Speaker 1: Delauded. I'm Robert Evans. This is Behind the Bastards, a
Speaker 1: podcast that has always opened by me shouting out the
Speaker 1: name of my favorite painkiller, Delatted. Oh it's good stuff.
Speaker 1: Because I'm hopeful because Sophia just got mailed a bunch
Speaker 1: of knives by our fans, and now I'm kind of
Speaker 1: hoping that some fans will send me a bunch of
Speaker 1: Delatted anonymously in the mail. Can we also say that
Speaker 1: Mama loves Darva st Darvasset Dad's the good ship. Yeah,
Speaker 1: that I And honestly, I can't think of a better
Speaker 1: idea during a time in which a lot of people
Speaker 1: are dying from fitneal overdoses and tainted pills than asking
Speaker 1: strangers to send us random medication in the mail. That's
Speaker 1: just good thinking again. Podcast Daddy and Podcast Mama love
Speaker 1: to gamble. Everyone knows we like to roll them bones. Baby.
Speaker 1: I got a coffee cup and eat the rich coffee cup.
Speaker 1: It's actually sitting next to me right now from a
Speaker 1: fan recently. But it came in packaging that I've never
Speaker 1: seen the packaging made since in retrospect. But it was
Speaker 1: like a rounded a box with rounded edges made entirely
Speaker 1: out of styrofoam that was like taped up and had
Speaker 1: very official looking labels on it, and it looked like
Speaker 1: the packaging you'd put in through like a vial of
Speaker 1: of medication or like like bacterial samples or something. So
Speaker 1: I was looking at this package like should I open this?
Speaker 1: What the fun is in this thing? And it just
Speaker 1: these knives. I was like, Oh, this could really be
Speaker 1: a terrible package to open. Most of these did not
Speaker 1: have names on them, and I respect that because you know,
Speaker 1: the government doesn't need to know what we sended to
Speaker 1: each other. Anonymously send your favorite Creators weapons in the mail.
Speaker 1: That's these knives were amazing. I just did a little
Speaker 1: tour of the knives. Robert, there's that amazing US Marine
Speaker 1: corpninek bar. Yeah, that's a good knife. You can ship
Speaker 1: up with a k bar. That's the kind of knife
Speaker 1: if you get to like jab your way outside of
Speaker 1: a car, nice as leather holster, Like, yes, I love it,
Speaker 1: Thank you so much. Someone sent a tiny miniature knife
Speaker 1: for like a little baby knife for sting babies having
Speaker 1: little little fetuses. Yeah, take it from a fetus knife
Speaker 1: and loves it. Yeah, that's a kind of knife that
Speaker 1: like like babies young enough to be legally aborted in
Speaker 1: the state of Texas would use in a knife fight, yes,
Speaker 1: to try to fight the people that will not give
Speaker 1: their mothers rights. Yeah, yeah, I got too loose knives
Speaker 1: that came with a collection of other things, like a
Speaker 1: bag of mazza and you know, yeah that was weird.
Speaker 1: I love that guy. Yeah, so just like some some
Speaker 1: maniac in a Midwestern states sent you a sack with
Speaker 1: loose knives, mazza, a cigarette. It was incredible. Hey, it
Speaker 1: was multiple notes. Yeah, it was a sweet and told
Speaker 1: me to take care of myself and my friends and
Speaker 1: family with these loose knives. And now that is the
Speaker 1: name of honestly my new band, Loose Knives. When you
Speaker 1: walked me through that us through that package, that is
Speaker 1: the proudest I've ever been of my fans. That was
Speaker 1: that was an incredible way to send a gift to somebody.
Speaker 1: Just loose knives with a cigarette in a sack, one
Speaker 1: rolling paper and a single matches Yes, matches please, thank you.
Speaker 1: What a hero. Someone sent me lavender bath products along
Speaker 1: with a tiny knife that goes on my keychain. Someone
Speaker 1: else sent me and like a key that I can
Speaker 1: sneak into an airport and specifically said this doesn't this
Speaker 1: isn't visible on X rays. God, that's some queen ship. God,
Speaker 1: thank you. That's you know, having when people when people
Speaker 1: send you stuff like that in the mail and just like,
Speaker 1: here's how you can smuggle a knife on an airplane.
Speaker 1: Stranger that whose content? I like, that lets me know
Speaker 1: that we're reaching the right demographic scene, you know, absolutely
Speaker 1: absolutely beautiful. I was telling Robbert before this, I was like, Yeah,
Speaker 1: I used to fly with a knife in my purse
Speaker 1: all the time on airplanes, and not because I was
Speaker 1: like trying to prove a point or anything. I just
Speaker 1: always carry a knife and I would forget to take
Speaker 1: it out before I flew and they never got it.
Speaker 1: It took me like fifteen times of flying before finally
Speaker 1: someone was like, is that a knife? And I was like, oh,
Speaker 1: shit is and then I lost it. But now I
Speaker 1: have a k bar, So fuck them and make sure
Speaker 1: you check the k bar. They will probably find that
Speaker 1: I won't fly with that one. That's just for local stabbings. Okay,
Speaker 1: that's for locals. That's good. Yeah, you need to have
Speaker 1: you need to have like like not every knife is
Speaker 1: suitable for stabbing people in every situation. Like if you're
Speaker 1: going to shank somebody in an airport bathroom, that's past
Speaker 1: security want the knife exactly exactly. But at k bar,
Speaker 1: you know, it's it's it's for a different thing. It's
Speaker 1: a different kind of vibe, it's a different kind of
Speaker 1: you know, stabbing. The k Bar is the knife that
Speaker 1: like if you have to uh in in the style
Speaker 1: of a parable of the sower, hike on foot from
Speaker 1: southern California to Oregon in order to save yourself during
Speaker 1: the climate apocalypse and crash in my compound, that's the
Speaker 1: knife you take with you to stab people on the road.
Speaker 1: I was thinking more of like Cheryl straight strads like
Speaker 1: wild you know, like I'm on the doing the Appalachian Trail.
Speaker 1: You know, maybe I stabbed something to eat. Maybe I
Speaker 1: stab a man who wants to get in this pussy.
Speaker 1: You know, you never know what happens, and you can
Speaker 1: eat him too, you know, you think I would stab
Speaker 1: a man without eating him. Robert the part first while
Speaker 1: it's still beating. Everyone knows that that's how you and
Speaker 1: then we slice up as butt cheek meat. That's the
Speaker 1: best meat into some steak tartar human cheek because like
Speaker 1: beef cheek is delicious. I imagine people's cheeks would be
Speaker 1: pretty good too. Um. I don't think they have as
Speaker 1: much like fatty loveliness, but probably they're not bad. Yeah,
Speaker 1: they're probably probably like you know, when you eat like
Speaker 1: a fish head and you get like all the parts
Speaker 1: out of the head and they're like delicious. I mean,
Speaker 1: we should probably ask one of our fans to just
Speaker 1: send please do please send us, Sophie, come on, you should.
Speaker 1: You should talk about doing even you said cut what
Speaker 1: Robert just said for safety reasons. So Robert, we're already
Speaker 1: getting sent knives that you vary more we are could
Speaker 1: be used in a nine eleven, and I feel like
Speaker 1: you could do with some of these. Say sure, that's
Speaker 1: enough for us. We don't need to encourage. You're right,
Speaker 1: we can get our own exactly. That's what the knives
Speaker 1: are for. And in the meantime, my k bars for
Speaker 1: like local stabbings, like your farm to table kind of
Speaker 1: farm to table stabbing, yeah, and then the other kind
Speaker 1: of stabbings that are like more, oh, you gotta travel
Speaker 1: to stab who you want. That's what my little airplane
Speaker 1: knife is for that's good. None of this has anything
Speaker 1: to do with what we're talking about today, which is cryptocurrency. Cool. So, Sophia,
Speaker 1: I never planned to do an episode on n f
Speaker 1: T s or cryptocurrency, UM, because I think it's all
Speaker 1: very silly. I am. I'm not a believer in any
Speaker 1: of this stuff. But over the last couple of weeks,
Speaker 1: in spite of myself, I've I've gone down a rabbit
Speaker 1: hole specifically inspired by some n f T scams that
Speaker 1: have recently come to light that I just found absolutely fascinating. Um.
Speaker 1: This is not going to be an episode about a
Speaker 1: specific bastard, and to be honest, even like the victims
Speaker 1: here are not people who really feel that bad for
Speaker 1: UM because they're gambling with money that only exists because
Speaker 1: it destroys rainforests. Basically like it's like cryptos. I think
Speaker 1: mostly bad, UM. But this show primarily functions by me
Speaker 1: getting interested in something and then reading about it. And
Speaker 1: this week I didn't want to read about Peter teal
Speaker 1: or or some sort of genocide Cichesco or whatever. UM.
Speaker 1: I wanted to read about cryptocurrency, so I did UM
Speaker 1: and the person you can blame this episode on. Is
Speaker 1: David Garrard or David Girard, who wrote a book called
Speaker 1: Attack of the fifty Foot Blockchain. UM. David is a
Speaker 1: senior Wikipedia editor. He's volunteered spokesperson for Wikipedia. He's also
Speaker 1: an author and a crypto expert who is a no coiner,
Speaker 1: which is somebody who doesn't is involved in the cryptocurrency world,
Speaker 1: often reporting on it, but does not actually hold any himself.
Speaker 1: And he doesn't hold any because he seems to pretty
Speaker 1: much think it's all bullshit. UM. He is widely despised
Speaker 1: in the cryptocurrency community, but as far as I can tell,
Speaker 1: he is very knowledgeable UM, and he's a good writer.
Speaker 1: I recommend the book heavily. UM. He's also pro some
Speaker 1: of the fundamental ideas that are behind cryptocurrency, which I
Speaker 1: actually kind of am as well. At the beginning of
Speaker 1: his book, he cites a quote from Bitcoin creator Satoshi
Speaker 1: Nakamoto's original manifesto or white paper, whatever you wanna call it,
Speaker 1: laying out Nakamoto's basic goal of the Bitcoin project. Quote,
Speaker 1: a purely peer to peer version of electronic cash would
Speaker 1: allow online payments to be sent directly from one party
Speaker 1: to another. Without going through a financial institution, so you
Speaker 1: can see, like, right, just that basically if you take
Speaker 1: out everything that's happened since if someone were to like
Speaker 1: tell you that idea, you know back in two that's
Speaker 1: five or whatever. Hey, this is what I want to make.
Speaker 1: That's not unreasonable, right, Like maybe that's just the libertarian
Speaker 1: in me, but like I get why you would want
Speaker 1: that real quick. We did not do an intro, did we?
Speaker 1: Why would we do an intro? We didn't intro. We
Speaker 1: talked about knives. I just wanted to make sure Sophie's
Speaker 1: faces were all converted. Everyone knows who you are, Sophia Alexandra.
Speaker 1: Normally we talk about horrible, dead baby things, but this
Speaker 1: week we started by talking about knives and cryptocurrency. Yeah,
Speaker 1: and then you said, I look, you lured me here
Speaker 1: under false pretenses. Um, I thought there would be dead babies. Instead,
Speaker 1: you were like, we're talking about n f T s
Speaker 1: and I'm like, oh, no, titties, how about this? You
Speaker 1: were like, that's not what n f T stands for.
Speaker 1: Cryptocurrency is incredibly environmentally wasteful. Every individual popular cryptocurrency uses
Speaker 1: more electricity and im it's more carbon per year than
Speaker 1: many nations. That leads to horrific climate change, which kills
Speaker 1: a shipload of babies. Tens of millions of babies are
Speaker 1: going to die. Additionally, every year is the world were
Speaker 1: warms and you feel better, Sofia, I guarantee there are
Speaker 1: mountains of babies being killed by this, mountains of them.
Speaker 1: I don't believe it, Sofia, I I will, I will
Speaker 1: for the for the next year. Every time there's a
Speaker 1: horrible natural disaster that affects babies, I'm gonna send you
Speaker 1: a picture. I'm gonna go to tiny baby hurricane. Yeah,
Speaker 1: a little baby hurricane. Hurricanes that just affect in I
Speaker 1: see you warts. Oh, we're nick you all with tiny's.
Speaker 1: We've scotten all the incubators, tropical storm, widow, bitty baby. Yeah.
Speaker 1: I don't think anyone's sending me knives after this, No, Sophia,
Speaker 1: But like so okay, cryptocurrency the basic idea like that
Speaker 1: Nakamoto was going for behind bitcoin, that's doesn't sound entirely
Speaker 1: unreasonable to me. A way for people to send electronic
Speaker 1: money directly without using a bank or without like you know,
Speaker 1: involving a government, right Like I don't have a fun
Speaker 1: the mental issue with that idea. In fact, I think
Speaker 1: there's there's reasons for which it could be value valuable.
Speaker 1: Now I'm it was a libertarian most of my life.
Speaker 1: I'm kind of more on the anarchistic spectrum now um,
Speaker 1: and I don't really like large, powerful, centralized institutions. So yeah,
Speaker 1: so you could see like if someone were to again,
Speaker 1: if bitcoin wasn't a thing of all of the ship
Speaker 1: that's happened, wasn't a thing someone said, Hey, I'm working
Speaker 1: on this idea, you might have thought like, oh, that
Speaker 1: that sounds like a neat experiment to dry, it's worth
Speaker 1: giving a shot. Um. One of the other things that
Speaker 1: Nakamoto was talking about that a lot of early people
Speaker 1: who were into cryptocurrency talked about was the promise that
Speaker 1: it would provide an option for people who are unbanked,
Speaker 1: which is folks who for a variety of reasons, maybe
Speaker 1: their location, the nation that they live in, you know,
Speaker 1: the level of poverty that they have, whatever, and maybe
Speaker 1: the fact that, like there's a lot of people in
Speaker 1: places like India who don't legally exist because they were
Speaker 1: you know, of where they were born. There's just nobody
Speaker 1: like keeping track of people there. Um, Like their identities
Speaker 1: often like tied up in the community that they live
Speaker 1: in rather than like a bunch of government documents. Um.
Speaker 1: So a lot of these people aren't going to be
Speaker 1: able to have an account with a financial institution. So
Speaker 1: one of the ideas was that, well, if you have
Speaker 1: some sort of electronic currency that doesn't rely on a
Speaker 1: government or a financial institution, it would provide an option
Speaker 1: for those people. Um, and specifically an option to do
Speaker 1: like micro transactions, so like sending small bits of money,
Speaker 1: you know, from one place to the other. Um. None
Speaker 1: of this has wound up happening. Cryptocurrency does none of
Speaker 1: this Like absolutely not. Well I was going to say
Speaker 1: that's the thing is if that's what it was, that
Speaker 1: would be tight. That's not what it is. And um,
Speaker 1: it's kind of like when I read about that ship
Speaker 1: that was like an independent nation and you can buy
Speaker 1: your like thing on it with crypto and then it's like, oh,
Speaker 1: we didn't realize how hard it is. It's actually very
Speaker 1: hard to do this savership and a government and uh infrastructure,
Speaker 1: but you're in ownership. Oh fuck. So yeah, the idea
Speaker 1: like sure, that's cool, but you did not think through
Speaker 1: anything like eating or shipping for the laws of the
Speaker 1: sea or what it takes to actually operate a boat
Speaker 1: of that size. So I actually really like that you
Speaker 1: brought that up, and the story for people who aren't aware,
Speaker 1: there's actually a good article about it. Um a bunch
Speaker 1: of like libertarian crypto nerds bought a cruise ship at
Speaker 1: the start of the pandemic um and sailed it off
Speaker 1: the coast of Panama in an attempt to create an
Speaker 1: independent nation there. And we're basically like selling bunks on
Speaker 1: the ship. And the idea was that would be like
Speaker 1: a perfectly free country. But for one thing, you can't
Speaker 1: be perfectly free living in a tiny room on a
Speaker 1: cruise ship. Like people weren't even allowed to have like
Speaker 1: microwaves in their room. They didn't have their own kitchens.
Speaker 1: They were alliant top Like if just there would have
Speaker 1: been a to be able to do this in a
Speaker 1: way that is safe. So you be like, okay, we
Speaker 1: have to be safe. They're like, you can't have a
Speaker 1: micro raven whatever, which is like hilarious when you're like,
Speaker 1: this is the freeest you'll ever be for you can
Speaker 1: never cook again, and to freedom, Like I love the
Speaker 1: movie Pirate Radio. UM I think that's one about those
Speaker 1: people who live on that boat that do a pirate.
Speaker 1: That's my dream. I would love to live on a
Speaker 1: big boat with like twenty something of my friends and
Speaker 1: run illegal media stations. That sounds like the coolest thing
Speaker 1: you could possibly do. Everybody has British accents and everybody's
Speaker 1: very British. It sounds it would be rad as hell.
Speaker 1: But obviously, um the idea. Anyway, what's the reason I
Speaker 1: think that it's good that you brought this up is
Speaker 1: that it's a perfect example of what has happened with
Speaker 1: a lot of cryptocurrency. We'll talk about this a little
Speaker 1: more in a bit, but like all of these people
Speaker 1: are good at one thing and it makes them think
Speaker 1: they're good at a bunch of other things, or at
Speaker 1: least they could figure it out. Like these crypto nerds
Speaker 1: were like really good at making a bunch of money
Speaker 1: in cryptocurren In other ways, like a lot of them
Speaker 1: were business owners. You know, They're the kind libertarians who
Speaker 1: did have a skill. They made their money doing something, um,
Speaker 1: and they were convinced use that like, well, how hard
Speaker 1: could it be to like operate a cruise ship or
Speaker 1: just I'll be able to hire somebody to operated how
Speaker 1: complicated could the laws be? And it's like, well, it's
Speaker 1: a nightmare. And it's the same thing with crypto people
Speaker 1: of someone that decorates their house nicely and it's like,
Speaker 1: let's just flip houses. And then they're like, oh no, yeah,
Speaker 1: not understand how to do that. I just know how
Speaker 1: to buy ship off of Wayfair and my bad and
Speaker 1: should not have tried to be an hd TV person
Speaker 1: you've seen. I've seen a lot of the same thing
Speaker 1: in like the pot industry because I was I was
Speaker 1: living in and around pot farms during the height of
Speaker 1: the marijuana gold rush in California. A lot of people
Speaker 1: who like would get in and try to start farms
Speaker 1: whould like made a bunch of money doing something else,
Speaker 1: something in business or whatever, like in the tech industry,
Speaker 1: and like, well, now I'm just gonna like I'm gonna
Speaker 1: be a pot farmer. And I didn't realize that, like
Speaker 1: because they've grown like a couple of plants in their
Speaker 1: house or something in it Like it's like no, no, no.
Speaker 1: Actual pot farming is one of the hardest things you
Speaker 1: can possibly do um and it it necessitates very close
Speaker 1: contact with incredibly date coustic. Even if you're like organically
Speaker 1: using pesticides, you're basically spraying sulfur in amounts that you
Speaker 1: have to wear like a fucking tip exit Like it's
Speaker 1: it's hard. And all these people like crashed and burned
Speaker 1: because they had no fucking clue what they were doing
Speaker 1: and they couldn't physically handle the demands of running a
Speaker 1: farm because farming is hard. It's like a lot of
Speaker 1: these people love to think it is easy from the outside. Yeah,
Speaker 1: it's it's a human problem. It's not just a crypto problem. No,
Speaker 1: everybody thinks something that you don't know shit about from
Speaker 1: the side, or like this ship is easy. The utopian
Speaker 1: kind of socialist and anarchist communities that I have a
Speaker 1: lot of you know, love for, but like a lot
Speaker 1: of people who were like city kids talking about their
Speaker 1: dream of like buying land and operating a farm, and
Speaker 1: like I'm farming about an acre right now, um, and
Speaker 1: I'm not. I the people who are engaged in the
Speaker 1: project with me have been doing it a lot longer,
Speaker 1: and I'm much better it than I am. And even
Speaker 1: the little bit that I'm doing is like this shipload
Speaker 1: of work, and that's like a little bit of land,
Speaker 1: not even trying to be fully self sufficient, like it's
Speaker 1: all it's this thing people do is like I don't
Speaker 1: I I think that this thing sounds fun. How hard
Speaker 1: could it possibly be? Oh no, it's a problem. Um.
Speaker 1: The issue is that, like same with a homemaker problem.
Speaker 1: It's like the idea these you know, a lot of
Speaker 1: these men have been like, oh, well, like all you
Speaker 1: do is fucking stay at home and take care of
Speaker 1: the kids in the house. How hard could this be?
Speaker 1: And then like you know, COVID happened and they had
Speaker 1: to do it for a little bit and they were like,
Speaker 1: oh my god, what you do as hell? And it's like, yeah, bitch,
Speaker 1: everybody's job is hard. I don't know what you think
Speaker 1: an easy job is? Just being rich? I would say,
Speaker 1: like being I think I could be a CEO of
Speaker 1: literally any company and do just lot a job. That's
Speaker 1: like no, that's like, uh, like what the royalty is
Speaker 1: in Britain. You know, yeah, I could Queen of England.
Speaker 1: You know. Yeah, I could be a pretty good pope too,
Speaker 1: I think. But yeah, anyway, you be the pope and
Speaker 1: I'll be the queen. Absolutely, we can finally destroy the
Speaker 1: Church of England can't. So the issue here, like this
Speaker 1: is the thing we all do underestimate how difficult things
Speaker 1: that we don't have experience with our um It's done
Speaker 1: in Krueger stuff and like, for example, if you and
Speaker 1: your friends buy five acres of land and realized farming
Speaker 1: is much harder, you have two options. Either you give
Speaker 1: up or you actually get better after a while. I
Speaker 1: didn't eventually figured out either way. The worst case scenario
Speaker 1: is like, oh, I made a mistake, and this is
Speaker 1: harder than I thought it was. If what you're trying
Speaker 1: to do is completely recreate a financi shull system, the
Speaker 1: mistakes you make will be things like, oh, I've been
Speaker 1: illegally selling unlicensed securities. Oh, I've been illegally operating as
Speaker 1: a money transmitting like organization without any of the proper paperwork.
Speaker 1: And now I found out that I've actually been committing
Speaker 1: numerous felonies. Oh, what I've been doing for years is
Speaker 1: actually embezzlement. And I was unaware because I don't understand
Speaker 1: any of these financial regulations, and I just thought it
Speaker 1: was easy to to to recreate all this. I thought
Speaker 1: that because it was cryptocurrency, there's no laws around it,
Speaker 1: and actually it's all still regulated the same way the
Speaker 1: rest of the economy is UM and I've been committing
Speaker 1: numerous crimes, which is why a lot of these guys
Speaker 1: go to jail. UM. A lot of the big crypto
Speaker 1: dudes UM either go to jail or flee the country
Speaker 1: because they either learn or yeah, anyway, this is what
Speaker 1: we're talking about here. UM. So at the moment, at best,
Speaker 1: bitcoin is an extremely volatile speculative commodity that uses an
Speaker 1: ungodly amount of electricity and it is a huge pain
Speaker 1: in the ask for most people to use. It is
Speaker 1: not freed any individuals from alliance on centralized bank type businesses.
Speaker 1: In fact, part one of the things that everyone gets
Speaker 1: excited about is like bitcoin's dollar value, you know, shoots
Speaker 1: up regularly to a high level. But like you're still excited,
Speaker 1: Like it's worth a lot of US dollars right, Like
Speaker 1: it's it's a money making scheme to get people rich
Speaker 1: in actual currency, and the people I know who are
Speaker 1: smart in crypto have done that. I have a friend
Speaker 1: who when bitcoin was like five hundred bucks of bitcoin,
Speaker 1: he was moving to Europe and he put a lot
Speaker 1: of his money into bitcoin, with the idea that like,
Speaker 1: well I'll move to Europe and I'll sell it for
Speaker 1: euros and I'll avoid a lot of transfer fees for
Speaker 1: doing that. Um. And he just kept some of it
Speaker 1: in there as the price shot up and he did
Speaker 1: very well. But his goal was always like, well, I
Speaker 1: don't I think this isn't like you know, a gamble,
Speaker 1: right like, and he's someone who enjoys gambling, and that's fine,
Speaker 1: Like if if you want to gamble. I don't have
Speaker 1: an issue with gambling obviously, like we do we sell
Speaker 1: sports betting and stuff. I have no moral problem with gambling. Um.
Speaker 1: But it's not a function currency in any meaningful way.
Speaker 1: It just isn't. It's um again at best, like a
Speaker 1: very volatile kind of investment type thing. UM. Also, I
Speaker 1: gotta say, with like the environmental footprint that all of
Speaker 1: us are making every day, that's just so fucked up.
Speaker 1: And with corporations not giving a ship and not changing anything,
Speaker 1: and the government not giving a ship and not changing anything,
Speaker 1: it's like, I mean, I understand trying to make money,
Speaker 1: but I just feel like making money from a thing
Speaker 1: that you know, destroys the environment is like another level
Speaker 1: of like making you feel bad, and it's like, yeah,
Speaker 1: all late stage capitalism makes you feel bad and participating
Speaker 1: in it. But if you know that there's no value
Speaker 1: to what you're putting money into, and the thing they're
Speaker 1: putting your money into is just made up so that
Speaker 1: people could make money, and then while it's made up,
Speaker 1: it's just making the environment worse. Just feeling is one
Speaker 1: of the things about it. I think if when you
Speaker 1: first got into it, especially if you got into it
Speaker 1: when it was not worth much, the environmental cost wasn't much,
Speaker 1: it hasn't always been as bad at So the way
Speaker 1: that bitcoin works, right, the thing that gives its scarcity
Speaker 1: um like when you're mining it. When you're doing it
Speaker 1: like is you're basically it. Computers mine it by having
Speaker 1: to do a bunch of calculations. It's called proof of work, right,
Speaker 1: And and the longer time goes on in order to
Speaker 1: keep the thing at a steady rate, while processing power increases,
Speaker 1: the calculations get harder. So at the beginning, very little
Speaker 1: power comparatively was used to mind bitcoin, but it just
Speaker 1: it gets hard, like the the math the computers have
Speaker 1: to do gets harder and harder and harder over time,
Speaker 1: and that increases the amount of electricity that bitcoin like requires,
Speaker 1: And I don't think a lot of people thought about
Speaker 1: it at the time, especially since, as we'll cover, this
Speaker 1: was just kind of like one of a at the start,
Speaker 1: was one of a couple of different crypto things people
Speaker 1: had tried and like in two thousand ten. And I
Speaker 1: don't think anyone could have guessed that bitcoin would eventually
Speaker 1: be drawing more power than dozens of nations like it,
Speaker 1: just because it didn't start that way. It was kind
Speaker 1: of like and when Satoshi Nakamoto created it, it was
Speaker 1: like an experiment, like I don't even think in his
Speaker 1: mind it was going to be the final product, the
Speaker 1: actual cryptocurrency he wanted to create. It was like, let's
Speaker 1: see if this works and then maybe iterate. Do you
Speaker 1: think do you think that like the idea that it
Speaker 1: could possibly become that was even something that people thought
Speaker 1: through all the way. I don't think so, because there's
Speaker 1: a number of things that are really really like the
Speaker 1: atom bomb, were like you didn't know that that's what
Speaker 1: gonna was going to happen, but then it did and
Speaker 1: it was fucked. Yeah, there's a bunch of things they
Speaker 1: would have done differently like Nakamoto and the like. The
Speaker 1: people who were kind of like getting it off the ground,
Speaker 1: I think would have done differently if they've known how
Speaker 1: successful it would be. For one thing, one of the
Speaker 1: reasons bitcoin like can't work as a global currency is
Speaker 1: that there is a hard cap on the number of
Speaker 1: trans actions worldwide that can ever occur. There can never
Speaker 1: be more at present than seven Bitcoin transactions per second
Speaker 1: planet wide, which doesn't work. It's a it's math ship,
Speaker 1: like I I don't understand the math, but that's the
Speaker 1: way it works. And people have proposed different ideas for
Speaker 1: like expanding the number of of bitcoin transactions that can
Speaker 1: that can happen. There's kind of like ways to basically
Speaker 1: change the code at a fundamental level, but it hasn't
Speaker 1: been done. And this handicap means that as bitcoin has
Speaker 1: gotten more popular, it has gotten more expensive just to
Speaker 1: make a transaction. So you have to pay because it
Speaker 1: takes like power and stuff in order to like even
Speaker 1: start a transaction, and you never entirely know when the
Speaker 1: transaction is going to happen. About twenty of them just
Speaker 1: get like canceled because there's this massive like blockage in
Speaker 1: terms of actually getting because you have to you have
Speaker 1: to actually like enter transactions onto the blockchain, right. That's
Speaker 1: the whole thing about bitcoin is it's on this thing
Speaker 1: called the blockchain, which is this persistent record of every
Speaker 1: bitcoin transaction, and only so many transactions can get written
Speaker 1: to the blockchain at a given point in time, so
Speaker 1: it's about seven a second right now, um, which makes
Speaker 1: it a huge Like you can't one of the people
Speaker 1: talk about bitcoin being used for drugs, and it is,
Speaker 1: it has been on like the Silk Road and stuff,
Speaker 1: but it's actually like it's it's a thing where individuals
Speaker 1: will like buy amounts of drugs with it, but drug dealers,
Speaker 1: like big name people like hate would never enjoy it,
Speaker 1: like use bitcoin for this because you don't know that
Speaker 1: the transaction is going to go through. You don't know
Speaker 1: when it's going to go through. So wait, let me
Speaker 1: ask you this is it just like if there's uh,
Speaker 1: it's like trying to get tickets to like hot show
Speaker 1: or something into ticket Master or whatever the funk, and
Speaker 1: there's like a lot of real yeah yeah, it's you
Speaker 1: get it in that exact moment, you get your thing,
Speaker 1: and if you don't, like, you don't yeah, yeah, it's
Speaker 1: kind of like that. It's very and again this is
Speaker 1: because number one, when it was invented, I don't think
Speaker 1: Nakamoto had any idea that it would ever be this popular,
Speaker 1: and it was not. They hadn't thought all this out right,
Speaker 1: because it's a new thing. And the problem is that
Speaker 1: you have any time you invent a new thing, that
Speaker 1: you think, what's the least that could happen with it?
Speaker 1: And what's the most that can happen with it? Do
Speaker 1: you think so? I don't think necessarily you do if
Speaker 1: you're the kind of person who just thinks this stuff
Speaker 1: is neat, like if you're the kind of math, brain
Speaker 1: engineer type person who just enjoys the intellectual problem of
Speaker 1: a cryptocurrency. He thought through a lot. There's things about
Speaker 1: bitcoin that are very smart. There is a reason it's
Speaker 1: been as successful as it is and is used as
Speaker 1: widely as it is. There's a reason why of all
Speaker 1: of the different cryptocurrency projects that have existed over the years,
Speaker 1: bitcoin is the biggest one. There were things that he
Speaker 1: did right, but it's also like a guy trying to
Speaker 1: dream up basically a whole new economic system. It was
Speaker 1: always going to be incomplete and like, but I guess, Like,
Speaker 1: I mean, it's like any kind of and forgive me
Speaker 1: for making this a science fiction comparison, but it's like
Speaker 1: any science fiction thing right where it's like, oh, it
Speaker 1: starts off real good, but like you've got to think about,
Speaker 1: like right, like all the best things that could happen
Speaker 1: and the worst things that could happen. So I feel
Speaker 1: like a lot of times, um, I don't know if
Speaker 1: I buy that these like hyper smart people didn't think
Speaker 1: about what could happen, because I just think that they
Speaker 1: did and they were like, oh, whatever, we'll worry about
Speaker 1: it later. Yeah, I mean maybe I don't know. And
Speaker 1: I'm not trying to say that in like a negative way.
Speaker 1: I'm just trying to think, like maybe the excitement of
Speaker 1: inventing this thing makes it so that even if you
Speaker 1: consider what the possibility of the end game is, you're
Speaker 1: just like, oh, I don't care because this is so exciting. Yeah.
Speaker 1: I think that's a big part of it. I think
Speaker 1: it's it's nerds being excited about a thing. It's like
Speaker 1: all of social media, it's kind of the same thing,
Speaker 1: where like they no one thought through what might happen
Speaker 1: because they were so excited about like, oh, can we
Speaker 1: make this work? Um? And can we get people interested
Speaker 1: in this thing? And that was a more important question
Speaker 1: than like, hey do we do we think we might
Speaker 1: need to be able to do more than seven transactions
Speaker 1: a second worldwide for this thing? Hey what if it
Speaker 1: winds up using more power than multiple entire nation's worth
Speaker 1: of people, um and and burning down rainforest in order
Speaker 1: to exist? Like and again it's also bitcoin get started
Speaker 1: in two thousand nine, right, Like the technology is in
Speaker 1: such a different place then that I don't think they
Speaker 1: don't think they necessarily thought, oh, dozens of different like
Speaker 1: Chinese corporations are going to buy massive mining rigs that
Speaker 1: are powered by coal plants in order to like mine
Speaker 1: more bitcoin. It was like it's it's a guy on
Speaker 1: a project in two thousand nine. You can't that's a lot.
Speaker 1: That's a lot to envision, and we'll talk about like
Speaker 1: why because the fundamental problem in a lot of ways
Speaker 1: with bitcoin is that, rather than it being what it
Speaker 1: should have been, was like, oh, here was an experiment.
Speaker 1: Here's the ways in which it was successful, here's the
Speaker 1: ways in which it's failed. Let's try a new thing.
Speaker 1: It's still like the thing in cryptocurrency, the biggest thing,
Speaker 1: and people are and it's because people are ideologically invested
Speaker 1: in it, and that is a problem because it's obsolete,
Speaker 1: it's bad, it's it's heavily flawed in a number of
Speaker 1: ways and shouldn't still exist, like something better should have
Speaker 1: come along. But people are ideologically committed to bitcoin, and
Speaker 1: that's a problem, and we'll get to that problem. One thing.
Speaker 1: I know we have to go, we have to promote
Speaker 1: some goods and services, but really quick before we go,
Speaker 1: I just want to say that, you know, honestly, some
Speaker 1: of this is like reminding me of what it's like
Speaker 1: to be a stand up right when you're like trying
Speaker 1: jokes out and in the beginning, it's like sometimes you'll
Speaker 1: say some stuff that ends up being reckless and not
Speaker 1: something that like you fully thought the implications of, or
Speaker 1: you know, you fully understood was going to be actually
Speaker 1: what you were trying to say, because you're just trying
Speaker 1: to say it to figure out what you're saying. And
Speaker 1: that's sometimes is what happens. And I think like the
Speaker 1: differences is like when you decide to let other people,
Speaker 1: when you decide to commit to that, or when you
Speaker 1: decide to whatever. But like, no one's blameless. There's jokes
Speaker 1: that I know I've done that are like shitty before
Speaker 1: I got to the like the final version of the joke.
Speaker 1: But I guess it's just so scary that the not
Speaker 1: final version of a joke for these people is on
Speaker 1: the scale that ruins rainforests and countries, and I think
Speaker 1: is wild. And I think the only thing I can
Speaker 1: compare it to is being like someone like Dave Chappelle.
Speaker 1: You know, we're like, you put out a big as
Speaker 1: special that's just like you being like I am a
Speaker 1: committed transphobe, and then the Dave Chappelle of currencies. Yeah,
Speaker 1: and like Dave Chappelle, it was cooler in two thousand nine.
Speaker 1: And my heart is breaking. But all right, speaking services
Speaker 1: Dave Chappelle, you know who doesn't create transphobic comedy specials.
Speaker 1: It's going to be an ad for Netflix. Oh, well
Speaker 1: here's Netflix. Oh we're back. So from the beginning of
Speaker 1: so again, I think there's there's some some neat promise
Speaker 1: and some of the ideas that inspired people behind cryptocurrency,
Speaker 1: But one of the issues with it is that from
Speaker 1: the beginning it's been primarily an ideological crusade rather than
Speaker 1: a quest to actually develop something that's inherently practical. Um
Speaker 1: In the book Attack of the fifty ft Blockchain, Gerard
Speaker 1: Gerard quotes Roger Vere, who was an early cryptocurrency advocate,
Speaker 1: as saying, at first, almost everyone who involved did so
Speaker 1: for philosophical reasons. We saw bitcoin as a great idea,
Speaker 1: as a way to separate money from the state. Now,
Speaker 1: Gerard goes further, explaining that much of the ideological justification
Speaker 1: for crypto as it exists is tied to what's called
Speaker 1: cyber libertarianism. And here's how he defines that quote. Computer
Speaker 1: programmers are highly susceptible to the just world fallacy that
Speaker 1: their economic good fortune is the product of virtue rather
Speaker 1: than circumstance, and the fallacy of transferable expertise that being
Speaker 1: competent in one field means they're competent in others. Silicon
Speaker 1: Valley has always been a cross of the hippie counterculture
Speaker 1: and iron Rand based libertarianism, this cross being termed the
Speaker 1: Californian ideology. Cyber libertarianism is an academic term for the
Speaker 1: early Internet strain of this ideology. Technological expertise is presumed
Speaker 1: to trump all other forms of expertise e g. Economics
Speaker 1: or finance, let alone softer sciences. I don't understand it.
Speaker 1: But it must be simple is the order of the day.
Speaker 1: And that's that's the issue here, is what we're talking
Speaker 1: about a little bit earlier. Um and obviously at this
Speaker 1: point because the standard. But it's simple. It's kind of
Speaker 1: like a motto for me and my twenties dating men. Yeah,
Speaker 1: and that's not a bad motto for dating for dating men,
Speaker 1: especially especially men in your twenties, because we we we
Speaker 1: tend to be pretty simple. Um. But so it's worth
Speaker 1: noting here that a lot of people who use crypto
Speaker 1: now because there is so much money in it, right,
Speaker 1: are just are gamblers or or scammers, not particularly believers
Speaker 1: in the ideology. When we're talking about the ideological part
Speaker 1: of crypto, it's it's it is the backbone still of cryptocurrency.
Speaker 1: It's a lot of the people making stuff. It's a
Speaker 1: lot of the people who are like the loudest evangelists. Um.
Speaker 1: But most of the people who make a lot of
Speaker 1: money off of crypto aren't you know, believers in anything.
Speaker 1: There in a lot of cases just scammers. There are
Speaker 1: people committing serious financial crimes to get rich themselves by robbing,
Speaker 1: robbing people into frauding them in mass and that is
Speaker 1: a huge amount of cryptocurrency. One of the things about
Speaker 1: it is because there's no state, there's no bank, there's
Speaker 1: no protection. So like, one thing that can happen is
Speaker 1: if you're doing a bitcoin transaction and you like type
Speaker 1: in the address you're sending it too wrong, that money
Speaker 1: is just gone. Um. It's like if every like if
Speaker 1: if every uh if every transaction you made was an
Speaker 1: even worse wire transfer basically, I mean I've done that
Speaker 1: on Venmo before, where you send money to someone who
Speaker 1: you thought you were sending you too, but it's not
Speaker 1: the right person, I mean has no decency to give
Speaker 1: you money back. But this ain't gonna happen with your
Speaker 1: cryptocurrency ship no. Um. Now, one of the things that
Speaker 1: is frustrating here is that like you have these these
Speaker 1: true believers in the ideological promise of crypto currency, and
Speaker 1: they provide cover for a lot of the scammers, often
Speaker 1: not intentionally, but like the fact that there's these people
Speaker 1: saying no, this is like a crusade and we're we're
Speaker 1: separating money from the state and this is good, and
Speaker 1: a lot of people are able to cloak themselves in
Speaker 1: that to steal tens of millions of dollars um and
Speaker 1: and it's it's very profitable to do that for the
Speaker 1: true believers. The quest for a currency free of central
Speaker 1: control goes back decades. Cryptocurrency is actually a lot older
Speaker 1: as an idea than you might guess. In fact, PayPal
Speaker 1: was actually founded with the understanding that it would be
Speaker 1: a perfectly anonymous way to send and receive money without
Speaker 1: government oversight. In Peter Teal told his employees that thanks
Speaker 1: to PayPal, quote, it will be nearly impossible for corrupt
Speaker 1: governments to steal wealth from their people through their old means. Now,
Speaker 1: Teal wound up underestimating governments well and his own greed,
Speaker 1: because once Teal gets rich, he stops saying ship like this,
Speaker 1: and he moves on to found the most powerful surveillance
Speaker 1: company in the world, spying for the federal governments on it, said,
Speaker 1: multiple federal governments on its citizens. So like again, a
Speaker 1: lot of these people, even the ones who are ideological,
Speaker 1: are absolutely willing to like turn on a dime if
Speaker 1: there's money in it. Now. Digital currency, though has a
Speaker 1: long history. Philosophically, the idea seems to have originated from
Speaker 1: a fellow named David Chaum, who was a computer scientist
Speaker 1: and a cryptographer. In nineteen eight two, Choum wrote a
Speaker 1: paper titled computer Systems Established, Maintained and Trusted by mutually
Speaker 1: suspicious groups. This was a thought experiment on how to
Speaker 1: create a trustless form of digital currency. Bitcoin is trust less.
Speaker 1: The blockchain, all blockchain cryptocurrencies are trust less, and trustless
Speaker 1: means that you cannot fake either the currency or the transactions. Right.
Speaker 1: It's very it's not entirely impossible, but it's very difficult
Speaker 1: to fake a Bitcoin transaction, right, or to fake a
Speaker 1: bitcoin because of the sheer amount of math necessary in
Speaker 1: order to like make one essentially, and the blockchain is
Speaker 1: very close to an unalterable record of transactions. So that's
Speaker 1: what makes it trust list, right. You don't have to
Speaker 1: trust somebody that like the transactions happening and going through.
Speaker 1: It's indelibly recorded on this thing. Um. So nineteen eighty
Speaker 1: two is when we kind of have the first person
Speaker 1: developed the idea for what becomes the blockchain. It's a persistent,
Speaker 1: unfalsibifiable record of transactions. Now, Chom did try to create
Speaker 1: his own cryptocurrency in nine with a company called digit Cash,
Speaker 1: in a thing called e cash. E cash was supposed
Speaker 1: to be perfectly anonymous. I'm sorry. Both of those names
Speaker 1: are so nineties. I know, it's incredibly nineties this. I
Speaker 1: imagine he was wearing Jinko's the entire time, and and
Speaker 1: one of those like Skully from X File suits with
Speaker 1: the huge shoulders. Call. Yeah. But also, do you remember,
Speaker 1: um that l A l A Styles or l A
Speaker 1: gear Gel? Do you know what I'm talking about? Yes?
Speaker 1: What was it called? I know what you're talking about.
Speaker 1: Are going to google it during the break. But it
Speaker 1: was all like Neon colors, a little bubbles in it,
Speaker 1: and you would put it all over your ship. That's
Speaker 1: the equivalent of this. Hell yeah, yeah, that's exactly it.
Speaker 1: It's the cryptocurrency equivalent of that weird s we all
Speaker 1: drew on our our binders when we were in middle school.
Speaker 1: Um for a weird reason like shout out millennials. Yeah,
Speaker 1: like kind of like a dollar sign but not but
Speaker 1: also why you know, we loved it. We did, We
Speaker 1: absolutely did so. E cash was supposed to be totally anonymous,
Speaker 1: and the idea of a currency that's transactions couldn't be
Speaker 1: tracked by a government enticed a lot of powerful people.
Speaker 1: Um and there were significant money put behind digit cash
Speaker 1: and e cash. David Marquat, who is the co founder
Speaker 1: of the venture capital firm August Capital and a former
Speaker 1: Microsoft market what is like a kum quat or like, yeah,
Speaker 1: it's m A r q U A r d T. Yeah, yeah,
Speaker 1: that's a that's like our red kum quat for sure.
Speaker 1: It's like a red kum quat that gives ten million
Speaker 1: dollars to vid Choum's cryptocurrency. Also, a kumquat is what
Speaker 1: I call your girlfriend? Now, wow, very respect, Can we
Speaker 1: get hr on the line, Sophie prove this fucking message.
Speaker 1: So only one bank agreed to use the cash. They
Speaker 1: implemented it from micro payments. They were in like Missouri.
Speaker 1: The system is not the bank is less populism. I
Speaker 1: was in middle school. Um And, yeah, the system was
Speaker 1: not popular. It was dissolved after three years. It just
Speaker 1: didn't like catch on in any way. David blamedless on
Speaker 1: the fact that the Internet had gotten more popular in
Speaker 1: the late nineties and the ideological and privacy obsessed nerds
Speaker 1: that he'd written his white papers for were not the
Speaker 1: bulk of the Internet anymore. Quote As the Web grew,
Speaker 1: the average level of sophistication of users dropped. It was
Speaker 1: hard to explain the importance of privacy to them. Most
Speaker 1: people are like, why do I need to learn how
Speaker 1: to use a whole new, weird digital money thing in
Speaker 1: ready to keep my transaction secret? And you know what,
Speaker 1: To be honest, I'm sure like the if you wanted
Speaker 1: to give him the actual like the drug dealer answer like, no,
Speaker 1: I care about privacy. That's why I use fucking cash.
Speaker 1: There is a perfectly anonymous way to transactly. It's that's
Speaker 1: why drug dealers do everything in cash. That is like
Speaker 1: the funniest thing about this is like, because they're all
Speaker 1: such fucking nerds, It's like we have to have a
Speaker 1: way to like, you know, make transactions that uh, nobody
Speaker 1: can tracks. Yeah, you can just use cash. Stop reinventing
Speaker 1: the wheel, you know what. It remins me that old
Speaker 1: chestnut about how America spent like so much money developing
Speaker 1: a pen that could write upside down in space and
Speaker 1: Russians just use a pencil. I don't know if that
Speaker 1: is that one. I don't know if it's real, but
Speaker 1: I'm just saying that's like that old chestnut. Yeah, yeah,
Speaker 1: you see that a lot. Now there is I will say,
Speaker 1: as somebody who used cryptocurrency buy drugs over the internet,
Speaker 1: there is one realistic use case for the anonymous currency,
Speaker 1: which is that if you're trying to buy illegal drugs
Speaker 1: through the internet, you can't use cash, right, you do
Speaker 1: need an option for that, And and some of these
Speaker 1: people attempted to provide that. In some weird libertarians tell
Speaker 1: your girl what kind of drugs you buy. I'll get
Speaker 1: to that. I'll get to that. In ninet, some weird
Speaker 1: libertarians invented e gold, which was supposedly an anonymous digital
Speaker 1: currency backed by actual gold, so it was on the
Speaker 1: gold standard. But it was crypto, which, to be honest
Speaker 1: at least makes more sense than like bitcoins, based on
Speaker 1: like the scarcity of being able to perform hard math
Speaker 1: calculations thing I don't know whatever getting someone to send
Speaker 1: you gold in exchange for your crypto though, well yeah,
Speaker 1: I don't know that that ever happened. But like modern cryptocurrency,
Speaker 1: it was way less anonymous than its founders claimed. The
Speaker 1: gold handed over their records to law enforcement when requested. Nevertheless,
Speaker 1: it was popular for more than a decade among people
Speaker 1: who wanted to buy drugs over the internet from shady
Speaker 1: Canadian pharmaceutical websites and needed some hint of deniability about it.
Speaker 1: I can confirm that the gold worked pretty well for
Speaker 1: this because, um allegedly, people I may or may not
Speaker 1: have known slash bin used it to purchase things like
Speaker 1: two C I and five M E O M I
Speaker 1: P T and two C T seven and two C
Speaker 1: T E and all sorts of fun shogun chemicals over
Speaker 1: the internet. Wait wait, wait, what can you tell the
Speaker 1: lay woman what that is? They're different hallucinogens that a
Speaker 1: guy named Alexander Shulgin invented and tested on he and
Speaker 1: his wife and wrote books about. And they're pretty rad
Speaker 1: for the most part. How how do they relate to
Speaker 1: mushrooms and or acid? Well, some of them are flinn flamin's,
Speaker 1: which I believe mushrooms are fine flamine too, So some
Speaker 1: of them actually are like some of them are kind
Speaker 1: of like synthetically similar to mushrooms. Some of them are
Speaker 1: very different, Like two ce I is like nothing else
Speaker 1: I've ever experienced they're just chemicals that it's very visual
Speaker 1: in a way that like it's visual in a way
Speaker 1: that like when you watched like how acid and stuff
Speaker 1: is depicted on TV. It's not actually lie that acid
Speaker 1: isn't like the but I'm asking is it more like
Speaker 1: That's what I'm explaining, So you know how like when
Speaker 1: TV shows are trying to depict an acid trip, they
Speaker 1: always show like all these psychedelic, weird colors and strange
Speaker 1: visuals that like, you don't really get on acid, Like
Speaker 1: I don't have a lot of open eyed, massive hallucinations
Speaker 1: of things that can happen on enough to see I like,
Speaker 1: it's really potent visual hallucinations. It's rad. I love to
Speaker 1: see I And if you mix two, see I and
Speaker 1: H seven to eight hours, So like a good mushroom
Speaker 1: trip or acid trip longer than mushrooms, a little shorter
Speaker 1: than acid. Mushrooms always take forever to get out my system.
Speaker 1: I think everybody is different. But yeah, yeah, usually mushrooms
Speaker 1: for me about three or four hours. But um wow, okay,
Speaker 1: yeah lucky yeah, um but yeah, I love it. Anyway.
Speaker 1: I have a lot of fondness for Eagle because it
Speaker 1: brought a lot of wonderful drugs into my life as
Speaker 1: a as a as a kid. Um. Now that said,
Speaker 1: it didn't last very long. It was actually shut down
Speaker 1: by the government in two thousand nine because the people
Speaker 1: running it had stopped getting the kind of licenses you
Speaker 1: need to transmit to be like to transmit money over
Speaker 1: the internet. Basically. Um again, it's this like they didn't
Speaker 1: believe they needed those licenses from the government, and the
Speaker 1: government said, well, yeah, you do. So. Liberty Reserve, which
Speaker 1: operated from two thousand six to thirteen, was another attempt
Speaker 1: to make it possible for people to buy things anonymously
Speaker 1: over the Internet. The goal of all this and an
Speaker 1: anonymity was for some people just a matter of principle.
Speaker 1: They weren't actually doing anything sketchy, They just didn't want
Speaker 1: the government to know what they were doing. But for
Speaker 1: a lot of folks, man, yeah, I get that, I do. Um.
Speaker 1: That said, for a lot of folks it was a
Speaker 1: matter of wanting to buy illegal firearms, child pornography, or
Speaker 1: drugs sometimes all three. Liberty Reserve was shut down when
Speaker 1: child pornography into the rug cat that's not air, but
Speaker 1: it is one of the things you would use untraceable
Speaker 1: money for like, those are kind of the Big Three. Okay,
Speaker 1: I share you, but I want you to go like,
Speaker 1: I'm not drawing a moral equivalence between them. I'm just
Speaker 1: saying that, but I just don't want them to be
Speaker 1: in the same sentence. I'm offended as someone that just
Speaker 1: wants to have a good trip. I mean, that was
Speaker 1: one of the things children that is not the same vibe.
Speaker 1: And even the Silk Road guy was like, well, I'm
Speaker 1: not gonna let people sell child porn on the Silk Road.
Speaker 1: You can hire hitman to murder people. But like, we're not.
Speaker 1: We have we have standards of boundaries. Things that was
Speaker 1: full on adults, full as adults, but when it comes
Speaker 1: to babies, no, you save that for Robber and Sophia,
Speaker 1: you know. I mean, but we won't molest him, just
Speaker 1: kill him, just kill him. Obviously we're not monsters. We're
Speaker 1: not monsters. Yeah, absolutely so. Liberty Reserve was shut down
Speaker 1: when its founder was imprisoned for twenty years for money laundering.
Speaker 1: Now there's more to crypto history than that, but most
Speaker 1: of what you need to know after this point is
Speaker 1: that in two thousand seven, Satoshi Nakamoto started working on
Speaker 1: bitcoin he was still following David Chaum's dream of a
Speaker 1: perfectly anonymous yet trustless digital currency. Bitcoin was also supposed
Speaker 1: to be like, you know, anonymous, um or what was
Speaker 1: supposed to be anonymous. That's the reputation it has. Two
Speaker 1: people say like, oh, bitcoin transactions are anonymous. They're not really,
Speaker 1: And in fact, because of the blockchain, they're often very
Speaker 1: close to the opposite of anonymous. Every transaction is registered
Speaker 1: indelibly forever on an immutable chain. Um. So, Like one
Speaker 1: of the things about this is that there you could
Speaker 1: there is a way to do uh, totally anonymous bitcoin
Speaker 1: transactions if you number one, if you mind the mind
Speaker 1: it on your own computer and get a bitcoin and
Speaker 1: you you know, are reasonably secure with your machine, then
Speaker 1: people would see the transaction where it was going, um,
Speaker 1: but they wouldn't necessarily know that it was your bitcoin. Also,
Speaker 1: some people buy bitcoin, like in person, like just hands
Speaker 1: someone cash for a hard drive with bitcoin on it.
Speaker 1: That's fairly anonymous, But the transaction itself is not anonymous.
Speaker 1: It's literally the opposite. Everyone including the FEDS, can see
Speaker 1: where bitcoin is going, you know. Um, so if they
Speaker 1: know somebody is a drug dealer or you know, uh,
Speaker 1: doing something else illegal and they see bitcoin coming to
Speaker 1: him and they can see that you owned that bitcoin,
Speaker 1: then they know that you were paying that person you know. Um.
Speaker 1: Now the other thing is that one of this is
Speaker 1: again part of the big selling point that the blockchain
Speaker 1: is is immutable, that everyone can see every transaction, that
Speaker 1: is what makes it trustless. But it's actually not true
Speaker 1: that the blockchain is immutable. UM. The blockchain is decentralized.
Speaker 1: So it's basically what makes it supposedly immutable is that
Speaker 1: all of the different computers with the blockchain on it
Speaker 1: are constantly sharing the blockchains and as long as they
Speaker 1: like most of them agree, that's the blockchain. Right. So theoretically,
Speaker 1: if you have enough computers operating to make up more
Speaker 1: than fifty one percent of the computers with the blockchain
Speaker 1: on it, kind of doing this decentralized sharing of the blockchain,
Speaker 1: you could change the blockchain. Um. And there are some
Speaker 1: there are some groups with potentially the power to do this.
Speaker 1: I mean maybe it's happened because there are these now
Speaker 1: big mining consortiums that you know, operate hundreds of thousands
Speaker 1: of computers mining bitcoin, and theoretically they could actually modify
Speaker 1: the blockchain if they got like together enough people with
Speaker 1: enough of a goal to do that what to like
Speaker 1: alter I don't know, yah, like to to either remove
Speaker 1: transactions or too. Like you could you could funk around
Speaker 1: in a bunch of different ways if you if you
Speaker 1: had fifty one percent of like the computers that were
Speaker 1: kind of involved in this big distributed conversation, like there's
Speaker 1: all sorts of ship you could get up to um.
Speaker 1: But yeah, this is a little more detailed than is
Speaker 1: necessary to understand the grift nature of crypto. Because that's
Speaker 1: because my eyes glazed over, or because my eyes glaze
Speaker 1: over when I get too much into the tech stuff,
Speaker 1: or because Sophie literally fell asleep and I could just
Speaker 1: read her hat and nothing else. Oh yeah, she did
Speaker 1: fall asleep, So get out. We're talking about the blockchain.
Speaker 1: You must have said the word blockchain in the last
Speaker 1: paragraph fifty two times. I am as frustrated by this
Speaker 1: as you are. But I'm setting up all this background
Speaker 1: because I want everyone to understand what an enormous, ridiculous
Speaker 1: grift that cryptocurrency has become since it got very popular.
Speaker 1: Because this story is funny, and instead of hashing out
Speaker 1: more technical details, I want to talk about Mount Cox. Now. First,
Speaker 1: you've got to take an ad break, buddy, No, I
Speaker 1: refuse to. You have to, because I'll use one of
Speaker 1: my new fucking knives on you to get stabbed by you.
Speaker 1: Good look, motherfucker. I got at least five of them.
Speaker 1: All right, Well here's you know who won't stab you
Speaker 1: these goods and services, boy spoilers, they might. All right,
Speaker 1: we're back and we're telling the tale of Mount Cox.
Speaker 1: Have you heard of Mountain Cox? Probably not? But what
Speaker 1: do you mean? Everything you say sounds like a bit
Speaker 1: Mount Cox was the first big bitcoin bank Mountain Docks, sorry,
Speaker 1: Mount Cox. It was the first big bitcoin bank. So
Speaker 1: at one point, like a huge chunk of the bitcoin
Speaker 1: being actively traded. I think a majority of it was
Speaker 1: like going through Mount Cox. It was the big bank
Speaker 1: in the bitcoin world, which obviously the whole thing is that, like,
Speaker 1: you're not going to need a bank. But the problem
Speaker 1: is that without a bank again, if you like miss
Speaker 1: type and address, your bitcoin just disappears forever. Like you
Speaker 1: have no security whatsoever. You have no safety. There's no
Speaker 1: way to um actually protect your money in any meaningful way.
Speaker 1: It can be hacked or stolen from you. So people
Speaker 1: started using exchanges, which are basically banks, because they wanted
Speaker 1: the security that banks get, which is very funny because
Speaker 1: the whole idea was like, we have to get away
Speaker 1: from you know, horrible banks, and then like we wound
Speaker 1: up reinventing banks, but because it's crypto, they wound up
Speaker 1: reinventing banks, but much worse. So Mount Gox is the
Speaker 1: first big bitcoin bank, and its origin is hilarious. In
Speaker 1: two thousand seven, a nerd named Jed Mcalp purchased the
Speaker 1: domain mount Gox mt g o x dot com for
Speaker 1: his Magic the Gathering card trading website. Mount Gox stood
Speaker 1: for Magic the Gathering the Gathering online exchange. In fact,
Speaker 1: it was not called mount gox at all until Magic
Speaker 1: the Gathering proved less profitable than Jett had hoped, and
Speaker 1: so he like he he basically like stopped running the website.
Speaker 1: But then in two thousand ten, there's a bunch of
Speaker 1: articles on bitcoin. This is kind of the first big
Speaker 1: boom period that bitpoint coin has. So he reads a
Speaker 1: bunch of these articles and he's like, oh, I bet
Speaker 1: I could make a bunch of money off bitcoin, and
Speaker 1: his his girlfriend likes the name of the what like
Speaker 1: the U R L of the website he has, So
Speaker 1: he just decides to relaunch his Magic the Gathering Online
Speaker 1: Exchange as Mount Gox, a bitcoin exchange, and the hope
Speaker 1: that like, oh that sounds like authoritative enough. I remember
Speaker 1: like on something awful following this as a kid in
Speaker 1: people being like when they realize the giant bitcoin bank
Speaker 1: was named after Magic the Gathering Online Exchange, Like, what
Speaker 1: the funk are you people doing? Like, wait a minute,
Speaker 1: this takes a little bit of the legitimacy out of
Speaker 1: this money. Oh yeah, and it's it's not legitimate at all.
Speaker 1: It turns out, so it was not long before Mount
Speaker 1: Cox was the place to trade bitcoin. It is highly
Speaker 1: possible that no other part of this story would have
Speaker 1: occurred without Mount dox Um, because again, bitcoin is a
Speaker 1: giant pain in the ask to do on your own.
Speaker 1: This whole like have no bank, just peer to peer
Speaker 1: with no middleman is a huge pain in the ass.
Speaker 1: That's super dangerous and like frustrating and annoying for people
Speaker 1: to do. And one of the things that's annoying about
Speaker 1: it is so all of the transactions that bitcoin has
Speaker 1: ever been involved in. Our stored on this ledger, right,
Speaker 1: the blockchain, well, as time goes on, that means it
Speaker 1: gets bigger, right, Like by definition, the blockchain is always
Speaker 1: getting longer, and so by like two element of twelve,
Speaker 1: it's like a hundred something gigabytes which you have to
Speaker 1: keep on your computer if you want to do the
Speaker 1: transaction without. I know, it's such a pain in the
Speaker 1: ass everything unlike your phone starts running out of room
Speaker 1: and you're just trying to take photos like a meaningful occasion,
Speaker 1: and then you're like no, and it's like that for
Speaker 1: your money. I don't know what's more important, you know,
Speaker 1: my Nanna's birthday or these Margarita's with the girls by Nanna. Yeah.
Speaker 1: The genius of cryptocurrency is that it's provided us all
Speaker 1: with a way to to take that feeling you get
Speaker 1: when your phone doesn't have space to take more pa
Speaker 1: pictures and apply it to spending money. I don't like this.
Speaker 1: It makes me feel as irresponsible about money as I
Speaker 1: have always been. Yeah, so Mountain Cox becomes huge, um
Speaker 1: and it allows for bitcoin to expand massively. Because now
Speaker 1: it's not a pain in the ass, people can basically
Speaker 1: trade it like it. Also, it kind of allows commodity
Speaker 1: trading with bitcoin, right, Mountain Cox is where a lot
Speaker 1: of that starts because before it had been so decentralized.
Speaker 1: Now there's this exchange. You can see the price of
Speaker 1: bitcoin and like how it changes, people can short sell
Speaker 1: and whatnot. It allows bitcoin to expands like my Cox. Yeah,
Speaker 1: well that is what where the story is going. Actually,
Speaker 1: because the spoilers Mountain Ox drops all of the bitcoin
Speaker 1: that it's sticks story, drop it like drop it like
Speaker 1: Mountain Cox is a bitcoin or the price of bitcoin
Speaker 1: grows steadily over the next year or so, um, And
Speaker 1: Micaeleb was smart enough to realize after a couple of
Speaker 1: years of this that the platform had become something much
Speaker 1: more than just a hobby and that he was doing
Speaker 1: like again, the starts is like, oh bitcoins neat, Like
Speaker 1: let's see if I can set up in exchange to
Speaker 1: trade it, and very quickly he's dealing with like millions
Speaker 1: and then like tens of millions of dollars and it's
Speaker 1: basically like kind of unlicensed trading securities and operating a bank,
Speaker 1: which is illegal. So Macaeleb, being a smartt is like
Speaker 1: I should probably get the funk out of this, Like
Speaker 1: this seems like it could be a problem for me,
Speaker 1: and I maybe didn't entirely anticipate what what what was
Speaker 1: going to happen here. Now he also had a problem
Speaker 1: and that tens of thousands of bitcoin had gone missing
Speaker 1: or been stolen from Mount Cox and he hadn't told anybody. Um,
Speaker 1: so he was basically like using new funds that were
Speaker 1: brought in to pay people out that had had the
Speaker 1: stolen bitcoins and the hopes that maybe would noticemids. It
Speaker 1: is a Pyramids game, like it keeps happening, Well, please
Speaker 1: ask And mckayl is a really sketchy guy. I can't
Speaker 1: say that he was like actually had stolen those but
Speaker 1: like I don't think we really know what happened to
Speaker 1: those bitcoin, but he was definitely like bitcoins fed off
Speaker 1: from the back of a truck, but we do know
Speaker 1: is whoops. So the same year that happens, he sells
Speaker 1: mount Gox to a guy named Mark carpelz Um and
Speaker 1: he doesn't tell him until the sales don't like, oh yeah,
Speaker 1: like sixty bitcoin are missing. You gotta keep playing this
Speaker 1: like shell game tied that from everybody heads up, gotta
Speaker 1: drop it like it's hot. Now Mark Mark car Pauls
Speaker 1: is also a shady motherfucker. He'd been convicted of fraud
Speaker 1: himself a couple of years earlier, so, like again, none
Speaker 1: of these victims are particularly sympathetic people either, but Carlo
Speaker 1: is it's a bad deal for him, and so by
Speaker 1: the time he becomes aware of the fact that a
Speaker 1: lot of the bitcoin the bank had been holding had
Speaker 1: been stolen, he basically agreed to assume all liability for this.
Speaker 1: As he continued to run Mount Guy's it's very funny,
Speaker 1: most like buying a cruise ship for your crypt donation
Speaker 1: and then realizing, oh fuck, a lot is involved with
Speaker 1: running a cruise ship, and it's hard to be a bank.
Speaker 1: And as he's running Mount Cox, not only is he
Speaker 1: having to deal with like the fact that sixty bitcoin
Speaker 1: are missing that he's trying to like cover in a
Speaker 1: variety of ways. He keeps getting hacked, the bank keeps
Speaker 1: getting hacked, and more bitcoin keeps getting stolen because of
Speaker 1: like errors in the coding and stuff. People are just
Speaker 1: siphoning take thousands and thousands of big bitcoin. So when
Speaker 1: he realized like tens of thousands of more bitcoin had
Speaker 1: been stolen, he panics and he takes the bank's assets
Speaker 1: offline and he puts them into what are called cold wallets.
Speaker 1: So a hot wallet is a is a crypto wallet
Speaker 1: that's online, right, and that means you can use it
Speaker 1: anytime you want to trade the money, but it also
Speaker 1: means that like a hacker could potentially get it, and
Speaker 1: if they get your wallet, they just have it and
Speaker 1: there's no way for you to get it back. It's
Speaker 1: just gone forever. Um. Cold wallets are just like basically
Speaker 1: just storing the files that are the cryptocurrency offline and
Speaker 1: something not connected to the internet, which is obviously the
Speaker 1: safest way to store it. But this again leads to
Speaker 1: this because he's unwilling to take any of these cold
Speaker 1: wallets and put them back online. Leads to this Ponzi
Speaker 1: scheme situation where like he's trying to bring in new
Speaker 1: money as quickly as he can to pay out the
Speaker 1: old money, so nobody notices that huge amounts of bitcoin
Speaker 1: have been hacked. The other problem is that I think
Speaker 1: when the hack first happened, it was like tens of
Speaker 1: thousands of dollars worth of bitcoin, but the price of
Speaker 1: bitcoin increases so much so that eventually it goes from like, oh,
Speaker 1: we're short like a hundred thousand or a couple hundred
Speaker 1: thousand dollars to like, we're short hundreds of millions of dollars.
Speaker 1: Like the problem expands exponentially over time because every time
Speaker 1: the price of bitcoin increases, he's in the hole for
Speaker 1: more money. Um, it's got a temperature. Um so he
Speaker 1: uh this So yeah, this is a bad situation. And
Speaker 1: for like the last couple of years he's running Mountain Cox.
Speaker 1: The bank is basically bankrupt and he's just like keeping
Speaker 1: it alive with nothing but lies. Um. So I'm gonna
Speaker 1: quote from a write up in the next Web here.
Speaker 1: On February four fourteen, coin Desk held a poll to
Speaker 1: find out how many mount Cox users had experienced withdrawal issues.
Speaker 1: In some cases, users still hadn't received their funds even
Speaker 1: weeks after they had requested withdrawal, which is great, way
Speaker 1: better than a bank to ask to withdraw your money
Speaker 1: and not be allowed to for weeks because it all
Speaker 1: cuts stolen a Bitcoin talk form threat, a master over
Speaker 1: chase could never All those banks will do is destroy
Speaker 1: the entire global economy by gambling on real estate money.
Speaker 1: Anytime you want, please don't please, don't take us making
Speaker 1: fun of how dumb bitcoin banks are the endorsement of Chase,
Speaker 1: no or of any bank. Actual banks are dumb. It's
Speaker 1: just a marker of how dumb the crypto banks are,
Speaker 1: that they're even dumber than regular banks, although obviously less
Speaker 1: toxic because when mount Cox collapses spoilers, it does not
Speaker 1: sink the entire global economy and leave tens of thousands
Speaker 1: of people homeless. So here, that's that's good. Uh, good stuff.
Speaker 1: On February seven, two fourteen, mount Cox canceled all bitcoin trading,
Speaker 1: froze accounts, and took a step back to take stock
Speaker 1: of what was actually going on. Ten days later, the
Speaker 1: exchange published a statement it claimed it had rectified the
Speaker 1: situation and that it was now on course to correct
Speaker 1: customer losses and resume trade. But by the end of
Speaker 1: the month, Mark Mark Carpellez had stepped down from his
Speaker 1: role at the Bitcoin Foundation and the firm's fate was sealed.
Speaker 1: It disclosed over seven hundred and forty thousand of users
Speaker 1: bitcoin two point nine billion dollars into day's value, had
Speaker 1: been stolen in a hack that it claimed had been
Speaker 1: ongoing for years. At the time that amount was valued
Speaker 1: it around half a billion dollars. On February fourteen, the
Speaker 1: exchange accepted its fate and filed for bankruptcy in Tokyo.
Speaker 1: It would also file for bankruptcy in the US later
Speaker 1: in March. Now bitcoin again had kind of sailed in
Speaker 1: this legal gray area, hadn't gotten a huge amount of
Speaker 1: government attention. That changes because like as silly is, like
Speaker 1: crypto is to you know, people in the feed or whatever.
Speaker 1: When half a billion dollars goes missing, law enforcements going
Speaker 1: to be like, well, okay, wait a second here, what
Speaker 1: what happened here? How did you lose half a billions?
Speaker 1: Being like yeah, so this creates a problem. Um, and
Speaker 1: there's like well look into yeah, and there's After eighteen
Speaker 1: months of like lawsuits and attempted like courts try to
Speaker 1: restructure the bank to get people some of their money,
Speaker 1: Carpelis Is eventually arrest on embezzlement charges in August of
Speaker 1: two thou fifteen. UM authorities claim that he manipulated Mount
Speaker 1: Cox's computer programs in order to alter its balance sheet
Speaker 1: to artificially increase funds in one of its accounts, So
Speaker 1: he was not his embezzlement was not him stealing money
Speaker 1: from mount Cox. It was him like lying about the
Speaker 1: money that was there in order to deal with the
Speaker 1: fact that there's this massive hole in it. Meanwhile, the
Speaker 1: founder of mount Cox has gone on to create a
Speaker 1: couple of new different kinds of cryptocurrency and like continues
Speaker 1: to do that side of the grift. It's very funny. Um,
Speaker 1: in the end, find out what the names of the
Speaker 1: currency are, because with mount gox is a starting point,
Speaker 1: I'm just excited to see where it goes. They're forgettable,
Speaker 1: to be honest. Are they like the nineties names of
Speaker 1: like e cash or did you like coin? Whatever? I
Speaker 1: don't know. They're not They're not very exciting. Um. I
Speaker 1: can find them for you in a little bit if
Speaker 1: you like. Okay, So if they're not good, I trust you.
Speaker 1: In the end, mountain Gox lost about six percent of
Speaker 1: all bitcoin in existence at the time. In imagine if
Speaker 1: a bank disappeared six percent of the world's money supply. Like,
Speaker 1: it's very funny. Some of it was later recovered, but
Speaker 1: more scandals followed. Um. And and that's so. And there
Speaker 1: have been like other exchanges, like a bunch of like
Speaker 1: there was one exchange that had a map because they
Speaker 1: keep getting hacked. Right, So there was one exchange that
Speaker 1: was based on an exchange that had initially been coded
Speaker 1: by a sixteen year old Chinese kid um and people
Speaker 1: liked it because it had a good user interface, but
Speaker 1: it was really bad code and it was never meant
Speaker 1: to deal with like hundreds of millions of dollars in transactions.
Speaker 1: But that's what happened, and there were a bunch of
Speaker 1: exploits and hackers stole like tens of thousands of of
Speaker 1: bitcoin and like made away with millions. And what that
Speaker 1: exchange did was tell everybody, Hey, so that we can
Speaker 1: make whole the rich people who were robbed, we're taking
Speaker 1: thirty seven percent of everybody's bank account, Like you just
Speaker 1: have to accept. Like they're all like like horrible griff
Speaker 1: Like all of these fucking exchanges. Um, some of them
Speaker 1: have gotten better now, but Mark, yeah, I mean, if
Speaker 1: you're being totally fair, like you could be like, well, yeah,
Speaker 1: a lot all of the early bitcoin exchanges and crypto
Speaker 1: exchanges were giant horrible grifts. But like, look at what
Speaker 1: banks were like in like the eighteen eighties, where they
Speaker 1: would just like run out of their client's money and
Speaker 1: everybody would be fucked and there would be runs on
Speaker 1: the bank. It's like, yeah, yeah, that is fair. Like um,
Speaker 1: the problem is, like, to what benefit are you recreating
Speaker 1: the financial system and all of the problems inherent in
Speaker 1: creating an entirely new financial system. I haven't found anyone
Speaker 1: who's actually been able to give a thing good that
Speaker 1: they're doing. If anybody did, yeah, um so uh. In
Speaker 1: two thousand fifteen, a new cryptocurrency, Ethereum is released. Um
Speaker 1: Ethereum is much more advanced than bitcoin um and it
Speaker 1: can handle like more transactions. It's it's you know, it
Speaker 1: was made like almost a decade later. So there's a
Speaker 1: lot of things that about Ethereum are smarter. It's main
Speaker 1: claim to fame, which are called smart contracts. And a
Speaker 1: smart contract is basically a program that is stored on
Speaker 1: the blockchain that executes UM when you like, do a
Speaker 1: trans Yeah, it's it's like a program that you like
Speaker 1: store on the blockchain and so it can't be changed
Speaker 1: or altered. And the idea behind this is that you
Speaker 1: could use these to make perfectly equitable contracts. Like one
Speaker 1: of the marketing terms is like, hey, imagine if a
Speaker 1: musician could actually hold a record account company accountable to
Speaker 1: the contract they signed because it's immutable and it's on
Speaker 1: the blockchain, everybody can see it. The problem is that
Speaker 1: number one contracts are only as good as their coding,
Speaker 1: so if they're coded wrong, then the whole thing could
Speaker 1: be a disaster. The other thing is that, like, well,
Speaker 1: the problem with inequitable contracts isn't that like they're hidden.
Speaker 1: It's that the people who write contracts are able to
Speaker 1: like have lawyers that can write them in ways to
Speaker 1: funk people over, and you maybe don't understand it. And
Speaker 1: there's no reason why ethereum. Smart contracts would suddenly render
Speaker 1: someone immune to a record company having more resources to
Speaker 1: figure out how to fun people over on a contract.
Speaker 1: It just doesn't make a whole lot of sense. Um.
Speaker 1: The other problem is that, like, as you know, in
Speaker 1: the entertainment industry, often you have a contract and then
Speaker 1: you have to renegotiate and like change it later, and
Speaker 1: because it's immutably on the blockchain, that's kind of hard
Speaker 1: to do with smart contracts. They're not very smart, is
Speaker 1: the problem. Um. You could argue that, like an agreement
Speaker 1: you make with human beings that a company you work
Speaker 1: for and have a contract for is much smarter because
Speaker 1: you can go to them and say, like, hey, actually,
Speaker 1: I want to change this part of my contract. Can
Speaker 1: we alter that and then sign a new contract, which
Speaker 1: I've done, Like I know a lot of people who
Speaker 1: have not that. Like there aren't horrible like abusive contracts
Speaker 1: that's constant, but like it is. I I don't think
Speaker 1: the way Ether is trying to do it as any smarter.
Speaker 1: And obviously most of what smart contracts have been used
Speaker 1: to do is create automatic Ponzi schemes um and like
Speaker 1: like like Ponzi schemes that execute automatically. It's like matters
Speaker 1: of code. Um. There's a ton of different ponzis and
Speaker 1: in fact, like people knowingly get involved in Ponzi schemes
Speaker 1: in the crypto world in the understanding that like, well,
Speaker 1: if I'm early enough, then I'll make some money off. Yeah, exactly,
Speaker 1: as long as I'm the one getting sucked over and
Speaker 1: I'm fucking someone else over rest American way, yep, yep.
Speaker 1: And there's a bunch of like there have been cases
Speaker 1: with these smart contracts where like the coding of the
Speaker 1: contract is bad um and it creates an opportunity because
Speaker 1: there's a hole in the coding for like hackers to
Speaker 1: steal millions and millions of ether or whatever. Um. And
Speaker 1: this has happened a couple of times. And when it's
Speaker 1: happened in like influential people, like people who had helped
Speaker 1: make ethereum like lost money, UM, they actually were able
Speaker 1: to create correct those errors. Like it's the thing I
Speaker 1: said where if you have like a high enough amount
Speaker 1: of the processing power, you can alter the blockchain basically
Speaker 1: um ship Like that has been done when like the
Speaker 1: whales lose money. UM. It's just not going to be
Speaker 1: done if you lose all your money because you're nobody um,
Speaker 1: which is cool. So you're you're recreating the part of
Speaker 1: the financial system wherein the rich make all the rules
Speaker 1: and get to change the rules if they lose money um,
Speaker 1: which is also fun. Now you'll know that I have
Speaker 1: not talked a lot about the environmental consequences of cryptocurrency.
Speaker 1: We'll talk about that a bit, UM. But even without that,
Speaker 1: like if you separate the environmental consequences, it's just all
Speaker 1: such a giant, obvious, fucking scam. And to make that point,
Speaker 1: I want to talk about the case of Bitcoin Savings
Speaker 1: and Trust, which was created by a guy who went
Speaker 1: online by a name inspired by a Jimmy Buffett song,
Speaker 1: Pirate at forty. So this guy who's creating Bitcoin Savings
Speaker 1: and Trust identifies himself as a pirate, which is going
Speaker 1: to be meaningful in a minute. So Pirate at forty No,
Speaker 1: not anymore for sure. Um. He promised huge returns on
Speaker 1: people's investments, and he collected as much as half a
Speaker 1: million bitcoin worth five of point six million dollars at
Speaker 1: the time, and worth like all of the money in
Speaker 1: the world now. Any reasonable investor would have known that,
Speaker 1: like the rate of return Pirate at forty was promising
Speaker 1: marked him out as a scammer. But this was bitcoin, um,
Speaker 1: and people didn't think that way. Uh. There were folks
Speaker 1: who called him off online and like forms and stuff,
Speaker 1: and they were downvoted essentially um and lost online clout
Speaker 1: in the community for being negative about what was obviously
Speaker 1: such a great investment opportunity. Why are you why don't
Speaker 1: why are you being negative about crypto bro? Like, we
Speaker 1: don't need that kind of thinking here. Uh. In the end,
Speaker 1: this very obvious ponzi scheme wound up in control of
Speaker 1: seven percent of all bitcoin and circulation at the time,
Speaker 1: um and it was a giant scam pirate at forty
Speaker 1: Like disappeared with everybody's fucking money. UM. Now he was
Speaker 1: caught in this case because again, these people are now
Speaker 1: committing financial crimes large enough for Like to be paid
Speaker 1: attention to um And some of the money was returned,
Speaker 1: but this was just the start of what would prove
Speaker 1: to be a long chain of bitcoin crimes and incompetence.
Speaker 1: Bid O Matt, at one time the third largest exchange
Speaker 1: for bitcoin, existed for months before it was revealed that
Speaker 1: they had kept the site's whole wallet file, which is
Speaker 1: all of everybody's money, on an Amazon Web Services cloud
Speaker 1: file that did not have a backup and was set
Speaker 1: to ephemeral, so if it was restarted, if the servers
Speaker 1: were restarted, the wallet was deleted and everybody's money disappeared forever,
Speaker 1: which is exactly what happened in July of two thousand eleven.
Speaker 1: My bank forgot to have a backup of our money.
Speaker 1: Sorry guys, my god. Bitcoinka was the project of a
Speaker 1: sixteen year old who was pretty good at coding and
Speaker 1: tried to make an exchange. It collapsed in two thousand twelve,
Speaker 1: without any database backups. All its remaining funds disappeared after
Speaker 1: a series of hacks due to the fact that the
Speaker 1: admins used the same password for Bitcoinica that they had
Speaker 1: used for mount Cox, which had been hacked months earlier,
Speaker 1: revealing the password and allowing hackers to eel everything. I
Speaker 1: could go on, stupid, why would you have a teenager
Speaker 1: do this well? And this this this this bit bitcoin
Speaker 1: which collapses the code that it was made by this
Speaker 1: teenager for it was then used by that other exchange,
Speaker 1: the one I told you about that got robbed and
Speaker 1: took thirty seven percent of everybody's money. Like, it's such
Speaker 1: stupid fucking bullshit. It's such stupid fucking bullshit. And you
Speaker 1: know what else is stupid fucking bullshit, Sophia. These goods
Speaker 1: and services no in f t s. And we're going
Speaker 1: to talk about n f t s in part two
Speaker 1: of this episode, but for right now, I want to
Speaker 1: talk about something that's not bullshit, Sophia. You're plug doubles. Wow,
Speaker 1: thank you so much. You're welcome so much. Find me
Speaker 1: on Twitter and insider on Twitter, Sophia, Sophia, you could
Speaker 1: listen to my two podcasts, Private Parts Unknown about love
Speaker 1: and sex around the world, and for twenty de Fiance
Speaker 1: with Miles Gray Where Are we um Do Stone recaps
Speaker 1: of Fiance Hell yeah, hell yeah. And you can find
Speaker 1: me on bitcoin dot scam where I am. Just send
Speaker 1: me three d and fifty dollars and if everybody does that,
Speaker 1: I will give you, guys Robert coin. Uh your hearts,
Speaker 1: so no exchange necessary. You don't have to have an exchange.
Speaker 1: It's in your heart. You just know. You send me
Speaker 1: through in your fifty bucks, You've got a Robert Coin.
Speaker 1: And then I'm gonna retire. I'm just gonna go. That's
Speaker 1: the episode.