How Crypto Is Reshaping Finance and Challenging the Status Quo

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**Anatoly Yakovenko** (1:00)
Crypto is eating the last big part of the world, which is finance. No human can comprehend it. The reason why America has been so successful is that we end up building things faster than anyone else.

**Tom Bilyeu** (1:11)
Do you think that crypto will completely replace fiat?

**Anatoly Yakovenko** (1:15)
Our government is aging. I think the Democrat leadership kind of shot themselves in the foot with crypto.

**Tom Bilyeu** (1:21)
What does the future of finance look like?

**Anatoly Yakovenko** (1:23)
I'm a super optimist. I think if all our problems are money problems, we're truly blessed.

**Tom Bilyeu** (1:31)
Anatoly Yakovenko, welcome to the show.

**Anatoly Yakovenko** (1:33)
Thanks for having me.

**Tom Bilyeu** (1:34)
So you have said that crypto will win against traditional finance, but I want to know why. What is it about crypto that's better for the average person today?

**Anatoly Yakovenko** (1:45)
The basic reason is that a lot of the kind of growth over the last, I think since the 80s, has been software eating the world. I think this is a Mark Andreessen line. And you kind of see technology, as it improves, start to automate more and more pieces of what we do with humans and fax machines and stuff like this. And crypto is eating the last part, I think, of the last big part of the world, which is finance. And finance has been really, really hard to replace with software, because there's just so much trust baked into finance. Like if you actually kind of go through the process, anyone that's been through the process of buying a house, you get all the work that people have done legally to make that as trustless as possible. You see that in the 800 pages of disclosures that you read, and no human can comprehend it. There's just no way to consume that information and make a rational decision. So you trust the people in the process, the brokers, the dealers, et cetera, to kind of not screw you over. And we have laws and stuff to kind of keep everyone in line. But because of that, it's really expensive. The cool thing about blockchain and crypto is that you can start replacing some of those pieces with software and cryptography, because we have mathematical guarantees that you cannot violate the cryptography portion. So you can trust that particular thing.
It's still a really slow and hard process, because we still have humans writing the software. And that software is going to have bugs and stuff like that. And you see that come out as big hacks and DeFi and stuff like that. But I think slowly but surely, you'll start seeing people replace their back office and kind of all the stuff that they do that's expensive, that some person that is doing a job can charge 20 basis points, can now be done with software. It'll get switched over.

**Tom Bilyeu** (3:40)
I've heard you talk about the current way that the financial system works is basically like a regressive tax on the entire economy. What do you mean by that? And how would crypto solve that?

**Anatoly Yakovenko** (3:51)
Yeah, so my engineering brain, like think of it as roads. Like if you have roads with potholes and tolls that are expensive, that's a cost that's paid by everybody in that economy. Like the cars wear down faster, you gotta spend more gas because the roads are inefficient, stuff like this. And when you straighten everything out and remove all the potholes, you remove that tax on the economy. So you're paying less of that tax in every transaction that you do.