S3E51 – David Doss – Earning 80% per year with crypto?

Key Timecodes

• (00:50) – Show intro and background history
• (02:35) – Deeper into his background history and businesses model
• (05:36) – How he started his entrepreneurial journey
• (06:36) – Deeper into his business model and strategies
• (11:09) – Understanding his cryptocurrency background
• (13:18) – Deeper into his cryptocurrency strategies and investing model
• (19:29) – What type of certifications does this type of business need?
• (21:11) – A bit about the expected returns at his business model
• (22:05) – The Cayman Islands, FTX, and the recent cryptocurrency confidence crisis
• (27:57) – Who can invest in his business as a client?
• (28:58) – The single world currency perspective
• (39:35) – What is the worst advice he ever received?
• (40:09) – What is the best advice he ever received?
• (42:56) – Guest contacts

Transcription

[00:00:04.440] – Intro

Hey, this is Sean Tepper, the host of Payback Time, an approachable and transparent podcast on financial independence. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go.

[00:00:18.320] – Intro

My next guest has a strong background in the cryptocurrency and blockchain space, and he talks about his transition to creating a fund that helps other institutions service their customers with crypto portfolios. In this episode, we discussed the pros and cons of incorporating a fund in the Cayman Islands, how to overcome objections related to the FTX scandal, how they reduce risk, and the potential of a single world currency. If you’re interested in crypto, this episode is for you. Please welcome David Doss.

[00:00:50.540] – Sean

David, welcome to the show.

[00:00:52.240] – David

Thank you for having me, Sean.

[00:00:53.680] – Sean

Good to have you here. So why don’t you kick us off and tell us about your background?

[00:00:58.030] – David

Yeah. So in terms of my background, I’ve spent about the last 15 years in marketing strategy operations, primarily for technology companies. And I also come from a very multinational global background. I was raised speaking a couple of different languages, and then I went on to travel in many different countries, live in a couple of different countries. And so that combination of being involved in a global background, also some of the research I did in grad school on basically bottom up social movements and also the background I have in technology, privacy, fintech, really drew me into the blockchain space. And that’s where I’ve been for about the last six years. So I’ve worked on blockchain and crypto initiatives with Gemini, Citibank, a number of other players, great and small, working in Web3 and digital assets and related areas. And so what specifically I’ve been focused on over the last couple of years is my company CKC. So we have two sides of that that we’re focused on. The one is CKC Fund, where we function as private fund advisors or private fund operators for investment vehicles focused on the digital asset space. And then the other side of it is CKC Studio, where we help startups as well as digital transformation initiatives within larger organizations to bring in a blockchain or Web3 component into their overall product and marketing value problem.

[00:02:36.050] – Sean

Awesome. Yeah, thank you for that context. Really straightforward, clean business model. I want to dive into your transition from what you were doing previously to creating CKC. So what were you doing before?

[00:02:50.660] – David

I was also working in the blockchain and crypto space. So over about the four years prior to really focusing on CKC, I had been working on marketing strategy operations specifically dedicated towards blockchain and crypto. So I’ve been eating, sleeping, breathing blockchain and crypto since basically around 2017, which in a space that’s an emerging market is actually pretty solid while here already. Through that time, also have been really focused on building out a trading and investing track record of my own. So beyond being professionally involved in the space was also investing my own capital into various projects, basically finding out different tactics and strategies for beating the market, essentially. And so through that really came to an overall point where this is something that I love, that I believe in, and that I have been doing, really just want to keep doing, but want to essentially do on my own terms. And I think that that’s something that’s really often a common theme is I remember reading, for example, Kiosaki’s Rich Dad, Poor Dad, and it’s often about we’re really beyond the desire to be an entrepreneur or whatnot. You also have to have some core competency or preferably competencies, plural.

[00:04:09.950] – David

And that, I think largely comes from a combination of passion and pain, basically, of desire to learn and also having enough experience of overcoming certain challenges, either for yourself or for other people.

[00:04:23.210] – Sean

Sure. Right on. So strong educational background and experience with blockchain. Now, were you working as a salaried employee or a consultant before you created CKC?

[00:04:35.520] – David

Yeah. So I was primarily working as a salaried employee, and definitely is not the easiest leap to take. But I think for a lot of us that were going through, especially at the time of the COVID-19 pandemic and all the crises around that, I think for a lot of people, it was this aha moment of re-evaluating priorities of, well, there’s only so much that you really can rely on in this world and might be good to start figuring out ways to rely on yourself more. And so I think that was one major wake up call area where it was also a wake up call area that was very directly related to markets and blockchain crypto specifically, where you saw, for example, the overall crypto market and Bitcoin specifically getting way less hard than, for example, the stock market during a lot of those early months of Covid.

[00:05:36.680] – Sean

Now, is this a business you were able to bootstrap a little bit while you had your full-time job or did you was there a non compete situation where you had to leave your previous employer and then start fresh as an entrepreneur with this new model?

[00:05:51.540] – David

That’s an interesting question. Yeah, so in terms of the jump starting of everything, I mean, certainly a need to finance a lot of the early stages myself was I think a big consideration. But then beyond that, also in my particular case, even though I was very heavily involved in blockchain and crypto, what I was doing was not essentially indirect competition to any previous employers. So I think that in that regard, it was fairly seamless. But yeah, I think there is the broader to your broader question was a period where I was doing a little bit more consulting on the side while building out the initial proof of concept. Good.

[00:06:36.290] – Sean

Yep. That’s what I wanted to confirm, because a lot of people listening, they’re working on building their own business. And how do I make moves while I still have a full-time job? So in your case, you were building this out consulting. Can you tell us specifically what consulting? Can you give us an example? If you can’t mention a client’s name, if it’s a business or a person, that’s fine. But it’ll just give our listeners an idea. What were you doing on the side to provide some value and create some momentum for your full-time or for your new gig?

[00:07:09.650] – David

Yeah. So a couple of areas that I was focused on was essentially a lot of that marketing strategy, project management specifically focused on blockchain and crypto. And so from there was a larger in a sense, natural progression of more individual solo consulting work towards more of a, let’s say, synergistic approach of some of this more asset management and corporate development type of services where rather than on a smaller scale client by client basis, we’re starting to think through what are some bigger picture ways that it could be doing a lot of these same things at more scalable potential.

[00:07:53.250] – Sean

Got it. So just to back up a second, your business model, which has the two segments, you have the fund, which I want to dive into a little bit further here in a moment, and you have the studio. So it sounds like on the side, you were the studio model, that consulting, that project management. That was how you were creating some side income. Is that right?

[00:08:15.240] – David

Yes. That’s mostly the picture is basically because of the broader focus of fund launch versus the corporate development and consulting. They operate on slightly different cycles where a lot of funds will tend to earn a large portion of their revenue at the end of each year from performance fees and such, whereas more of the consulting and corporate development can be more of a month to month cash flow opportunity essentially. So the two do have some synergy from a internal perspective, but then they also have some synergy from an overall customer value prop perspective where there are a lot of services that we can provide from the Studio side that are relevant to some of our prospective investors where there’s basically a full suite of solutions we can offer. Also, it’s in a sense, two sides of the same coin from an overall market perspective that the more we’re looking at investing into specific areas, the better an idea we have of what types of directions to be taking for specific products and specific clients. And conversely, the more that we’re exposed to different use cases across different clients, the more helpful that is for our overall understanding from an investment standpoint for due diligence and market perspective and asset evaluation.

[00:09:38.960] – Sean

Got you. Now, some of our listeners I do know work for large financial institutions, and they’re listening to you and they’re like, hey, we want to be offering some cryptocurrency or some fund around blockchain. You would be able to help with that. Is that correct? You help them structure a product they can sell to their customers? Or what are you specifically doing with that service side of your business?

[00:10:03.870] – David

Yeah. So that’s a good point. There are a couple of key areas there. So one of them is we have a main flagship vehicle that we advise and operate. But then beyond that, we also work with a variety of asset managers on basically we’re working towards providing their clients with various services, and that could take a number of different shapes basically. So in some cases, especially with more boutique wealth managers, they may not have the infrastructure or really the desire to build out their own in-house vehicles for advising or for basically investing into digital assets. But we can be in a position to basically do that as almost like a white label service in some cases where they can have some governance supervision on top of that or as more of a passive referral opportunity where they’re essentially sending their clients forward with a way for them to monetize without being directly involved.

[00:11:09.270] – Sean

Very cool. Got it. Okay, so I’m looking at I know plenty of wealth managers that they are like an owner operator, it’s just them. Or maybe they have a team of five or less people and they’re like, we don’t have the overhead or the resources in play to manage this. Although customers are asking for it, they could go to you and say, hey, can you help us offer some digital product in the world of blockchain and cryptocurrency? And your answer is yes, you can offer the product and some of the service if needed.

[00:11:39.390] – David

Correct. So yeah, to your point, Sean, there’s a really large disjunct right now in the space overall, where basically far more people are asking their wealth managers for these types of services than there are wealth managers that offer these either directly or indirectly through their network. So that’s for a number of different reasons, including just how quickly the space has grown. But overall, you’re seeing, depending on what research you’re looking at, you’re seeing basically around 25 % to 50 % of investors and primarily when we’re talking about those figures, it’s high net worth individuals, institutions, etc, that are interested in or actively looking for these opportunities. But then you’re really only seeing somewhere in the 5-15 % range of managers that are really offering these. So you’re seeing that disjunct by a factor of about 2-3 X essentially. And I mentioned those ranges just because it’s difficult in some senses to say, Well, both it varies on a global basis, depending on what you’re looking at country by country, but also depends on what exactly we’re talking about in terms of digital assets, because that’s a fairly broad umbrella.

[00:12:56.360] – Sean

Yeah. Well, that’s a good segue. Let’s dive into the types of products you offer to your customers. Are we talking about individual… Right away when I think of cryptocurrency, I’m thinking of the big players out there like Bitcoin and Ethereum and Litecoin. Are you putting them into a bundle of different coins? Coins or specific coins? Tell us about the fund a little bit.

[00:13:19.460] – David

Right. Well, how many different cryptocurrencies do you think there are out there?

[00:13:23.850] – Sean

Well, I did a video on this about World Coin. I want to get into that. But I saw an article, there were over 28,000.

[00:13:31.140] – David

Okay. So yeah, and that also depends on the definitions and stuff that depending on who you ask, it could be anywhere between 20,000 and more like in the 30 or even 40,000. But yes, this is something where if you ask most people in New York City on the street or whatnot, they would maybe be able to list five or ten or max 20 of these. But to that point with, let’s call it around 25,000 different cryptocurrencies out there. I mean, that’s a lot. So just thinking through, though, this is the overall crypto space has such a broad range where depending on market conditions, maybe around 40 % of that total market cap is going to be Bitcoin. And then from there, around 75 % of the total market cap is going to be in top 100 assets, essentially. And then there’s this very, very long tail from there of different opportunities. But ultimately, point being that what we’re looking to do is basically conduct similar types of conventional asset evaluation and asset management that wealth managers or fund operators in the traditional equities and treasury’s landscapes would be doing. We’re looking to provide that within the digital asset space where a lot of people that have had some exposure to, let’s say, of tow in terms of fund management, it’s tended to be more from either an early stage VC, venture capital an approach, or from a really highly leveraged and also highly risky, more exotic trading type of approach.

[00:15:18.310] – David

So both of those areas have been areas that have been quite impacted, especially over the last year in the wake of FTX, in the wake of Celsius and all three arrows capital, all these major institutions going belly up. What those challenges ultimately come down to is an excessive use of leverage where Celsius, Alameda Research, FTX’s parent or sister company and multiple of these other organizations, Three O’s Capital were all highly, highly leveraged. And in a rapid and unforeseen downturn, this left them way over exposed to risk. It also came down to basically a lack of regulatory supervision. So what we’re looking to do is provide a much more basically risk managed type of solution that is also much more in mind with what a lot of investors are used to in the stocks and bonds space. So we go in there and we look at all those different thousands of different assets. What we’re looking to do is find the ones that really make sense from a correlation perspective, from a liquidity perspective, from a utility perspective, of what kinds of fundamental value potential are there for these types of assets. And then we layer that into an overall diversified portfolio across high cap, medium cap, low cap, somewhat similar to what a stocks manager might do.

[00:16:48.540] – David

And then we actively rebalance that portfolio over time and we layer in yield generating approaches that are a little bit similar to, let’s say, something like your dividend stocks and these sorts of things where there can be a little bit of additional yield coming in on top of the capital appreciation for that total appreciation type strategy. So yeah. And then what we do now beyond that is basically limit the exposure to high risk futures, limit the exposure to leverage these sorts of things that have been very catastrophic in many cases in the crypto market, where ultimately it comes down to this is an emerging asset class with a whole lot of upside. But it’s also as an emerging asset class, something where there are a whole lot of unknowns and there are a whole lot of risks that we are looking to reduce rather than to amplify that.

[00:17:42.020] – Sean

Got it. Now this is starting to make a lot more sense, essentially. And I don’t want to oversimplify this, so please correct me if I’m wrong, but essentially of almost a mutual fund, but focused on cryptocurrencies, where you guys you’ll manage a bucket of crypto coins or currencies for a customer and you’ll rebalance to make sure they’re not too heavily allocated in one, which can create more risk. Is that a simple way to put it?

[00:18:08.060] – David

Largely, yes, except that I would not characterize it as a mutual fund. So most of the other things that you had mentioned, yes, but this is a situation where this is really more actively managed, where if you had, for example, a mutual fund that was exclusively focused on, let’s say, top 100 digital assets or top 100 stocks or whatever, the only type of rebalancing that they would usually do is when something came into or fell out of the top 100. Whereas what we’re doing is really much more of an active perspective of let’s say this asset has 10X, what is the potential upside or risk from there? How do we let’s say, adjust this position or we’re getting yield from these assets. Where do we reallocate that yield into other areas that are going to basically provide more upside and then also looking at broader market conditions of, is it going to make sense to increase exposure into low to mid caps, for example, in more of a bullish type of environment, or is it going to make more sense to start bunkering down into some of the medium to high caps and more of a bearish environment?

[00:19:22.120] – David

So there’s in large part what you described, but from an active management perspective.

[00:19:29.280] – Sean

Right on. And to do what you’re doing, do you need any certifications? When I think about the investments management world, portfolio managers, wealth managers, they’re getting to Series Seven, Series 65. Do you need any certification?

[00:19:43.580] – David

So it’s going to depend on the structure involved. But generally speaking to your point, funds are highly regulated. So the primary vehicle that we manage is registered inayman Islands under CMO, Cayman Islands Monetary Authority. So there’s a particular registration that needs to be conducted there. And then we also, depending on the vehicle, needs to be registered, for example, under Reg D with the SCC. So the general rule of thumb is if you’re running something that is an international vehicle that accepts investments around the world, you’re going to need to be often complying with not only the regulation of the place where the money is housed, but also the regulation of the place that the investor is coming from. So it’s a there are multiple rules and regulations that a organization like this needs to be watching out for.

[00:20:39.170] – Sean

One that jumped out is that Reg D with SCC. So any listeners out there they could literally go Google that, look into what that entails.

[00:20:49.090] – David

Yes. And similarly could also this is something where partners and such are able to look up in relevant databases the required information for a specific fund or fund operator, fund advisor, either through SCC databases or through payment Islands databases or related. Sure.

[00:21:11.990] – Sean

I have to ask this because I’ve had a lot of advisors on this podcast. What returns per year are your customers getting on average?

[00:21:21.220] – David

Yeah. So just thinking through, I can’t really talk about specifics from our side on a more public basis, but thinking through the digital asset space in general, Bitcoin has had a median annual return over the last five years of about 80, 80 %. So some years have been a lot higher, others have been a lot lower. But from a median perspective, that 80 % mark. And what we’ve been looking to do in our mandate is to outperform that essentially. We have been in a number of different cases successful in outperforming that over a similar time horizon.

[00:22:02.980] – Sean

Got you. Yeah, thank you for that transparency. Now I have to talk about Cainman Islands. And the reason I bring this up, because I’ve had this conversation with some of our customers, because of FTX, I’ve had investors who are of all ages say to me, Sean, I’m just super cautious with anybody that says they’ve got an entity established south of the states in one of the islands. Immediately, that jumps out as, Uh-oh, FTX related. How do you respond to that to increase their confidence that they want to invest with you?

[00:22:35.730] – David

Right. Yeah. So there are a number of… I mean, that’s maybe an entire podcast, even unto itself. And we actually just got back from Grant came in over this weekend. We were there last week meeting with a number of partners and collaborators. And also we had a really interesting panel on this topic as well that lasted almost an hour with a number of different experts. So if that’s of more interest, please feel free to reach out to me and would be happy to send more info on that. But a couple of relevant points around that. Firstly, on the FTX side. So FTX was British Virgin Islands. So in that regard, there’s been a lot of specific concern around the BBI structure and regulation just in the wake of FTX that I think Cainemann has not experienced to the same extent. And I think that also even comes down to at the beginning of things, FTX was looking at whether they were going to do this in Cainman or do it in the British Virgin Islands. And I would argue that basically there are reasons why it ended up not being in Cainman that as far as I can understand have to do with basically FTX’s lack of ability to get away with certain things in Cain in that they were able to get away with in the British Virgin Islands.

[00:23:56.520] – David

That’s certainly a larger topic and can of worms. But specifically when it comes to Cain in, I think there’s an incredible amount of rigor there that is not really present in a lot of other jurisdictions. And specifically to that point for us at ultimately, that’s really the primary reason for us, rather than any tax considerations. What we found really interesting about Kman for digital asset funds was that there already is clear regulatory framework around them in a way that really isn’t present yet in the United States. And there is their requirements for mandatory third party audits from auditors that are basically accredited to audit public companies. So this level of supervised advisory and regulatory rigor that really isn’t applied to digital asset funds or private funds, hedge funds in the US to the same extent. So I think another key area there is a broader topic of international being better or worse. And I think one slogan from the nomad capitalist guy, he’ll say, go where you’re treated best. And so to us, going where we’re treated best means a place where there is clear framework on what we should and should not be doing with a digital asset fund, private fund, hedge fund.

[00:25:21.170] – David

And there’s also applies to our investors where they know that they’re going to have a certain level of service and a certain level of transparency at as basically part of the course, as mandatory that they might not be getting in other areas. Beyond that, there’s also the topic of the larger international relations component of some of these statements where, for example, when you think through the US versus some other countries, some of the largest say, for example, money laundering scandals that have happened in the world really come from G20 countries and not from some of these smaller offshore locations where they can be this, let’s say, convenient bogeyman where they’re in some cases too small to defend themselves essentially. But when it comes down to looking through some of the data, I think it was Andrew Penney from Rothschild once mentioned that the US was effectively the biggest tax haven in the world. So thinking through this broader topic, I think it ultimately is a case by case question for individual investors, depending on priorities. It’s like, what are you looking to achieve from a regulatory perspective? Where are you specifically going to be treated best?

[00:26:37.190] – David

That’s ultimately a very individual and very personal question.

[00:26:41.280] – Sean

Thanks for that. That detailed response. I had to quickly, because G20, I actually have to admit, I did not know what countries were on the list. So US, Canada, Australia, China, UK, Russia, France, Germany, a lot of big players here.

[00:27:00.940] – David

Exactly.

[00:27:01.840] – Sean

In other words, a lot of the countries thought that the states, Caribbean Islands, British, Virgin Islands, they almost get pointed at when things like this happened, when a lot of the issues actually take place in the major countries.

[00:27:16.550] – David

Yes.

[00:27:17.190] – Sean

Okay. Yeah, I can believe that. That makes sense. Let’s take a quick commercial break. Hey, this is a quick heads up that we have a second podcast titled Top Stocks. With Top Stocks Podcast, I talk about investing, business, and finance. The audio content is published on your favorite podcast platforms such as Apple, Spotify, Google, or Amazon. The video content is published on the Tykr YouTube channel, so you can either watch or listen to each episode. These episodes are just me, so no interviews. The overall goal is to help you become a better investor. Go ahead and look up Top Stocks Podcast or check out the Tykr YouTube channel. All right, back to the show. All right, let’s talk about who can invest with you. Are you only open to accredited investors or can anybody come to you and invest?

[00:28:07.070] – David

Yeah. Specifically, I’m representing CKC management policy. That’s the fund advisor. We only work with fund vehicles, basically. So people don’t invest into us directly per se. But generally speaking, when we are managing a vehicle, it’s something that only works with accredited investors and above. Got it.

[00:28:30.600] – Sean

So it sounds like you’re helping more hedge funds than financial advisory practices. Is that correct?

[00:28:37.870] – David

No. So it’s both. Okay. Just the point being that I represent a company that is basically managing vehicles. And I guess the point being that from a people investing perspective and not really providing investment advice or anything of that nature directly.

[00:28:57.260] – Sean

Sure. Got you. Okay. Before we jump to the rapid fire round, I’m going to talk about an interesting topic, which I don’t think a lot of people are aware of, but the world is moving toward a single world currency. I did a video on YouTube people can check out on World Coin, which checks some of the boxes, in my opinion, could be the single world currency, maybe not, maybe an inspiration for something. What are you seeing out there as far as coins and the way the world is moving? What are your thoughts in a single world currency?

[00:29:30.330] – David

Yeah, so it’s a very timely question. That was actually another we had another really interesting panel discussion with a variety of experts on that topic as well last week that I really enjoyed as well. There are a couple of notes there. So specifically focused on World Coin, I think this has raised a lot of questions around privacy, around centralization versus decentralization. So for those who may not be aware, basically one of the founders of ChatGPT/OpenAI and some related teams and members were involved in this coin, World Coin, which basically is focused on an identity solution as related to the blockchain and AI. So they’ve been basically having people scan through these retinal machines around the world, do eyeball scans to then basically prove out like a tokenized identity to show that they’re not robots and that they’re good actors and stuff like this. But it’s raised larger questions where some of this identity information, personal identifiable information has ended up being sold on the black market or ended up being stolen, misappropriated. Also raises a lot of Privacy questions of how is that data being stored? Who has access to it, all this stuff. And beyond that also raises a larger question of centralization versus decentralization.

[00:30:58.120] – David

That really when a lot of people think of a blockchain or let’s say something like Bitcoin specifically, it’s a very decentralized solution where there’s a lot of more of a peer to pure type of function to it, where something like World Coin ultimately has more of a centralized database of information that could become a problem in the future essentially. So that’s one key area that I think a lot of people are asking about in terms of Sean, your mention of is a global cryptocurrency. Maybe another key area that I think a lot of people have been wondering about right now is Central Bank Digital Currency, CBDCs, where a lot of countries have been looking into this. A couple have already adopted one, including Jamaica. But what will this mean? There are a lot of questions on it, a lot of unanswered, and I think it largely depends on how a CBDC is implemented and by what country. So I think on a plus side, there are a lot of opportunities that people see for this to be essentially a gateway for people to better understand and better access digital assets, where a lot of experts will argue that despite some of these digital assets, cryptocurrency is losing market share, and that there’s more of a potential for a net influx of funds into the digital asset space through Central Bank digital currencies.

[00:32:22.400] – David

But to that point of centralization and Privacy, some of the concerns around those CBDCs as well is how is this going to affect basically government control over people’s finances? And that’s, I think, a largely unanswered question, depending on what government we’re talking about and also how it’s implemented.

[00:32:43.300] – Sean

Good perspective there. If this is something I do a lot of homework on offline to see what’s going on with not just governments and what they will do with the currency, but also what is the United Nations doing? What moves are they making toward a single world currency? And when the tech pops up, that tends to be more scalable, which this would be another podcast in itself. I did a whole deep dive into the difference between proof of work and proof of stake coins. Long story, short here for the listeners, proof of work is what Bitcoin is powered by very energy intensive, does not scale fast, whereas proof of Stake is what Ethereum is powered by. It’s 99, I think, 99.8 % more efficient, so it can scale a lot faster. I’m like, okay, so I feel like it’s got to be a proof of stake coin, not Proof of work. Question is, yeah, what government or will it be the United Nations that oversees this, has control of it? It can be a scary conversation as well as interesting at the same time.

[00:33:43.380] – David

Yeah. So to your point about proof of stake and proof of work, another major topic that’s on a lot of people’s minds around blockchain and cryptocurrency is the environment, both from a pros and a cons side of the fence. Right. So certainly to your point, Sean, the proof of stake solutions are generally more energy efficient than the proof of work ones. And I think that the space overall is moving more away from proof of work towards proof of stake, especially with the Ethereum upgrade, for example, to proof of stake in the last few years, as well as some other notable news in that regard. But beyond that, I think it’s important to be considering even with something like proof of work, like machine mineable cryptocurrency like Bitcoin. There are a lot of factors that the mainstream media doesn’t necessarily bear in mind around that. So for one thing, I think it’s important to be looking at this from a more apples to apples perspective, for example, for similar flow of funds and a lot of other ecosystems, how much office space would be required, how much server power, computing power, how much travel time for more of a central employee based non automated system would be required to provide this type of value.

[00:35:05.130] – David

And a lot of a more in-depth analysis on that would show that it is actually very significantly more energy would be required from a traditional system doing similar things to what Bitcoin does at a similar market cap scale, a lot more would be required of a more Web2 type of infrastructure to do so. Beyond that, also important to bear in mind that a lot of the mining that is happening out there is happening with basically either some level of… There’s a huge part of it that’s happening with solar energy or wind energy or more renewable resource type of energy. And there’s also a lot of the mining is happening from basically energy that might otherwise end up going to waste, such as off-gassing from natural gas plants or other types of solutions, where basically the alternative would be actually for this energy to just be completely wasted. So all in all, even when thinking of proof of work versus proof of stake, certainly proof of stake is going to be better net from an energy perspective, but the proof of work side actually does a lot more heavy lifting for the energy demand than what a lot of people realize.

[00:36:24.130] – Sean

Yeah, that’s good to know. I’m sure there will be more creative ways out there on how you can power crypto. I think of environmental friendly ways such as wind power, solar, so on, so forth. Absolutely. It makes it more sustainable for the long term. No, that’s good. Before we jump to the rapid fire around, I just want to summarize some of the highlights here. You have a crypto fund. You can help institutions. Sounds like you’re working with individuals more through other institutions, but the idea is a safer strategy that can get you 80 % or more per year. I know to the listeners, there’s no guarantees or returns on this podcast, but gives you a benchmark to aim for. We’ll get everybody listening. You’ll get David’s contact information website, all that good stuff at the end. But let’s transition to the rapid-fire round. This is the part of the episode where we get to find out who David really is.

[00:37:17.170] – David

Yeah. All right, let’s do it.

[00:37:19.300] – Sean

All right. If you can try to answer each question in 15 seconds or less.

[00:37:24.310] – David

All.

[00:37:24.710] – Sean

Right. Question one, what is your favorite podcast?

[00:37:29.000] – David

Oh, my. Well, I would say one really top one that I’ve enjoyed a lot is Bridger Pennington’s Investment Fund Secrets. So it’s been really helpful as an emerging fund manager to stay in touch with some of the various best practices.

[00:37:47.090] – Sean

Awesome. All right. What is a recent book you read and would recommend?

[00:37:51.430] – David

So on a broader perspective, I would say I recommend reading, reading, reading. So Grant Cardone once said that they did a study on top Fortune 500 CEOs and was saying that on average they read 60 or more books a year. So in general, my recommendation is try to read at least a book a week, if not more. But specifically, I’ve read a book, I forgot the title, but it was on the history of scams. I think it’s really important to be looking into when we’re talking about AI, cryptocurrency and other emerging asset classes to realize that with every emerging asset class, there’s immense opportunity, but it also opens up, unfortunately, a lot of risk around, basically around scams that people need to be aware of and do their own due diligence on.

[00:38:37.370] – Sean

I love anything on scams. I think if you’re in this space investing stocks, crypto, it’s good to read all the edge cases possible to get yourself perspective on what people are doing, what causes issues, and how do you avoid all of that.

[00:38:55.300] – David

Yeah. This is nothing new. When the railroads first came out, there were railroad scams, and then there were television scams or radio scams when those were new mediums. It’s different manifestations of the same trend in human nature.

[00:39:16.010] – Sean

Right on. All right, it’s a movie question. What is your favorite movie?

[00:39:20.010] – David

Well, I really enjoyed watching The Big Short, for one. I think that was a great one on just thinking through Black Swan events, investing, market cycles, and related areas.

[00:39:34.420] – Sean

Yeah, great film. All right, a few business questions. What is the worst advice you ever received?

[00:39:40.330] – David

I would say thinking through. I was told once to wait for blockchain and crypto to become more validated before making any decisions and such. I think that although early markets can be a bit risky, I think that when you know you know and sometimes it’s better to be an early adopter pioneer when you are cognizant of the upsides and the downsides.

[00:40:08.870] – Sean

Yes, right on. All right, flipped that equation. What is the best advice you ever received?

[00:40:14.160] – David

I would say it was managing energy rather than managing time, really focusing on making sure that you can wake up every day ready to give 100 % when you need to, but then to really turn it off and reset when you need to. And that has multiple aspects, which include how you’re sleeping, how much you’re sleeping, how and when and how much you’re eating, the exercise, time for reflection, meditation, time with family and friends, really balancing the things that are important to you overall and finding the right time and place for everything is easier said than done.

[00:40:53.190] – Sean

Sounds like I’m talking to an athlete for transparency here. David and I were talking before we hit record. He has a fencing background. He’s actually pretty talented. If you are interested in fencing, you should reach out to David on that topic alone.

[00:41:07.570] – David

But.

[00:41:07.930] – Sean

I love talking to athletes because it’s that comment, How do you balance nutrition or working out, sleep and how that impacts your business world? It is profound.

[00:41:20.280] – David

So 100% agree. Absolutely. I mean, thinking through, especially if you’re working for yourself, looking to start a company, etc, really you have to be ready and available to give something 100%. If you’re not sleeping enough, it’s detracting from your IQ. If you’re not eating right, it’s detracting from your IQ. A bunch of little conscious efforts add up to a whole lot of small additions to your brain power, essentially.

[00:41:50.280] – Sean

I love it. We’ll get you on. We’ll talk about that specifically on a podcast.

[00:41:55.880] – Sean

Last question here is a time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?

[00:42:03.950] – David

Gosh, I would go back to 16. I think that that’s a pretty pivotal time where I’m starting to think through life in general and where things are going. I would say to focus on moving toward rather than moving away from things. I think a lot of younger folks can start being a bit more motivated by jumping through other people’s hoops of this degree or this whatever. And it can also be fear of not getting the right grades or not getting the right internship or whatnot. We’re really trying to proactively focus on what am I building toward? What are my values? My goals is something that I think is really important. Awesome.

[00:42:56.890] – Sean

Well, David, where can the audience reach you?

[00:42:59.810] – David

We would love to continue the conversation. Linkedin would be a great spot, pretty active there. You can also contact me at David@kc. Fund.

[00:43:10.270] – Sean

Awesome. All right. Well, thank you so much for your time.

[00:43:12.440] – David

We’ll talk soon. Thank you, Sean. Appreciate you hosting. All right.

[00:43:18.040] – Sean

Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for spending some time with me. Also, if you have a moment, could you please head over to Apple Podcast and leave a review? The more reviews we get, the more Apple will share this podcast with the world. So thanks for doing that. And last thing, if you do hear any stocks mentioned on this podcast, please keep in mind this podcast is for entertainment purposes only. Please do not make a buy or sell decision based solely on what you hear. All right. Thanks for your time. Talk to you later. See you.