SLP163 Cory Klippsten – Bitcoin’s Intransigent Minority, Swan Bitcoin & Bitcoiner Ventures

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Cory Klippsten, CEO and Co-founder of Swan Bitcoin, GP of Bitcoiner Ventures joins me on the show to talk about: 

  • Taleb’s thought and applying it to Bitcoin
  • The Intransigent Minority
  • Swan Bitcoin
  • Cheapest Auto DCA in the US
  • Bitcoiner Ventures and what it’s about, and how to get involved

Cory Klippsten links:

Sponsor links:

Stephan Livera links:

Podcast Transcript:

Stephan Livera:

Cory, welcome to the show.

Cory Klippsten:

Good to be here Stephan.

Stephan Livera:

Cory, I know you’ve got an interesting history here that you went through the shitcoins and then you came out and became Bitcoin only. And now you’re CEO and founder of Swan Bitcoin. Can you tell us a little bit about yourself and how you came onto the Bitcoin only?

Cory Klippsten:

Yeah, so first of all I’ll say I did the horse shoe run like a lot of people, but we can get there, but yeah, I mean starting way back in the beginning, grew up in Northern Cali. Parents met on Haight Ashbury, kind of a bit of a commune upbringing. So kind of outside the system. Got used to kind of looking at things from a bit of an outsider’s perspective, even though I physically look as WASPy as can be. So that’s been a bit of a superpower over the years to sort of play the role of the insider, but also the other, so that’s been pretty cool. Grew up in Seattle. Went out East for about 15 years, New York, Chicago. Really was in tech. I started the internet the late nineties working for Microsoft and then kinda caught the I just, I went through dotcom bust out in New York city with all the, you know free, happy hours from small ad tech companies in the media, internet media companies.

Cory Klippsten:

And it just didn’t seem very solid. And this is kind of interesting now that we’re going through kind of the third round already in my professional career of the system collapsing around us. But I think it’s very instructive and it’s probably what attuned me to Bitcoin in the first place was so the internet felt very unreal to me. So what did I do? I decided, well, okay, so if that was on a shaky foundation and these valuations weren’t real and these companies weren’t real and these jobs weren’t real, like, let me go try out the real economy, quote unquote. So I went to business school at university of Chicago. I went to cowork for McKinsey. I started a private equity consulting shop. I was doing private equity firm like inaudible. I started to get signals from friends in New York, including a roommate who was on the distressed bank loans desk and sales desk at Goldman that this was all a house of cards too.

Cory Klippsten:

And then we watched that kind of unfold over the next couple of years in 08, 09. And so I was looking at that and I was saying, well, if that wasn’t real either, in many ways you might as well at least do something that you have more control over. And you know, that’s kind of being an entrepreneur. An entrepreneur or at least being in a business where you have lots and lots of clients. So that kind of sparked my interest in getting back into early stage tech. I went to Google for a couple of years really just as like internet business school. I spent that whole time, you know, obviously doing my job, but also networking like crazy with tech founders and VCs and trying to understand. Got back out to California, moved to Los Angeles in early 2013 and left Google in the summer of 13 to work in early stage tech.

Cory Klippsten:

So that’s what I’ve been doing for the last seven years is kind of either operating or advising or consulting to call it like seed stage, A round, B round type Silicon Valley startups, call it Silicon Valley, but really like SF, New York, LA have been the kind of the three markets that I focused on. And then, you know, bringing that to Bitcoin, you know, I had a few different opportunities to go down the rabbit hole and missed them. Somebody gave me Bitcoin at a tech conference in January of 2014 and you know, I proceeded to not read the whitepaper and not go down the rabbit hole and lose the private keys to my probably blockchain wallet, I think. So that sucks. But it was very formative as, as if we get through to like my own story. And then

Cory Klippsten:

So almost two years later, so Christmas of 2015 heading into 16, you know, a friend of mine had a startup advisory stakes and early shares in a few different Bitcoinish companies like Balaji’s company and a couple others. And asked me to help him put together like a deck so he could sell off half of a series LLC that had bundled up all these startup stakes. And so I did but maybe because, you know, the companies I was putting slides together on were, you know, Bitcoin mining and a toaster and Ripple, nothing was really exciting about it and it didn’t take, I don’t know. But yeah, I just, I still didn’t get didn’t understand the opportunity. So it wasn’t until the price action, you know, hit my network in spring of 17, and, you know, a bunch of people in my circles in startups and VCs, you know, jumping out and starting crypto funds and joining ICOs and et cetera, et cetera, that, that caught my attention.

Cory Klippsten:

Now, I got really, really lucky in that one of the first people that I reached out to was actually running a crypto fund and was huge and you know, QTUM and all these ICOs and stuff. But he insisted that I start with Bitcoin and spend a few months on just Bitcoin. So I at least had that foundation of, getting up to speed and kind of like always having it in the back of my mind. I was totally fooled by the Fred Wilson posts and all the Andreessen Horowitz activity and thinking that, you know, Facebook was right around the corner. And so that definitely ended up wasting about nine months. So all of that fall of 17, I was looking at ICO’s and I had this whole horrible 40 page document I put together about how I was going to go and pitch all these Silicon Valley companies on creating tokens.

Cory Klippsten:

And it was just brutal. Anyway, so yeah, I basically, it took me until, you know, March or April of 18. So after the bubble sort of burst. And you were kind of like wondering what was going on here and I didn’t have the benefit of multiple cycles in the background and having lived through them or whatever. So I didn’t have any idea of how deep it would go in that bear market. But I basically started shifting all of my activities and all of my learning and my research to Bitcoin only since spring of 18, and shifted all my professional activities by the end of that summer. So then by the end of August, starting in September of 2019, I’ve been working as much as I can trying to figure out what I could personally do in Bitcoin.

Stephan Livera:

Yeah, that’s a really cool story because it’s like you’ve just run the full gamut, right? And you’ve got a lack of range of experience across different industries and you’ve sort of managed to, you’ve basically come to the same conclusion that all the hardcore Bitcoin only people. You’ve kind of ended up in this same place that many of us and many of my listeners are in, which is basically only Bitcoin. And it’s also been really interesting as well. I obviously listeners know, I’ve been involved as well with things like Give Bitcoin and Swan Bitcoin now. Can you tell us a little bit about how you exploring the opportunities in terms of this Bitcoin space and what is actually a business that you can run in this space because notoriously it has been difficult to make money in Bitcoin.

Cory Klippsten:

Yeah, absolutely. I mean, I think we kind of know the the profitable industries industry-wide profitability has been manufacturing ASICs and exchanges and that’s pretty much it. So as an industry, mining has not been profitable, even though individual mining companies that have advantages in strategy or you know, sourcing or power generation or whatever, obviously have many, have done very well as an industry. It hasn’t been profitable. And then, you know, the payments companies, whatever. Obviously that stuff is probably a little further off in the future for some of them to be wildly profitable. Although I think there are some, some interesting things going on with the Paxfuls and the Bitrefills of the world that are doing some cool things, fold, stuff like that. So, yeah, I mean, I started like, I always do just asking people that I thought were well-placed and who also kind of knew me and I kept on coming back to people with the same question in the fall of 2018 which is like, how can I professionally sell Bitcoin?

Cory Klippsten:

Look, I just want to like, talk about it, I want to pitch it, I want to educate myself about it, educate other people about it and, and get them to buy it. And you know, obviously I’ve crystallized my thesis since then and put it in pretty words, but you know, it hasn’t changed, which is that I believe very early on from my own experience that you know, one’s propensity to store value in the Bitcoin protocol is directly correlated to your understanding. So I always thought that Bitcoin marketing is actually just Bitcoin education. So I rooted around in the fall of 2019, I was working with a guy who was trying to put basically like 80% Bitcoin and 20% leverage treasuries into a closed fund structure. That would be a lot easier to get passed through the SEC.

Cory Klippsten:

After we sorta got it up and running and did the legal and everything, I realized that if I was going to have a role going forward, it would require me to like go to New York and you know, go up and down the street and talk to people that didn’t care about Bitcoin and that sounded super boring and not like something I want to do. I’ve got a family and live out in L.A. And it’s nice here, like to stay home if I can. So I kind of ditched that and had kind of a dark Christmas of 2019 still trying to figure out, or 2018 still trying to figure out what to do. Luckily I had some scratch left on the side, so mostly I just bought dips like a beast.

Cory Klippsten:

It’s pretty much just, you know, watching YouTube and listening to podcasts and educating myself and kinda like that deep crypto winter is when you steel your resolve. Like you’re initially going to the podcasts and obviously it was listening to everything and reading all the books that were available and there were a lot, you know, thankfully by then by the end of 2018, you had new books like Saifedean’s book had come out six months before your podcast was out there. I was devouring that and Marty’s podcast and a bunch of other ones. And you initially go to those as a essentially like a support group because you feel kind of lonely in your you know, you’re the only one among your friends that’s HODLing and buying more as this thing, you know, maybe going to zero. And then, you know, your brain actually starts to do some work in the background and you wake up one day and you’re like a total believer and because you actually understand it and you know, it’s not about belief anymore, it’s actually knowledge. So, you know, Trace betrayer did name his podcast, right? It is Bitcoin knowledge. It’s not Bitcoin belief. You know, that is the right name for a Bitcoin podcast. Maybe we’ll get it back from him one day.

Stephan Livera:

Yeah. And you’re right like that. It just takes a bit, it’s a big journey to go down this. Like there’s so many different things that you could learn and there’s so many pathways that you could, or points in the pathway where you might go the wrong way and then you’re like totally screwed. And so it’s a challenging thing. And with Swan Bitcoin, I definitely notice that there’s a strong focus on education there. You’ve got Swan Signal and you’ve got the blog, you know, you’ve got these different pathways for people to get started and then also start learning on the pathway of, Oh, this is what Austrian economics is. Oh Okay and this is what the basics of Bitcoin’s technology and how that works. So tell us a little bit about your approach around education with Swan.

Cory Klippsten:

Yeah, sure. I mean probably who’s us to at least start with? The first product we put out was GiveBitcoin, which we put out in November just in time for the holiday season. And that one basically it makes it really easy to give someone else Bitcoin. And basically this is for a new person. You go to your cousin or your aunt or your, you know, your friend at work or your employees or something like that. We had a lot of people gifting to employees and colleagues and it comes bundled with a 12 chapters of a book called the gift of Bitcoin, which is just a really nice introduction to somebody totally new to Bitcoin. So that’s been rolling out and we just put out chapter 4 a couple of weeks ago or we’re finishing up chapter 5 right now and we’re also already drafting chapter 6, which is all about wallets and sort of like, where do you put your Bitcoins?

Cory Klippsten:

So it’s really fun to kind of think about that. You know, every month we have a new effort that continues to think about things from through the eyes of a newcomer. And then we deliberately have some more newcoiner types involved in that to give us their perspective and make sure that it’s actually understandable and you know, thanks to you and, and Yan and Brady and some of these folks that have been chipping in Matt ODell, you know consulting on that education with us and providing their content and making it really good. And so that was kind of the, the genesis of the approach, the education first approach of the company overall when we decided to do Swan as a, you know, basically a product to buy Bitcoin for yourself. So Give, you buy for somebody else, Swan, you buy for yourself.

Cory Klippsten:

We knew that the best way to sort of access newcoiners, which is where most clients, most clients that we’re going to have over the life of the company are going to be people who aren’t in Bitcoin today. Cause there just aren’t that many people in Bitcoin today. And a lot of them have their stack already or they have their preferred platforms or whatever it is. So it’s, we know that our task is to go out and educate new people and get them hooked with some interesting headline and some good education, some good knowledge and draw them in and teach them about Bitcoin. And we know that the more that they know about Bitcoin, they’re more they’re going to buy.

Stephan Livera:

Yeah. Right. That’s absolutely right. And you had a really good post that I wanted to talk a little bit about as well. So it’s called 10 million Bitcoiners and the intransigent minority. So tell us a little bit about that. What’s the idea behind 10 million Bitcoiners?

Cory Klippsten:

Yeah, so obviously the name of the company being Swan, it’s pretty clear. I’m a big Nassim Taleb fan the address of the company, which isn’t actually out there in public, but we say it’s at the intersection of Taleb street and Nakamoto Avenue. So this is a concept that he’s written about. And he’s not the one who invented it. He actually observed it and saw other people writing about it and then just kind of took it fraud. In particularly, he wrote about an intransigent minority or an intolerant minority in a couple of his books prior to skin in the game, but he went really deep on it there. And it’s basically the idea that in a complex system like a society you only need a very small number of people to be totally dedicated to a cause or to not accept an alternative to flip an entire society to their way of thinking.

Cory Klippsten:

So the classic example that I laid out there that he also used was just a kosher or halal meat the qualifications are pretty similar in a place like London. So you might have 3 or 4% of the population that insists on only eating kosher or only eating halal. But because everybody else, the other 95% or 96% is willing to eat that, it’s not such a bad trade off for them, but the minority is not willing to eat the other, the non-kosher then basically the whole supply chain flips over to kosher. And then you can see this on so many food products even, you know, in the States there’ll be a little kosher symbol on, you know, almost every product that you’re eating. Most of it is, is actually kosher and is manufactured in a way that is acceptable to our Jewish and Muslim friends.

Stephan Livera:

Right. And the interesting thing there is that it takes a little bit of a certification and certain work to make it that way. Right. So there is some cost that is being incurred by the manufacturer, but in some way that’s being obviously like you’re talking about incidence, it’s being worn by everybody, but it’s because of those, a small minority.

Cory Klippsten:

Yeah, yeah. That, can cut either way. Some that, there are examples also of where the minority wants something that’s like less expensive and still flips it over. So or is better like a minority might want something that’s better. That’s how I see it with Bitcoin. Like we’re trying to work toward having an intolerant or an intransigent minority of people in the United States that own enough Bitcoin for it to be meaningful and care about it, understand it enough that they’re going to be vocal in defense of it. And so you know, that sort of just quick back of the envelope is if it’s 3 or 4% and we have, you know, 325, 330 million people in the U.S. you get 10 million Bitcoiners that we need to have to, you know, there is no existential threat that we’ve identified that hasn’t been deFUDed at this point for Bitcoin.

Cory Klippsten:

Like it, there’s nothing, there’s nothing known that is a legit threat. And I obviously observed this on telegram and Twitter and you know, million podcasts over the last few years. Like there literally is an answer for everything. But if I were going to pick one that could delay things or make things difficult, it would be, you know, concerted effort on the behalf of the U.S. Government. Like that would be the one thing, you know, just the, the full force and power of the U.S. Legislature and military and spy systems and all of that, the financial system and, you know, the whole dollar reserve system being anti Bitcoin would be would make it harder for me to enjoy Bitcoin in my life and for my children at least. And you know, might make people like me just shut down shop if you’re not willing to move to another jurisdiction, things like that.

Cory Klippsten:

So yes, Bitcoin would survive regardless, but I think it’s a much better future. If we can speed Bitcoin adoption and Bitcoin resilience on the social layer. So, you know I see it as a moral imperative and a personal imperative in a company imperative to recruit as many Bitcoiners. Again, you can people self define or define it however they want. In this case, I’m just using it as someone that owns a decent chunk of Bitcoin and cares about it enough to like write a letter to a Congressman or show up at a town hall meeting.

Stephan Livera:

Yeah, I like that. It’s a good because again, people can debate til the cows come home. Okay. Just because you hold Bitcoin, maybe you’re not a Bitcoiner maybe there are some people who hold the proverbial Bitcoin flavored risk, right? They’re just holding an ETF somewhere or they’re holding some financial product that gives them the Bitcoin price exposure, but they’re not, they’re not, they haven’t grasped what it is to hold the underlying, right. Of actually holding your own private keys and so on. And I liked that idea and I think a good way of explaining it or articulating it, I think Will Reeves from fold has explained it as we’re building a political electorate here. What do you think about that?

Cory Klippsten:

No, I love it. I mean we launched something called Bitcoin for America yesterday on Twitter. So we had 10,000 views of that video in a couple of hours. So that was pretty fun. But that’s kind of the campaign that we’ll be running throughout the election season here in the States. It’s Bitcoin for America.

Stephan Livera:

Right. And that’s also an interesting topic because there is a very strong libertarian streak running through many Bitcoin people and arguably as well, the way America was founded has a very libertarian streak about it. And so it’s sort of like a calling back to, you know, the initial values. And how do you see that playing out today where let’s say maybe a lot less Americans today are libertarians than in the past?

Cory Klippsten:

Yeah, I mean, I’ve gone to the trouble of going back and finding a lot of founding fathers quotes about 6 or 7 months ago and put a bunch of them on Twitter and in little memes and they were quotes that related to Bitcoin. Obviously didn’t save it quite because it was, you know, 1830 or whatever. But at the end of the day, like they all basically agreed on one crucial thing, which is that if we let the banks print the money, we’d be screwed as a country. Well, since 1913, we’re kinda been doing that and we accelerated a big time in ’71. And so now we’re in a position that is not we’re in the position that the founding fathers thought would make the country fail. So we might want to do something about that.

Stephan Livera:

Yeah. Yeah. So you can be patriotic and make the argument for Bitcoin as well, that you want your country to be competitive.

Cory Klippsten:

Yeah. I mean if you’re, if you’re down with founding fathers and you’re constitutionalist and you know, you want the ideals of the Republic to carry forward, you know, you want to find a way to be aligned with Bitcoin because it’s the most American thing you could be in favor of.

Stephan Livera:

Right? Yeah. And I think for the international listeners as well, right. I’m in Australia, probably 45, 50% of my listeners are in the U.S. So this is very relevant for them. But even for international listeners I understand Swan is also potentially looking to expand internationally. Do you have any thoughts to share around that?

Cory Klippsten:

Yeah, you know, we’re super focused right now on the U.S. Which is obviously the biggest market and we think if we absolutely nail the product and the experience and you know, kind of satisfy all the needs and wants and desires and delight our customers, we’re going to be in a really good spot. And thankfully we’re in a big market where you have a lot of head room. But yeah, we are already sort of doing the legal groundwork and on the backend we can already be in 140 countries in every major currency today. The partnerships that we have and kind of like the stack that we’ve built. We can technically take funds in exchange for Bitcoin from 140 countries right now. But you talk about, you know, support, you talk about regulations, you talk about, the licenses and all these different things.

Cory Klippsten:

You kind of do have to go country by country and language by language and all those things. So you know, like, like most companies will probably look at Canada and then we’ll look at the UK and we’ll look at Australia and just kind of go country by country in English first and then branch out from there. If it goes that far, we’ll see.

Stephan Livera:

Yeah, that’s great.

Cory Klippsten:

There’s a lot of row to hoe in the U.S. And we’re inaudible you follow me or follow Swan on Twitter? Anybody asks about, you know, Europe or Australia or Canada. We just say, talk to Ruben, talk to Francis, talk to Aleks. It’s out there somewhere in the future, but it’s not immediate.

Stephan Livera:

Yep, sure, sure. So in terms of this one Bitcoin set up, tell us a little bit about who else is involved. I know Yan Pritzker is involved, you’ve got Brady. Tell us a little bit about who else is, who else is there?

Cory Klippsten:

Yeah, I mean so Yan and I got to know each other initially because, you know, I loved his book and we met at Bitcoin 2019 in SF around that, just made plans to meet up. And I wanted to tell him about GiveBitcoin brought him on as an advisor and you know, the guy just can’t stop himself from getting involved in, you know, product and engineering, like it’s in his blood. And he was trying to, you know, stay semi retired after selling his last company, but he just couldn’t stop. And you know, he started providing great feedback, not just like on a section of a chapter, but you know, kind of scanning the whole thing and rewriting things. And before long he asked if he could be in the team Slack and so that he was there just like chiming in on product and tech decisions and you know, basically with the launch of Swan, you know, and just coming up with the, the idea for that and exactly how I wanted to do it.

Cory Klippsten:

I think that’s what got him over the hump. And so from like mid December, he was onboard full time and really wanted to build this new product with us. So that was awesome. And that was about the same time I think Brady came on at the beginning of December. And that was just I started to have, I developed a hypothesis after working with a lot of different people that you basically just need to hire Bitcoiners for this stuff, otherwise you waste too much time. And also you’re just kinda, you know, you need people that are kind of down for the cause. So it’s not only saving you a lot of time, it’s also you’re getting their brain working on non-work hours so that they come back with good ideas because we know that anyone who’s a bitcoiner is going to be reading and talking and listening to podcasts and you know, we’re all just like degenerate Bitcoiners that can’t do anything else.

Cory Klippsten:

So if you hire Bitcoiners you get much more bang for your back, you know, and we’re all kind of working toward a bright inaudible future. And this goes for myself too. Obviously a lot of other things like I could be doing for more fiat, but I would never trade it. I love doing this. So let’s kinda, there’s the three of us. We’ve got a great longterm HODLer out of Germany who’s an incredible designer and coder. So he’s lives in a small town outside of Frankfurt. So you can see him on the website, but he’s been a great add to the team, has been on since January. And then we have a kind of, I mentioned having kind of a newcoiner who provides the outsider’s perspective, but I have a longtime friend named Matt Ruby.

Cory Klippsten:

I’ve been friends with since 2002 or 2003. Guy officiated my wedding in Istanbul like known the guy for a long time. He’s got a really interesting and helpful background cause he was actually the author and the writer of the blog for 37 signals. So this is the guys this is base camp. There’s kind of a famous tech blog that started in the early aughts called signal versus noise that he wrote for eight years. And those guys never spent a dime on marketing. All they did was just educate people and they’re the ones that created base camp. And you know, David Heinemeier Hansson created Ruby on rails. So kind of really well known people in tech. I think the only outside investor they ever took was just Jeff Bezos with a personal check and only cause Jeff begged them you know, and they still own the whole company and they have super happy employees and they work like 32 hour work weeks and they’re totally remote.

Cory Klippsten:

So having Matt on the team, he’s got a special skill that he brings to the table where you can translate something for a normie audience and bring them up to speed. So that’s been awesome to unleash him on Bitcoin. And he’s, you know, definitely the primary author of the book with me and everybody else chipping in. And yeah, I just think it’s interesting to have him, you know, cause he’s actually a full time standup comic now for the last eight or nine years. So he’s just doing this on the side. He does like halftime with us and then does comedy at nights when there’s, you know when you can actually go to a nightclub and it’s not COVID season in New York. He’s in the clubs for farming and hosting and stuff like that.

Cory Klippsten:

But yeah, I just find it really interesting to have him be in the mix and just kind of providing that a non Bitcoiners perspective. It keeps us honest. And then there’s a bunch of other people like we just added one of my favorite humans in Bitcoin and just in the world is a Brekkie von Bitcoin, Jason Don. So he’s just come on as a creative director. Official start date I think is actually tomorrow, but he’s been working with us for a few weeks. He’s been, he’s been kicking around and chipping in for months now. So that’s why it kind of became obvious that we needed to bring them on. So we have an author and we have an artist on staff and then our newest hire is we have an actor on staff. So you’ll get the, you’re the first person that’s going to get the the background on Reggie Brown, who’s the guy that we had a play Obama in our Bitcoin for America video yesterday.

Cory Klippsten:

So he’s an old friend of mine from Chicago. We were friends since 2006, 2007 in Chicago. And in 2008, this the skinny guy from Chicago started to get really popular and ran for president and Reggie happened to look a lot like him and was an actor and you just decided to, you know, get in makeup and practice the impersonation and got himself an agent in Hollywood and moved out here and he’s been doing like really good business as basically the best known Obama impersonator for the last 12 years. So he’s done, you know, all kinds of news shows and comedy shows and tons and tons of Bill Maher appearances and Fox news and all these different things as a, as Obama. So now he’s doing that for us a little bit, but we’re also going to have him play other things too. So he’s kind of the staff actor and presenter. And the fun thing that we’re thinking of doing is we’re gonna, he’s not a bitcoiner. But we’re going to use this basically to onboard him as a Bitcoiner in document his process as he learns about Bitcoin and learns how to engage with Bitcoiners and play Bitcoiners and you know, it’s gonna to be fun. I really like this idea of of having a staff actor.

Stephan Livera:

Right? Yeah. And speaking to the journey of learning about Bitcoin and I think it is psychologically important to have the dollar cost average approach as well. I think it’s, a lot of people have come in and tried to take the lump sum, Oh, is it a good time? And then they just mistime it because again, basically nobody can time it well. Or very few people can. And psychologically to me, I think that’s where the dollar cost average auto buy, whatever you want to call it. I like that approach very much. So what was it about that approach that appealed to you?

Cory Klippsten:

I kind of approached it from a standpoint of, okay, what is actually going to solve the problem here? And the problem is how do you, how do you actually accumulate a meaningful amount of Bitcoin? You know, because it’s really difficult for humans that have been tuned to spend cash as you receive it, to accumulate enough money to purchase an asset without using credit. And so, you know, really the only things that have been effective at getting people big chunks of value into an asset class have been retirement, which comes automatically out of your paycheck and mortgages, which is something that you have to pay every month. It’s the first thing that goes out. And so I think that approach of saying, okay, you set it and forget it. You’re just paying for this thing every month. You know, you’re just gonna buy a bit of Bitcoin every month and think about it.

Cory Klippsten:

as like, you know, a Bitcoin savings account or whatever it is, you’re just going to accumulate this Bitcoin. And it just be it’s a forced habit. You only have to make that decision once as opposed to, you know, there are certain people and they’re hardcore Bitcoiners and they’re listening to a lot of podcasts and they’re the people that will religiously sit down and go on the exchange and you know, set a limit order and wait for the, you know, the tick to go down and pick up their limit order, whatever it is. But there’s so much mental friction and so much time associated with that ritual. We can only expect some single digit percentage of people to actually DCA dollar cost average without it being automatic. So when I looked at it, I thought the three things, it was super clear to me.

Cory Klippsten:

I’m surprised that other people don’t all do it the same way, but it was very clear to me that you had to automate three things to actually solve the problem. You have to automatically pull the funds from the bank account, you have to automatically purchase the Bitcoin and then you have to automatically withdraw it to the user’s designated storage. Like the address that they want it to go to or xPub we do xPubs too. So with all three of those, I think you have, you know, the best way to for you know, 90 plus percent of people to be able to accumulate a meaningful position in Bitcoin.

Stephan Livera:

Yeah, that makes a big difference because it really is about smoothing the friction out. And I know that for my focus is very much about teaching people towards self custody, as wherever possible, self custody. And I think many of my listeners will share that concern. And so that is something that is important to them because they have been through these scenarios before where let’s say Mt. Gox went down and these exchanges all go down and without having a strong self custody culture, there’s just so much risk there. And so definitely appreciate that Swan Bitcoin is very much advocating and advancing down that line of you should self custody and you should withdraw regularly.

Cory Klippsten:

Yeah, it is very interesting. And you know, one of the other things that’s pretty cool about it is most people choose round numbers for their withdrawals. So we’re working on this and Matt O’dell is helping us like think through this, but basically if you can do basically all your withdrawals at one time and they’re all in the same denomination. So like, let’s say we’re doing like a thousand withdrawals or a thousand sends to user designated addresses of, you know, 0.05 or 0.1 or 0.01 or whatever it is, it effectively looks like a coinjoin.

Stephan Livera:

Oh, right. If it’s a batch spend, right?

Cory Klippsten:

Batch spend in, they’re all going out in the same denomination. So there’s a little bit of a, you know, privacy there, but obviously a lot of people that will receive it will go off and do, you know, coinjoins, whirlpools, whatever they want after the fact too.

Stephan Livera:

Right? And yeah, I just, I think there’s a lot there just around the friction, right? It’s mostly the friction aspect, right? Even if you’re super committed to Bitcoin, you might, and you’re trying to manually buy, you might think, Oh, maybe I’ll wait a little bit because I think, you know, it’s coming down and I’m going to be able to get more if I wait just a little bit, and then you end up trying to optimize or for something. It’s like you’re missing the forest for the trees. And that’s something that I’ve it’s a tendency I’ve noticed in myself when I was, you know, manually buying manually buying Bitcoin before. And occasionally I would slip it up a little bit. And then you’d kind of miss a buy and then you kind of like, ah, I missed the opportunity. So, but there’s that strong FOMO aspect of it as well because people sort of feel like, Oh, there’s a big dip, I want to buy some now. And that can run you in, that can put you into trouble as well because you’re trying to like take lump sums or certain chunks of money as opposed to just saying, no, here’s the plan. Just this amount every week or this amount every month or whatever it is. Yeah.

Cory Klippsten:

Yeah, that’s right. And again, you know, I think conditional on being a bitcoiner like you probably have a little bit better relationship with money than the average person. And so, you know, saving up and having a chunk of fiat on the sideline to put into Bitcoin when you deem the price is low is something that’s a real experience that many of us have had and have been through. It’s not a realistic experience for most people. Most people are not going to be able to put $5,000 in an account on the side. And I know this from sitting in the chat, we turned on chat, you know, two or three days ago with our early access people. And I’ve had a lot of conversations about people like very concerned that our paycheck plan that’s supposed to pull on the 1st and 15th actually is going to pull, you know, on the 1st and 15th or later because it’s coming out of their paycheck.

Stephan Livera:

Yeah.

Cory Klippsten:

Paycheck. Yeah. But they want it. But our pricing, and this is another really important thing, I, I got really really tired of the inequity of the two providers that do DCA in the U.S. Gemini and Coinbase just gouging people on fees for small bias. So it’s just like egregiously high. If you do $10 fee, a $10 buy on Coinbase is a 9.9% fee plus the spread. So we just decided to basically treat everybody the same with our tiers, so it doesn’t get egregious like that. So for us, I think you know, a $10 buy is 2.49%, if you prepay your fees annually, 2.99% if you’re just doing pay as you go. And we go all the way down to a 0.99% for buys of 200 bucks a month or more. So 50 bucks a week or more, you’re in our highest tier and you’re down under 1% fees for set it and forget it recurring Bitcoin buys and you know, the lowest fed square Gemini and Coinbase I think is like 1.49%.

Stephan Livera:

In terms of the spread as well. What sort of press do they end up getting from that?

Cory Klippsten:

We don’t take, we don’t take a spread, so it’s just the fees. The fees are the fees and we get, you know, basically the best market price that is available through our providers. Just a network of exchanges and OTC funds that are, they’re plugged into a desk basically.

Stephan Livera:

Yup. So essentially this is the, this would be the cheapest DCA option available for Americans.

Cory Klippsten:

Yeah, that’s right. Yeah. Well that’s a good thing as well specifically. I mean, so you could, you could wire money into an exchange or some kind of service and convert it to tether and set it up to buy every minute or whatever. That for me, again, the problem for me isn’t solved unless you have the automatic withdraw from the bank account, the automatic purchase of the Bitcoin and the automatic withdrawal to your own storage. So unless you’re solving all three of those, I don’t consider that product a competitor to us. You’re something else. And that’s fine. There are people that make those product choices and they want to do it that way. Like, you know, supposedly there are a few people on Kraken that do actually a DCA, but you have to wire the money to crack in and it sits there and your inaudible account and then it gets inaudible out into Bitcoin over time. Right,

Stephan Livera:

I see you. Yeah. Yeah. And it’s more of a manual approach because that user has to actually kind of manually operate it.

Cory Klippsten:

Well they have to push the money from their bank account to the exchange versus halving it just automatically pulled from the bank account.

Stephan Livera:

Yeah.

Cory Klippsten:

So the buying the purchasing of the Bitcoin is automated and I hear it’s great and that’s totally awesome. But I really do think you need the pull from the bank account to, to automate this thing. Right? Yeah. Also ACH is free, which is nice.

Stephan Livera:

Yeah. That’s always a bit tricky as well around like how you set up the banking and all that. But yeah, I guess it’s, it’s, it doesn’t take, and that’s the other thing as well, it doesn’t take that many people doing DCA before you end up with this huge hugely bullish pressure. Upwards on the price because it’s just not that many. This is not that many Bitcoins to go around in terms of the new mining supply.

Cory Klippsten:

Yeah, no, I think you’re absolutely right. I mean we’ve obviously been able to see the impact that square going so hard with with cash app and making it easy to smash to stack sats as the boys over at TFTC say you know, that that’s had a meaningful impact on, on sucking up the new supply that comes in every day. And I absolutely think there will be lots more. We’ve got River up in San Francisco with Alex and the boys and I’m friends with Andrew their marketing guy down here in LA and like it was slightly different approach that’s more like, you know, exchange focus more of a brokerage and they do sells and a lot of high net worth sort of like family office focus and we’re kind of like trying to bring millions in. But I think there are like, it’s silly to think that when millions of people sell gold around the world and millions of people sell stocks around the world and Bitcoin is supposed to be this huge asset class.

Cory Klippsten:

Do we really think there aren’t going to be like at least thousands of businesses selling Bitcoin? Of course there will be. You know, I’ve seen I became aware of Reserve over, I think they’re Swiss and they’re going to be serving the EU, but because Connor inaudible published a piece in their new blog. So that’s clearly like a well experienced and capitalized team that’s going to be doing something else over there. And you know, I think there’s going to be new ones popping up all the time. And you know, a rising tide lifts all boats and we all, we all kind of make it happen together and that’s totally fine. There’s plenty to go around. You know, I think this thing is heading for like a hundred trillion market cap, which means at least a few trillion has to flow into it. And a percent or two of a few trillion is pretty meaningful. So there’s plenty of money to go around as you do this, right?

Stephan Livera:

Yeah, absolutely. And so let’s talk now about Bitcoiner Ventures. So it’s this new thing I’m involved as well. Can you tell us a little bit about it? What is it?

Cory Klippsten:

Yeah, so I mean this, this came from you know, like summer of 18 was when I first wanted to start it and I was looking at all the money that a consensus could throw around or you know, some of these ecosystem funds, like that giant pile that Block One gave to galaxy like 300 million to invest in EOS startups or whatever it was. And I was like, why isn’t there this for Bitcoin? And it’s like, well there is, it’s just, you know, it’s all venture investors globally, look at Bitcoin startups. But I felt like it could be helped by having at least like another strong voice that was, you know, putting in the work and the time to be authoritative and exhibit like, Hey, I’ve got some tastes. Like, we can all have our opinions about movies, but it’s also nice if a professional reviewer watches everything and you get to know their taste and then you can at least judge whether you like something by calibrating against their taste.

Cory Klippsten:

So that’s what I thought we could do by being a focal point where we do actually do the work. We do look at the, you know, the fundraising decks and meet the teams and know the teams and, and you know, so I started thinking about this initially with with Steve Lee and Dan Held in like summer of 18. Never quite got around to it cause I was pulled into other things. And you know, basically with getting to know you and Yan Pritzker over the last year you know, we obviously felt the three of us that we could provide a good voice and really be, we have good access to deals. And I think that people around the world will, I mean they’re already proving that they do trust our tastes and they’re signing up for our Angel Syndicate.

Cory Klippsten:

So there’s Bitcoiner Ventures Angel syndicate is how we’re starting it. And we’ve got our first deal, got our first allocation in a very well known Bitcoin startup. I can’t say the name, but you can go and find us on Angel list. We can post the AngelList syndicate URL in the show notes and you can go in there and if you’re on AngelList already subscribe to our syndicate or it’s pretty easy if you’re an accredited level investor to sign up for AngelList and start contributing to these startups. The way AngelList works basically we’ve signed up for, you know, in this case just to get off the ground $100,000 allocation in a deal that’s currently going down for a Bitcoin startup. And there are a bunch of other investors in the round professional investors that are doing their due diligence, et cetera. And obviously we are too. And we fill that up with checks of anywhere between like, you know, one and 25,000 so you can invest in a Bitcoin startup for as little as one K US from around the world by the way. So it’s not just a U.S. thing. This can be a global investor base.

Stephan Livera:

Yeah. So it’s an opportunity for people to take part and be a part of the group who are investing into Bitcoin proper companies. And so can you just tell us a little bit about how investments will be looked at, and which companies will get invested in?

Cory Klippsten:

It’s Bitcoin only. So that’s one of the key things. So, you know, I think it, if your exchange is also a selling icon or toilet paper coin or whatever else, like no, not interested. So this is a Bitcoin infrastructure companies like we’ll be looking, we already are talking to a few Bitcoin mining services and software type companies, definitely consumer services, you know, things like us and you know, a Strike for instance or an Unchained or you know, things like that will definitely be on the shortlist. The Folds, the Lollis, just things that are getting Bitcoin infrastructure built and companies that are getting Bitcoin in more people’s hands and educating about Bitcoin and pushing it forward. And you know, we’ve seen historically that, you know, there are obviously companies that have been in the space that have delivered outsized returns with a different risk reward profile from Bitcoin itself. So I think we’re making a strong case that it absolutely does make sense, not just as sort of like be a good Bitcoin citizen, you know, charitable investment. It’s like, no, there’s actually companies now being built in and around Bitcoin that have very good prospects for outsized returns going forward.

Stephan Livera:

Yeah. And so it’s one way that people can, if they weren’t normally going to go and participate in investing into Bitcoin companies, this is one way where they can participate as part of the syndicate and contribute money in that way. And in doing so fund Bitcoin companies that they like that they want to see.

Cory Klippsten:

that’s right. That’s absolutely right.

Stephan Livera:

Yeah. So in terms of how it works then, like if somebody is listening now and they want to be a part of it or they want to, you know, they want to invest, right? They’ve got some money and they would like to invest in the chosen a company as part of the syndicate. What’s the way they contribute? How do they get involved?

Cory Klippsten:

Just go to Bitcoinerventures.com and you can just go and sign up and send us an email. Our email is a hello@bitcoinerventures.com. So you can just shoot us a note. I’ll come right to my inbox and we’ll take a look. And we can point you toward the syndicate. Or if you’re a founder of a Bitcoin company, we’ll take a look at what you’re doing. Just so everybody knows, like the sweet spot is, you know, basically like seeds and A’s. Maybe we’ll do some later stage companies as some of the current crop of Bitcoin companies advance a little further. But you know, you’ve got to have, you know, be well on your way to having product and market. Ideally a little bit of revenue and you need to have other investors. We’ll never be the first check or the only check. So if you just have an idea or you just kinda like getting off the ground, absolutely want to know what you’re doing, we’ll talk about it, we’ll promote it. But there won’t be a check forthcoming until you get a little bit further along.

Stephan Livera:

Yeah, it’s an opportunity, there for you know, Bitcoin proper companies as well. Like if you’re a founder, you can put it in an email and say, Hey, maybe we could be part of we could work together or you could invest. So that’s there as well.

Cory Klippsten:

I should let you at least mention our incentive structure as well. So, you know, obviously venture investors typically take a percentage of assets under management and the carry, which is basically a percentage of the profits. We’re taking 0% on assets under management, so not taking any money there. And instead of 20, we’re taking 10, and that’s obviously like split between the partners and also equally with an investor, associate Louis Liu who’s helping with a lot of the blocking and tackling and has good deal sourcing and good deal evaluation skills. So basically the four of us just splitting that and we’re also all investing a little bit in each of these companies as well. So we have skin in the game by putting up some money ourselves in each of the deals that we select. And that forces us to actually pay attention and all three of us and decide what we’re going to do.

Cory Klippsten:

And then we have an incentive to you know, help make it go great and, you know, be really choosy because we actually do have a little bit of upside along with our investors. You know, for doing the work and for selecting the deals. And, you know I would absolutely love to see some financial returns from this endeavor, but you know, but it is well under market and it’s not for us. I mean, I’ll speak for myself, I think you feel the same way, but it’s not actually about the money. It’s about the money, Bitcoin.

Stephan Livera:

Yeah, yeah, yeah. It’s really about what can we do, what companies out there will really benefit and benefit back to Bitcoin. Right. And help build the infrastructure around Bitcoin and help kind of advance it on this journey of becoming, you know, the global money. And I think it’s also an interesting point because over the years, many of us in the Bitcoin space have been frustrated that there would be some shitcoin fund manager who would be charging the typical 2 and 20 or even more. And telling people, Hey, you’ve got to, you can’t just invest in Bitcoin, you’ve got to invest in all these other, you know, and think of it like it’s quote unquote crypto, right? Which obviously I disagree with. What if we had actually something that was more Bitcoin focused and people could invest their money and know that it was going towards proper Bitcoin only and being done in a way with the, where the focus is, we’re going to try and push Bitcoin along this pathway of becoming global money.

Cory Klippsten:

Yup, absolutely.

Stephan Livera:

So look, I, let’s just finish it up with a bit of a broader comment around the macro comments and the macro scene, where in right, we are just seeing just unprecedented actions by governments all around the world. I mean, we’ve got this crazy, crazy amount of money printing and stimulus. We’ve got all this crazy stuff happening in terms of government intervention into the market, around just into our lives in terms of, you know, many of us practically sitting on house arrest at this point. Many of us around the world. So it’s a crazy scenario. What is the, where does Bitcoin play into that?

Cory Klippsten:

Well, I put in my time thinking about this on Sunday morning and posted a tweet. So I’ll just read that. I could not imagine a more positive setup for Bitcoin. QE, call it quantitative easing unlimited will succeed in kicking the can down the road one more time, but everyone now knows fiat comes from thin air and can be used for anything. So from here it’s a free for all unlimited dollars and fixed Bitcoin equals moon. And that’s really what I think, you know, I think in the first few weeks of this thing really getting out of hand and I got my cues from, Bitcoin Twitter, and then really Macro Voices got all over this the last week of January. So, you know, this is, it’s hard because Bitcoiners are right about so much that we can get very full of ourselves being right about things.

Cory Klippsten:

But the fact is this sort of to Talebbian fat tails, exponential thinking like this way of looking at the world, like that mental model, you know, complex systems and you know, beating of butterfly wings and all these different things are a much more accurate way of thinking about the world. And it basically let, you know macro investors are very similar, which is why there’s this big love affair between macro investors and Bitcoiners. Cause there is no more macro investment out there than Bitcoin, whether they know it or not are the ones that really were out in front of this and saw this, you know really early like Taleb was publishing on this in you know, the third week of January about how this was going to be a global pandemic and that the WHO had it wrong and all these things.

Cory Klippsten:

And you know, we’ve seen that time and time again, whether it’s, you know, two bit idiot being all over this or Balaji or you know, any of your favorite hardcore Bitcoiners for the most part have been on, on top of this as well. And so I did definitely see that. Here’s what I was nervous about. I was nervous about the whole thing kind of falling apart before Bitcoin was ready. Cause I just, you know, there’s just not enough capacity. The market cap’s not high enough and I could see, you know, draconian measures slapping down while there aren’t enough Bitcoiners and not enough infrastructure. And you know, especially when you look at the night of March 12th and what happened with the price in BitMex and cascading liquidations and all of the margin calls all over the place and all that kind of stuff. Like you look at that and it’s like kind of scared to take all this on now.

Cory Klippsten:

The best thing that could possibly happen is like being able to see the wizard behind the curtain with Kashkari coming on and saying, we have unlimited money. We can just print it as much as you want. Unlimited. Right. And then you know, Bitcoin coming into the halving like you, I don’t even care what happens to price this year. Like, it’s just, it’s so obvious now the value prop and crystallizing that this thing isn’t a hedge against like a financial crisis. It’s a hedge against the existing system and this existing system has just shown its massive cracks yet again. And you know, I think, one of the macro voices guests totaled up, if the dollar is actually going to backstop all of the Euro debt and all of the corporate debt and basically everything that it has to backstop, it’s not going to be 6 trillion. It’s going to be 45 to 47 trillion. Like what’s the release valve for that? I wish we had something.

Stephan Livera:

I don’t know. Now it’s an interesting point as well because I’ve often, Well, I’m kind of coming around to that view that look, the typical person is not gonna really care about Bitcoin until they feel it in their hip pocket. Right they feel the inflation and it may be that in the short term. We don’t necessarily see a lot of CPI, consumer price inflation. And it may just be, it may take some time for that to really filter out and that is what pushes them in. But at the same time though, Bitcoin is still extremely small and we’re about to come into a halving. So the actual downwards sell pressure exerted by the miners is just going to massively decrease. Right. It’s going to halve obviously, and then with all the people stocking just regularly, I say it like we are going to sort of see a bull run in Bitcoin probably next year. Right. And it just sort of hits this crazy perfect storm for Bitcoin.

Cory Klippsten:

Listen, it seems to be setting up that way. So we’ll see. I mean we’re you know my company and my comrades in in Swan with our wings out flappin’ as hard as we can just trying to get ready for this thing and, and be there to take the orders, that is kind of the goal. But yeah, I think it’s, I’ve never been more, more bullish for Bitcoin than I am now. And I think, you know whatever your price forecast was for a given year out in the future, so let’s say like 2024, 2028, 2032 whatever, and you had a number in mind, like conditional upon the system actually collapsing again, which it is in the process of doing and you have another crisis conditional upon that happening that now that condition has been satisfied and it was priced in, you know, as a maybe before and now it’s a definite, so you actually have to either change the year of your price forecast or like 2 to 5x your forecast for the year that you had in your mind. Like you have to because now that actually happened and now we actually have our government going on and saying we can print as much money as we want. And they are. So yeah, just Bitcoin as a thing happening by a certain date became a lot more certain.

Stephan Livera:

Yeah, that’s a great way to frame it. So look, Cory, where can the listeners follow you and Swan and Bitcoiner Ventures.

Cory Klippsten:

Yeah. So Swanbitcoin.com in the U.S. come and set it up. And if you have any friends that are looking at Bitcoin that are in the U.S. please send them our way. We’ll take care of them and teach them about Bitcoin and get them stacking and then bitcoinerventures.com please come and sign up for the AngelList syndicate, and there’s no obligation. By the way, you can get notified of all the deals and look at all the materials just by signing up you have no obligation to actually participate in a given deal. A lot of people may not have a lot of experience with AngelList. And then me you know, me, Brekkie, Brady and Yan all have the handle keys to Swan Bitcoin. So if somebody says something stupid, it’s me. No, I’m just kidding. And then I’m @coryklippsten on Twitter and easy to find there. And you know, you can also email me anytime at Corey, C-O-R-Y at swanbitcoin.com.

Stephan Livera:

Fantastic. I’ve enjoyed chatting with you, Cory. Thanks for joining me.

Cory Klippsten:

Yeah, thanks Stephan.

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