection rates a lot and you know hopefully get this under some sort of control and you know I guess we will see how bad it is but one thing that is unclear to me is like when are you actually going to be able to say we can relax those again and we can go back to some sort of normal like when can you say again okay it's fine I have a concert with a thousand people or it's fine to have you know opening restaurants again to have a conference do you think this is gonna take us you know like a year and a half

down the line when there's vaccines or you know will we be able to get there earlier if there's like widespread testing or like how do you see the path going back to normalizing it no one knows if you just look at all the information that's available today I would find it pleasant but not to be expected surprise if things dissipated over the summer and we were ultimately able to contain and crush this type of outbreak I think you probably need herd immunity you probably need most people to get this over a couple year period and or have the vaccine release rolled out as manufactured and ultimately distributed to everybody that needs it before you can truly feel confident that

this is properly tamp down I thought was the worst case scenario and some of my early posts which is okay let's assume 50% of the world gets this we're 40 percent just to use round numbers right if 40 percent of the world gets this a 3 billion people if two percents ends up being the fatality rate once you've heard in a hospital overwhelmed in some regions but you know lower fatality rates and others or kind of this variability and when people get infection say it's 2% or saves 1% well there's 1% that's 30 million people that die from this which is a pretty big number but 60 million people die every year globally you're only talking about a 50%

times spike in the overall rate of fatalities at the hopefully the worst case scenario yeah and some of those people are probably gonna die anyway exactly like your probability of dying any given you're in your eighties is you know in the double digits if you're a fatality rate from this is you know fifteen percent you know twenty percent whatever it's still only impacting your personal probabilities by a factor of two versus in order of magnitude so that outcome is is ultimately not catastrophic from a global perspective if it happens it's just all of the secondary and tertiary issues that are arise from that if we don't get the assumptions right and and you don't

control the chaos if you can control the chaos and that's the worst case scenario it's still pretty bad a lot of people are you know gonna experience pain and suffering will lose family members but at the end of the day it's it's not you know crippling to the world order and economic structures and it's not gonna you know put us sick us into a global depression then the number of variables that you have to manager it's just complete chaos so so no one knows and I think you would much rather roll the dice especially in the West where you have reserve currencies even if they get put under extreme stress you probably want to roll the dice on overcorrecting in the short term because you can always print your way out of any economic hardship that service workers might have

and then you can have a massive stimulus program on the back half of this to kind of make up for some of the lost temporary growth just like you would like a hurricane or snow storm or some other natural disaster which you know there's a precedent for but the big difference of course is that you've never seen anything like this that would impact entire countries continents global population all once normally if you have a tsunami they can be very very bad but it only impacts what region forest fires same thing and so on so I would certainly put the the impact somewhere between recession and depression if we keep bucking it up like we've been doing in the West the one thing I will say though when it comes to crypto and when it comes to to startups

I think the one thing that this does is it totally resets the startup fundraising ecosystem so one of the couple highest impact things that I think could happen in the next couple of years for startups is at least you know I'll speak from a us-centric perspective the accredited investor rules need to be relaxed pretty much immediately because you need more liquidity and you know more capital capable of flowing into the private markets in addition to the public markets I think you need to raise the caps on reg a-plus and reg CF in terms of the amount of money some of these companies can raise from non-accredited investors because the venture capital market is just going to completely cease out and the other thing

that you could do if you fix the accredited investor rules you could open up some of the top performing funds and you know basically creates pools of LP capital from non-accredited Wester non institutional investors that could you know flow and much more easily so all of the venture funds that are trying to raise follow-ons don't have trouble replenishing their own coffers you're still gonna have massive you know the quiddity issues but for any incremental improvements you can make to the fundraising process and to making it easier for startups to cash is gonna be pretty critical I think overnight the entire start a funding ecosystem is just you know completely reset and that's gonna have trickle-down effects in the coming quarters and years really

as you know startups lay people off and you know even in the best case to limit their their high pace so speaking of trickle-down effects I'd like to come back to the situation in the US and I mean perhaps even more globally the situation in Western countries and how they've been dealing with this so the Fed just reduced interest rates to zero and injected like a massive amount of stimulus into the economy in Europe we're seeing a slightly different approach at least here in France the approach is is to sort of help small businesses and help people go through this crisis by offering to you'll say you know pay their mortgage payments or this sort of thing but let's focus on the US for a moment what does the Fed

hope to do by injecting all this new money into the market and to allude to something you said earlier like you know the machines if the cogs start turning because people aren't go out and eating at restaurants and going to work and producing but what does that money do what is it for and what can people expect the benefit from this stimulus there's two types of stimulus the one that was announced last week was you know the feds easing and kind of Treasury interventions to drive down interest rates and just infuse unprecedent amounts of liquidity in the repo markets that's one thing right but like I said before that only keeps the Treasury market properly functioning it

doesn't necessarily have any impact on the Main Street consumer or you know individual that's impacted so the much bigger thing you need to watch for and understand is how quickly some of these fiscal measures are going to get rolled out and how aggressive they're going to be so that's I guess this stuff just passed last night at midnight so I haven't even actually has to catch up on it but I know that there is a pretty sizable package that is on its way to the White House for signature and should include a combination of tax relief and you know a variety of other measures that are designed to limit the blow for everybody in the US right now at least in the short term how effective those are in terms of creating structural improvements is anybody's guess that

again it's if the entire global economy grinds to a halt for several months there are cascading effects to what that means for companies is they think about you know keeping employees or laying them off when it comes to you know whether they're able to service their debts or not I'm sure you guys are probably in this boat but you know I've cancelled a number of personal subscriptions just in the last week you know we've cut our personal you know burn rates and our teeny budget is basically going to zero right outside of like Netflix and a couple of things for the home everybody's doing the same thing at the same time and it seems like it'll have a massive short-term deflationary impact but what I think will be fascinating a watch is when this gets resolved what happens next and this

is kind of where the rubber meets the road for us and the crypto realm anyone that's chilled on Twitter or wherever about Bitcoin or crypto being a safe haven during a global recession just does know what they're talking about they never did they probably never will for the most part the folks that I know trust you know respect that think about crypto as as an investment asset class I've never thought about this being a flight to safety or you know something that you want to own when all hell breaks loose like 2008 or like we're seeing today but instead it's a hedge against all the other monetary systems failing in the background so if this only lasts a couple of months and unprecedented money printing you know

revitalizes the economy and the engine starts to get going again will we see some currencies you know enter periods of hyperinflation or will we see people start to you know flock into Bitcoin and other cryptocurrencies are close to zero and and you know by extension that makes this look like a more attractive investment than a negative yielding bond which is going to be the norm I think for quite a while and you know the US and Europe in particular the title is podcast could maybe just be too many variables because I know I keep saying it but all the mental arithmetic that I put in the back of a napkin and think about how this could play out a best-case scenario is governments take this extremely seriously they rev up the printing presses they throw unprecedented capital at this

problem a vaccine is developed and mass distributed we limit deaths globally to the low single-digit millions which still puts this you know 10x as bad as global flu but still manageable and then you know we have a severe but short-term recession in which you know after which time everything you know starts humming again and a page chunk of investors once they're more comfortable will look at what's going on from you know inflationary pressure standpoint and at that point say we should have some crypto allocations so that's at least on the monetary side I think there's you know a whole slew of things it could be you know interesting on the on the web 3 this is not as well I think on that side I'm also wondering you know just to what extent this will change in the long term

the structure of markets and the relationship between government and private enterprise so in Germany they've announced that the government will basically like lend money to like any business in trouble with the virus now I don't know exactly the parameters and stuff like that but I would not be surprised right if that I wouldn't end us right there is government by trying to help the shale oil industry and if you have these massive massive interventions in markets right you're basically saying okay we're gonna try to save all those businesses that you know would have been in affected by coronavirus like how can you step that back in the end and if you have in the end all of a sudden maybe the government being a creditor to all these companies because you know they said there were an

difficulties with coronavirus give us a loan or maybe on the other side having the Fed or the government basic going in directly into being in the stock market buying up shares it just seems like a crazy world ahead of us that's the best-case scenario yeah in Germany and I think France will have a similar approach although they're not lending money specifically they're offering clemency to companies so that they don't have to pay all their social charges so basically all the charges you would pay you know for employees and things like that and they're also offering unemployment benefits to all the restaurant workers for instance that are not gonna be at work but the market has this this ability to sort of weed out bad companies companies that would fail anyway but in this case at least in France like there's it's indiscriminate

right so like if any company like epicenter has employees in France and so we pay social charges we just need to send an email to the administration say like we can't pay these who knows maybe we would have we would have folded in three months anyway but it's totally indiscriminate so the the state is basically intervening in the market in a way that is absolutely unprecedented it's like in 2008 you had like too big to fail and then they stepped in and said okay these banks we have to save but what if it's basically the same kind of approach before all businesses everyone it's like nobody can fail when it comes to any type of fiscal or monetary response I'm just in a perpetual state of shrug emoji I think we lost the window I think I think that

people in the West are leadership in the West are so [ __ ] cowardly that nothing positive is gonna happen I'm disgusted like there's no leadership anywhere in the West we're [ __ ] spoiled we don't take things seriously nobody understands the need to take things seriously until it's already too late because everybody likes to [ __ ] on anyone that's you know being a turd in the punchbowl and raising a justifiable alarm and then the best part is if you actually do that right you maybe prevented something catastrophic no one will ever be the wiser because they'll just say oh yeah remember that that flew and we took it so seriously and and that was only like doing you know 20,000 people that died it's the same as like the typical flu when really if you hadn't taken any

action well then you know millions of people would have died and the economy would have gone into depression those are basically the two camps right now and then you know the third camp is just like the open you know thoughts and prayers camp I'll call them in the West right it's the same thing that we do after every single mass shooting in the u.s. thoughts and prayers but nothing actually changes so maybe one day thoughts and prayers alone will be able to help us but in a situation like this would be nice if more people took it seriously and we're scared out of their [ __ ] minds absolutely agree well let's talk a little bit about markets so we've had an insane week in the stock markets right if some fastest drop ever I think the S&P 500 completely crashing and your stock market everywhere the Treasury

bond markets right have also gone through an enormous amount of insanity and so the crypto right so we had crypto a crash Bitcoin to remember what it was 40 percent in a day what's your take on that do you think this has kind of like adjusted to the reality or I'm I'm sure there's a lot of volatility still ahead but evening to some extent it's kind of like priced in what's ahead or not yet I don't think anyone yeah too many variables it's just you know like it all depends on on the response it all depends on you know what the with the rate of the slope is if things keep accelerating in a negative direction and of course this is

not priced in if things start to level off then yeah maybe maybe the worst is over from a market standpoint but I think crypto will probably be a leading indicator on the rest of the market at this point because like I said I think you know crypto was gonna get eviscerated like any other risk on asset which is really how it's traded historically because so many the speculators are in it for you know the hundred thousand or million-dollar upside long-term but you know once you've washed those weak hands out the market and a liquidity crunch you can kind of take a step back and if the unprecedented you know economic

stimulus that takes place over the course of the next six months year kicks in a high gear crypto should be a pretty meaningful beneficiary of that at least when it comes to you know the monetary pitchin and you know the uncorrelated asset pitch we haven't seen that we've never seen inflationary recession it's always been you know something that people thought about as you know possible it's certainly why I invested early on I know it's why many other early people invested early on and quite frankly you know there there are thresholds that I'm going to continue to to load up on on Bitcoin if things get worse right the only reason I wasn't buying more the other night when we had 3900 is because I was locked out of my account I'm not gonna I'm not gonna name names as to

which company prevented me from from accessing my capital for that trade suffice it to say I miss that window but there could be other windows like that in the in the days ahead and I'm not alone right I mean I there is a certain lower bound I believe to the crypto price because there's a die hard enough community of believers in this long term macro narrative that Bitcoin provides where the nominal value of all total Bitcoin will be low enough that someone will take cash and buy at that lower bound price right and so you know right now what do we have like a hundred hundred billion market cap something

like that give or take right I didn't check it you know right before we came on you know 450 400 or whatever let's call it you know a hundred billion in total market cap well you know net out Satoshi's coins you know maybe ninety billion of that is actually you know currently owned float if we go down to three thousand you know now you're in the fifty billion dollar neighborhood it doesn't take that many deep pocketed investors that are worried about gold that aren't worried about their national currencies that are worried about their governments in this type of you know global recessionary environments that that that doesn't get bit up so I don't know what the lower

bound is but I know that there are different thresholds that I won't personally back up the truck and I am the minnow compared to many other people that I've known in the industry that that feel the same way yeah I know I agree let's speak a little bit about you know what are the long-term effects on this maybe from a societal perspective in terms of sort of changing how the world works how maybe business works and you alluded to web 3 as well you know what this kind of means for crypto like where's the opportunity here for crypto decentralized networks in the medium and long term yeah I mean I've written about this a little bit and my post on on

Sunday night and you know I think everybody's talking about some obvious ones remote first software VR online gaming online education ecommerce right it you know anything digital or you know that requires less you know physical interaction I also think that in terms of the losers San Francisco is maybe they're a an example of a city that will will likely you know suffer some some pretty meaningful human capital shocks from something like this if a good chunk of workforce management moves remote if a good chunk of your engineering talent finally moves international and those local ties become you know less

important than then this could accelerate what is already a a slow ebb in the tech scene from from San Francisco and that could be you know much more acute and in the months quarters had and you know we've already seen it you know a bunch of defections from within crept out cities like Denver and Austin and even New York right from San Francisco I think you know we already talked about the impact on the star tech ecosystem I think this probably should be the death of the American health insurance system it which just needs a radical of right I'm not necessarily advocating for any particular economic model but this kind of

exposes all of the flaws in our employer-sponsored healthcare system which by the way folks that are not American might not know is a relic of World War two because there were controls on wages people coming back from the war and a loophole that employers were able to exploit was to offer other ancillary benefits of their employees to compete for talent post-world War two so this is an entire accident of history right unintended consequence where employers that never should've been involved in health care the first place got involved there was a lot different now and you know probably makes sense to retire that given given the stresses that you know this pandemic is likely to put on the US healthcare system if we pay the most per capita for healthcare and fail the most

catastrophic lis in managing this outbreak I think it's fair to say that we should blow up and start the entire system from scratch how likely do you think that is that I mean like it's such a politically charged issue that like do you think that even this can radically change the US healthcare system and at its most fundamental level I do the better questions how many million deaths does it take right if a hundred million people get infected and the case fatality rate is 2% and we hit that or exceed that and two million people or more died and they're two three four week demise is ultimately live tweeted

and broadcasts and social media and blogs and it becomes permanently ingrained in the American psyche I don't think there's any way that any American in a crisis in a scenario like that could possibly think that the current system that we have is an acceptable alternative I mean pardon me for sounding a bit grim here but just looking at the political landscape and again I'm not an American and I don't live in the US but who's most likely to benefit from the health care system and who's most likely to suffer the consequences of the health care system and how those people typically vote I think it's probably across the board you know older Americans I think you weren't Republican right younger

you know more more liberal but in terms of health care coverage younger more liberal lower-income so I think it's it's it's across the board you've got you know a lot of different demographics on that when you're talking about something as massive as health care coverage I think it's it's it's tough to you know put people into you know one political pocket there but I think you know if there is a reset in the American health care system that I hope Balaji is his his but as part of the redesign because he's he's called everything pretty well so far he's got a ton of great ideas and I know there was a rumor going around that he was in the running to be FDA Commissioner back in 2017 and you certainly wish that had been the case in

many respects but there's just so much it has to change in in the US healthcare system so there is you know kind of one edge case where things get you know pretty pretty freakin bad not nuclear and and you know putting the US and you know long term depression bad but you know bad enough from an object standpoint from a social urgency standpoint then you might see some positive changes to how our health care system structured you mentioned the McNeal interview at the onset here I mean if you just contrast how quickly the Chinese were able to move on this versus anything that we've been able to do stateside it's it's just night and day and and I mean it's embarrassing frankly that that we are so far behind

in this and it doesn't even seem like there's anyone with a coherent plan to tactfully you know bring this under control yeah I mean that definitely seems to be the case just one more question about about markets what do you think would be the market reaction if we found out that Trump had kovat I limit down 20% oh I'll end on a positive note right you know I generally think that you know life goes on people get past things but to just you know kind of throw your arms in the air and say yeah whatever's gonna happen is gonna happen that's what's that's what's maddening to me so you know what what I think is a silver lining in all this is you're going to see a next generation

I hope if things get bad you'll see a next generation of leaders emerge that that took this seriously that take it seriously that that you know run to the proverbial frontlines to help in the crisis versus explained to crisis and the biggest thing that I think we need right now you know the US and and you know internationally is just you know some semblance of courage and duty and and a March solidarity a marsh or solidarity exactly I think you're gonna see plenty of people that are in that camp I hope it's the vast majority and the more people it is the sooner it is the better chance we have that this goes away in a couple months and everybody

gets to talk [ __ ] to me on Twitter indefinitely because I'll just be like one of the chicken littles that was blown this wildly out of proportion it was just the flu and you're such a [ __ ] and bubble blah I I really hope that's the case I feel like past a certain point even if it does get worse right if we go into the summer and it doesn't succeed and and then we continue on to next year perhaps let's imagine like that worst-case scenario you know people will adapt like humans have an incredible ability to adapt and we're already seeing hints of that if you look at like you know Italy like people singing singing on their balconies or whatever like you know human ingenuity and their ability our ability to to face hard situations is pretty incredible and so I

think that even if were highly hindered as a society we'll find ways to adapt and like VR is a way to do that right like remote work will will find ingenuitive ways I'm sure that I think you know generally speaking the best case scenarios are always you know when you have like a severe and like a very fast rip the band-aid off type of negative moment but then you know tons of little positive you know incremental wins on on the staircase back up because you want to see like the dopamine hits on the way up because they're just more frequent and it really doesn't matter what the magnitude is on the way down get it all out of the way adapt move on and then you know just get yourself in a

state where where you can move on to the next challenge or or recover from a pretty major setback I think the thing that's so frustrating is you just see the response and no one wants to rip the band-aid off right it's just this like deluge of negative headlines negative days in the market negative political bickering and just a feeling of helplessness I think from from so many people I think that's gonna turn around by the way I personally think that you know come hell or high water this this will be turning around sometime and in June or July and it's just a matter of like how severe and and and how how bad things get in the interim but I I find it hard to believe

that one way or another we're not at the light at the end of the tunnel stage by you know sometime early summer and no absolutely well thanks so much for coming on Ryan it was it was great are you sure no absolutely no it's if you and I think you know the kind of effort you've put in yeah it's just inform people about that's been great will of course link to also your document so you've had a Google Doc and very big Google document at this point that you've kind of kept up to date with lots of resources so we'll link to that will link to your a bunch of other resources one thing that maybe I can recommend here that I've been listening to religiously and last I guess almost months now is a path that's called macro

voices yeah they've done an amazing job of covering this as well so there's been a bunch of really great resources so we'll put those into the show notes so people can you know learn more about it about you know what's going on how to protect themselves how to deal with this and yeah so how to get through this and yeah I'm mapping in the end they would there would be lots of of course will come out of this right as a society and there'll be lots of hopefully positives as well emerging from this yeah so in meantime thanks so much right well thank you and I guess there's a a parting word here just to make things a little bit more real tour de Meester just tweeted that there's 39 potential Kovach cases from eath CC paris including Vittal

including me ari are you on that list I mean I'm not on that list but I'm self-quarantine because I've been sick I was sick since before et Cie and I'm still sick so you know yeah okay yeah I know absolutely I mean I was thinking about that conference for before that and I was like this is a bit you know maybe a bit reckless bit risky although to be honest in my estimation actually with ECC I was sort of thinking like you know probably still okay but if they did like week later it was exactly what I was thinking to it that was sort of my thinking a bit but I was like you know I personally wouldn't go I think it's a bit too risky but I think that's also the astonishing thing just that you know exponential growth is even if you know

that this incredible growth is coming it ends up being so fast and so powerful it's still still shocking and yeah I think we're seeing that and well hopefully at least the lessons learned that you know one has to be very careful with these events and not doing them for a while I am going to shamelessly shill may net dot events as a closing point there because I think the community is going to need some places to to rally and we've already publicly committed to donating 50 percent of the profits to third parties whether that's charities I don't know whether that's different development efforts or community funds just to ensure that that you know different major crypto projects don't

run out of money to be determined but but we want to make as much money as possible for this event in in June that way we can hopefully be at least part of the solution here thanks so much training thanks Ryan thank you guys have a good one thank you for joining us on this week's episode we release new episodes every week you can find and subscribe to the show on iTunes Spotify YouTube SoundCloud or wherever you listen to podcasts and if you have a Google home or Alexa device you can tell if to listen to the latest episode of the epicentre podcast goto epicenter TV slash subscribe for a full list of places where you can watch and listen while you there be sure to sign up for the newsletter so you get

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