A manager at a $6 billion quant fund gives the best intro to cryptocurrencies we've heard

A manager at a $6 billion quant fund gives the best intro to cryptocurrencies we've heard



Patrick O'Shaughnessy, O'Shaughnessy Asset Management.

Patrick O'Shaughnessy vividly recalls the first week he was introduced to the world of cryptocurrencies.

O'Shaughnessy, a manager at his family's $6 billion quant asset manager of the same name, was chatting with one of his analysts over lunch at the beginning of this year about what they did over the weekend.

"He told me he bought a bunch of cryptocurrencies: ether, bitcoin, and litecoin," O'Shaughnessy told Business Insider. "And I was like what the hell is a cryptocurrency."

He figured if one of his guys was spending time on "this stuff," then he'd have to learn more. Serendipitously, the next day O'Shaughnessy got an email from Matthew Goetz, a former vice president at Goldman Sachs, who wanted to connect with O'Shaughnessy to tell him about the cryptocurrency hedge fund he was looking to start with Ari Paul, formerly of Susquehanna, a quantitative trading firm.


Today, that hedge fund is BlockTower Capital.

That weekend, O'Shaughnessy met up with Paul in Chicago to talk crypto. The conversation, which was 95% Paul answering O'Shaughnessy's litany of questions, triggered his journey into the world of cryptocurrencies.

That journey, which O'Shaughnessy says is still ongoing, produced one of the best introductions to blockchain that this reporter has ever come across: Hash Power.

The audio documentary, which was a collaborative effort between O'Shaughnessy and the gang at BlockTower, is meant for newcomers but it's weighty with interviews and insights from top leaders in the field, including Fred Ehrsam, the cofounder of Coinbase, and a slew of crypto-investors.

The first episode of the audio documentary is a high-level look at the technology underpinning bitcoin and other cryptocurrencies: blockchain. It starts with a definition by Jeremiah Lowin, who likens it to a database.


"This is a database. What's special about it is it's distributed. It's all across the world. It's hosted by many, many different computers in this sort of peer-to-peer framework. So there is no one central server running this and critically there is no one person who has control of it. So we have this distributed decentralized global database. So what? Why is that interesting? The original bitcoin paper produces a way to let people trust the content of this database even though they don't know who all the people around the world who are writing into it."

The episode is further guided by Naval Ravikant, CEO of Angelist, Peter Jubber of Fidelity, and Olaf Carlson-Wee, the first employee of Coinbase, and others. Have a listen:

 The next two episodes will cover the following:

  1. Investing in cryptocurrencies.
  2. New projects in the field.

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