Charles Fried is an experienced crypto investor and a software entrepreneur. He’s convinced that an increased understanding of money can lead to a happier and more fulfilling life.
Shownotes
- Charles' website
- Charles’ 3D software company
- Charles' Investment Company
- Podcast with Alex Gladstein on how Bitcoin is good for human rights
- His Twitter @iSeekLong
Full Transcript
[00:00:00] Andri: Hi, and welcome to the Andri Peetso podcast.
In this episode, we'll take a dive into the modern world of finance, and if you're not into finance, don't worry. I think you will enjoy this one. And I actually think you will need to hear this conversation even more, if that's the case.
We're going to talk about cryptocurrencies or digital assets and how Bitcoin is your best bet to protect yourself against inflation.
Then we'll talk about what in the world inflation even is exactly, and how does it happen. After that we'll delve into central bank digital currencies, and why you don't want anything to do with them.
All this and much more with today's guest Charles Lucian Fried.
Charles is a French British software entrepreneur.
He co-founded Additive Flow, which is a leading mechanical engineering simulation software. That's a mouthful.
And in a completely unrelated industry, or as we'll soon find out somewhat related, he founded Unsigned Research, which develops sophisticated algorithmic investment strategies.
Charles is a deeply curious person by nature and strives to understand technologists that have the potential to advance humankind.
So, hi Charles, and welcome to the show.
[00:01:10] Charles: Thank you, Andri It's a pleasure to be here.
[00:01:12] Andri: Now, just so people understand your background and where you're coming from, please tell the listeners and myself, what's the company that you're building? What are you launching right now? Or if you've already launched it?
[00:01:24] Charles: Yes. So, I guess fundamentally I'm a software entrepreneur. I see tremendous opportunity in developing software products. And so having said that I'm currently working on two companies, the first one is a simulation and optimization software for, industrial additive manufacturing, which is another word for 3d printing.
And then the second one is in finance. So we're developing some quantitative trading strategies in the digital asset space. So happy to kind of elaborate on both of those. And I know they can sound quite, dissimilar, but actually both rely on like complex software systems, which is, I think what I've gotten pretty good at.
[00:02:03] Andri: I would never have figured or come up with the idea to have somebody on, to talk about 3d printing, but let's pin in that for now and circle back to it. The main topic of this podcast is finance.
And you said that you're launching a trading company. So can we go a bit into that? What what's it about? How is it different and how did you get into it?
[00:02:25] Charles: Yes, absolutely. So let me contextualize this by saying I've been quite involved in finance for the last 10 ish years. The first period of that, we took some funds from various investors and invested it based on some fundamentals in the digital asset space.
And then as we progress, I think we made kind of pretty good return for those investors, but as the industry matured, it was also clear to me that there was some diminishing returns within the digital assets space.
And so given my background in software, for me, it was an obvious transition to build algorithmic trading strategies, for our investors. And so that company is called Unsigned research,
We're a team of about four or five right now. And it was incorporated only two months ago. And so that company kind of really focuses on relatively low frequency trading strategies, that exploits the kind of idiosyncratic nature of the crypto markets.
So we have one strategy that is live today returning approximately 60% annualized, and we have a bunch more, in development. So yeah, I'm, I'm super excited about this. I really am.
[00:03:31] Andri: You said you incorporated it only a couple of months ago, but is it already active or are you doing trading on there actively or do you have already a fund launched?
[00:03:38] Charles: Right. Yes. So, I, I guess there's like two steps to this. The first one is, so the way we're going to interact with our customers is by building software that connects directly to the exchange and that trades on their behalf. And the reason why we do that is because we don't need to have kind of proper, fund structure, around us.
And then as soon as we reach between five and 10 million, AUM, which I forecast, in the next kind of year or two, then we'll launch a proper fund, which will kind of give us more flexibility in our trading. But yeah, right now we have one strategy, in, in kind of like quarantine mode, that we'll be scaling up shortly.
[00:04:11] Andri: So let's dissect, some of the words that I heard just now. So what is an AOM?
[00:04:17] Charles: Oh, yeah, I'm throwing tons of stuff. So just to tell me if any doesn't make sense. Yes. So AUM stands for assets under management and it's simply the total dollar amount, that our kind of systems manage.
[00:04:30] Andri: Okay. And you mentioned that the fund does low frequency trading. What exactly does it mean and how, how is high-frequency trading different?
[00:04:37] Charles: Low-frequency kind of focuses on, trading, not so often. So for example, the current strategies that we have trade about once a day. And then when you move into like kind of higher frequency space, then you might be trading every second or every minute or that sort of thing. But I, I think that there's like a nice trade off where when you trade very infrequently, then it's very much kind of about, finance. And then when you trade much more frequency, it gets closest to like computer science, and, signal processing and that sort of stuff. So we're kind of like in the middle of the two here?
[00:05:09] Andri: And you mentioned also idiosyncrasy. How does that exactly translate or can you expand on that a bit?
[00:05:17] Charles: To anyone who's been involved in the crypto markets, and who also has experience in traditional finance, they'll find that many of the products have been kind of reinvented from the ground up. And so that is what I mean by, idiosyncrasies in the sense that they are kind of very specific things to specific markets.
And if you can come to correctly understand those, then you can benefit.
[00:05:42] Andri: I'm just trying to wrap my head around this concept and I think the best way that I could understand it, and the the listener can understand this is you kind of explaining what the advantage of trading like this with your methods is as opposed to just somebody looking at charts at home and trying to make up strategies and watching YouTube videos.
[00:06:02] Charles: Yeah, I think you're right. I should actually start there and then, move into what we do. But yeah, you know, like fundamentally, we rely on kind of sophisticated data science technique that allows us to identify trends that are kind of long lasting over time. And so when we can understand those, then we develop systems that kind of, extract, uh, the benefits, that we can, in order to, generate returns.
[00:06:29] Andri: I have a keyword here diminishing returns in crypto. And I don't actually know how to formulate this question. But it's in regards to your trading strategies. So maybe you can help me out, and let's take it this way.
[00:06:41] Charles: Yeah, Yeah, absolutely. Yeah. So, so diminishing returns, right?
Like crypto has been an asset that has been appreciating about a hundred percent per year for the last 10 years. So to me, it's clear that this is not going to last.
And then, you know, when you kind of get algorithms to trade on your behalf, first of all, you kind of take the human aspect out of it, which is quite irrational, and also tends to at some point, make bad decisions.
So when you hand that over to a software, you're kind of pretty sure that there's going to be consistent decision-making, if you've written the software correctly. And so the ultimate goal here is to generate superior risk adjusted returns.
And so that can be basically condensed into a single metric, which is called the Sharpie ratio, which is the amount of return that you get for every unit of risk and risk here is a pretty well-defined term, which refers to volatility.
And as you might know, the crypto markets are extremely volatile. So on a risk adjusted basis, whilst you have a hundred percent per year, your risk adjusted or Sharpie ratio is actually kind of relatively low compared to what we can get using our trading strategies. Which basically intends to minimize the volatility.
[00:07:53] Andri: Yeah, volatility is the keyword here. But I'm going to come back to this, because there's a lot to discuss given what day is today, and what just recently happened.
[00:08:02] Charles: Yes, it's been a wild week.
[00:08:04] Andri: It has, and very emotional.
[00:08:06] Charles: A hundred percent, yeah.
I think, you know, that this week will definitely be remembered in, the future of crypto's, history alongside, mt. Gox, Bitcoin cash and all those sorts of like pivotal moments.
[00:08:20] Andri: And I guess a lot of regulation, new regulation is also incoming here. So it's going to be example for a long time.
Let's talk about Luna and what just recently happened. My first question is, would your trading strategy, for example, that you're deploying would you have safeguards against, systematic failures like this? Maybe a systematic failure maybe an attack, but this like downward death spiral that the Terra Luna ecosystem experienced.
[00:08:46] Charles: Yeah, that's a very good question. First of all, risk management is, absolutely core to every system that we develop. And I can't emphasize that enough,
In the context of Luna, the current strategy that we have is long short, meaning that we go long on assets that go up and short on assets that go down. and so one variant that we have live actually made very significant returns, from, the downfall of Luna.
[00:09:13] Andri: I guess, that a lot of people actually did make money shorting Luna, like on its way down right now. And...
[00:09:20] Charles: Yeah.
[00:09:21] Andri: Just for context for the listeners, as I was talking to Charles, just before this podcast, the, reason that I'm asking is very personal for me because I got completely destroyed with Luna and with what's happening right now.
And there's actually a fun story here. last summer, there was also a dip in the crypto to market. I think it was June or may, may, or June, June, probably that it happened. And I remember that I promised myself that I'm always going to keep 33% of my portfolio now in stablecoins Which I did successfully.
But the problem is that I kept my stablecoins in uh UST, which is the, Luna's stablecoin which kind of went down. and, the double whammy there was that I was in this complicated, DeFi system of LP, in the Luna's automated market maker ecosystem, and my, coins with my Luna pairings were locked in there.
And there was basic nothing I could do as I was watching the, my portfolio plummet towards zero and losing everything. It's been a painful couple of days, been building a lot of mental fortitude, but I guess what my own biggest takeaway here is that crypto is nice to have, but I shouldn't identify with crypto and I should just like focus on building because it's crypto, you never know what's going to happen.
[00:10:46] Charles: Yeah. I mean, I'm, I'm very sorry to hear that. Yeah. It's it's definitely tough times, you know.
I was also kind of reading, some tweets, as a reply to that, the founder of, Luna and, I think many people lost like a substantial amount of their their net worth.
So I think you have to be careful in the crypto markets and, but, you know, I think for me, there's also like, one aspect that it's really important to diversify. Not to kind of concentrate your, your wealth into a single asset, no matter how safe it might seem at the time. so yeah, it's a tough one here.
[00:11:17] Andri: And, that's the lesson as well, like from a personal, finance point of view because after this has happened, I've seen so many Reddit threads and tweets of people having attempted to take their lives as a result of this, or are contemplating taking their lives or some people have taken their lives.
And it's crazy to see that this has such an effect on people.
[00:11:39] Charles: It really happens. Yeah. it's the truth. Yes.
[00:11:42] Andri: So...
[00:11:43] Charles: it's a sad truth.
[00:11:44] Andri: But just, as a coping mechanism, quick side question, before we move on, Do you think it was just a series of unfortunate events or do think it was an actual, attack on the ecosystem?
[00:11:54] Charles: Well, so I mean, we're in the very early stages of, the majority of these systems.
And so I think in either case, whether it was like a fault or an attack, from my standpoint, these systems should resist any attacks whatsoever. In either case, for me, it's, it's kind of like a failure of the system.
[00:12:14] Andri: Yeah, I guess it doesn't matter because it happened already.
[00:12:16] Charles: Yeah. and one thing that I'm not particularly comfortable with as well is the attitude and the kind of slight arrogance of the founder. That, that, was kind of like, off-putting quite early on.
[00:12:27] Andri: Yeah, I think that only exhasterbated the downward death spiral, people lost hope in the founder.
And in a moment like this, he could have like, from a PR standpoint, taken a huge stand, say that we're going to get this through together, be really supportive and understanding, and then slowly build it up and then be a shining example of like, we went to hell and we came back and we built this and like restore people's faith in the project.
I was kind of hoping that would happen as well. Maybe hire the, higher, like a really good PR company. but, it, it seems to me that this might not be happening because all I've seen from his Twitter, as you said, is arrogance. it's been just crazy because like a lot of old tweets have resurfaced as well, where he Mocks people who suggest that this might happen. The exact thing that happened, that this might happen and were warning against it, and he flat out, mocks them and calls them, names and says things like have fun being poor. So that's a very...
[00:13:31] Charles: There's many of those.
[00:13:32] Andri: Many. So, I think ultimately it was his let's say, personality that was the death of the project. Which is very unfortunate because it was looked on as this shining new example. But also what I heard is that this event was really badly timed also because before the four pool, which is the pool of four biggest stablecoins launched, and in that case, this wouldn't have been possible anymore.
And I think the launch was like in, it's not that far away actually.
[00:14:04] Charles: Yeah. I heard something like that as well. I'm not entirely sure on the details, but what you're saying sounds very familiar.
[00:14:11] Andri: I guess the takeaway from here is if you're gonna make a crypto project and be the CEO of a multi-billion dollar coin, it's best not to be a douche bag and to remain humble.
[00:14:22] Charles: Yes.
[00:14:23] Andri: So.
[00:14:24] Charles: I think remaining humble is is, is a good, a good lesson for in
[00:14:28] Andri: Exactly. But it's still exciting to see how this recovers and I try to remain hopeful because I would at least like to get some of my portfolio back.
[00:14:38] Charles: Well, I mean, I think you're a very optimistic person in general, and I can definitely see how this will just kind of make you a stronger and better person.
Absolutely.
[00:14:46] Andri: I guess it's just an expensive lesson, but thank you.
[00:14:49] Charles: Yeah. Well sometimes expensive lessons are the most valuable ones.
[00:14:53] Andri: Exactly.
[00:14:54] Charles: Yeah.
[00:14:55] Andri: So moving on, we were actually talking about this last time we were hanging out the Lisbon that most people have zero financial literacy. And I'm definitely at fault here because given how I got wrecked in crypto right now, but also given my understanding of everything else that's going on in the space. I know that I do not understand how money works as well as I would like to understand it, but I'm learning and I'm trying to figure everything out.
However, my lack of understanding only further demonstrates that indeed, very few people understand how money works exactly and how the financial systems work. So let's revisit that conversation What do you see are the problems that could result from the lack of public's understanding on how the financial system works?
[00:15:46] Charles: So you know, I think in generally speaking for me, it just seems completely crazy that most people would work their entire lives, to earn money, despite the fact, they don't really understand how it works And what I mean by that is the fact that you can make simple habits, such as saving a little bit of money and investing it in the right place, that will have a significant long-term impact on your life and potentially leading to financial freedom.
So kind of understanding these basic concepts, I think can lead to a significantly better life.
And, it's, as I said, it's kind of a shame these things aren't properly taught, at school.
But then when you're referring to the financial system, obviously it's a very complicated thing and I don't think many people fully understand it, but you know, at high level, when you consider that governments are kind of inflating the supply of money, it's important that, you basically don't keep your assets in cash, right?
Because those depreciate over time. And so therefore the question is how do I place my money in order to preserve its value over time? Now, property is a good choice. Equities is also a good choice, crypto potentially a good choice, depending on your situation.
[00:16:58] Andri: So inflation is something I want to come back to. I'm marking it down right now to my notes, but listening to podcasts with people like Michael Saylor, for example, for me, it really illustrates that even high level economic experts disagree on how the financial systems work and how we should interpret the data there.
And from that I could own extrapolate that most politicians and most governments and most people don't exactly understand these things either.
And that just like trickles down and it's, I guess it's like a parabolic curve, that's just like falling off with understanding. I guess the everyday average person such as myself, has like very, very, very little understanding of things.
[00:17:39] Charles: Yeah, absolutely.
And then it's kinda like paradoxical that people say, well, I'm not gonna invest in Bitcoin or crypto because I don't understand how it works. But, you know, I think if you were to ask them, if they understood the traditional financial system, probably they'd give you an answer that doesn't really, suit reality.
[00:17:56] Andri: And I guess in this theme, inflation is also the keyword, because inflation is what differentiates a lot of crypto assets or like the idea of cryptocurrencies, the idea of decentralized finance, from the, normal currencies, the fiat currencies. The everyday Dollars in Euros.
So let's actually open this up a bit. What exactly is inflation? What is the nature of inflation?
Because there's a number that we're getting I guess just yesterday the central bank, Announced the new deflation numbers, whatever
they're called. what exactly does this even mean? And what is inflation and how this inflation actually even happen Is it just a natural occurrence of the financial system or is it something more nefarious and deliberate?
[00:18:40] Charles: Yeah, well, it's, it's a very, it's a complicated topic, but, you know, I think as you've mentioned, like most countries are releasing their kind of CPI, which stands for consumer price inflation. And so that is the government's way to measure inflation via a basket of consumer goods.
And so I know that in the UK, this figure came around, 7.5%. And so that means that basically, if you have a business and you're generating, less profit than seven and a half percent per year, then you're theoretically losing money. And this is what we call real terms. Right. And so it basically increases the competition for everyone to actually produce more faster, better, you know?
And then when you kind of go into hyperinflation, which is double digit and above, then things can start to get pretty ugly and completely spiral out of control. And so this kind of leads to the loss of, every single asset that one has, which is, is pretty disruptive.
[00:19:38] Andri: Correct me if I'm wrong, but, in case of a 10% inflation, for example, if you're keeping your cash stuffed in a mattress, you would be bankrupt within 10 years, or was it even less than that?
[00:19:48] Charles: That sounds about right, yeah. I think that's a nice way to put it. Another figure that, I know of is that most fiat currencies have an average lifespan of 40 ish years. And most of the deaths related to those is due to hyper inflation.
So this is not some kind of speculative or like doomsday scenario. This is something that happens regularly to a majority of the population on planet earth.
So it is a kind of real systemic threat, that you have to consider when you're thinking about preserving your wealth. And I should really clarify at this point that when we're talking about mitigating for inflation using digital assets, what I really mean here is through Bitcoin. Because as far as I can see all other crypto assets have a supply that is controlled by a central authority.
So I think that's a really important distinction for people who are thinking about investing here, long-term.
[00:20:44] Andri: And there's still a problem that cryptocurrencies are somewhat correlated to actual stock market. So we are just waiting and hoping for that correlation to end some point, and that cryptos can start taking on a life of their own. But then, in terms of inflation, how does inflation actually happen?
What exactly is inflation?
[00:21:04] Charles: So inflation is the expansion of the monetary supply.
So in layman terms, that is government printing more money, which means there's basically more money than there was, yesterday. And so that may have immediate effects such as what we've seen during COVID.
They needed to print a lot of money for like various aids. And now we're kind of seeing the effects of that, but it can also be much more gradual, such as the case in other countries. Yeah.
[00:21:33] Andri: And you're being really kind with these words right now, and I'm going to play the bad cop then. The way I understood it. and then the way I heard it somewhere is basically it's fraud. It's money fraud. It's theft, exactly.
That inflation is theft.
[00:21:50] Charles: Yes, it is.
[00:21:51] Andri: Because if I were to get, um, magic money printing machine and start printing new dollars in euros in my basement, I would be arrested because money fraud and everything else.
But if the government does it, then it's okay. Because they have the permission to.
So essentially let's say we have a fixed amount of money. So if I now have a hundred euros and the government starts putting way more money into the economy, then that extra money is actually going to start devaluing my hundred euros that I've worked hard to earn.
So essentially you can claim that inflation is, uh.... How do I say this?
[00:22:35] Charles: Stealing the time of your population? I think essentially.
[00:22:39] Andri: Yes. And, it's also taking away your own bodily autonomy. Because this is my body. This is my energy. I'm working for something. I'm putting the energy out there in a sense, and I'm getting paid in form of money.
So money is energy stored. So I could change my energy for the work I've done for the value, put into the system for something else, goods and services that I want.
But if there's a government who controls the money supply, in a centralized manner, they can just print more. And through that process devalue my own bodily autonomy, and take my life energy life force from me if we want to let go that route. But ideally could make a case for this And that's
why cryptocurrencies I guess right now only Bitcoin, is actually decentralized that no one owns it. No one can print more Bitcoins. No one can control any aspect of it. And if you own a Bitcoin, if you put your energy into it that's yours it not devalue because no one can devalue this.
[00:23:38] Charles: I think that's, that's definitely a very nice way to put it, you know? And when they kind of stealing this energy from you, it's going to other places and one of those other places is, funding war.
So in that sense, when you're partaking into a financial system, with a currency that is being inflated and spent on war, that is you basically, saying that you're okay with that.
And in some instances it's for defense, which might be okay, but in other cases is for offense. Right. And so, yeah, I don't particularly feel comfortable about that.
[00:24:10] Andri: Nor should you and neither do I.
But for most people, including myself up until like only some months ago, this is how I thought things are, that it's immutable, and that they've always been like this.
But when I started looking into history of central banking, history of Fiat currencies, I understood that this has been only going on for the last 50 years.
Let's say central banking in that sense that it's an experiment that we're running and this experiment has failed already many times within this 50 years. Like Venezuela for example, and all these other hyper inflammatory, not hyper inflammatory hyperinflation at samples. Yeah. Examples from the last, last couple of decades.
So, so it's crazy that I would even think that this is so immutable.
[00:24:59] Charles: 1971 is when the dollar went off the gold standard. So it is indeed a very short period of time. Yeah. We kind of figuring out what it looks like
[00:25:08] Andri: Yeah. And Bitcoin has been compared to gold, so many times, but a lot of people argued and I would even agree with this is the Bitcoin is kind of better than gold. Because like someone could always crack alchemy or, or, mine some new gold on a meteor, or when you have haul around big pieces and everything.
But Bitcoin is mathematics. And I really think it's, it's come here to stay. It has survived for 11 years. So I do put a lot of faith in it, especially because no one governs it, no one controls it. And I guess in that way, it's also a threat to the government because if governments are controlling Fiat currencies, their own currencies in a centralized manner, this is giving the governments too much power to do whatever they want.
And they have power over everyone who participates in the system and they can do things like, as you said, fund a war or pass policies that you don't agree with.
[00:26:07] Charles: For Bitcoin is freedom.
[00:26:09] Andri: And the other benefit of Bitcoin is that it's a trustless system. It just works regardless if you trust other parties or not, but all the other financial systems ultimately are built on trust, of you trusting your government, for example. And historically, I guess you would agree that governments are not to be trusted.
[00:26:29] Charles: History has proven out over and over again, that governments tend to fail. Yeah. And you know, I've I spent most of my, Kind of adult years in London, and in London, we're extremely fortunate to have, the oldest financial system in the world. So it's been going for around 260 years.
And so, you know, when I've been talking about Bitcoin during all these years to like friends, some of them work in a financial sector, none of them kind of really saw the value in it. Which is no wonder.
But you know, when you compare that to someone, who's kind of been like living in Venezuela, who has a government that is corrupt, who's inflating the supply who's confiscating, property. then the use cases is much more obvious.
[00:27:10] Andri: And as you told me as well, is that 80%, 85% of the population, right?
[00:27:16] Charles: Actually, that statement comes from Alex, Gladstein. So if your viewers haven't heard about Alex Gladstein I highly recommend you check him out. He has some very compelling, use case for Bitcoin and how it can provide freedom to the world.
And so that particular statistics states that 85% of the population on planet earth is living under either and or an autocratic regime or double digit inflation.
So yeah, these are kind of significant, like very bad, scenarios where Bitcoin, I don't want to say it's kind of like the panacea, but it can definitely help these individuals, escape, these regions or live a better life.
[00:27:58] Andri: And it's also crazy that, I guess right now already, if I remember the statistics correctly, there are almost 8 billion people on the planet. And I think it was about 6 billion already have a cell phone, But there's a very small percentage of them who are actually banked, who have a bank account.
The idea has been thrown around a lot already, but cryptocurrencies can bank the unbanked and do so very easily.
[00:28:24] Charles: A hundred percent. Yeah, yeah, yeah. And you, you know, like fundamentally, the prosperity of humankind is a function of the friction around how easily we can transfer assets from point A to B.
And what I mean by that is, someone who is living in Africa, who wants to sell one of the goods that they've produced, it is currently very difficult for them to sell it to someone in the US or in the UK, for example.
And so by embracing a network such as Bitcoin, which basically provides access to anyone, as you said, with a cell phone, I think is going to be tremendously empowering, for the development of humankind. So I'm extremely excited about that. And it is definitely something I kind of want to play a stronger role, within financial inclusion.
[00:29:10] Andri: And so I guess the idea that we're aiming for here, that we're discussing between ourselves, and we're trying to get the viewer to understand is that investing in Bitcoin is basically not even investing.
Just by simply placing at least some amounts of your wealth in specifically Bitcoin, not other cryptos, because, other cryptos, anything could happen at this point. But into Bitcoin, you can preserve that wealth and it's going to be untouchable and immutable in some sense.
And most likely it seems this way, this is not financial advice that you might make some, let's say profits along the way. But the idea is, managing your wealth in an anti inflationary way.
[00:29:52] Charles: I think that that's really well framed. And when you come to think of like, preserving your wealth over time, what you're really doing is mitigating against uncertainty. Right.
And so then the question is what do you trust more? Do you trust mathematics and an algorithmic system, or do you trust politicians? And for me, well, I guess I'm kind of biased because I'm a software guy I'm going to go for the algorithm and mathematics.
But, you know, as the world kind of becomes increasingly digitized, I think many people will agree with me. So in my standpoint, it's a very obvious move here. And, most of my wealth is indeed in Bitcoin and all my, assets, I now kind of denominate in, in Bitcoin.
But yeah, I think as you said, none of this is financial advice
[00:30:36] Andri: And like a little side step here, it's my own personal criticism as well, what I have observed you and the viewers may or may not agree with me, but the way I see it is that politics, at least in my country are filled with, people who have been, let's say, bred to be career politicians, or just like, fanatics.
People that are looking for some sort of glamour or like people who are really fanatic about these things.
But none of these people are actually inherently talented because I guess the, open sector here, the public sector doesn't attract, high achievers or good thinkers because the upside is very low.
And, and it doesn't attract people with strong moral codes either.
Because again, if you want to make money in a moral way, the upside is very low. So we end up with this like pool of people that really shouldn't be in positions of power, creating their own little negative feedback loops.
[00:31:30] Charles: This is, This is, such a critical point to me anyway, like the, the way I see the governments, the government entity structured is that there is a deep and intrinsic sense of complacency.
And I think that stems within the fact that they can just print more money.
And so why be profitable, right? Which is the very stark contrast between like the capitalistic system, where individuals must make best use of their resources and generate profits.
So I I'm seeing that kind of, yeah, pretty pervasively.
[00:32:04] Andri: And coming back full circle here. If top economic experts don't even agree on how inflation works and how the monetary system actually functions, and how to interpret the data, how can you expect these politicians to do that?
And I guess they're just like swinging whichever way it brings, most profit to them personally, what benefits them. Because you need the public favor, you don't think long-term, you only think short-term of yourself and like what you can achieve now in your lifetime, in the time that you're in office.
And it's, it's just catastrophic. So I'm actually really excited to see what web 3 and what the decentralization, like how that might change everything, But understandably, the powers that be don't want to lose their power. So there is a lot of, ongoing battles and information battles and everything else and regulatory battles where the centralized powers are trying to still hold on to the power that they have and not lose too much.
So, do you think that digital assets and I'm choosing my words very carefully here when saying digital assets instead of cryptocurrencies, do you think that, they are the solution to many modern day governance problems that we talked about.
And I'm asking this because we've already seen some overreach in large global superpowers, or will these cryptocurrencies be used against us and they will only accelerate our descent into Orwellian dystopia.
And I'm implying, talking about CBDCs here, and maybe you can expand on the term and let's take it from there.
[00:33:42] Charles: Yeah. So CBDCs, uh central bank, digital currencies. And, yeah, I mean, there's definitely like a very hot topic at the moment. Most governments are either exploring or actively undertaking their development.
I guess from their point of view, it's kind of a more efficient way to control, their money and to allocate them to their citizens. But then yeah, from like, a residents, perspective, it can be, quite dystopian as, as you've mentioned, right.
In the sense that, for example, if you haven't been behaving in the way that they want to, then they might, prevent you from buying a train ticket which means you're kind of stuck where you are.
So, I think it definitely has some, potentially, bad side effects.
[00:34:25] Andri: This ties directly into the show black mirror. Who's who's seen it. There was an episode where there was a social credit score and people who had a low enough social credit score. couldn't spend their money in the ways they wanted to spend it.
I mean, it sounds like a conspiracy theory and very dystopian, but this is exactly what's already going on in China and people are locked in their regions and they're unable to leave. They're unable to purchase services.
And there's camera systems everywhere, all over the place. and tracking, what people buy, what they spend their money on. Raising and lowering scores based on what they post on social media.
And the score gives you access to services, access to schools, access to like everything else. So you're really going to have to be an upstanding citizen and be under this totalitarian control basically.
And the central bank, digital currencies, are programmable assets, which means that the governments can program them to function whichever way they want them to function. As you said, let's say your social credit score falls under 50 points.
That means you lose your access to train tickets, or, let's say you wanted to fly over to Estonia to do this podcast in person, but Hey Charles, like last podcast, you criticized the government, so you can't make the flight. Sorry. So these scenarios.
[00:35:41] Charles: We're seeing now in Canada with the truckers.
[00:35:42] Andri: Oh yeah, I guess the precedent was already set where they used emergency powers to confiscate the funds that people were donating to the truckers, right?
[00:35:50] Charles: Yeah. So it's not some kind of scenario that I think we're just making up. These things are really happening today.
So, you know, as society, I think it's really important for us to kind of be fair in the way we evaluate things. But also like critical. And also asking ourselves, well, what is the potential of this technology?
Should the government change into, a different one with, different motives, which might be against that, of the population?
[00:36:15] Andri: Yeah. And exactly like the way you mentioned Canada, it clearly illustrates that this isn't even a far away problem in China, somewhere.
This is going on in our own backyard right here. And, it's, it's clearly very biased and, prone to. Political manipulation, because imagine somebody had frozen the bank accounts of black lives matter protesters, for example, what kind of backslash could that have been? But instead this was applied to the
Canadian truckers. So there's definitely politics in play here. And, the power that it gives governments is too crazy. But as you said, technology is neutral.
[00:36:54] Charles: Yes, that is, that is my
belief. Technology is neutral. It's all about what we make of it.
[00:36:59] Andri: So we've spent quite some time scaring the audience with the horror stories of government overreach. And if somebody now decides that they've had enough and that they want to participate in the de-centralization revolution or the process of decentralization of the monetary system, what can they do?
What should they do? Is buying and trading Bitcoin the only way?
[00:37:21] Charles: So trading is a definitely, like it's real job.
And so therefore, I think it kind of requires a lot of training and, studying.
Having said that, yeah, I don't think, trading is the right option for most people. However, if you do want to get involved, I think a good way forward is dollar cost averaging, which involves buying, a small amount of Bitcoin on a regular basis.
So that could be weekly or a monthly. And just keeping that up because it basically averages your cost of entry over time. Which is a pretty good thing since it kind of ensures that you're not buying right at the top.
[00:38:01] Andri: And I guess it's also a smart move to stick to Bitcoin If you don't understand the crypto market, because it's very easy to get lost scammed or lose all your money. Even in a $55 billion asset, that seems relatively secure, but you can go from a hundred dollars to $0.03 within 72 hours, which was unprecedented, but this is just what happened, in the last 72 hours.
[00:38:26] Charles: Yeah, it can absolutely be brutal. Yeah.
But I think for like, for the more risk inclined, another good option is to buy into an index, which is basically like a basket of the top 10 or top 20, cryptocurrencies. Historically that has kind of yielded pretty good returns as well.
[00:38:43] Andri: But I'm actually now wondering what, happened. Let's say to a top 10 index right now after Luna crashed,
[00:38:49] Charles: It really depends on how the index was structured, but a pretty typical way is to weight the allocation to any given asset as a proportion to the market cap.
[00:38:59] Andri: Hm.
[00:38:59] Charles: So having said that even at the top of the market cap of Luna relative to Bitcoin was quite small. And so, I would expect that to have a kind of relatively small impact. But obviously the whole crypto market is quite significantly down right now.
So, yeah, you'd be in a drawdown.
[00:39:15] Andri: And yeah, obviously, as we mentioned before, this isn't financial advice, so people need to take responsibility and do their own research, but try not to get scammed by promises of quick riches.
But uh Bitcoin seems to be a safe asset. Bitcoin seems to be an asset that's gonna allow you to, keep the value of your money. Maybe grow your money a bit. And that it's going to be anti inflationary, anti inflationary, and all those other good things.
But also a lot of big crypto experts, I've heard have recommended people to just like buy, let's say 50% of Bitcoin and 50% of Ethereum, which are the top two digital assets. And this seems to be like solid and balanced advice for most people, I guess. And, before we wrap up, something that I promised that we're going to come back to is the 3d printing.
This is something that I literally know nothing about, and I would love to learn something about the space. So it's a golden opportunity.
So Charles, can you please tell me. How did you get into 3d printing and what exactly are you doing in 3d printing? But, tell me first how did you get into 3d printing.
[00:40:23] Charles: Yes, so well, so I've been in the 3d printing space now for
around 15. years I built my first 3d printer when I was around 15 or so years old. So I'm now 30.
And so the reason why I got into it is because I was always very interested by how things were made. And when I came across the technology for me, it was the solution to make any object. Which of course is not true, but you can produce pretty much any shape, especially over any other manufacturing types.
And so right now I am the CTO and co-founder of a company called Additive Flow, which has developed the leading multi-physics, optimization software. And so the USP here, if you wish is the ability to optimize components using multiple materials or multiple properties. And so this has significant impact on a number of, engineering sectors, such as aerospace, medical and, auto,
And I'm sure a bunch of others.
Basically we can optimize components to a level of performance that was, far above, what we previously could. So in a most recent project, we optimized a component, which meant it could be manufactured 60% faster. Another example was a 2x increase in sustainability.
And so we'd have all these amazing, kind of, gains that the software provides. And so, yeah, we're kind of now in like a deep commercialization phase where, we, we have to make sure we kind of leverage this, this technology and software
[00:41:49] Andri: so you basically developed a 3d printer and the software that can print. Different materials onto the same component and mix the compounds in the way needed. Am I getting that correctly?
[00:42:02] Charles: Yes. Yeah. That's a pretty good description.
So when you're designing 3d components, you basically use a software called CAD, which stands for computer aided design, and it's like a 3d equivalent to Photoshop.
And so these initial software were developed in the 1970s when 3d printing wasn't around. Okay. And so then in the late 1980s ish, the 3d printers came along and there, you had the ability to change the material throughout the component. And so, that required a new type of software, which we've developed today.
And as you've said, we have the ability to modulate the material throughout the component.
So say you had one part that needs to be kind of mechanically strong on one end and then thermally conductive in the other, we would put steel on one part and then copper, which is conductive on the, on the other.
So that's one aspect, that's multi material. But it breaks down into three parts. So we have multi material chemically speaking. Then we have, metamaterials, which is, lattices. And then we have multi-property, which is the same chemical material, except that we're going to modulate the micro structure. So thrown a ton of information there.
And for anyone who's not familiar in manufacturing, there's probably made no sense, but yeah.
[00:43:18] Andri: But I heard aerospace in there. So is this like a use case then?
Who needs components like this?
[00:43:26] Charles: Yes. So aerospace is, is really a big one for us because any small gains that we can give them has significant repercussions on the type of machines that they can build. So, I mean, we've worked with most of the major aerospace companies, and so we recently kind of delivered, a very innovative project, on a component that will, be on a satellite 46,000 kilometers from planet earth.
Yeah.
[00:43:55] Andri: That's wild.
[00:43:56] Charles: Yeah. I, I can't give too much detail on that, but, yeah, you know, it's fair to say that the way that they've engineered components so far is, very different to the kind of, engineering that we're proposing.
And so there's definitely like, a strong element of education that will kind of, ensure that the technology reaches its full potential.
[00:44:17] Andri: So you said that you built your first 3d printer, was it 10 years ago?
[00:44:21] Charles: So I was 15, 16, which is now 30, so that's 15 years ago. Yeah.
And, yeah, for me it was, you know, I think you have this, this concept of like epiphanes. And for me that was kind of really one of them. Where you have like a component of like, electronics and then software and then mechanical and all these different things are coming together to turn a digital object into a physical world.
And I found that so amazing. Which is why I've been focusing in that space for, for that time.
[00:44:53] Andri: And from one of our previous conversations, I remember that you started printing these details on your university campus. And you were running your first business out of your university dorm room.
[00:45:03] Charles: That's right. Yeah. So I had a university dorm and in there I
had four printers. And so that's where I started my first business. And I can vividly remember one of the customers, which was actually Rolls Royce, coming to pick up the parts and being slightly concerned that it came out of a university And, but thankfully the components were good and I had a happy customer.
[00:45:26] Andri: Can you go into a bit of detail, what did you produce for Rolls Royce?
[00:45:30] Charles: So yeah, I am, it's hard for me to go into specifics, but there were components that they were using for measurement. So there had to be relatively precise and well printed, which was definitely a challenge given that I built these 3d printers with my hands. But yeah, that, that was a good experience.
[00:45:51] Andri: Did you ever get into any trouble? Cause you don't have to pay utilities in your dorm. So I guess it's also a good place to mine bitcoin, if anyone's listening...
[00:45:58] Charles: Yeah, you could, you could do that. Yeah, for me, you know, the, the main problem I had was sleeping when I had the 3d printers on.
Because back in the day, the motors are actually, if they're not programmed correctly, or if they get too much voltage, they're really quite loud.
And so I had to sleep next to four of them on all the time, because obviously I had to kind of meet my orders.
So yeah, that, that was, that was a fun adventure.
[00:46:23] Andri: I can only, wait for the day when you can 3D print, your own Lamborghini or something.
[00:46:27] Charles: It's coming. Yeah. A multi-material Lamborghini. I think we're well on the way there.
[00:46:31] Andri: Do you remember those, like anti-piracy ads? Like 'you wouldn't download a car'. It's like, I would, if I could exactly.
So, I guess we've covered mostly everything that we wanted to talk about today. And I hope the listeners learned something about cryptocurrency, inflation, or like we piqued your interest enough to go look into this stuff and learn more about it. Is there any closing comments or asks or notes or anything that you want to add and address the audience with?
[00:47:03] Charles: I mean, I, first of all, thank you so much for having me on your podcast.
You know, as always, even outside of the podcast, I always have so much fun speaking with you. yeah. And yeah, I really mean it.
And, and then in terms of like ask yeah, I mean, so I think if anyone who's listening, found any of the interesting any of the ideas that. I've shared. Interesting. then please feel free to reach out. I'm always very happy to chat with, with, most people.
[00:47:29] Andri: What was the name of the trading fund that you're launching the trading company.
[00:47:33] Charles: The trading company is called Unsigned Research. And so the website for that is unsigned-research.com. And then my 3d printing company is additiveflow.com. And, you can also find me on Twitter @iSeekLong
[00:47:50] Andri: I'm going to add those to the show notes for anyone
[00:47:52] Charles: Thank you. I appreciate it.
Wanting too reach out and have a look.
[00:47:55] Andri: So again, thank you for your time. It's fun.
It's always been fun. And, yeah, let's do this again soon, then, round 2.
[00:48:02] Charles: Sounds good. Absolutely. Whenever you want.
Thanks Andri Cheers. Bye.
[00:48:08] Andri: And to everyone else listening, if you enjoyed this podcast, please go ahead and subscribe wherever you get your podcasts.
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