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Jeff Roberts of Fortune on The Big Crypto Crash of 2018
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Jeff Roberts Interview Transcript


 

Adam Chapnick:

So what lead to this big down turn? I spoke with Jeff Roberts, a journalist and writer at Fortune, for some answers.

Hey Jeff. Thanks for being here. How are you doing?

Jeff Roberts:

I'm good Adam. How are you doing?

Adam Chapnick:

Good, good. So I guess we should start with whatever body is talking about. Obviously the bottom has fallen out of pretty much all of the crypto markets today. Everywhere you look people are screaming that the sky is falling. What do you think about that? What has that attributed too, or what are your thoughts on that?

Jeff Roberts:

Yeah, it's ugly out there. I mean we knew this was coming, and maybe this is the reckoning. Folks have been predicting this for months, and now it's here. I mean I've seen crashes before, but this is the worst I've seen in a while. I think ultimately it's health. You know this had to happen sooner or later, so bring it and let's get it over with, and let's see what's next.

Adam Chapnick:

So do you think this is linked to any kind of real world news that makes some sort of ... I know it's hard to call anything rational that's happening out in the market right now, but do you see any links that might explain what's going on, or is just the great adjustment that everyone has been expecting?

Jeff Roberts:

I think it's the great adjustment. I mean there's always things that trigger it up and down like [inaudible 00:02:46] China, but we've seen that before and it hasn't been this bad. Bitconnect reported a Ponzi scheme. I mean that's not good, but normally those things wouldn't be enough to explain this sort of melt down. I seen a couple of people suggest maybe there's some insider going on, or like this is a dump, or a dump happened before some really bad news hits like Mt. Gox. But I haven't heard any proof of that yet, so my inclination right now is that this is just a natural kind of deflating of some of the froth.

Adam Chapnick:

Got it. So I know you have been at least a proponent of Ripple, among some of the other coins. Can you talk about that? What are your thoughts on that? I know that one is crazy down as well. Was it over priced? Why are you positive about Ripple in general, and what do you think about what's going on?

Jeff Roberts:

I mean I have to be careful. As a journalist I'm not really positive or negative on any of them. You know I don't own any Ripple. I don't advocate for it. But the way I break them down is like do you see a use for some of these. Do you see a company behind it? Do you see people with a good team. And you know Ripple and XRP ... I mean I think Brad, the CO, is making a very good case for real world use in it, and it's run by a confident company. You know some of the other stuff like the TRONs, and some of these other things out there just seemed invented to pump and dump. Where as Ripple and XRP is sort of a product within a company, and it's being used for something. So that's why I'm more positive about Ripple than some of the other ones.

Adam Chapnick:

Yeah, I think that makes a lot of sense. And there's a lot of misunderstanding, specifically around Ripple, but I think in general about how to value a coin versus how to value a company, and Ripple definitely falls in there. What do you know about the MoneyGram and Ripple joining forces? That was in the news this week.

Jeff Roberts:

Yeah, that's a slightly complicated story. You know the way it breaks down is this: Ripple and XRP are kind of the outlier, because it's centrally controlled. So Bitcoiners hate them. But this company that's made 100 billion of these things, released them into the market, put a bunch into treasury stock. So of course the speculators are there just like all the other currencies. But Ripple is trying to make the case that they're going to disrupt the remittance market where instead of like having companies in overseas markets have to hold a local bank account they can just hold extra [inaudible 00:04:57] intermediate currency. And since the transaction fees are very low, prepared to Bitcoin, and they're almost instantaneous they're sort of hoping that banks and market makers are going to hold some of this stuff, which will increase its value obviously in the real world along side the speculative to mention of it.

Adam Chapnick:

Yeah. It's interesting. I think speaking of coins that have some kind of obviously, or maybe apparent utility, actual use in the real world, let's talk about Ethereum. I hear a lot of people who get into this space they first try to wrap their heads around Bitcoin, and then they hear Ethereum. Oh it's Bitcoin, but it has this thing, this contract that can happen. Is that general why it's better? Does that give it more legs into the future? What do you feel about Ethereum?

Jeff Roberts:

Yeah, I'm a believer in Ethereum too. I mean with a lot of this technology I'm a believer in the long-term technology of it. The current speculative mania, yeah it's going to pop and it is, but [inaudible 00:05:53] will rise again. And the ones with something behind them will. And Ethereum is, I think, I don't want to say a winner, but I think it's here for the long-term because it's a platform on which lots of other people are building useful, decentralized applications. I mean that's very important. Likewise I think a lot of people have faith in Vitalik Buterin, the sort of boy genius behind it. You know you don't want to put your whole fortune on a 22 year old kid, but I mean Vitalik is the real deal and he seems to care.

And I've heard some people say they prefer the model of this kind of benevolent autocrat who runs Ethereum compared to the wild west of Bitcoin. Because Bitcoin is like herding cats whereas Ethereum ... it's sort of like if Bitcoin still had Satochi overseeing it you could probably address a lot of the problems quicker, because you would have an authority figure. And Ethereum to me is kind of like that. That's where having Vitalik sit over it is kind of a good shephard of it, but who knows the guy is a kid so we'll see.

Adam Chapnick:

I absolutely love the benevolent autocrat. We're going to keep that as a defining feature of promise in crypto. That's so good.

So what about the big news from [inaudible 00:07:06] couple of months ago now, but futures. What do you think about Futures? Has that helped, hurt? How has that impact things that people are trading those now?

Jeff Roberts:

Well it's kind of ironic isn't it? Wasn't one of the big benefits of Futures was going to stabilize the market, let people hedge? So what happened? It seems it all went to Hell when Futures came. I think that's a coincidence, but I think it's too soon to say. I know in theory two months ago, probably like everyone else was saying, this is a good thing it will stabilize the market. But based on the last couple of days it's not ... well maybe without Futures it would be 10 times worse, I don't know.

Adam Chapnick:

Yeah, maybe. That's right. This might be the stable state.

So you wrote a little while ago that ICOs are a way for start ups to raise money outside of the venture capital ecosystem. Do you think that that's the future; that ICOs are going to be a meaningful replacement?

Jeff Roberts:

Yeah. I think there's no kind of like putting the lid back on that box. I mean it's a very smart way to raise money, it's a very democratic way to raise money. But I think people have to figure out the process. It's a new financial technology. It's a new legal technology if that makes sense. So I think we've seen the potential of it, and know I think we're probably going to go into a dark period for a year or two as they figure this out. But overall I think it's a great idea; less reliance on venture capitalists, a bigger investor base. I mean I think the long-term has a huge upside.

Adam Chapnick:

And be sure to check out our full interview with Jeff on our YouTube channel. You'll hear how he got his start covering this industry, and his advice when it comes to staying safe from ICO scams.