The following is a transcript of a recent podcast with my friend and investor in The Block, David Nage. This podcast was particularly fun because David knows me so well and we were able to chat like buddies. I hope you enjoy the read (or listen) as much as I enjoyed sharing it with David and his listeners! The Base Layer podcast episode can be found here: Base Layer, Episode 47: Mike Dudas.
Per David’s notes: “Mike Dudas joins Base Layer to talk about the early days of The Block to now becoming one of the “go-to” resources for news and research on crypto. We talk about the narratives that are currently discussed, from geofencing to Libra. We spend a good amount of time also discussing their work on Libra which was exceptional, learn more about their reporters who are breaking stories in the space better than main stream outlets and much more.”
David Nage: This is Base Layer, brought to you by Arca. I am your host, David Nage. This is Base Layer, where institutional investors come to learn about crypto. This is your new episode with Mike Dudas from The Block. We had a great conversation. I’ve known Mike for a long time before he started The Block. I actually saw the first pitch deck for The Block.
We talked about the state of crypto news and we talked about why some of the legacy players seem to be a little bit slow and continue to use this narrative of talking about the all time highs of bitcoin of 21,000 and how it capitulated down, whereas Mike and the team at The Block are really at the forefront of the news and information flow within this asset class.
So this is a great conversation. We talked about a lot of the narratives that were happening within the news perspective. We talked about things like geofencing and the regulatory effects that are happening. So, this is a great one. Mike and the team are cracking a lot of news. They were at the forefront of the Libra news. No one else was really covering it the way that they were and they got a lot of exceptional coverage for that. So, this is one to definitely take a listen to.
Remember, nothing on Base Layer is investment advice, so please do your own research and on the flip-side, you’re going to hear the conversation with Mike. Enjoy.
Mike, how are you?
Mike Dudas: I’m doing quite well, thank you.
David Nage: I’ve gotten to know Mike for the last few years, and full disclosure, I am an investor in The Block, so I’ve gotten to see this journey that Mike has taken from leaving Button to forming The Block. I have seen the early imagery and arc of The Block when they were starting to come up with their logo. I’ve seen the early pitch decks and Mike has built an amazing business and The Block has become the go to source for news and information in crypto.
So, Mike, if you could, as we like to do on the show with guests, we don’t like to go through the origin story in terms of when did you find bitcoin, but when you did find bitcoin and I know you are very, very, very proud of bitcoin and you love bitcoin and you’re an advocate of bitcoin, what about bitcoin, what about blockchain really said to you this is where the innovation or the revolution is going to happen and made you decide this is where you’re going to have to pursue your career.
Mike Dudas: The most exciting thing about bitcoin which came onto my radar in 2012, but really hit me hard in 2013, was hey here’s a way that folks can transact outside of all of the intermediaries that are involved in a traditional payment flow. That’s not language that would make sense to a layman, but I had since 2009, been working at Google Wallet and at the time I was at Braintree and Venmo and I had spent so much time working to negotiate mobile payments with retailers, with credit card networks, with credit card issuers, and the number of folks that you had to deal with to get one transaction from a swipe all the way back to the merchant is just incredible, and the promise at the time of bitcoin was, we can do this, and we don’t need all these trusted intermediaries and hey maybe there is going to be some cost savings that comes out of that.
That was to me, the thing that immediately struck me. It was also post financial crisis a few years later. I read, for me, a seminal article that Chamath Palihapitiya had written about bitcoin being schmuck insurance. So, basically on a personal level, it was the payments, which obviously still hasn’t materialized to the extent that we all hoped and then on a macro-level, there was this schmuck insurance against individual countries and a number of other economic scenarios where’s there is rampant inflation, where there’s monetary abuse and that one has obviously been the one that realized itself over the last six, seven years and is the primary pro-bitcoin story today.
But candidly, I gravitated towards the one that hasn’t picked up yet which is payments, and we’re a decade into a century long plus journey, I would expect, so very early days.
David Nage: You’ve talked a lot about that article having an impact on you and the schmuck insurance. I know you’ve cited that article a lot and hopefully people have read it, but we’ll probably put some links in there on the post on that because I know it’s an important article.
And so, you read about this, you obviously were at Venmo, you were at some of the payment sides, you saw the promise that having a distributed ledger and having the ability to disintermediate the middleman, if you will, could have on retailers from your perspective. And so, we’ve seen L1, layer one, bitcoin having some scale and obviously there’s been some scaling issues. We’ve seen SegWit and we’ve seen some other attempts at L2, lightning and some other things to hopefully speed up that process using side chains and hash time locks and all that other good stuff. So, that’s a good one to delve into.
You saw this promise of disintermediating the middleman. And then you said, “Okay, I’m going to attack this market by setting up a prominent news and research facility.” How did you come about that?
Mike Dudas: I looked at this market in late 2017 and it was a time that I was four years into the journey of, I had founded a company with a few other fantastic folks, a successful company in mobile commerce and it was the fourth company I had been at in a 12 year journey in the mobile commerce space. And, I really felt like I’d never tapped into what I think cryptocurrency and blockchain technology, but really the money properties of cryptocurrency change, which is the ability to transact, to have an economy that runs parallel and or outside of the centralized government backed, big institution backed and heavily regulated money system that in our lifetimes, effectively, it’s been the only thing that we’ve known. Where the trust in the government and the backing of the government is what gives money its value.
So, I wasn’t that deep into it. It was more for me, a very obvious thing which was every company that’s being built just sells to a bank or sells to PayPal. There has to be something bigger. 2017 was the watershed moment for a lot of folks. It was the first time that you saw a real use case at scale outside of a store of value, which was look you can actually like do transaction financing (ICOs), right? And while I think there’s a lot of things coming home to roost now from a US regulatory perspective, in other countries, it’s a different story.
So you have companies raising money directly from the public and then effectively being able to build blockchain technology and fund it in a very different way through an initial coin offering and the economics of that, the claims on assets existed or didn’t. But things were very different than they had been previously, so that caught my attention. I had missed Ethereum for a couple of years while I was working outside of the cryptocurrency ecosystem. So, 2017 was that watershed moment.
So, fast forward, I made the decision that I wanted to move into the space. That it was a mixture of all the things I loved, which was money and governance and politics. I had been a public policy, meaning an economics and political science, major in college and what I realized is look, I’m not as competent as an investor at the world-class level you need to be to enter an emerging frontier technology area, I’m not going to invest here. By the way, I did think things were overvalued. Certainly didn’t think they’d drop to the levels they did, but definitely thought, hey things are overvalued and I didn’t understand how to invest in the early stage stuff because I’m not an engineer and even today, we’re still at the protocol level with a lot of what’s being built.
Then I considered, hey should I jump into a project, right? I’ve worked at company’s my whole life, but I really didn’t have the full faith and confidence to jump into any single project. So, I said how can I help, I’m just me, who is, when you think of really intense crypto folks, below average knowledge in terms, I haven’t been in this ecosystem for six, seven years. I was in some Telegram groups with just geniuses right, engineering geniuses, economic geniuses, folks of all types and it was a first time in a long time that I felt very hesitant and shy about communicating or talking and I said, “Wow, if I feel this way, well then, and I’ve spent a fair amount of time, learning what’s happening then so many other folks must feel this way.” So I think I can work in media, I can work in education and explaining things.
So that was the niche that I said was a good fit for me, that I was excited about. And, what was interesting at that time is the price of all these cryptocurrencies was really high when I started The Block, and there was a ton of retail action, I actually thought we would target retail. The tagline was “Crypto Simplified,” and we were going to educate and bring 50 to 100 times as many folks into the space as existed at that time and obviously the crash was really fast, really brutal and frankly in retrospect and hindsight, it didn’t affect our fundraising so we were able to raise money to move forward with the company.
However, it did affect our focus. It moved a lot of folks out of the space. It made it crystal clear that it was still extremely early days, very institutional and professional focused and that’s where what we do today, The Block, being the financial information services company for digital assets, meaning research, analysis, journalism and data for digital assets, that’s a professional offering and that’s very different than what I had conceived of what I was pitching, for example, to folks like you over a year ago.
David Nage: That’s true. And, so talk about the evolution. We didn’t necessarily prepare on that one. But I remember the evolution and I think it’s quite interesting for the listeners because you actually beta-tested a lot of this before you actually went live with The Block after you fund-raised. You actually started testing it on Twitter. You started testing it on Telegram. How did you actually start building the audience that you have because that is incredibly valuable and having the audience that you have is also, for investors that are looking at The Block, something that they would look at too.
Mike Dudas: We immediately, again, being a very social person and there’s a reason I’m in the media information space and so when I was beginning to learn, I noticed the complexity of cryptocurrencies, the fact that they rely on heavy technology, networks, security, basically each one has a different program language that’s often confusing and hard to work with. Some are flexible. Some are extremely inflexible. And you have to work on governance and you have to work on basically what the inflation of this particular currency is going to be.
There’s so many multi-disciplinary issues that you have to deal with. No one person can be an expert. So, I was in groups with folks as you said on Telegram and reading discussions on Twitter and just seeing the level of confusion, but also the level of shared learning and said, “Wow. This is an ecosystem that I think is important and it’s ripe for learning by group and learning by conversation.” So, I created my own Slack group that did involve into the name The Block and it ended up being about 1,200 folks. It was free and we had a really live, rich conversation going on. A company was founded out of this. A number of folks discussed jobs, discussed investments, so it was a ton of fun.
But what was really interesting is this particular time, was one when, this was when Binance just took off, right? So people were trading all kinds of coins and the conversation again was very retail oriented. It was a number of my friends, who now, even with bitcoin significantly recovering, really aren’t involved in the space. It was a very different time.
But that and a lot of learning, I was able to do there and then share publicly certainly helped and this is a very, very social space in so many ways, right? Again from governance, from if you listen to bitcoiners, for example they talk about social attacks on the protocol and the community. There’s just such a social element, that goes beyond the pure technology, that really was attractive to me and it’s been exciting. You see the different communities that have evolved around specific tokens but also, even subgroups within the specific token. So, it’s a fascinating, fascinating space and time but yeah, I got a leg up before starting the company by participating in a community that I helped incubate.
David Nage: Yeah. I think that was really smart and it’s always great to be able to beta-test something before you go live so it definitely worked out in your favor. And so getting to how The Block versus some of the mainstream outlets treat crypto, and so I think this is interesting because with the soup du jour of Facebook/ Libra/ Collibra, it seemed from perspectives on Twitter and social and the investment community within digital assets that The Block really had a leg up.
You guys were breaking news about the components and the companies that were participating being validators on their note, I think it was for 10 million dollars a piece, you had that information and you were scooping that up before any of the mainstream news media outlets like CNBC and Bloomberg were really covering that and so I’m really curious to get your opinion on this. The Block versus mainstream outlets and news, first, how are you guys breaking that compared to others and why are they so damn slow? And, they don’t seem so motivated to cover this space as compared to you guys
Mike Dudas: Mm-hmm (affirmative). So, one is, the media and journalism element of our business, that is very, very much a people business. People moving from one company to another, people like journalists establishing relationships with companies and people sharing information that is out there that they know that isn’t ready to be shared with the public. So, we’re fortunate… and then people trusting you. Meaning like they have to believe if they share information with you, there’s not going to be recourse to them. So, we’re fortunate that our journalism team is extremely professional, extremely well-liked, understands the topic that they’re covering and this is key. So if somebody gives information to one media outlet versus another, they’re trusting that that outlet is the one that they want to spread the message about this particular piece of news, so it gets to your Bloomberg question, it gets to your Fortune, your New York Times question, so mainstream media ha been covering this space for a long time.
And, it’s not necessarily for them a passion to the same degree that it is the folks working on our team, so what we’ve seen as we’ve built up credibility over the past nine months, is that an increasing number of important stories are getting put in front of us because people trust our treatment of it. They trust our understanding of it and they know we care so we’re going to get to the bottom. We’re actually going to challenge and give good feedback to them on whether it’s a good or a bad thing.
So that happened with the Facebook news and it wasn’t just one individual. It was multiple folks who helped us with that story and at the end of the day I would say Facebook, at first probably didn’t like it, but once they saw the totality of the work and I can’t speak for them, but we’ve not really heard any negativity from them since. I think they’re probably happy with the way we represented it and then they shared it with a number of other folks who ultimately, and in embargoes if you think about what happened there and what happens with most big news, it’s embargoed by the company, right, that’s presenting it.
And I think in terms of the media, in terms of people’s ability to digest information, it’s really a negative for everybody but the company. So, anyway, if we’re included in an embargo, and we’ve agreed to it, we’ll respect it, but all it means is that in the case of major, major news like Facebook, you’re going to get 50 stories dumped on you the day that it occurs, so what we feel like we give a service to the cryptocurrency community by giving folks the ability to digest the key elements by covering it with the care and attention it deserved a couple days earlier than Facebook anticipated, but it also gave everybody else the chance to cover it as well.
David Nage: And here’s the interesting comparison. So, while The Block was dissecting the white paper, and there was technical white paper and there was also an executive summary and they also provide a lot of information on their new site for Calibra. For some reason, I always see this, is that the news outlets always like to start with the same paragraph, “Well bitcoin was at 21,000 at the end of December 2017 and it dropped all the way down to 3000 and now it’s reigned back again.” There’s always that same first paragraph and then they go into the story.
And so Block never does that. You guys always start from what is the actual story, not let’s talk about how bitcoin was at 21,000 back in December 2017, which is almost now coming to a two year time pan. There’s still news outlets that are using that first paragraph. So, I think that’s an interesting comparison.
And so talking about that Crypto Winter, The Block actually almost, if you can say blossomed out of crypto winter. So you were growing this business, you were raising right around that time, how difficult was it at that time, or was it not that difficult because people saw the writing on the wall that this a needed resource in the ecosystem and if you learned anything, what did you learn during that period in terms of building out your future roadmap?
Mike Dudas: The first thing I’ll say is it wasn’t easy to raise, so, it wasn’t easy to find a lead. Not that I specifically sought it out, but we don’t have another person on the board and our largest checks are in the $250,000 range, so we raised two rounds of funding. We raised a 2 million dollar note last summer and then recently we just closed on a million and a half dollar note at a higher valuation.
And, we have some wonderful investors, but they were both difficult to raise. What’s interesting is the second note was actually harder to raise. The first one was on an idea and so people were really excited about what we were going out to build. The price was still higher than it is today. If you remember, I pitched you, I think it was April, May, June time period of 2018, so that round was fairly smooth.
Then imagine, I went out, and it was difficult over that summer the price plunged and we changed our focus. We were going to do a co-working space, an educational thing, Crypto Simplified and we changed the whole tenor of the company, so we had a little bit of very early turnover to folks who very early on the team moved on and we shifted focus and that’s when I recruited just the absolute pillars of the company, Steven who is our first researcher, Larry who is our head of research and analysis, and Frank who is our head of news, and those three hires helped us to go from zero to serious almost instantaneously.
What’s fascinating, but I guess obvious about news and information and especially in this age, is that people and personalities are so, so, so, critical, right? So those three folks were the earliest folks to take a risk and once they did, we were able to attract a team of wonderful folks around us. I also had taken a risk and built the site out with not a full-time CTO, but took the risk to do it with a development shop and they did a great job which attracted an old friend of mine to join Jake McGraw, as CTO and co-founder and he’s been incredible and built the team real fast.
So, then fast forward nine months, we’ve got 15 people and very little revenue, so the second round of seed-funding was the hardest to raise because we’re still in the middle of crypto winter. All right. So, I raised a round, end of Q1 beginning of Q2 this year and remember we were in the 3000s to 4500 range and it was really, really hard so it took me a month long than I thought I would. Our deck leaked, which actually ended up helping us, but it was tough.
You know as an investor, I think it probably took me two months to get the investment update. You’re actually probably still waiting for one, I have one coming out over the weekend, but it is a great one. So it was a really tough time. Q1 of this year with the price low, a fully loaded team, we had just put up the paywall, so our traffic dropped, it was a really challenging time. Then, my goodness, what we had prayed would happen, “hey stick around, be tough, build a business in the bear market, the best businesses are built in the hardest markets, you’re going to see who really cares” and is true and we built that team and lo and behold man, it’s almost it was out of a story book, but the market started to recover.
And I’m literally looking the price of bitcoin right now, it’s approaching 9500 as we’re talking and it really just has changed the mentality of everybody. Every single metric that we look at, we as of June, have more unique visitors, more traffic, more website visits, more revenue than we had in the entire month of May, and we’re a little more than halfway through June.
So, it’s just been monstrous and you can just feel the momentum building so things have changed. The things that are happening in the industry, I think media companies and for media services and information companies are a bellwether for the level of interest, as is trading volume and other things, but I can tell you that the inbound that we’re getting, the traffic that we are getting, the revenue that we are generating has been really powerful.
And I’ve actually been surprised. So, our business model is a bit mixed, as you know. So we run about 12 to 15 free stories a day and about three paid or premium stories a day that are really difference-makers that can help you make money and make great decisions. And we charge enterprise pricing for that. It’s $1000 a year, $85 a month and those sales have been pretty consistent and really picked up in the last couple weeks, but the ad revenue has just gone through the roof, as this market over the last four to six weeks has recovered.
So, we’re really going to exceed our goals in that area. And it’s exciting and we’re becoming a real site. Other sites are complaining about Google and this that and the other thing, but I think those are the ones with freelance writers and folks that don’t really understand the industry.
David Nage: Let’s talk about that. You read my mind. And we actually, again, did not prepare that conversation, but you read my mind. There was this, and for people who are not as following this and again, we like always like to say that digital assets and crypto is a 24/7/365 asset class and technology stack and we’ll talk more about that later as it relates to news, but there was a few outlets out there, one in particular, which we won’t have to name right now, but they had claimed that because of Google’s new privacy and settings that they were going to have to shut down.
There’s also this other narrative that’s happening with geofencing. We’ve seen some of the exchanges on the cryptocurrency side start to shut down US investors and so there’s this whole thing that’s playing out and then of course we saw with Facebook, there was commentary about that today, that for a time and period about a year ago, I know The Block was actually shut out of being part of Facebook for a while, so what part of that… Do you see this as a narrative that some of the corporations out there or in terms of some of the governments out there, are trying to lock out the US?
Mike Dudas: It feels like two different questions. So one is, do I think technical gatekeepers, meaning existing technology companies are trying to block new emerging tech companies in the crypto currency space from succeeding? I think that was overblown and so I’m not a believer. For example, there was a company Crypto Coin News, CCN, that made a big deal about their traffic being cut and my belief is it was because they were attracting potentially low quality traffic and doing some fun business.
The other question is more, Facebook blocking ads, who knows. I don’t know. I was annoyed as heck that it took them so long, they and Google and others put blanket blocks on cryptocurrency ads even from companies like our own, but we found other ways to grow our business and so I’m not going to sit here and complain about it. I don’t think that it was as negative as what’s happening with governments.
The US specifically, because you asked about the regulatory climate here, look, it’s still confusing as hell, right? You look at any single body, right, the CFTC, you have somebody like Giancarlo, and he’s a fan of cryptocurrency and then you move over to the SEC and you have governors who disagree, or commissioners who disagree on basically what their position is, and they’re having speeches that basically contradict one another depending on who they are talking to. You got FinCEN and you got the New York Attorney General, then you’ve got the Southern District, right? You have so many different regulatory bodies that your head as a company must just spin off. It’s just insanity.
It would be paralyzing to be a company today thinking about doing a token offering. I think people weren’t necessarily aware of or understanding of how these different regulatory bodies and legal bodies would come down on them in 2017, so people took various levels of approaches from aggressive to conservative, and it looks like aggressive is going to be the one that is going to bite people in the ass and that’s not surprising, but you see Kick versus the SEC, you see a number of folks who’ve already settled. I think most projects, if they’re sane, will prefer out of court settlements, but the SEC is going to make an example, and who knows if it’s going to be Kik or somebody else, but it looks like that one is going to court.
It is having an impact, to your question. You can hear it directly from the heads of the projects. You can hear the frustrations from the people who are trying to comply like Muneeb and The Blockstack team. You can see YouNow Props just giving away tokens after having done an ICO. There is no clarity, tremendous uncertainty, and it feels like the SEC is talking out of both sides of their mouth. You have the chairman yesterday saying, “Hey. We’re going to relax, or we should relax the rules for individuals to access hedge funds and other risky assets and we should change potentially the creditor investor rules,” and then over here you’ve got these projects that have innovative economics but are not getting clear guidance.
That being said, a number of these objects are nonsense. So, they’re money losers. They’re effectively angel investing stage of development deals that were raising money at Series B valuations and egregious. Even professional investors, are going to lose money on these investments, except for ones who’ve got insider deals.
So it was an ugly scene, and I would say that as a blanket statement. There were pockets of things that were not ugly. Honorable founders, honorable investors, but the results were some really nasty stuff that happened, and I think we’re going to see that come out over the next couple of years. There’s going to be a number of projects that are just going to be hamstrung by regulatory uncertainty, and I think you’re going to see fewer token offerings and innovative financing structures, but if that is the secret sauce of this next era, then that puts the US behind.
If you believe like I do, that bitcoin and if you believe like many do that Ethereum are, let’s just say the base layer, right of innovation, and those are the cryptocurrencies that matter, then build on top of them. You don’t need your own token. Build a business on top of them. Buy your Ethereum, buy your bitcoin and build something on top of them. I think there’s going to be a lot of great businesses there.
So I wouldn’t say that innovation is being stifled in the US, quite to the degree that other folks are saying it is, right? I would say VC gains will be stifled and that’s why they’re loud. I would say Cooley’s legal fees will be stifled and that’s why you see them participating and asking the public for money for defendcrypto.org that’s I think going to pay for Cooley’s legal fees, which is insane. You see things like that, but ultimately, there’s a lot of room to innovate.
There’s a lot of room to make money in the cryptocurrency ecosystem, so I would say work around regulations and find those opportunities, and those are things like decentralized finance. Those are things like building an alternative financial infrastructure whether that be on top of bitcoin or others. Bringing bitcoin to additional people and building businesses that are like picks and shovels. Business that are like ours, right? Information. But, it’s going to take time.
David Nage: And speaking of on-ramps, I saw that you guys have a nice relationship with Lolli, so we’ll give a shutout to Alex Adelman and the team over there at Lolli. They were on the show a few months ago. Big fans of them.
Mike Dudas: I love Alex. He’s a really, really great… One, he’s a great guy. Two, he’s a really excellent entrepreneur, so the business model that he has, which is shop and get bitcoin back is smart, right? Historically people have gotten cash back, percentage back, but I think he’s really, really honed in on something that people love which is getting bitcoin for doing the things you do every day. And, he’s made it so user-friendly. I just want to hit that point of really like not enough folks, I know we hear this a lot, make things super user-friendly but damn, he sure does and his team does. And this is not sponsored. But, I would encourage folks as a friend of his to check it out.
David Nage: I agree. So we just talked a whole bunch about different things in terms of hats being built, we talked about some of the narratives, we talked about geofencing regulatory effect, and I said a few minutes ago that this asset class, this technology stack is 24/7/365. Normally equity investors, normal traditional market investors, family offices, institutional investors usually see a 4pm close and they wipe their hand clean and they call it a day and they go home. That does not happen within crypto. When everyone goes home here in the states, the Asian markets are popping and you would see that time and time again if you look at any kind of bitcoin chart or any other crypto asset chart, you see that there’s always pick up come around 7:00, 8:00 at night, Eastern, there’s always a pick up because the markets over there are now humming along. For a news and media company like The Block, how hard is it to cover an asset class that just doesn’t sleep?
Mike Dudas: It’s extremely difficult, and it’s why we needed to raise a good amount of money out of the gate. One, we want people who care, and we want full-time folks versus folks just writing freelance and that aren’t dependable, that’s from an administrative perspective. From a team perspective, it’s really challenging and not optimal and you need to have coverage as you said, somebody awake at all times of the day on your news and journalism team particularly.
We’re really excited, we just hired a woman Yogita who is based in India. We have folks in eastern Europe. central Europe and London. So, we have folks in all the time zones, in all four time zones of the United States, so we’re well covered, and it’s really good for us from a making sure that we don’t miss things perspective.
It’s tough, still. You have to edit, and the markets never stop. So you’re handing off responsibilities, you’re tired and you have to basically use good consistent judgment and processes in a really fast moving environment to determine and really say what matters and how it should be covered.
We’re working on this just like everyone else is and we haven’t perfected it. But, I don’t think anybody else has either. So, it’s a process, but we’re having fun and the key to doing it successfully is having people who really care and are interested. That’s the only way you can have good judgment. If you don’t really care about crypto, it’s hard to tell the difference between one headline and another.
David Nage: And there is a very important point. Again, going back to traditional media outlets, the reporters and the people who are asking the questions regarding crypto and digital assets and blockchain, they seem to not have that passion and again reports on The Block and others out there, there is a passion and you can sense it. This is something that they care about this is something that they’ve spent a lot of time understanding. It’s not just paper that they’ve been giving that they’re reading and they’re just asking questions to an interviewee. It’s something that is pretty evident when you notice the reporting on The Block versus others out there.
The last thing want to talk on before we get to know you a little bit better, is there’s been some attempts out there to use the underpinnings of Bitcoin’s blockchain technology. This notion of consensus, this notion of having models of distribution where you have validators out there that can look at data, look at news and validate if it is true or not and there’s been some start-ups like TruStory out there that have been trying to do. What’s your opinion on using the technological underpinnings of blockchain to curate and remove fake news? Would The Block ever use that or is there any kind of ideation around that?
Mike Dudas: It’s not in our plans, the amount of data… Look, like Facebook can’t even do it right, or at least they need human moderators and many of us saw the horrible story yesterday in the Verge about the toll it takes on these human moderators in addition to all of the algorithms they are using to identify content that’s true, false, extreme, you name it, right? YouTube is being investigated by the FTC. It’s a very timely question and YouTube is likely going to be fined significantly. Australia passed a law that the folks down at the ISP level who allowed this content that might be prohibited, to get to someone, would be liable.
It’s a little bit tangential… It’s not tangential it’s a little bit beside of what you asked, but being an arbitrator of what’s true or not, or what’s appropriate or not in this day and age is extremely difficult. So, it’s not something that’s part of our mission today, in terms of doing it from a provable via technology perspective.
What we are trying to do is be the objective source that analyzes all the different inputs into something and carries a brand, carries a factual backing and a credibility and a reputation for fair treatment and thoughtfulness that will make people trust us.
And it sounds funny, right? That sounds so old school like New York Times, that would sound like their 1900 mission. But honestly in this world, it really feels as if we are further away from being able to algorithmically pin down the truth than we’ve ever been. In fact, we’re moving back to that age where any given city it feels like its has hundreds or thousands of publications based on where people are spending their time online which is how cities were back in the day of local newspapers and multiple ones in each city.
So, I believe that while noble, the TruStory team in their first iteration, made a good attempt at an interesting problem, but obviously it wasn’t the right approach and they’re working on something else and they have a good team and hopefully will make it work. The notion of a token curated registry in general is one that I’m skeptical of. I haven’t seen it working to date, we can spend 45 minutes talking about it. So, it’s probably better to have other folks on to do that, but I’m skeptical that those work.
What does work is what’s worked for the history of humanity, is trust in others people’s judgements and how they evaluate systems and products and it’s funny to say that but it really is true. And it’s why you see this meme warfare and it’s why you see these battles on top of the technology itself day in and day out, it’s because basically the backing of anything that we’re doing here is backed by the trust and the faith that we have collectively in these things that we are creating, these assets.
David Nage: So interesting. We’re supposed to have trust in a trustless system.
Mike Dudas: Right? It does seem backwards but at least if we can trust the mechanics of it, then we can talk about all the other things around it.
David Nage: Right. Very interesting and so getting to the top of the hour with you at it is accustomed with all the other guests that come on Base Layer, we’d like to learn a little bit more about you. Now aside from being a die-hard Liverpool fan and so everyone can know that, Mike will always be at a bar watching LFC when the season comes about and hopefully they can do what they did again this season to the Spurs and to some other people like Chelsea fans which I am also partly a Chelsea fan too-
Mike Dudas: And my investors, because their games are on the Champions League at 3 pm during the middle of the week. I tend to bring a computer with me and I’ll watch and work.
David Nage: Exactly. We’d like to know what you’re reading and it doesn’t necessarily have to be crypto-related. If there is anything that you read recently that really resonated with you and also music, I’ve always kind of identified music as really giving a sense of someone’s personality. We’ve had people like Jeremy Welch come on and say that he loves metal. We’ve had other people come on and talk about music in their specific region like in Poland and we’ve had other people talking about it electronica, so what music are you listening to but also what are you reading?
Mike Dudas: Absolutely. So, the most recent book that I finished was Bitcoin Billionaires. About the Winklevii, and it was a really fun book. It wasn’t tremendously deep. It was by Ben Mezrich, who I think is great author and he wrote what turned into the Social Network. So, those gentleman, the Winklevii, have been through a tremendous amount and to see them come out of it with such conviction after really being screwed over in the Facebook era, it is powerful to see. They invested in bitcoin. Made a ton of money and have built Gemini which really isn’t discussed in the book very much, but is going to be in Volume Two and I think is really interesting and regulated business — something that they really focus on, regulation.
I read that after I had read Bad Blood. So it was fun to read about one of the biggest frauds that had occurred in tech, Elizabeth Holmes and Theranos, and then follow that up with Bitcoin Billionaires which was a story of redemption and emerging success.
What I’m reading now, and as I’ve mentioned we raised two rounds, the second round a million and a half, was primarily raised from funds from different parts of Asia from Singapore, from China, from Japan, so we basically are looking east, as they say. So, I’ve been reading the Age of Ambition, a great book about how China has become so much more commercial but also the restrictions of the communist regime, which is extremely powerful as we know.
It’s particularly timely with the trade war that’s emerging between the US and China. So, I’ll be doing a lot more reading about that. I recently read a book about South Korea and went to the Deconomy cryptocurrency conference there. So, I’m doing a mixture of all non-fiction right now for me and a mixture of just broad general technology and then reading really about geo-politics but generally with a focus on business in Asia.
And then music, so I have to tell you, I really loved the Bradley Cooper and Lady Gaga movie, A Star is Born. Something about it just hit me, man. I’ve watched it three times on every plane I’m on and it’s just really interesting. The music is beautiful to me and it sounds cheesy. I’m not normally into this kind of thing, so I’ve been listening to that soundtrack quite a bit.
It’s not about for me, personal love, I have a wonderful family, but a lot of it is about loneliness and emerging, a star is born, emerging. We’re trying to build something here and we’re trying to emerge into a really… Just like in the movie, it’s an intense world out there and everybody is haunted by X, Y or Z and you’re emerging into this glare where more people are focused on you and it feels very isolating even when you have really good people around you. So it resonated with me. And that was a movie that I saw, and I don’t watch a ton of movies, that really hit home for me and the soundtrack around it.
David Nage: I did not know that so that’s a good piece of new information about Mike. The last thing that we like to do with guests to give them an opportunity, so if people who are listening want to learn more about The Block or actually get on The Block or reach out to you, feel free to let them know where to go.
Mike Dudas: Absolutely. So, Twitter is just the best way to reach me: @mdudas. My DMs are open and I really do enjoy hearing from folks. Even folks who are trolling, particularly in private, it’s a better opportunity to have a conversation and hear feedback. And I’m also mdudas@theblockcrypto.com, which is actually our website. So, our URL is https://www.theblockcrypto.com/. We want it to be the starting point, the homepage for all serious folks. Folks who have a base level understanding of cryptocurrencies, of blockchain technology and their applications and really want to stay up to date on what’s happening day in and day out in the ecosystem.
David Nage: And let’s hope that you never have to raise money so you can actually just buy theblock.com because that’s been a little ridiculous.
Mike Dudas: You’ve seen how much URLs can cost, right? From voice.com.
David Nage: We won’t go there. That’s another narrative that’s happening in the last few days with some of the projects, but we won’t go there.
Mike Dudas: Never tiring in cryptocurrency, is it?
David Nage: An inside joke but they can find out more. Anyway, this is Mike Dudas of The Block. Check him out. It is a resource that hundreds and thousands of people within the digital asset space look at it every single day to pick up news and information about what’s happening in this whack world of crypto land. So, Mike thank you for joining us. Hopefully you can come back and give us an update in a few months on how everything is going. Thanks Mike.
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