In this episode, we unpack some basic definitions for digital assets and explore why NFTs are flipping the art world – and the broader creator economy – on its head. If you’ve ever wondered what a token is but were too afraid to ask, this is the episode for you.
Guest
Kate Goldman – FinTech Associate at the Center for Financial Markets at the Milken Institute, and the author of an excellent report, “A Taxonomy of Digital Assets.”
Immutable: Episode 4, with Kate Goldman
“What’s In a Name? The Beginning of Wisdom”
Josh Burek: This is Immutable, from Harvard Kennedy School’s Belfer Center for Science and International Affairs. I’m Josh Burek. In today’s episode, we hear from Kate Goldman. She’s the FinTech Associate at the Center for Financial Markets at the Milken Institute, and the author of an excellent report, “A Taxonomy of Digital Assets.” If you’ve ever wondered what a token is but were too afraid to ask, this is the episode for you. Kate and I unpack some basic definitions for digital assets, and we explore why NFTs are flipping the art world – and the broader creator economy – on its head.
Josh Burek: Kate Goldman, welcome to Immutable. It’s great to have you here.
Kate Goldman: Thanks, Josh. It’s wonderful to join you here.
Josh Burek: Many of us are just beginning to dip our toes into crypto waters and it can be pretty intimidating. In addition to well-known offerings like Bitcoin, Ethereum, NFTs, stable coins, and now meme coins. And this is clearly no longer the land of libertarian obscurity, right? Tom Brady is big in this space. El Salvador made Bitcoin an official national currency. And Melania Trump has now launched an NFT platform. So clearly more of us need to come to terms with these terms. And I can’t think of anyone better to help us do this, Kate, then you. You are a living Rosetta Stone for crypto, and I’m thanking you in advance for taking some time to help us think more clearly and speak more precisely about this domain.
Kate Goldman: Absolutely. If anyone has ever heard me talk before, I am more obsessed with definitions and terminology than really anyone should be, but I think it’s just so critical in the crypto space. Especially like you’re talking about, it is a little intimidating to get started in the crypto space. And I think a lot of people do get a little bit caught up in the terms and what do they mean?
How do I understand what this lingo means? And so having uniformity and alignment across the space, hopefully it makes it just like 1% easier for folks to know what we’re talking about.
Josh Burek: Well, it’s an important public service. And to start at the top, Confucius famously said that the beginning of wisdom is to call things by their proper names. And I feel like you’ve done yeoman service in this regard through a great new report you’ve published with the Milken Institute, A Taxonomy of Digital Assets. And this report compares this taxonomy to what’s done in the animal kingdom, right, where in biology, animal taxonomy structures the hierarchy from the most general to the most specific. And I want to hear later about how you’ve organized digital offerings, but I’m hopeful that this episode will serve as a long-term reference for listeners.
So would love if we could just begin with some definitions, Kate, beginning with a token. What is a token when we talk about crypto and blockchain – and why should I care? Why should anyone care whether a token is fungible or non-fungible?
Kate Goldman: So a token is simply a denomination of a cryptocurrency, meaning it represents a tradable asset that exists on its own native blockchain. So we’ve got Ethereum, which is the token, the denomination of currency, and then that exists on the Ethereum blockchain. So they’re interlinked in that.
And then the conversation around fungibility is really key. So, like any commodity, cryptocurrencies are fungible and all you need to know is that you can exchange them. And it doesn’t matter if I have a dollar and you have a paper dollar, we can swap those dollars and nothing will happen. If I have a Mona Lisa and you have a Picasso, we would not be able to swap them because even though they’re similar asset types and they might be worth really similar amounts in value, or even the same amount, the individuality of those pieces means that they are not interchangeable.
So that is the F in NFT. Meaning that a non-fungible token is again, token being the denomination, but it is unique and not able to swap with other even similar tokens.
Josh Burek: We’re going to return to this because this differentiation between something that is utterly interchangeable and its opposite – something that is utterly unique – has vast implications for how technology is being deployed. And in your first answer, Kate, about tokens, you referred to cryptocurrency. So let’s also just take that from square one. What’s your best working definition for cryptocurrency?
Kate Goldman: A cryptocurrency is a type of digital asset being that they cannot be held physically and instead they reside or are data-stored on distributed ledger technology. Which we can get into a little bit later, but commonly referred to as blockchain is the most notable form of DLT or distributed ledger technology.
But cryptocurrencies are recorded on these vast networks of computers that decentralize ownership and allows them to, you know, historically they have been operative outside of government control. They are privately issued being that, I could issue it; I don’t need to be a central bank. You mentioned El Salvador and central bank digital currencies.
So we’ve become more of a mature state in the crypto ecosystem, where governments are wrapping their heads around “How do we engage in this space? What does our relationship look like to cryptocurrency?” – something that have for the last 12 years, since they came around, have existed in the private issuance state.
So the word crypto comes from cryptogram. Which basically just refers to, and I won’t bore you with this, the algorithmic mechanisms that safeguard cryptocurrencies against manipulations and malfeasance and things like that.
Josh Burek: It’s important to understand what this is not least because how we define cryptocurrency affects how it’s regulated. This brings up the broader question of “What is money?” And money has taken multifarious forms over human history. From cattle to rocks to gold. But regardless of form, I think most students of history agree that to be money, it must satisfy three conditions, right? One is it must serve as a store of value. It must serve as a unit of account. And third, it must serve as a medium of exchange. I know there’s been some debate about this, but as you see it, does cryptocurrency satisfy those three conditions and do governments regard it as money?
Kate Goldman: Answering your first question. Yes. I think people underestimate – and I’m so glad that you touched on this – how many different forms of money we’ve seen. Since the beginning of mankind, people have always been using goods and services and being paid in different forms. Shells used to be a really, really common form of currency all across the globe.
And now, it would be shocking to see that happen in the United States to be paid in shell because it just doesn’t interchange in that same way. And so the paper money or coins, as
we think about now, those are just the newest iteration in a long history of evolving currencies, and cryptocurrencies are the newest iterations of that in that legacy of ever-evolving money,
Aristotle famously said money exists not by nature, but by law. And I think that gets into your second question, which is do governments see this as money. Is cryptocurrency money in the eyes of the government? That is very jurisdictionally specific. We’ve touched on El Salvador, where of course they’ve allowed cryptocurrencies or Bitcoin to be part of the legal tender system.
In Miami, we have Mayor Suarez, who has issued a MiamiCoin and has become sort of very pro-Bitcoin, pro-crypto, is doing all sorts of interesting stuff in the city with it. But ultimately the United States is not issuing it through its central banks. So I think it’s money with a caveat or money with a stipulation, I don’t anticipate that being always the case.
I think we are seeing evolve right before our eyes, the government grappling with what they want to do with crypto. Like how do they handle this? And that reckoning and that acknowledgement is what starts building the fundamental credibility for something being money in the eyes of the government.
Josh Burek: So you’ve just hit on a very important concept, which is this idea of credibility. And that raises the idea of the distinction between money, I suppose, and fiat money. If I were to hand you, Kate, a gold coin, aside from you maybe biting down on it and making sure that it’s not counterfeit, you would immediately recognize that as having intrinsic value regardless of how I represent it to you, because it’s gold.
If I hand you a dollar bill, you and I understand that that doesn’t actually have intrinsic value. What it essentially is, is a promise, right? It’s the U.S. government saying we’re giving you our full faith and credit that this can be exchanged, and used as money. So dollar bills, paper cash currency is fiat money.
If I were to buy a Bitcoin, am I buying fiat in a sense, or is it something with intrinsic value? Or is that answer subjective?
Kate Goldman: Ooh, that’s a good question. It’s not fiat currency because we have pretty specific definitions for what is fiat currency. And I think the intrinsic value of crypto is real. If I had a physical paper dollar in front of me, it could not do what crypto does for me. It doesn’t have the same use cases other than being something I can use to exchange for goods or services or food or anything. Cryptocurrency has a broad range of use cases, and I think it expands beyond what a fiat currency would be regarded as.
Josh Burek: One of the reasons that skeptics have been reluctant to think about cryptocurrencies like Bitcoin as some kind of an alternative to traditional government-issued legal tender is this idea that, heretofore, they’ve been very volatile in their store of value. And this has led to the emergence of so-called stable-coins.
So can you unpack what a stable-coin is?
Kate Goldman: Absolutely, a stable-coin is a type of cryptocurrency. And basically the stable in stable-coin refers to the fact that the value is algorithmically pegged to a different reserve asset or asset grouping. And so that tether mitigates the volatility and the risk because it is being directly impacted by something like the value of gold, for example, or the U.S. dollar. And while those do see price fluctuations, they are typically far less drastic than you would see of the price of Ethereum. Which for example, I think has dropped, like 5% today. That stability is, an interesting use case for stable-coins, and that allows them to operate far more similarly to what we would traditionally think of as money and less like an investment tool, which is a large part of why people get hung up on thinking of them as currencies is just because they operate also similar to a stock, where you’re putting money into something and you’re seeing that price fluctuation.
It’s important to note that stability across stable coins is not uniform. For example, they can be pegged to other cryptocurrencies or gold I’ve mentioned or national currencies or a basket of currencies, which was popularized back in 2019 when Facebook came out with their, what was called Libra project at the time, where they were going to issue a stable-coin that was backed by, I believe it was just a handful of different currencies, including the U.S. dollar. And that’s where the value would be tethered to. So stability is, it fluctuates across the space, but it is far less volatile than Ethereum or Bitcoin or other cryptocurrency.
Josh Burek: We can see two key themes emerging so far from your very helpful answers, and that is stability and credibility. And underlying both of those is ultimately a distributed ledger technology popularly known as blockchain. Kate, is blockchain basically just the world’s largest spreadsheet. Is this just a database?
What is it that has enabled the rise of this class of new digital assets?
Kate Goldman: Blockchain or any distributed ledger technology takes pieces of information, captures them, and then it distributes them across a vast network of thousands of different computers all across the world. So where the cloud holds all of this information in one singular place, DLTs or distributed ledger technology is taking that pot of data and spreading it so that each piece of data is sort of self-encapsulated and becomes linked with one another.
So every time an exchange or anything is done that is recorded on the blockchain – so I sell my crypto, I buy something, I purchased an NFT – all of those captures of data become what is called a node. And I’ll take us back to the nature comparison. When you think about a large tree or a houseplant, a node is actually a term that comes from biology.
The branch splits off or a new leaf or a new branch splits off the main primary. So all of those diversions are created by nodes and it’s the same way on a blockchain. It’s linking all of the new diversions of information, creating this vast spreadsheet or ledger, literal digital ledger of information that is being stored.
And people like this information for a bunch of different reasons. It is incredibly secure because to break into a cloud, you’re really just hacking into one singular system and you’re accessing all of the information on a blockchain, you would have to go piece by piece by piece. To get to whatever information you’re looking at, you don’t access all of that on one singular node, they all become their own individual representations of data that are linked, but separate from one another.
And on top of that, it is a public record of everything that is happening. There’s a little bit of a misconception that they are anonymous, but they are really pseudonymous. It’s a little bit of a tongue twister. And that allows people to have a certain sense of security, both in that it’s a different representation of your identification online, but also in the fact that this information is being permanently recorded.
And so it’s immutable – of course the name of the podcast here – and it’s irrefutable and it is a permanent record of what has gone on.
Josh Burek: Thank you for calling out the final piece of the stool here. Credibility, stability, and immutability.
Kate Goldman: Yes.
Josh Burek: It seems to me that that being able to represent to an ecosystem, to an economy, that this cannot be manipulated, this cannot be engineered with distortion is a crucial feature.
That promise has to be born over time. But so far that has what has enabled the mainstreaming of this technology is this idea that unlike centralized cloud-driven approaches to data, the distributed nature, and the, you know, “We’re playing with Sharpies, not pencils,” is very appealing to those in the financial services industry.
And it’s also appealing to governments now. There’s a great project at the Atlantic council. My good friend, Josh Lipsky has been tracking the dozens of countries that have taken substantial steps toward launching a CBDC: a central bank digital currency. What’s in it for them? Why do this? What problem does that solve?
Kate Goldman: It solves a whole host of problems for a government to issue a central bank digital currency, because it is a fast and immediately settleable payment to and from the government to private citizens. So I like to say it’s sort of like if the government was Venmo-ing you, with the key distinction being that the government is not actually Venmo-ing because Venmo takes a period of time to settle into your bank account.
This is instant settlement. So people can access this money. Say if you had stimulus checks, if it was sent through a central bank digital currency, we would all have associated wallets. You would be able to access that money the second that the government sends it out to you. That’s a really powerful tool for economic empowerment and inclusion. Many people don’t have the capital to float between days of settlement.
And I have to give a shout out to one of my very good friends, Jennifer Lassiter. She has just joined The Digital Dollar Project as their first executive director. They’re a really cool non-profit and they’re doing just wonderful work in the space to amplify CBDCs, talk about them, think about what would this look like in the United States. What does privacy mean? People ruffle a little bit at the thought of that relationship between central banks and the people being so intertwined where the government can have access to your financial information in a way that they maybe not otherwise would’ve been.
There’s really key conversations happening from The Digital Dollar Project and other wonderful organizations around, “What does privacy look like? What does issuance look like of a CBDC? What does governance look like? Who’s maintaining this, who’s recording this? How do we look at this technology in the United States in our own specific term?” Because you’re absolutely right. Almost, I think, 80 different countries across the world are testing these. They have pilots going on and the United States should not be the last in line for CBDCs because they’re clearly something that has really just surged in popularity. And I don’t think it serves us well to be the last one to build something.
Josh Burek: We certainly don’t want to be last, but we don’t want to rush to be first. We want to get it right. And I think about the philosopher you quoted earlier that money exists, not by nature, but by law. And it’ll be fascinating to see which governments end up setting the tone for the emergence of CBDCs and so far, it looks like China has taken a lead position in rolling this out. And that has all kinds of negative implications for consumers and privacy. And that was the subject of a conversation I had with Yaya Fanusie a few episodes ago.
Well, on the other end of the spectrum, Kate, from a CBDC is a meme-coin. So help us get our heads around this. And why wasn’t I investing in Shiba Inu last year?
Kate Goldman: It’s an excellent question. The beauty of crypto is that if you have a computer and a few YouTube tutorials, you can make a cryptocurrency. Anyone can do it. It is so open and available. I’m not saying that it’s easy by any means to create a crypto, but ultimately we all have the ability to do so with a little bit of good old fashioned Wikipedia, but a meme-coin is sort of like the response to that.
It’s this silly culture that has emerged in crypto because historically there was a very libertarian niche, subset of people were really, really into crypto back in the day. And a lot of these meme-coins have popped up poking fun in itself.
It’s a little bit of self-deprecating humor in crypto that it’s being represented by Doge, which is an old meme from forever ago or Shiba Inu or anything. It’s silly humor, but it points out how open and accessible this technology really is. And they become seriously legitimized.
When you have hundreds of thousands of people holding Doge or Shiba in their wallets, I don’t think it becomes that meme anymore. It becomes very real –
Josh Burek: At least Elon Musk tweets about it.
Kate Goldman: Yeah. He has an incredible ability to impact the price with just a tweet. But you know, you see what happened to the price of AMC, where you have the subReddit of Wall Street bets basically coalescing around the idea of not liking the fact that institutional investors were shorting AMC. So they—
Josh Burek: Right. Let’s take it to the hedge funds.
Kate Goldman: Yeah. And now AMC is exploring how to actually accept Dogecoin and Shiba as payment in their theater. It’s just this fascinating, like full circle of what Internet communities can produce and how that is actualized in the real world.
Josh Burek: It’s hard to believe that it’s come to this, but Kate, underneath all of these definitions of various crypto assets is a feature set that we haven’t talked about yet that I think could be profound in its application. That is the idea of a smart contract. And people sometimes link this term to the emergence of a web 3.0 or a trustless web. How do you see smart contracts taking shape? How do you define them, and how might we experience them in the year to come?
Kate Goldman: At their core, they’re an algorithmically executed exchange. You can think about them like a vending machine wherein you’re not having a person staffing a machine. There isn’t someone facilitating this exchange for you. On one side are a bag of Doritos and I have $2 and I will not be given the bag of Doritos until I put in my money.
Then the vending machine facilitates this exchange where the chips are then released to me. So that’s really what a smart contract does. It takes two entities and there is a pre-agreed upon exchange. What typically a lawyer would draw up for you or what you would discuss, perhaps some sort of third party to execute for you.
It doesn’t release or it doesn’t make itself whole until the other party pays or until the other party does what is agreed upon. So it is removing that facilitation by human and it is digitizing that in a contract.
Josh Burek: How are we beginning to see this play out?
Kate Goldman: My uncle is a lawyer. And even they’re talking about how do we utilize smart contracts? Like anything in the world, it started in a clunkier, analog, more human version and humans are fallible and we make mistakes and we are expensive and being able to digitize anything has unbelievable opportunities to make things run more efficiently, to make it go faster. For example, like underwriting loans can be digitized now for that discovery process and issuing the loan. And when you digitize it, it frees up the people who work at the insurance company or the lawyers to do other things.
And it allows us to use our own personal time. The ultimate asset in life is just the time that we’re given and we’re able to do other things with it. It is a smoother way of creating exchanges.
Josh Burek: We saw over the last decade how wifi took over all of our appliances. I think my fridge is hooked up to my Internet. Are we going to see the smart contract of things?
Kate Goldman: I could easily see a world where that happens. I think smart contracts can be used for anything. Any sort of exchange that you would have, like where you’re buying things, that can all be realized through smart contracts, anything that you would want to buy. It can be facilitated faster, easier using a smart contract.
I don’t think anyone has a desire to remove all human elements. It’d be slightly depressing if only contracts like these digital exchanges were happening. I still enjoy chatting with my barista in the morning, but there are really important areas where it makes more sense to have the machines step up to the plate.
Josh Burek: I mentioned at the top of the program, your fascinating new report, A Taxonomy of Digital Assets. And in that report, you make a fundamental distinction between digital currencies and virtual currencies, and it would be helpful to you hear you just talk about this in real-world terms. Many listeners have used Venmo, PayPal, Zelle, and other platforms to move money to friends. But when they’re doing that, they’re just transferring money in digital form, right? They’re not using virtual currencies, is that right?
Kate Goldman: With this overall encapsulating term digital assets, there are different ways to digitally represent currency. One being cryptocurrencies, which we’ve talked about are cryptographically encoded, private issuances of money. And then the other piece is in something like Venmo, where you’re having fiat currency represented online, represented on your phone or on a screen. The distinction between a virtual currency and a digital currency is whether or not they have legal tender status. So if you look at Bitcoin, for example, it is a virtual currency specifically in the United States where it does not have legal tender status.
Our central government or central banks rather are not issuing Bitcoins, but in El Salvador you have the opposite, where they are legal tender. And so in El Salvador, Bitcoin would be considered a digital currency.
Josh Burek: We’re really seeing already that the taxonomy may be jurisdictional.
Kate Goldman: Absolutely. And my hope for the taxonomy. I hope that it is out of date in six months or a year because the space, the ecosystem of crypto or digital assets broadly are changing so quickly and so broadly all across the world that if the taxonomy is still technically accurate in a year, I would be disappointed in the pace which we’re changing things.
I hope that I have to redo it every six months.
Josh Burek: You’re right. It is moving fast, but even so, where do you see some of the biggest misnomers and misconceptions happening in how we talk about it?
Kate Goldman: The most dangerous misconception about digital assets is that they’re a monolith and that they all operate and work in the same way. So a lot of the times people will talk about a central bank digital currency in the same breath as Bitcoin or a stable coin or Dogecoin. And all of these different forms of digital assets have really key defining features that distinguish them from one another, and they impact all sorts of things about the currencies or about the assets, but importantly how risky they are and what sort of oversight should be deployed to regulate them. So in the context of Congress or agencies who are making all sorts of decisions every day, you know, we’re having a record number of hearings on cryptocurrencies, and they’re in the process of building that regulatory regime.
It is really, really important that the distinctions between all of these different assets are part of the conversation and that we are not regulating them uniformly across the space, because that would be a mistake. It’s important to factor in things like risk and, you know, how volatile they are, like all of these different key features of them, whether or not it’s fungible, what’s the underlying technology.
What is the issuance process of these coins? All of those are really key parts of the conversation for regulators who are in this fascinating spot of making all these key choices.
Josh Burek: I want to return to non-fungible tokens, NFTs. I’ve heard you talk with great passion about the subject, and I know we see people kind of rolling their eyes at the idea that NFTs mean you can mint a tweet or sell a 1% share of Air Jordan sneakers.
But there’s something big going on here, isn’t there? Particularly with regard to concepts like ownership and equity. Tell me what you’re seeing in the space that gets you excited.
Kate Goldman: The NFT space is quite literally flipping the art world on its head. And you know, we were talking about the subreddit Wall Street bets earlier, and there is a really distinct culture of frustration around how inaccessible so many things have been for so long. And the beauty of crypto and the beauty of NFTs is that they’re so broadly democratized and accessible that literally anyone can purchase them for just a few dollars you can buy an NFT or invest in cryptocurrencies.
Josh Burek: Do you have an NFT?
Kate Goldman: I do not have an NFT, but I do own crypto. For a long time, I did not own crypto because I am very stubborn and I thought it made me a better policy analyst, which is, at my heart, what I am. I come from a public policy background and I didn’t want to be financially linked to crypto in my analysis of it.
It made me have more scrutiny and I just fell in love with this culture and this passion around crypto, around NFTs, that people feel this sense of resurgence in, “Oh, I can access these things.”
If you wanted to buy a house, which has traditionally been, one of the best ways to accrue wealth is to invest in physical property, but most people don’t have that liquid capital on hand and to buy a house, you have to go to a bank and plea your case and get a home mortgage loan.
And you’re given a rate and all these sort of judgements are cast on you. And this relationship is created between the banks and the people sort of seeking to purchase houses. With an NFT, you’re not beholden to this ultimate overseer of the asset. If you have the money, you’re able to invest in, you’re able to purchase it.
And you’re able to receive ownership of the NFT. And that is really, really inspiring for a lot of people. And that’s what gets them sort of jazzed on the idea of, you know, taking part in this commerce model. It is a brand new way for people to access ownership and purchase investments.
Josh Burek: That’s so fascinating you brought up houses, because I think it could represent a paradigm shift in how we think about debt, right. Entrepreneurs for years, as they build out their businesses, they don’t go deep into debt. What they do is they sell equity to investors. They effectively recruit co-investors who share the risk, but also share the upside return.
It seems to me that with NFTs, there’s the possibility of extending that model to not just artists but the broad class of content creators. And even, as you say, traditional purchases for which the middle and lower classes have typically incurred debt, but for which they could attract co-investors.
Kate Goldman: Absolutely. I think the crowdfunding model is a really unique way to buy something or to purchase something because it creates that community of like, “OK, we’re in this together.” And when it’s all digitized, it doesn’t need to be going to your parents for, uh, friends and family loan; going to, you know, raising money in your community.
This can all literally happen with strangers through the Internet, through, the value of the internet. We can all just purchase like 0.01% of something. I think I own like 0.03% of an Ethereum. I don’t even own an entire one. That is a really fascinating evolution of the way we share data or the way we purchase goods and how we’re interacting with all of these asset classes.
Josh Burek: But at the risk of jumping the shark, Kate, let me push this a little further. In addition to owning a tiny share of Ethereum, I could envision a scenario where I say, “Hey, this Kate Goldman, she’s going places. I want to invest in Kate.” And basically people could run their own IPO. “I love your career trajectory. I want to have a tiny share of Kate Goldman.” Is that crazy?
Kate Goldman: No, I don’t think that’s crazy at all. I think those are the types of conversations that we will be seeing happen. And I think it’ll get even crazier than that. It’ll become even more esoteric where you can own or invest into. broad and generalized things. I think the NFT market that we’re seeing right now, we’re you’re purchasing digital art, it is almost the tamest it might be, or the most comparable to normal ownership models that the history will look like.
I could see a world in which almost everything is an NFT, especially when we start talking about the luxury goods market is something I’ve picked on a lot lately, or a car or even a home is an NFT.
Just taking a step back, the NFT can be literally anything. It is a digital code that is linked to whatever you want. It can be a photo of a monkey. It can be a physical painting, something that you’re, you know, you hold tangibly. And all that is doing is recording on top of blockchains.
You know, Josh bought this NFT on this date. He owns this, you are linked, and you have that permanent immutable public record of like, “Yeah, this is mine.” Like that can’t be destroyed or it can’t be taken away from. And that can be transferred to any number of different areas. You know, if you purchase a home, having it as an NFT is, you know, it’s an interesting proposition as far as insuring it, as far as, transferring ownership like a deed almost, or if you do repairs or if you have an addition on the house, like all of that can become encoded into that ownership.
Circling back to NFTs, as we’re seeing them now, where you have all sorts of artists issuing NFTs, they’re able to realize the returns on future resales of these items. And that’s a really, really important actualization of the relationship between the artists and their art, where we talk about the trope of the struggling artist with NFTs, you can digitally enable royalties to be transacted back to the artist on every single resale.
And so you could see returns from an art piece that you’ve created in perpetuity and that is empowering in a way that I don’t think we’ve ever seen before in the art world.
Josh Burek: And arguably not just royalties, like musicians get, but a recurring equity stake, where they’re capturing returns from the collector’s market, from the secondary market, where most of the returns today go to collectors and not creators.
Kate, I would be remiss if I didn’t mention that you have a new podcast, Crypto Study Hall, and one of the really fascinating themes that you’re going to be an are exploring in this podcast is the connection between crypto and social justice. This is a big idea, and I know it’s early innings for you with this podcast, but how do you see this nexus of social justice and digital assets?
Kate Goldman: Every day I’m talking about the democratization of finance, and that is like the core underpinning ethos of crypto is giving people access to money or to an investment tool or to a currency in a way that is radically different from how it is ever looked before.
We were talking about, you’re not beholden to the bank to give you a loan. You’re not beholden to whomever to receive this investment opportunity. You’re able to literally access if you have just a dollar you could invest just a singular dollar and take part in this ecosystem. And that inclusivity allows, young people, people of color, people who have been historically shut out from incumbents to invest in realized gains on their very own terms. There is no gatekeeper from this form of wealth building.
And then more specifically, there are key applications of crypto that have very powerful opportunities as far as, you know, social justice. And when you think about this in the traditional sense, I don’t think people traditionally think of financial empowerment and social justice in just the same way. But when you take for example, someone who is escaping a domestic violence situation, using crypto is a really powerful tool for them to have money that is separate from, maybe their abuser is either, you know, holding the finances captive or they’re paying attention to the banking accounts. Like they’re running the bank between the two of them and being able to have crypto where you can move your own money in a way that is a little bit more discreet than if you were operating through a shared bank account.
That is a wonderful and incredible opportunity to empower folks to leave violent situations and they can be sent money. Additionally, not just spending their money, but be sent money in a way that is slightly out of the purview or the view of the situation where they’re trying to leave. And all of these different applications will emerge.
And there’s really, really powerful social justice advocates talking about and exploring this space. It’s a fascinating joining of the financial ecosystem that crypto is operating in, I guess like the tech scene and people who are working in nonprofits, people who are working for #metoo, or all of those different organizations are able to see what crypto can do for each other’s respective goals and orientations. And all of that is really exciting and compelling and Kirsten my co-host on the podcast, we just want to learn more and explore and just continue to talk about all of the really exceptional ways that crypto can be utilized.
Especially the more non-traditional ones are the ones that don’t get as much coverage in the media, we want to amplify and think about and talk about all of that. So I appreciate you calling out the podcast from one podcaster to me, a brand-new podcaster, yeah, it’s a blast.
Josh Burek: Well, I’m so glad you are tackling these themes. You said a few minutes ago, Kate, when talking about banks and mortgages that traditionally a homeowner is really deeply beholden to the bank and that comes with all kinds of implications socially, financially, and I kept thinking about that word beholden, as you were talking about crypto and what it could mean for financial empowerment.
And I guess the counterpoint, right, here that the positive social implication is restoring a deep sense of agency to people who, for generations have been beholden to traditional power centers and how freeing that can be as they think about building living standards, building prosperity, without being beholden to those old networks.
So I salute what you’re doing. I can’t thank you enough for your insight during this episode. You’ve covered a lot of ground at both the 30,000 foot level and in the trenches. So Kate Goldman, I’m in your debt. Thank you. Look forward to continuing the conversation.
Kate Goldman: Absolutely. Thank you so much for having me on today. This is a blast.