Sticking A Fork In 2024 with Stuart Sopp & Trevor Marshall | Okay, Computer.
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Welcome to the OK Computer Podcast. I am Dan Nathan. This is going to be the last OK Computer of the year. I have two special guests with me, my good friends, Stuart Sopp. He is the CEO, co-founder of Current, and Trevor Marshall, the CTO and co-founder of Current. Guys, welcome back to the pod.

Thanks for having us. We got a lot to do here. Okay. First things first, I want to thank you. Guy and I want to both thank you actually for being great partners of ours for years now. And we really appreciate all the support. We appreciate your contributions to the content. And obviously this fine studio, you are our landlord. So thanks guys. We really appreciate that.

All right. So here we are. It's a day before Christmas Eve. So as Guy says, it's Christmas Eve Eve. And we were just debating before the cameras were on, is Santa Claus real? Now you are making a very strong case for it, Stu, like the certain action that you have. It's weird that you kind of dye that beard or so. Ginger. So all year long, and then he takes it out a little bit. All right. We're not going to do that. All right. We're going to do three things right here. I want to talk about the state of

fintech this year. And I think a lot of expectations, if you just look in the public markets, what we saw with a lot of fintech names, but also a lot of financial names after the election, it was off to the races a little bit. So we'd love to hear about your business, some of the things that you're seeing, some of the potential for M&A. And then I want to get into a little bit of like what you guys see the consumer doing in 2025 and how that's changed over the course of the last year or so. I would love to get your take on just the macro.

on rates and the likes. Stu, you come on the Tape podcast and you often speak with Danny, Guy, and myself. So we want to get a bit of that. And then the last one, Trevor, you and I have been talking about this all year long. What are some of the use cases for generative AI that support some of the moves that we've seen in both the public and the private markets as it relates to valuations, the capital inflows and the like? And again, this is, I think, going to be a debate into 2025 as a lot of investors in both the public and private

Start to think about how do I get a return on this investment, both as an investor, but also the companies that are making these investments, how do they get the returns on that? And then one last thing, we can't get out of here without talking a little crypto. We got to talk about what quantum computing means for the crypto. I know Trevor probably has some thoughts. And also, I've been asking a lot of folks about this. If we get to artificial general intelligence, don't the machines just take all the Bitcoin? I don't know. We're going to get to that a little bit. They just fork it.

All right. I got to shut up. I got to just fork it. Bitcoin cash. Is that what they're doing there? Oh, I mean, that's another theory, but like the, you would just, it's already been forked once or twice before. So they will just have a quantum resistant cryptography and they will just fork the chain with the miners. So you're saying, wait, wait, so they're going to fuck the chain. Well, I,

Oh, no, fork the chain. No, fork you. Okay. No, fork it. So to be honest, BCH is from that earlier one. Okay. All right. Let's hit the state of fintech right now because we've seen a lot of these names really see in the public markets a big spark in the last month and a half or so. And we're going to talk about some of the valuations. They've gotten back up in the private markets. And I think that's something that was a long sort of period of time where a lot of folks –

said, are we going to get back to some of those 2021 valuations? But they think about a lot of the companies. They've made a lot of progress since then. Right. So you guys are a great example. You kept your heads down. You kept on building. You kept on servicing your consumers. So, Stu, let's start with you. Talk about current and what you guys have done over the last couple of years and then really love to talk about how you're using some of this technology that we just referenced. Sure.

I'll give you the abridged version. A couple of years, we'll be here all day for you, unfortunately. But in short, Current, which is a financial technology platform servicing the needs of everyday Americans, has had a really good year. We've had our best year ever. And we've had our best quarter ever and our best month ever in December, month to date so far. So hopefully it gives you an idea that

When you say best month, give me a sense of like what are the metrics? We put out a press release a couple of weeks ago on some funding that we had done over the last sort of three months. And so just to quote our press release, we've seen close to 100% growth year on year, every month, year on year.

And going forward in our 25 planning, we expect that to increase to maybe over 100% growth in 2025. And so now we're hitting the sort of scale, like we have real numbers right now, right Trevor? We have real numbers, we're a real company. And so that kind of level of growth at that size is really exciting for us, but it's also really exciting for our customers. So we're providing...

what I think is an essential business for them and their lives. Yeah, I guess, you know, I know a little bit about the history of the company, but, you know, you guys were growing very fast off a low base, let's say, five years ago, but you got to what, like a few million consumers. So when you talk about real numbers, I mean, those were real numbers. So Trevor, you and I have talked a lot

a lot about this over the course of the last year. What does it mean, some of the advancements that we've seen in generative AI, but let's just call it AI in general, right, from a consumer standpoint, but a lot of the platform that you built, you've relied on a lot of this technology too. How much does that come into some of the success that you've had in, let's say, a better consumer environment? Because again, you've been making improvements, it seems like, you know, on a monthly basis. I

I am a user, I see the easy to use app, but there's a lot of stuff underneath the surface that is making that consumer experience that much better. - Yeah, I mean we've launched a lot of consumer facing features, but what the consumer only sees if they're using the product is how well those features have been working.

The last year for us has really been the story of data transformation at Current. And it's not directly because of the progress in Gen AI, but certainly the investment that's happening there sort of in the cloud computing space is giving us a tremendous amount of advantage for the types of technologies that are directly applicable to our business.

So from starting with our own core, our own sort of homogenous data that can come out of the platform and be used to train models, we've actually put seven or eight extremely impactful models in production, things that can help us get the limits right for our earn

our earned wage access product, things that can help us understand the risk of a user and a risk of a transaction. So we can prove more transactions, get more money going through the system, enable spending for our consumers. So yeah, that's been a huge part of why everything is starting to work so well together. Data is really at the center of making the whole machine work better.

- Right, so it's not just financial decisions, right? So making better credit decisions as it relates to your consumers. But I assume, Trevor, there's a bit of a productivity gain that you may not have expected, let's say, a year or two ago, until a lot of these models were proven out in a way. I know Google Cloud is a big partner

Like speak to that a little bit because it sounds like you are getting the return on investment because that is one of the things that I think a lot of public market investors and Microsoft's a great example. So we have a NASDAQ that's up 32% in the year. There's a weekend change left on the year. And Microsoft is literally underperforming the market by like 10%.

15% or so. And I think some investors are making certain assumptions about their cloud usage, their access to open AI's technology and the like. And if anything, like Google Cloud, and you've been telling me for two years that this is going to be a sleeper, right? So out of the gate with public cloud, Amazon had all the market share, Microsoft's been taking market share, but so has Google. So speak a little bit to me about what that means to you. You partner with Google Cloud. How is

that building on top of their models that are getting better, I assume, helping that whole process? I think the last few times I've been on here, I've been saying things like we don't see the direct productivity replacement yet in terms of headcount, but reflecting on it and sort of looking back at what we've done over the last year versus what you could have done five or six years ago. And there's been an acceleration here. It's

been really in using machine learning operations and optimizing that without people. And the concrete example of this is

there's a lot of statistical techniques that you need to use to figure out what is the right model to train and deploy in a certain place. With Vertex AI, which is one of Google Cloud's products, we're doing all of that optimization with a very, very small data team. And it's converging mostly on this intersection between data science and data engineering. That doesn't require a whole team of PhDs

Who understand the statistical models and are producing sort of de novo? Hey, let's test this let's test this not only does the process of manually setting up training Take a very long time. It's extremely error prone. It's much more of an art than a science If you're doing it by hand, it's literally like these handcrafted things which had a time in place but now you can run with vertex AI 40 of these options and

And you can let that run automatically and you can actually see the comparison between the techniques. And you still need to understand what are the core principles and what's driving the precision and the recall of these models. But you don't need to do all the manual effort and you don't have to worry about the errors that come out as you're starting to do this. So, yeah, a lot of the when I say seven or eight models in production, that's on the back of testing hundreds, if not thousands of models under the hood.

and finding the things that really work. So that's been sort of the big area and no one does the MLOps side of it like Google Cloud. So I think that continues to be, and this has almost nothing to do with Gen AI, except for the fact that it requires clean data in, clean data out.

And the types of processes that you use to train and make inferences are very similar. So there's a tremendous amount of investments that's going into that machine learning ops space. And we're benefiting sort of drafting off all of the focus there that's at the corporate level for Google. And that's been fantastic for us because it turns into real...

and advantages for our customers, which is good for everyone. Yeah, I want to talk about the corporate level of current. Stu, obviously you know enough about technology to be mildly dangerous. I know guys on Trevor's team have to turn your computers on in the morning. Yeah, it's terrible. Yeah, he's head of IT too. No, I know. That's true. I got the Zooms working. Yeah, Zooms. Four years after the pandemic, you still don't know how to use Zoom.

But what does that mean? Like when you're thinking about the business in general, you just gave us kind of a rundown of like how your company's performance as inflecting, it seems like, especially after years kind of honing some of these customer relationships and figuring out what customers want and then kind of putting a path forward that from a technology standpoint, how are you thinking about when you and Trevor sit down on a daily basis and he gives you some updates of kind of how this is benefiting the

company. How do you think about it? Because productivity is a big one. Trevor just said it's not really impacting headcount, but it probably gives you the ability to scale quicker, right? I think it has impacted headcount. I think that's where Trevor's kind of going with it, but he's looking at it from the other side. He's looking at it from a productivity point of view. We can do amazing things that normally takes another 100 people

but we can do it with the existing full-time headcount that we have with like some mild retraining and engineers to data engineers and data science. There's like a data analyst, maybe a little data science. And so you're sort of upskilling some of your existing employees, but you're sort of leveraging like this really niche, high-end, highly powered model set that Google has. And so if you look at our full-time headcount, it has not gone up, like from a company perspective. Yeah.

But we are doing insanely amazing things year on year. And that will continue next year. Now, will it go up a little bit next year? Yes. But not to the same extent. We were comparing, even this morning, us and our favorite competitor mate, I think you call him, Chime. And so they're like 1,200, 1,300 people. We're a couple hundred.

And we were like, even at a billion dollars in a couple of years, I think they're a billion five, we could only see ourselves growing 500, 700 people. Even in the fintech tech forward space, we would see ourselves 50% of their head count and probably doing more things. So things are moving really quickly. We're getting more efficient. We need less people. You just need people with good context.

good executive function, good communication, truth seekers who can apply themselves to all these tools. That's really what you want. Everyone's looking more like a CEO than anything. No, I know it's dangerous for me, but it's great. You look like the quintessential CEO. Yeah, I know. It's really tough for me to get into private schools. So if you're just listening to this, just Google them, kids. I mean, listen, you

You're endearing as a CEO. I want to brought it out a little bit to FinTech because Trevor, I'm on a couple occasions, maybe six to nine months ago, Klarna was going to be one of the first FinTech companies to go public, supposedly. Maybe it was at the end of this year, but it's certainly going to be at some point.

And one of the original headlines, this is as the company was kind of getting their kind of costs in alignment, you know what I mean, before they go public. You know, they talked about some of the tools that they're using on a customer service standpoint allowed them to cut 700 jobs. Now, this was a long time ago. They may have overhired, though.

But again, a lot of consumer-facing companies overhired in 2020 and 2021. So you think they're just using it as an example of efficiency. It's a great excuse to cut a bunch of heads and don't get mad. So give me a sense. You just mentioned Chime. I mean, there's a lot of companies in your space that are differentiated from one another. You guys serve a certain slice of consumers worldwide.

I mean, in general, how do you think the whole sector is shaping up a little bit? And maybe Trevor, from your standpoint, are some companies doing better than others adapting this technology to kind of re-accelerate growth and maybe kind of keep costs aligned and raise productivity? - My view is generally American FinTech is back.

And you can see that just from all the activity over the last week even. So give us a sense of what some of that activity in general. Acquisition of Moneyline, acquisition of Bridget, fundraisers sort of being announced all over the place, Chimes filing for their IPO. Underneath what's in the news is, of course, like, you know, the people that Stuart and I get to spend time with, which is a lot of excitement about what's coming in the early part of next year in terms of activity, both from like

private capital placement, but also IPOs that are still to be filed and things like that. So the market is opening up in a really interesting way. But from the technology side, I haven't seen all of, I don't think we've fully realized some of the things that we're seeing. For example, even for us, we've been over a year on this super data focus expansion

And we're not projecting even the majority of the step function changes until sometime next year. And we're going like as fast as possible. And I know just from that Competimate landscape that we are best positioned, if not close to it, to be able to capitalize on the way that we have our data stored and what we can do with it and the techniques that we're doing. And also the strategic commitment to the direction, which is also like a big differentiator.

it's still taking us time to roll out. And we're, you know, for certain areas of our business, we expect like orders of magnitude changes still to come. - Yeah, so one of the things that was really interesting about this kind of new, I don't know, enthusiasm about the new administration as it relates to, let's say, you know, less regulation,

more M&A. Trevor, Stu just mentioned that Moneyline is a company that you guys work with. We know very well they're a new sponsor of the On The Tape podcast and Market Call. I've known the CEO, Dee Chow, I think for maybe four or five years. And so there's a company not too different than you guys, just kind of heads down, kind of kept

on building, right? And so when you think about that acquisition and you don't have to speak to that, you know, specifically, but like Trevor said, there's been a couple deals of late. Do you guys expect more? And what would be the criteria? Because the Money Lion deal was not an obvious one, right? Here's a company that their acquirer is, you know,

cybersecurity company and they have a whole, you know, it looks like a kind of a holding co for a lot of cool tech. What do you expect in 2025? Do you see a lot of similar companies kind of moving together to get scale? Do you see companies like looking to kind of pick off some valuations that maybe got too low in the last few years? Yeah, I think it was a non-obvious acquisition. And I think Bridget as well, which by the way, I think people are getting ahead of next year. So I would, you know, to Trevor's point, our US fintech is back.

And of course, like you just mentioned, the White House change, administration change is probably giving some confidence and tailwinds. It is yet to be seen what's going to happen. We don't, no one knows, right? So, and that could be highly destabilizing as well because they're going to pull a bunch of levers. And we just saw this with what just happened

with the potential government shutdown. So I think people are buying FinTech to get positioned because they see it as cheap, actually. I think those deals, whilst are good for the industry, I think they're probably on the lower multiple side than what will happen next year. And so good for them. So there's some certainty for the founders and people who built those companies. And at the same time, the acquirers are like, hey, we think there's more juice in this and it's going to get going. So it's extremely bullish for this sector for at least 2025, I think. Yeah.

It's funny, though. And from my perspective in thinking about public markets and kind of, you know, all this pressure that's been put on from the DOJ and the FTC on, you know, the five or six massive tech companies, there hasn't been a lot of M&A. A lot of those companies used to make all these tuck-in deals again and again and again. You know, some acqui-hires here and there they can probably get away with. But I think back to the first Trump administration, and there were two deals. Mm-hmm.

The one that they blocked, Visa, Plaid, which if you think about it, that's not – I don't think if you just kind of consider what might happen going forward, maybe it's the scale that Visa was and Plaid obviously a massive company that maybe it was going to be noncompetitive for companies like yours. I was on the M&A committee for that.

Oh, really? I said it was non-competitive. Yeah. Just for the record. I just, I thought that was a bad decision. But to your point, I think broadly, like look at Discover and Cap One, right? So that's like a foregone, that's going to get. It should get done now, right? It will be the biggest credit card company in the world. Yeah. And that's going to happen next year probably. And so, and that will just unlock.

A lot of money in the system, a lot of confidence comes back. It's like, all right, we can get deals done again. M&As are really, really important for the ecology of private sector. I mean, of course, Republic and all that stuff, and we've got to stop monopolies and duopolies and things like that. And I genuinely do believe that. But then from the private sector, we do need M&As because without M&As, it's an exit lever for the venture capital market.

private funding markets and so that they can reinvest that money into younger startups. And that keeps the ecology going. Yeah, my sense is that you probably do see a lot of M&A. You think about this dual track IPO, M&A, you get M&A done a lot

quicker, right? Like if you think about it from that standpoint, and then now if you talk, you know, Trevor just mentioned the step function that you guys are going to get based on these investments. If you're a strategic, you probably want to get in front of some of that, right? And you know that, you know, the one thing I'll just say also on the, you know, the incoming administration is like,

I don't think that the FTC and the DOJ are going to drop these cases based on what comes out of the White House against Apple, Amazon, Meta, Google. All of those CEOs ran down to Mar-a-Lago. They all committed a million dollars each from their company. I think personally, a lot of them, Uber was another one to the inauguration fund and the like. And it'll be really interesting to see if they keep...

the status quo on that, but maybe these companies try to pick at it a little bit. Maybe they try to make some acquisitions. Does that make a little sense? Because they haven't been making acquisitions. And then again, it's really hard to innovate within those big companies. Like, yeah, Google has whatever they call them, these other things. And Waymo came out of that. Quantum computing, you know, the advancement they just had. So Trevor, how do you think about it? Like,

from the top down or whether it's a middle thing, some more mid-market stuff coming together rather than some of the big companies looking down and making. I mean, the smart strategic moves will be around utilities, you know, Stripe moving into stable coins.

is a great example. So the acquisitions that I would expect from strategics, I mean, some of the two that were mentioned, the Moneyline and sort of the, let's call it a lease to own space of Holdco that includes Rent-A-Center with Bridget, these are tools that will be used to increase the entire portfolio value. There's true, how do you sell the rest of the products together? 'Cause there's been a trend or at least a theme that people invested on, which is this concept of embedded finance.

Both those deals to me are examples of how do you embed products and finance into channels that you already own when you're looking at stablecoin acquisitions or things like that. These are all about like increasing cross sell. I think those make sense for strategics, but there could be bigger acquisitions where you're actually standing up new business lines. And I don't think we've seen that totally yet, but that could be an interesting theme in 2025 where you've got maybe larger companies that are looking to take serious positions

and serious strategic directions. That hasn't happened yet, but I think that's like sort of the next thing that should happen. I also think like success from Nubank and Revolut is really important here because you've got those companies that are sort of mega corps, one private, one public.

but they have very similar tech stacks to us, right? Or we have to them, whichever way you want to look at it. And so I think the fintech that's being sold now is a little different. There's like two parts of fintech, right? It's like vertical, get it going, try and make it work, versus this sort of longer term play, which we would probably classify ourselves in, right?

And so utilizing the data and the technology and providing innovative product suite that's out there. America's still yet for the taking. So I feel like there is some good market comparisons to what we're doing. And at the same time, I think Chime's IPO-ing, that's great, but we are different in a nuanced way. And so I get excited for us in 2015.

You know, I want to take a step back for a second, Trevor. You just talked about Stripe is obviously like one of the main ways that small businesses get paid, right? Like if you think about what their product and service is. And so you just mentioned stablecoin. So what does it mean that a company like Stripe, they have this currency that exists, right? Does it make it easier to do like cross-border? Is that kind of the point? Or just kind of explain a little bit what that means for them to use a stablecoin? Yeah, so, you know, the acquisition of Bridge really represents

Stripe's commitment to being at sort of the bleeding edge of payments. They've always taken in sort of the acquirer's view, which is they sell to merchants. That's their primary customer. But for the last couple of years, they've started broadening the sort of full product suite to include an issuing product, which is like

growing and pretty big. So this is for people who want to have these embedded programs. But to me, what the stablecoin acquisition starts to represent is truly going after the centerpiece of that, which is the network. And so in every payment, you have a sender and a receiver, and the rail that that travels on is your network.

And you've seen some changes like the interesting things that have happened in networks, Discover Capital One. So like a huge example of it. But also what Square is doing in terms of trying to internalize all of their flow by paying with cash app at these merchants, they're creating that that network as well. I think Stripe is starting to move towards how do they start internalizing these payments by owning pieces of the network?

And stablecoin and other rails like this, there's light spark and other types of like crypto rails where if you can take a piece of that and that's faster, more secure money movement over time, you don't need to sell as much to the merchants or to the issuers. You sell to both of them at once through that network. So I think that's the longer term play there is them getting actually concretely into the network.

Hi, everyone. It's Guy. You've probably heard me mention Current before on the pod, but we can't stop talking about how easy managing all your money is with their app. It helps you grow your savings, you can build your credit, and it works for the entire family. Plus, with their new Paycheck Advance feature, you can get up to $500 before payday when you switch your payroll and qualify. No credit checks or mandatory fees required.

It's super easy to sign up. Just go to Current.com slash OK. O-K-A-Y. That's Current.com OK to get the app.

For more information, visit Current.com or call 888-851-1172 for more information.

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podcast today. Let's talk crypto for a second here because again, you know, we saw Bitcoin break out above 70,000. This was right around the election, right? And then it went as high as what, you know, 107 or 106, 107. Here we are. It's about 93,000 right now. And, you know, there's a lot of examples that, you know, Guy and I have been talking about on our podcast over the last five or six weeks is that a lot of things just got overly exuberant. Like, as an example, on November 6th, the day after the election, JP Morgan gapped up

10%. I mean, literally, it gapped up 5% and closed on the dead high up 10%. This is the largest bank by market cap on the planet, right? So you think about that, a lot of things got a little goofy there, and a lot of things have come back in. I think, you know, JP Morgan since gave back maybe 5%, 6% of that. But until last week, as Trump was making all these announcements of folks who are going to kind of lead the crypto path forward, and that's not exactly regulation. It's going to be the people in charge of that sort of stuff.

Thoughts there. Like, did you guys, I know you guys are huge proponents. I know personally and professionally, you like to think about like blockchain technology and you just kind of described stable coins and where they sit in the ecosystem of payments and the like here. What do you think about like what's,

what it looks like in 2025. Do you think anything like material happens to kind of change the trajectory of institutional ownership? Because that's really what is going to make the price continue to go higher, right? Yeah, I think it does. I think with all these political appointments, there's enough ecology tailwind and also Operation Chokehold,

1.0 and 2.0 is now over, right? That was the previous administration's active attempt at minimizing or destroying most parts of the crypto industry. It's not just like removing them. It's like, hey, we're going to be pro. The price will get ahead of the process for sure because it's crypto, it's super liquid and it's decentralized so everyone can get in it.

and globally. And so I do think prices will probably melt up a little bit still. I don't know if Bitcoin goes through 120, 140 in 25, but like I would, I would then see like a rotation to like a whole bunch of other stuff. And like, yeah. So other, other tokens, you mean? Yeah. The tokens, like there's AI tokens. Are you guys nervous though? There's just all,

All of the meme tokens have come back. You have the Hak Tua thing. It's immediately a fraud. I know. That's a game. I know. But what I'm saying is, it's like, you know, in 2021, I mean, it was just a free-for-all. You know, we were talking about this last week on one of the pods. It won't be like that. So, like, Beeple happened, and it was originally supposed to be $5 million, and then it was $15, and then it, like, ended up selling for $69 million, and it's probably worth, like, nothing now.

Right. And so like a month ago, you saw this banana taped to a wall at Sotheby's. Now, there's no crypto asset. It could have been some crypto, bro. You know what I mean? Like it was just buying it. Like, what? Do they know who bought it or no? Yeah, the Tron family. OK, so so what? So my point is, is like I'm sure Lamborghini dealerships are doing amazing. It speaks to a very similar environment.

Okay, and so when I think about the pull forward, at least in price, we're down 15% right now. I mean, this could go back on no news, back to 75,000. You know what I mean? Like it could, I mean, why not? Because you already had that big move early in the year when all those ETFs, right, got approved. And you saw that move from, I'm looking at right here,

40 to 70 and then it just consolidated all year long between basically 55,000 and 70 and it really only broke out after the election So but it's me it's sailor right, you know, he's the one that has been issuing debt He's at 0% and he's the one that's selling, you know return Like amazing returns on bond like debt instruments to pension funds globally who are all under underwater on their obligations

And so he is providing like the sole solution for one set of the market by sort of having this debt equity overlay on Bitcoin. It is a very unique Bitcoin thing and it's proving to work at this point. Now, could you get margin called maybe all the things 70,000, 65,000, something like that. But like these numbers are massive and I don't think that trade goes away. And so like I think specifically for Bitcoin,

It has a lot of tailwind. Yeah. Yeah. I'm on the same boat with that. Just looking at all the price action. There's some things that are getting close to their 21 highs, if not slightly through, but not really. Not once you get out of the top 10 for sure. Yeah. Yeah. Bitcoin is just, especially because you have the institutional flows also on the ETF side. It's just...

You've been saying it's structurally different for Bitcoin. All right. So explain to me this. And I've been asking this question for, I guess, since 2017. And back then, you'd ask the question, what are the use cases of Bitcoin in particular? And people would rattle off like six of them. And inflation hedge would

be one to basement of the dollar. The dollar is trading pretty well. And, you know, and I guess Bitcoin was trading pretty well, too. So under those circumstances, kind of weird. You know what I mean? It became very correlated to the Nasdaq. You know what I mean? So as a risk asset, you know, I get it's two trillion. You have to pay attention to it. I'm not like poo pooing at

by any means, but when I think about, other than a store of value, I can't think of kind of what we're not gonna transact in it, you know what I mean? The Bitcoin, the actual blockchain, it's slow as shit, right? Like, no, it is. I mean, like I'm just saying, 'cause I go back five years and I remember all those folks on Twitter and doing all those like clubhouses and Twitter spaces and listening to the enthusiasm about it. And I think you guys have been a lot more sober about it. I think you guys have been in the camp. There's a finite amount of this.

It's really interesting from a perspective. If you like gold, then you should like this. If you're a technologist, there's a lot of fascinating aspects of it, right? And you see the ability for it to scale exponentially, you know what I mean, as a network. But there aren't a lot of use cases, right? So you hold it as a risk asset that you think is going to appreciate the way a lot of folks looked at NVIDIA a few years ago and that sort of thing. Is that fair, Trevor? For me personally, that's probably the dominant.

I mean, there is payments on Bitcoin through Lightning. And I think a couple episodes ago that I was on, I kind of walked through sort of how those channels work and where some of the innovation is there. And I think that's going to continue, especially because you can create stable assets on top of it.

I don't know if it's the most appropriate settlement channel. Ethereum seems pretty secure, like a lot of these others seem pretty secure, but Bitcoin hasn't forked, meaningfully forked since 2013. Yeah. It's been that long? Yeah. I mean, there's been, we had our little Bitcoin classic and our other- I got smoked in one of those. There's been some detours, but- I think in cash, I got destroyed.

Yeah, Bitcoin Cash. And yeah, that was people who wanted to reverse like some black old Bitcoin. Anyway, there hasn't been like a meaningful, meaningful fork. What if we get to, let's say, three years from now, right? You have David Sachs. You have all these guys in there, all these guys who think they're absolutely brilliant. And let's say nothing really happened.

Right. Let's say that people just think of it as nerd gold. You know what I mean? The way you guys, let's say, no, I know, but let's say the innovation in and around blockchain and stuff, it never really happens. Let's say there's no meaningful like DeFi protocols that are particularly interesting. They're slow and this and that, whatever, you know, there's still like the fraud and all the bullshit. I get it. Like, you know, whatever.

I guess the strongest case that I would make for it right now is the scarcity. And then if like Putin and Kim Jong-un and all these guys are buying it, like then we should be buying it. Does that make sense? Like I really do. I mean, like because the last thing you want to do is have those folks kind of corner the market and then use it for nefarious reasons. Does that make some sense to you?

Yeah, I mean, it's super easily traceable. And also you can block it. You know, I think this is way better than cash, for example, where each of those countries you just mentioned print US dollars, you know, legally and then use that as currency. So like this is a step up. I'm not really worried about the money laundering or the sort of terrorism watch list stuff, OFAQ stuff than that.

I think Bitcoin has always been a better form of gold. And I don't think we've never said anything different. The only thing I will say every now and again, and I've said it on this podcast, is it's kind of like the hedge against the U.S.,

government and the dollar. It's sort of like this. It's almost like monetary inflation rather than just inflation that we see in the consumer level. And so look at gold. Gold is doing the same damn thing. And gold is telling everyone that monetary inflation is here and it's been here all year and last year and the year before. And so these things are rising despite the fact that the dollar can go up. And I think you've asked two, three years what will happen if there's no innovation. Well, there doesn't need to be any innovation. We just have to what

understand what's going to happen to monetary inflation. And this incoming administration's kind of saying, we're going to slow that down. Which by the way, I will challenge them because I don't think they will. I don't think they're going to be successful in it. So that's why I'm like 120, then probably comes off again. And then you look back three years and you've been 55,000, 140 on the wide at 95,

in two and a half years. You're the trader guy. You know what I mean? That's honestly what I think would happen. Can I ask you a question, though? If the dollar keeps going higher and Bitcoin keeps going higher, if you were buying this outside of the US, it's a disaster. You know what I mean? It actually only works for... It depends when you buy it.

Yeah, but you know what I'm saying? So it becomes a really funky risk asset. You're right. You know what I mean? So again, I don't know that. Let's move on a little bit to just what you're seeing out of the consumers. So we just talked about monetary. And again, it's a very interesting case where the Federal Reserve has cut interest rates 100 basis points since September. Yet we're seeing the 10-year yield trade at the highest levels. And I want to say six months is at 4.57%. A lot of folks think it's going

north of 5%. You had that pause, at least the language of it. It kind of spooked the stock market a bit. So my question to you guys is, okay, so the Fed's trying to normalize interest rates. We still have inflation above their target on a cumulative basis over the last five years. It's been a disaster. I suspect it's been especially hard on

on your user, on your consumer. Let's talk a little bit about what you see. Let's assume that the Fed doesn't get inflation down to its 2% target. Let's assume the Fed funds rate stays in and around 4.5%, or maybe even has a slight bid to it there because the 10-year is on its way to 5%. What does that mean for your consumer?

What matters to our consumer really, because they're not in the traditional consumer lending products, it's not having a massive effect on them in that way. And they don't have a lot of savings. And so there's no wealth effect for this going up for them. And the vast majority of the people that we bank don't have mortgages. Although there is some correlation, obviously, from you.

rental yields and things like that. So their lives are getting more expensive. From a consumer inflation standpoint, life is just more expensive than it was three years ago. Even though the rate of change is now lessening, it doesn't matter. The notional absolute amount is just materially high, 2x higher in groceries and things like this. And so working harder, so they've got more jobs. We've actually posted on that trend that we've seen over the last year or so, it's been

more people are getting secondary jobs. There's obviously been some wage inflation, which I think has helped. So you've seen the unionization of, you know, like Starbucks and this kind of, and Amazon striking and things like this. This is a symptom of what's happening to our consumer, which is like, hey, we need more money. We need better terms. Uh,

These are record corporate profits, et cetera, et cetera. Walmart stocks going through the roof. Yeah. So I'm going to ask you that. So where's ours? So Dollar General is at like 10-year lows. And Walmart is like, Walmart looked like they have like the best foundation model on the planet. You know what I mean? Like, and someone just realized that. I mean, this stock had been consolidating for four years and then just took off, you know, over the last year, year and a half or so. Talk to me about like this, you know, you hear this expression, the cap.

hay-shaped recovery because that's something that feels like it might get worse in 2025. You know what I mean? For a lot of the reasons that we just talked about, there's this massive case of income inequality and it seems like it just is made worse every time that we have, you know, interest rates go much lower. If you own risk assets, that works a lot. If you're kind of in the, you know, a higher earning sort of situation. And so does there seem like there's going to be some daylight, some convergence in the consumer that you serve versus what you're seeing else in like a mid to higher earning kind of consumer?

I think to the two examples you just gave, like Walmart and Dollar General, Walmart's doing really well because of people downsizing, right? So they're going from whatever target, which is doing probably quite badly. Yes, it is. And some other sort of higher value, perceived higher brand stores. So for slightly more affluent people, they're finding savings, right? And they're sort of cutting back on travel and stuff.

sometimes traveled, not over Thanksgiving, but like discretionary stuff. And so they're sort of surviving, okay. But the dollar generals, there's nowhere else to go. You go to food stamps, you go to EBT, you go to like, so, and then you're talking about entitlements through this new administration and all this other stuff. So I think you're seeing the stress and the strain from just those two stocks that you mentioned. From what we're seeing internally, obviously we have an earned wage access product and we have a credit building product that are the two main things that work synergistically together. And those things are doing really well. And we've also got a points and reward system that

is also exceptionally well in this market, is doing exceptionally well in this market, is giving more value back to the consumer because they really need it right now. Yeah. All right, before we get out of here, I just want to kind of hit at least one topic. And, you know, Trevor and I have been going back and forth on this. As an avid Android user, at least on your smartphone, you have been extremely bullish on...

on Apple since WWDC, you thought they were going to get Apple intelligence right. You liked the fact that they basically had not been spending tens of billions of dollars to kind of build their own models, right? And kind of integrate that. They license for nothing. It sounds like open AI when Microsoft had to spend $13 billion and you know, a lot of that came back to them in credits, which was great. You know what I mean? So, but like think about Apple strategy and

Who else is impressing you, let's say, as a technologist from afar? Like the investment they made, the way that they've integrated it, the way that they built it on top of their kind of cloud businesses. Speak to me like, I guess, Google versus Microsoft versus Amazon. Amazon should be more impressive than it is because Amazon did a big push to get consumer devices. Now, not a super successful push, but a lot of people still have Alexas and things like that. In theory, they could be far further ahead. I don't think they got

the strategy quite right in terms of delivering a consumer product that can be sort of the front door into a lot more certainly gen AI stuff. Google, I've already shared my perspective on that, which is like they're the best at big data from a cloud provider. And over time, it's just going to pull more and more business. When I look at our own cloud spend, it's all trending towards their data products. And that's where our productivity is coming from. Apple, I think the last time I said, you know,

Ultimately for consumer, it's about having the front door. Something that's been maybe a little surprising to me is that they haven't clamped down on the ChatGBT or they could be clamping down on apps. In the past, Apple has flexed this muscle where they go, hey, competing product, let's clamp down on that.

I think Apple Pay is one of the best examples of them doing it successfully where they really own the wallet market. And at this point, you can't launch a card without figuring out how you're gonna deal with Apple Pay 'cause it's such a consumer expectation. And there's no competition to that. At least on Google, you could do a Samsung Pay. There's a bunch of other stuff. Google Pay is definitely the biggest one. But in the areas where they clamp down, they clamp down hard. So while it hasn't played out yet where I think they still can just completely own

whatever the technology is, because the consumer behavior is already there. Like you talk to anyone, most people know how to interact with an LLM pretty well. And I think over time people- But most people aren't using them though, by the way. Most consumers. That is, even consumers. I've seen that at least for people who are working in whitish collar jobs. Almost every one of my friends who has a job like that has used a chat GPT in some function or something like that. Now, Apple hasn't clamped down yet, but I feel like once they have their own product,

they'll turn the screws. It's so bad right now. Explain really quickly what has gone on with Google. They've showed some data on Willow, so this is their quantum computing chip. I was absolutely shocked the day that that announcement came out. The stock gapped up 5%. Think about that. This is a $2 trillion market cap company, and this was an announcement that

was not on anybody's radar, right? And the magnitude of the data, or at least the positivity of it versus whatever trials they were doing. So it gave a lot of that back over the last week or so. But talk to me about what that means for this company going forward. So the excitement for folks who haven't followed it or couldn't quite parse why it was exciting. So in quantum computing, the smallest unit is called a qubit.

And it basically represents if a bit has a zero or a one, it's a far more complex space, which allows it to do far more computation. And historically, in a lot of that quantum development, the more qubits you add, the more crazy it gets, the more error prone it gets. And this new, basically what

Willow was announcing is that as they add more qubits, it gets more stable. So the error reduces. And that means that you can actually build something that scales. And right now they actually put out a pretty good graphic, which is like sort of the axes of what is quantumly difficult, but actually like what has business relevance. And the specific benchmark they put out has no business relevance. The thing that when they're talking about

yeah, computed more than the lifetime of the universe, like that specific algorithm, you can't do anything commercially with it. But it is a matter of time before they can kind of scale up the system and apply commercial use cases to it. - How long do you think? So if you're an investor in Google, this is not something, yeah, but you wouldn't hold your breath for this, right?

And it could happen the way that people are focused. Oh, Waymo's great. It's going to scale at some point, but you're going to take the over on when it's going to be meaningful. All right. Well, that's something we definitely want to keep an eye on. It seems like it's kind of way over my pay grade, which is why hopefully you'll keep coming back and giving us advancements. All right. The last thing on that, Stu, we kind of alluded to this. Is quantum computing going to break Bitcoin? Because that's something that I kept on hearing. I mean, think about it from a crypto

Yeah. Give it to me. Well, to Trevor's point, like if that if they were to scale the Willow quantum computer to like a decent amount, 100,000 of those computers strung together and the error rates are all good. You could probably break it. You know, you could probably break the SHA-256 in like 10 minutes. Right. Obviously really expensive, but they can't do that yet. That's the other part.

And so what would happen or what will happen, I think, over the next two years, which I put a tweet out when I saw this. I don't have Twitter, so I don't see it. You don't see it. Yeah, okay. I'll just paraphrase. Just read it. We should just do a podcast of you reading my old tweets. Yeah.

No, I just basically said, I think over the next one to two years, I think the Bitcoin bros are going to get together with the miners and the devs and they're going to go, okay, we need a quantum resistant cryptography. When should we fork? Let's all agree firstly on what that is. And then secondly, when do we put it in? And they'll just fork Bitcoin again. Now, my other view was that when they do that, Bitcoin Cash and the new whatever Bitcoin

The Bitcoin old will become things and like they did last yeah, it would mean like the most recent fork in Bitcoin was for scalability Right and but it was like non-controversial like there hasn't a while it took a while and but there hasn't been like I was saying earlier there hasn't been like a significant change in the Bitcoin protocol for a very long time and like the last time I can remember was yep 2013 2014 there was a bug and and it was addressed right and that that's like a fundamental protocol shift and

Already today, you need to have a transaction. Like you can make Bitcoin as it exists today, quantum safe by moving, like whenever you produce a transaction, because when you take a private key signature and you attach it with your public key, that's how you do transactions. Then you've given a solution basically for people to backwards engineer quantum computing to derive that private key basically. But there's techniques you can use even today to make it quantum resistant. And the key thing will be what types of automated

mechanisms do you put into the protocol? It's definitely doable. It would not be something that is a showstopper for Bitcoin. So I walk away from this last portion of the conversation just saying buy uranium, buy nuclear. No, but think about it because if Bitcoin and generative AI and quantum now are going to be competing for energy, it seems like that would be like the single point of failure for a lot of advancement in all of those fields. I don't know.

Well, also, we have crash retrieval UFOs now, Dan. So we have zero point energy. I don't even know what that is. We have zero point energy, which will affect uranium. Well, it sounds like something that's got to come. Yeah, you don't need that anymore. Nuclear is so, like, human. Yeah, well, remember the, what was the thing? Do you remember the Avatar movie, which is horrible?

Oh, yeah. But weren't they out there like mining for some energy thing or something? Or something like that. Unobtainment. It was so bad. But then also probably more near and dear to our hearts is whatever they were kind of mining in Dune, that stuff was the – that's pretty cool, right? It actually enabled like interstellar – Travel. Yeah, travel and stuff like that. I can't wait for the third one to come out. It's going to be great. And that's a spoiler alert, by the way, if you haven't seen the second one yet.

Those are amazing, amazing movies. All right, guys. I really appreciate it here. We appreciate you. We appreciate this partnership. As we said, I hope you and your families have a great holiday season. Stuart Sopp, Trevor Marshall, thanks, guys, for being here. Thanks. If you like what you heard, make sure to hit follow and leave us a review. It helps other people find the show. We also want to hear from you. Email us at contact at riskreversal.com.