1 00:00:05,000 --> 00:00:09,400 Speaker 1: On this episode of Newtsworld. During the pandemic, crypto became 2 00:00:09,480 --> 00:00:14,280 Speaker 1: inescapable seemingly overnight. Everyone from Wall Street to Main Street 3 00:00:14,560 --> 00:00:19,400 Speaker 1: started talking about bitcoin, NFTs, the blockchain, DeFi, and the metaverse. 4 00:00:20,200 --> 00:00:24,520 Speaker 1: Promoters held it as the dawn of the future of money, art, commerce, 5 00:00:24,600 --> 00:00:27,120 Speaker 1: and the Internet. No one knew what it all meant, 6 00:00:27,320 --> 00:00:29,920 Speaker 1: but everyone knew someone who bought some cryptocurrency with a 7 00:00:29,960 --> 00:00:33,199 Speaker 1: bizarre name and hit it big. Even people who were 8 00:00:33,240 --> 00:00:35,920 Speaker 1: sick of hearing about it all couldn't help but feel 9 00:00:35,960 --> 00:00:39,400 Speaker 1: a powerful sense of fomo, the fear of missing out. 10 00:00:40,200 --> 00:00:43,200 Speaker 1: My guest today was one of those people. His interest 11 00:00:43,280 --> 00:00:45,200 Speaker 1: was piqued by an argument with a high school buddy 12 00:00:45,200 --> 00:00:49,240 Speaker 1: about dogecoin. What started out his idle curiosity turned into 13 00:00:49,240 --> 00:00:53,400 Speaker 1: a two year, globe spanning quest to uncover the secret 14 00:00:53,720 --> 00:00:55,960 Speaker 1: at the heart of the greatest financial mania the world 15 00:00:55,960 --> 00:00:58,800 Speaker 1: has ever seen, a journey chronicled in his new book, 16 00:01:00,000 --> 00:01:05,280 Speaker 1: Go Up. Inside Crypto's wild Rise and Staggering Fall. Here 17 00:01:05,319 --> 00:01:08,039 Speaker 1: to talk about his new book, I'm really pleased to 18 00:01:08,120 --> 00:01:12,280 Speaker 1: welcome my guest, Zeke Fox. He's an investigative reporter from 19 00:01:12,319 --> 00:01:25,800 Speaker 1: Bloomberg BusinessWeek and Bloomberg News. Zeke welcome and thank you 20 00:01:25,880 --> 00:01:27,120 Speaker 1: for joining me on news World. 21 00:01:27,680 --> 00:01:30,040 Speaker 2: Thank you so much for having me on kliston. 22 00:01:30,080 --> 00:01:33,800 Speaker 1: I own I think two and two thirds bitcoins or something. 23 00:01:34,240 --> 00:01:36,960 Speaker 1: We got very early on, just because we just wanted 24 00:01:36,959 --> 00:01:37,640 Speaker 1: to see what it was like. 25 00:01:37,720 --> 00:01:39,440 Speaker 2: You're doing pretty good then, yeah, Well, and. 26 00:01:39,400 --> 00:01:43,440 Speaker 1: I gave both of our grandchildren one bitcoin each and said, 27 00:01:43,840 --> 00:01:46,920 Speaker 1: don't cash it in, just ride it out and see 28 00:01:46,959 --> 00:01:49,240 Speaker 1: what happens. And their mother said, you know, this is 29 00:01:49,280 --> 00:01:52,800 Speaker 1: not financing, this is gambling. So I think there's some 30 00:01:52,920 --> 00:01:55,320 Speaker 1: truth to that. But let I start with where did 31 00:01:55,360 --> 00:01:59,440 Speaker 1: bitcoin come from? It was really sort of the breakthrough cryptocurrency. 32 00:01:59,440 --> 00:02:00,320 Speaker 1: How did that happen? 33 00:02:00,960 --> 00:02:04,559 Speaker 2: Yeah, so sometimes this whole crypto world has talked about 34 00:02:04,680 --> 00:02:08,200 Speaker 2: like it's some sort of new fangled thing, but at 35 00:02:08,200 --> 00:02:13,440 Speaker 2: this point, bitcoin was invented fourteen years ago by someone 36 00:02:14,040 --> 00:02:18,120 Speaker 2: or a group who went by the name Satoshi Nakamoto, 37 00:02:18,520 --> 00:02:21,880 Speaker 2: and they published this white paper that described a way 38 00:02:21,919 --> 00:02:26,360 Speaker 2: to create a new currency that would not need a 39 00:02:26,520 --> 00:02:31,720 Speaker 2: central record keeper to keep track of who had how much. 40 00:02:32,200 --> 00:02:35,080 Speaker 2: And you know, like a lot of people, I found 41 00:02:35,080 --> 00:02:37,800 Speaker 2: all this kind of baffling. When I started this book, 42 00:02:37,880 --> 00:02:40,600 Speaker 2: I was not a crypto expert, but in the book, 43 00:02:40,639 --> 00:02:43,679 Speaker 2: I use a metaphor that I think will help listeners 44 00:02:43,760 --> 00:02:46,600 Speaker 2: understand what crypto is all about, because it really boils 45 00:02:46,600 --> 00:02:50,639 Speaker 2: down to something that's not as complicated as you might think. Basically, 46 00:02:51,200 --> 00:02:53,560 Speaker 2: if you think of a bank, one of the main 47 00:02:53,600 --> 00:02:56,680 Speaker 2: functions of a bank is just maintaining a list on 48 00:02:56,720 --> 00:03:00,519 Speaker 2: the column A, we got everybody's names, call them B 49 00:03:01,320 --> 00:03:04,640 Speaker 2: how much money they have, And that's one of the 50 00:03:04,680 --> 00:03:07,200 Speaker 2: main things banks do. And if I send you money, 51 00:03:07,400 --> 00:03:10,680 Speaker 2: they're just reducing the number on my row in that 52 00:03:10,680 --> 00:03:13,840 Speaker 2: spreadsheet and bumping up the number on your row. And now, 53 00:03:13,880 --> 00:03:17,000 Speaker 2: if we're talking in crypto, instead of a bank keeping 54 00:03:17,040 --> 00:03:22,280 Speaker 2: the spreadsheet, all the users of the currency get together 55 00:03:22,880 --> 00:03:26,000 Speaker 2: and through these complicated systems, the end result is you've 56 00:03:26,000 --> 00:03:29,200 Speaker 2: got a spreadsheet that the users are maintaining together. And 57 00:03:29,280 --> 00:03:33,079 Speaker 2: if this cryptocurrency is bitcoin, then instead of keeping track 58 00:03:33,120 --> 00:03:35,320 Speaker 2: of dollars, it keeps track of how many bitcoins that 59 00:03:35,360 --> 00:03:38,520 Speaker 2: we have. And if it's solana or doge coin, then 60 00:03:38,600 --> 00:03:41,040 Speaker 2: call them b is how many solana or doge coin 61 00:03:41,080 --> 00:03:44,520 Speaker 2: that we have. And these currencies like a bitcoin or 62 00:03:44,560 --> 00:03:48,160 Speaker 2: a doge coin, they don't really exist in any place 63 00:03:48,200 --> 00:03:50,720 Speaker 2: other than this spreadsheet. When you own a bitcoin. It 64 00:03:50,800 --> 00:03:53,560 Speaker 2: just means that like your row in that spreadsheet has 65 00:03:53,680 --> 00:03:56,960 Speaker 2: number one next to it, and people pay. Even today, 66 00:03:57,280 --> 00:04:00,240 Speaker 2: I think it's twenty five thousand dollars to increase your 67 00:04:00,600 --> 00:04:02,000 Speaker 2: number of bitcoins by one. 68 00:04:02,240 --> 00:04:04,560 Speaker 1: But let me go back, because I have to confess 69 00:04:05,280 --> 00:04:07,320 Speaker 1: some pieces of this I find to be kind of 70 00:04:07,400 --> 00:04:11,280 Speaker 1: like magic. As I understand it, around two thousand and eight, 71 00:04:11,400 --> 00:04:15,960 Speaker 1: are actually on Halloween, this concept suddenly comes up and 72 00:04:16,600 --> 00:04:21,159 Speaker 1: there's either a person or a group named Satoshi Nakamoto. 73 00:04:21,839 --> 00:04:25,240 Speaker 1: Now do we know is Satoshi Nakamoto a person? Do 74 00:04:25,279 --> 00:04:26,200 Speaker 1: we know anything about him? 75 00:04:26,760 --> 00:04:31,240 Speaker 2: So he was active on this bitcoin list serve in 76 00:04:31,279 --> 00:04:35,480 Speaker 2: the early days, and all we have are his or 77 00:04:35,480 --> 00:04:40,160 Speaker 2: her writings from those times. He never revealed his or 78 00:04:40,160 --> 00:04:43,919 Speaker 2: her identity and disappeared about ten years ago and we 79 00:04:43,960 --> 00:04:47,520 Speaker 2: haven't heard from him since. And when Satochi Knakamota disappeared, 80 00:04:47,839 --> 00:04:51,680 Speaker 2: bitcoin was sort of a hobby for nerds, like people 81 00:04:51,680 --> 00:04:55,279 Speaker 2: would run the bitcoin software on their computer like someone 82 00:04:55,320 --> 00:04:57,320 Speaker 2: might have had a ham radio back in the day. 83 00:04:57,920 --> 00:05:00,760 Speaker 2: But now the price of bitcoin one has gotten so 84 00:05:00,920 --> 00:05:07,280 Speaker 2: high that Satoshi Nakamoto, whoever they are, we know that 85 00:05:07,320 --> 00:05:09,159 Speaker 2: they hold a lot of bitcoins and that they're a 86 00:05:09,160 --> 00:05:13,560 Speaker 2: billionaire many times over. But we can also tell by 87 00:05:13,600 --> 00:05:18,039 Speaker 2: looking at this collectively maintained spreadsheet that Satoshi has not 88 00:05:18,160 --> 00:05:21,120 Speaker 2: been catching in those bitcoins. So for a long time 89 00:05:21,120 --> 00:05:23,880 Speaker 2: it was a big guessing game. Who's Satoshi Nakamoto? A 90 00:05:23,920 --> 00:05:28,119 Speaker 2: couple times journalists thought they'd figured it out, but people 91 00:05:28,120 --> 00:05:30,360 Speaker 2: have mainly given up at this point. It did not 92 00:05:30,480 --> 00:05:33,360 Speaker 2: seem like a one that I was going to crack either. 93 00:05:33,839 --> 00:05:35,720 Speaker 2: I got no clues on my two years down the 94 00:05:35,760 --> 00:05:36,720 Speaker 2: crypto rabbit hole. 95 00:05:37,240 --> 00:05:39,880 Speaker 1: So you have somebody emerge. In two thousand and eight 96 00:05:40,520 --> 00:05:45,600 Speaker 1: they launched this concept. They apparently have several billion dollars 97 00:05:45,600 --> 00:05:51,800 Speaker 1: in theory in bitcoin. They stop in twenty eleven, and 98 00:05:51,920 --> 00:05:54,160 Speaker 1: in the last twelve years we haven't heard from them. 99 00:05:54,200 --> 00:05:55,640 Speaker 2: Not a peep, not a peep. 100 00:05:56,000 --> 00:05:58,440 Speaker 1: This will be a wild movie. You have to stop 101 00:05:58,440 --> 00:06:02,599 Speaker 1: and think, where is Satoshi Nakamoto? Could be sort of 102 00:06:02,600 --> 00:06:03,800 Speaker 1: a great reality show. 103 00:06:03,920 --> 00:06:07,400 Speaker 2: Oh definitely. I just want to make it even more 104 00:06:07,440 --> 00:06:10,839 Speaker 2: science fiction y. When he started this right, like I said, 105 00:06:11,040 --> 00:06:15,080 Speaker 2: you would contribute to the bitcoin network by running software 106 00:06:15,120 --> 00:06:20,000 Speaker 2: on your home computer, and that's what maintained the spreadsheet. 107 00:06:20,200 --> 00:06:25,719 Speaker 2: Now because there's a process called mining, which is again 108 00:06:25,880 --> 00:06:30,760 Speaker 2: pretty complicated to explain, but it's essentially a contest where 109 00:06:31,320 --> 00:06:37,599 Speaker 2: people guess random numbers and the winner is awarded a 110 00:06:37,680 --> 00:06:41,200 Speaker 2: prize in bitcoin. And it's become so lucrative that now 111 00:06:41,560 --> 00:06:46,919 Speaker 2: their whole data centers like giant warehouses with thousands of 112 00:06:46,960 --> 00:06:51,120 Speaker 2: thousands of computers all just playing this guessing game trying 113 00:06:51,160 --> 00:06:56,160 Speaker 2: to win bitcoins. By one estimate, bitcoin mining uses more 114 00:06:56,200 --> 00:07:02,440 Speaker 2: electricity than the whole country of Argentina. Are even setting 115 00:07:02,560 --> 00:07:08,279 Speaker 2: up bitcoin mines in shipping containers near old natural gas 116 00:07:08,279 --> 00:07:11,360 Speaker 2: wells so that they can burn the gas and use 117 00:07:11,400 --> 00:07:15,120 Speaker 2: that power to run computers in the shipping container and 118 00:07:15,200 --> 00:07:18,920 Speaker 2: mine for bitcoins, so it's like spread all over the world. 119 00:07:19,360 --> 00:07:21,920 Speaker 1: They use the term mining rather than manufacturing. 120 00:07:22,640 --> 00:07:27,000 Speaker 2: Yeah, I think the metaphor makes sense because in mining 121 00:07:27,040 --> 00:07:29,080 Speaker 2: you have to sift through a lot of dirt and 122 00:07:29,120 --> 00:07:31,360 Speaker 2: then maybe you find a little nugget of gold. And 123 00:07:31,400 --> 00:07:35,240 Speaker 2: these bitcoin miners, they have computers more or less guessing 124 00:07:35,320 --> 00:07:38,080 Speaker 2: random numbers and you have to guess a lot a 125 00:07:38,080 --> 00:07:42,160 Speaker 2: lot of times before you find that little bitcoin prize. 126 00:07:42,480 --> 00:07:44,840 Speaker 1: So in the early days, what you have is almost 127 00:07:44,920 --> 00:07:47,440 Speaker 1: like ham radio or something. You have a bunch of 128 00:07:47,480 --> 00:07:51,480 Speaker 1: people around who are geeks. They're using their home computers, 129 00:07:51,920 --> 00:07:56,360 Speaker 1: and you have this basically pretty thin network and bitcoins 130 00:07:56,440 --> 00:07:58,680 Speaker 1: weren't worth mush, almost like it was a hobby. It's 131 00:07:58,720 --> 00:08:02,320 Speaker 1: a variation on gaming. And then suddenly it begins to 132 00:08:02,440 --> 00:08:06,000 Speaker 1: take off. And as I understand it, and you have 133 00:08:06,040 --> 00:08:08,440 Speaker 1: to explain two different things here for people like me 134 00:08:08,480 --> 00:08:12,280 Speaker 1: who are not very informed, But there's a site in 135 00:08:12,320 --> 00:08:16,880 Speaker 1: twenty eleven on the dark Web called the Silk Road 136 00:08:17,520 --> 00:08:22,320 Speaker 1: and it sort of began to really move bitcoin for drugs. 137 00:08:23,080 --> 00:08:25,280 Speaker 1: First of all, what is the dark web? 138 00:08:25,880 --> 00:08:29,600 Speaker 2: So it's less crazy than it sounds. Essentially, you just 139 00:08:29,720 --> 00:08:34,559 Speaker 2: download this other web browser that uses a different protocol 140 00:08:34,920 --> 00:08:37,520 Speaker 2: as far as you're concerned as a user. It's just 141 00:08:37,600 --> 00:08:39,520 Speaker 2: like a different web browser that you open up on 142 00:08:39,600 --> 00:08:43,240 Speaker 2: your computer instead of Google Chrome, and this lets you 143 00:08:43,320 --> 00:08:47,560 Speaker 2: access these other websites. And the way the protocol works, 144 00:08:48,160 --> 00:08:51,080 Speaker 2: the ownership of these websites cannot be traced in the 145 00:08:51,120 --> 00:08:55,000 Speaker 2: same way as traditional websites. So criminals thought this was 146 00:08:55,040 --> 00:08:58,640 Speaker 2: a good place to open up things like a marketplace 147 00:08:58,679 --> 00:09:03,360 Speaker 2: for drugs. So you could just fire up your tour 148 00:09:03,480 --> 00:09:07,760 Speaker 2: browser go over to the Silk Road. I mean this 149 00:09:07,840 --> 00:09:10,520 Speaker 2: was twelve years ago or so so the website was 150 00:09:10,520 --> 00:09:13,679 Speaker 2: pretty rudimentary. It looked kind of like eBay, but every 151 00:09:13,720 --> 00:09:20,480 Speaker 2: listing is for like ecstasy, heroin, guns, and people are 152 00:09:20,600 --> 00:09:25,720 Speaker 2: offering these in exchange for this new fangled currency called bitcoin. 153 00:09:25,960 --> 00:09:28,480 Speaker 2: That's actually the first time I ever heard about bitcoin. 154 00:09:28,920 --> 00:09:33,000 Speaker 2: I was reading about the Silk Road on Goker, the 155 00:09:33,080 --> 00:09:36,160 Speaker 2: old website, and it definitely sounded like something out of 156 00:09:36,160 --> 00:09:38,319 Speaker 2: the future that you just go on this website, you 157 00:09:38,360 --> 00:09:42,240 Speaker 2: buy this weird virtual currency, you send it to somebody 158 00:09:42,280 --> 00:09:44,200 Speaker 2: you don't know, and then drugs are going to come 159 00:09:44,200 --> 00:09:44,640 Speaker 2: in the mail. 160 00:09:44,960 --> 00:09:46,920 Speaker 1: I mean, it almost sounds like it's a variation on 161 00:09:46,960 --> 00:09:50,760 Speaker 1: the Matrix. You sort of think Keanu Reeves maybe wandering 162 00:09:50,800 --> 00:09:52,040 Speaker 1: around on the Silk Road. 163 00:09:52,559 --> 00:09:55,360 Speaker 2: It's funny you say that. At one of my first 164 00:09:55,400 --> 00:09:58,520 Speaker 2: bitcoin conferences, I met this guy who looked like he 165 00:09:58,640 --> 00:10:00,640 Speaker 2: was out of the matrix with this big trench coat. 166 00:10:00,840 --> 00:10:02,920 Speaker 2: He had all sorts of jewelry, he was wearing this 167 00:10:03,000 --> 00:10:05,360 Speaker 2: funny ring that covered his whole finger that almost looked 168 00:10:05,400 --> 00:10:09,080 Speaker 2: like kind of a claw. And he told me that 169 00:10:09,240 --> 00:10:12,200 Speaker 2: he had made big money selling drugs on the Silk 170 00:10:12,240 --> 00:10:14,120 Speaker 2: Road back in the day, and then now he was 171 00:10:14,240 --> 00:10:19,880 Speaker 2: using those profits on other cryptocurrency ventures. And yeah, that 172 00:10:20,000 --> 00:10:22,880 Speaker 2: was just one of my introductions to this kind of 173 00:10:22,920 --> 00:10:25,920 Speaker 2: crazy alternate reality that was the crypto world. 174 00:10:26,520 --> 00:10:30,520 Speaker 1: So as things started to grow, the price of bitcoin 175 00:10:30,559 --> 00:10:33,720 Speaker 1: began to go up because there were now uses for 176 00:10:33,800 --> 00:10:36,319 Speaker 1: it and people actually valued it. 177 00:10:36,960 --> 00:10:40,199 Speaker 2: I wasn't sure before I started research if this was overstated, 178 00:10:40,280 --> 00:10:43,840 Speaker 2: but no, it's true. Like really, before people would just 179 00:10:43,880 --> 00:10:47,040 Speaker 2: send bitcoins back and forth, almost for fun. And then 180 00:10:47,080 --> 00:10:50,080 Speaker 2: once Silk Road showed up, now you could finally do 181 00:10:50,200 --> 00:10:54,120 Speaker 2: something with it, and that caused the price of bitcoin 182 00:10:54,160 --> 00:10:57,120 Speaker 2: to go up. There's also evidence that in those early 183 00:10:57,240 --> 00:11:02,960 Speaker 2: days some bitcoin fan unds manipulated the price of bitcoin 184 00:11:03,480 --> 00:11:06,719 Speaker 2: to make it go up in order to build momentum 185 00:11:06,960 --> 00:11:09,480 Speaker 2: and get more people interested in crypto. 186 00:11:10,160 --> 00:11:12,040 Speaker 1: We did it just on a wark because we'd read 187 00:11:12,080 --> 00:11:14,560 Speaker 1: about it, and I think we paid maybe seven hundred 188 00:11:14,600 --> 00:11:15,480 Speaker 1: dollars per coin. 189 00:11:16,200 --> 00:11:18,720 Speaker 2: Oh wow, so you were pretty early well. 190 00:11:18,840 --> 00:11:21,560 Speaker 1: So when it jumped to sixty thousand dollars, there was 191 00:11:21,559 --> 00:11:24,480 Speaker 1: that brief moment where Callista said to me, you know, 192 00:11:24,520 --> 00:11:27,400 Speaker 1: maybe we should get out, but I said, oh no, 193 00:11:27,440 --> 00:11:29,600 Speaker 1: we're going to stay. And then of course it dropped 194 00:11:29,679 --> 00:11:33,320 Speaker 1: dramatically down in just below I think seventeen thousand at 195 00:11:33,320 --> 00:11:35,040 Speaker 1: one point, not that I was noticing. 196 00:11:36,920 --> 00:11:40,000 Speaker 2: This is why I would never become a crypto billionaire, 197 00:11:40,040 --> 00:11:42,559 Speaker 2: because if I bought something for one thousand and it 198 00:11:42,640 --> 00:11:45,240 Speaker 2: went up to two thousand, I would say score, I'd 199 00:11:45,240 --> 00:11:47,640 Speaker 2: sell it and go out to dinner, real fancy meal 200 00:11:47,720 --> 00:11:48,160 Speaker 2: or something. 201 00:11:48,559 --> 00:11:50,600 Speaker 1: Well, but there are a couple of studies by people 202 00:11:50,600 --> 00:11:53,679 Speaker 1: who actually, I'm sure don't know anything. This suggests that 203 00:11:54,280 --> 00:11:56,920 Speaker 1: you're likely to get to about four hundred thousand dollars 204 00:11:56,960 --> 00:12:00,960 Speaker 1: per bitcoin in the early twenty thirties. As I understand it, 205 00:12:01,240 --> 00:12:05,520 Speaker 1: there is a limited total number of bitcoins that mathematically 206 00:12:05,520 --> 00:12:09,320 Speaker 1: can be created, yes, and then therefore there will at 207 00:12:09,360 --> 00:12:11,440 Speaker 1: some point be a scarcity of bitcoins. 208 00:12:11,800 --> 00:12:15,360 Speaker 2: Yes, so you're talking to someone who's the skeptic. 209 00:12:15,880 --> 00:12:19,160 Speaker 1: Okay, good, That's why we wanted you on. We needed 210 00:12:19,160 --> 00:12:22,000 Speaker 1: somebody who did not have my wild and crazy enthusiasm 211 00:12:22,240 --> 00:12:23,280 Speaker 1: to say, are you nuts. 212 00:12:23,600 --> 00:12:28,000 Speaker 2: I've had this debate with bitcoin people before, and I 213 00:12:28,120 --> 00:12:31,120 Speaker 2: like to bring up that just because something is scarce 214 00:12:31,800 --> 00:12:35,280 Speaker 2: does not mean that it will necessarily be valuable. It's 215 00:12:35,280 --> 00:12:38,040 Speaker 2: true there can only ever be twenty one million bitcoins, 216 00:12:38,400 --> 00:12:44,200 Speaker 2: but Disney only printed twenty one million copies of the 217 00:12:44,240 --> 00:12:48,000 Speaker 2: original toy story on VHS, and those are still only 218 00:12:48,080 --> 00:12:52,080 Speaker 2: worth three dollars. So if the demand isn't there, it 219 00:12:52,080 --> 00:12:55,040 Speaker 2: doesn't matter that the supply is limited. My take is 220 00:12:55,040 --> 00:12:59,560 Speaker 2: that something must be useful to create demand. And in 221 00:12:59,559 --> 00:13:01,480 Speaker 2: the book I go to El Salvador, which is the 222 00:13:01,480 --> 00:13:04,240 Speaker 2: first country to try and really make a go at 223 00:13:04,320 --> 00:13:07,240 Speaker 2: using bitcoin, and I went to go see how it 224 00:13:07,280 --> 00:13:11,200 Speaker 2: worked out. And bitcoin advocates will say that this is 225 00:13:11,200 --> 00:13:13,680 Speaker 2: some sort of miracle. It's really helped El Salvador, and 226 00:13:13,760 --> 00:13:16,800 Speaker 2: El Salvador's economy is doing well lately, but it's got 227 00:13:16,840 --> 00:13:20,360 Speaker 2: nothing to do with bitcoin. Nobody uses it, and locals 228 00:13:20,360 --> 00:13:22,800 Speaker 2: would laugh at me when I asked to use bitcoin. 229 00:13:23,200 --> 00:13:25,840 Speaker 2: They'd make excuses, it's a law, they're supposed to accept it. 230 00:13:26,080 --> 00:13:28,640 Speaker 2: But they'd be like, Oh, the machine's down, Oh the 231 00:13:28,679 --> 00:13:31,560 Speaker 2: manager's on break. Do we really have to you know? 232 00:13:31,600 --> 00:13:33,319 Speaker 2: They looked at me like, not another one of these 233 00:13:33,400 --> 00:13:37,080 Speaker 2: jerks from the US who wants to spend his bitcoin 234 00:13:37,120 --> 00:13:39,679 Speaker 2: at my coffee shop. The reason they don't want to 235 00:13:39,679 --> 00:13:41,920 Speaker 2: take it is that it's unwieldy, it's difficult to use. 236 00:13:42,559 --> 00:13:46,400 Speaker 2: The value goes up and down unpredictably, and we have alternatives. 237 00:13:46,440 --> 00:13:48,880 Speaker 2: Like when I traveled around the world to research this book, 238 00:13:49,240 --> 00:13:52,880 Speaker 2: everywhere I brought my Visa card. You can just tap 239 00:13:52,920 --> 00:13:57,920 Speaker 2: it pays instantly, no fees, even in foreign countries, and 240 00:13:57,960 --> 00:13:59,240 Speaker 2: I got rewards points. 241 00:14:00,080 --> 00:14:02,280 Speaker 1: I hadn't thought about it. But in a sense, Visa 242 00:14:02,480 --> 00:14:03,760 Speaker 1: is an electronic currency. 243 00:14:04,640 --> 00:14:08,680 Speaker 2: Yes. I mean even the creators of PayPal, like Elon Musk, 244 00:14:08,920 --> 00:14:11,600 Speaker 2: they're thinking about some of the same ideas as crypto people, 245 00:14:12,040 --> 00:14:15,000 Speaker 2: and they thought that by creating this website where you 246 00:14:15,000 --> 00:14:19,800 Speaker 2: could send money from person to person, you were, yes, 247 00:14:19,840 --> 00:14:23,960 Speaker 2: creating like this new digital currency. But the difference is 248 00:14:23,960 --> 00:14:27,720 Speaker 2: that when you use Visa or PayPal, those are US 249 00:14:27,800 --> 00:14:32,800 Speaker 2: regulated companies that have to comply with all sorts of rules, 250 00:14:33,480 --> 00:14:35,520 Speaker 2: the main one of which is knowing who the customer 251 00:14:35,600 --> 00:14:40,160 Speaker 2: is keeping their information on file. In crypto companies, cryptocurrencies 252 00:14:40,200 --> 00:14:43,920 Speaker 2: don't do that, so that makes it attractive for certain purposes. 253 00:14:55,720 --> 00:14:58,400 Speaker 1: Hi, this is newt and my new book Marchs the Majority, 254 00:14:58,440 --> 00:15:01,920 Speaker 1: The Real Story of the Republican Real I offer strategies 255 00:15:01,960 --> 00:15:05,680 Speaker 1: and insights for everyday citizens and for season politicians. It's 256 00:15:05,680 --> 00:15:08,760 Speaker 1: both a guide for political success and for winning back 257 00:15:08,800 --> 00:15:12,040 Speaker 1: the majority. In twenty twenty four. March to the Majority 258 00:15:12,040 --> 00:15:16,080 Speaker 1: outlines the sixteen year campaign to write the Contract with America, 259 00:15:16,520 --> 00:15:19,960 Speaker 1: explains how we elected the first Republican House majority in 260 00:15:20,120 --> 00:15:23,560 Speaker 1: forty years in how we worked with President Bill Clinton 261 00:15:23,800 --> 00:15:29,040 Speaker 1: to pass major reforms, including four consecutive balance budgets. March 262 00:15:29,080 --> 00:15:32,120 Speaker 1: to the Majority tells the behind the scenes story of 263 00:15:32,200 --> 00:15:34,760 Speaker 1: how we got it done. Here's a special offer for 264 00:15:34,880 --> 00:15:38,720 Speaker 1: my podcast listeners. You can order March the Majority right 265 00:15:38,760 --> 00:15:42,240 Speaker 1: now at gingrishtree sixty dot com slash book and it'll 266 00:15:42,280 --> 00:15:44,800 Speaker 1: be shipped directly to you. Don't miss out on a 267 00:15:44,880 --> 00:15:48,320 Speaker 1: special offer. Go to gingishtree sixty dot com slash book 268 00:15:48,600 --> 00:15:52,000 Speaker 1: and order your copy now. Order it today at gingishtree 269 00:15:52,080 --> 00:16:01,320 Speaker 1: sixty dot com slash book. There are a number of 270 00:16:01,320 --> 00:16:04,840 Speaker 1: these cryptocurrencies. Bitcoin's the most famous and I guess the 271 00:16:04,880 --> 00:16:07,960 Speaker 1: most popular and has the largest market, if you want 272 00:16:08,000 --> 00:16:10,480 Speaker 1: to call it that. But how do these currencies come 273 00:16:10,520 --> 00:16:12,680 Speaker 1: and go? I mean everyone saw You'll see something new 274 00:16:12,760 --> 00:16:14,920 Speaker 1: pop up and somebody will put a bunch of money 275 00:16:14,960 --> 00:16:17,320 Speaker 1: into it and it will temporarily look like it's hot 276 00:16:17,840 --> 00:16:18,880 Speaker 1: and then will disappear. 277 00:16:19,880 --> 00:16:23,440 Speaker 2: So Bitcoin was hard to use, and for a while 278 00:16:23,480 --> 00:16:28,160 Speaker 2: it was difficult to start a new cryptocurrency. Then Vitalic 279 00:16:28,640 --> 00:16:34,000 Speaker 2: Bhuteran created a new one called Ethereum, and Ethereum is 280 00:16:34,240 --> 00:16:38,280 Speaker 2: kind of a platform that is programmable and you can 281 00:16:38,440 --> 00:16:42,680 Speaker 2: use it to create other currencies. So around twenty seventeen 282 00:16:42,720 --> 00:16:45,600 Speaker 2: there was this huge boom in new currencies. It seemed 283 00:16:45,600 --> 00:16:49,280 Speaker 2: like everybody who had any moticum of fame was spinning 284 00:16:49,360 --> 00:16:52,240 Speaker 2: up their own cryptocurrency and raising millions of dollars. This 285 00:16:52,400 --> 00:16:55,600 Speaker 2: was back when there was like denta coin, the official 286 00:16:55,640 --> 00:16:58,560 Speaker 2: coin of dentists, and they would really get millions of 287 00:16:58,600 --> 00:17:02,240 Speaker 2: dollars for that. Oh, you could hire a programmer to 288 00:17:02,320 --> 00:17:05,600 Speaker 2: make a new coin. There's just not that much work involved, 289 00:17:05,640 --> 00:17:07,560 Speaker 2: Like I don't know how to do it, but somebody 290 00:17:07,600 --> 00:17:09,960 Speaker 2: could do it for you in like an hour. But now, 291 00:17:10,640 --> 00:17:13,600 Speaker 2: in this most recent boom, investors have gotten a little 292 00:17:13,640 --> 00:17:16,480 Speaker 2: bit more. I don't know if sophisticated is the right word. 293 00:17:17,119 --> 00:17:19,199 Speaker 2: You need to give people a little bit more just 294 00:17:19,280 --> 00:17:21,560 Speaker 2: the promise of like I'm famous, I have a coin. 295 00:17:22,200 --> 00:17:24,760 Speaker 2: It doesn't work anymore to lure people in. In the 296 00:17:24,800 --> 00:17:28,760 Speaker 2: most recent boom, promises were made that were more like 297 00:17:29,440 --> 00:17:32,400 Speaker 2: if you buy my coin, you're going to earn ten 298 00:17:32,480 --> 00:17:35,680 Speaker 2: or twenty percent interest. That was the really appealing pitch 299 00:17:35,840 --> 00:17:37,919 Speaker 2: of the most recent boom and bust. 300 00:17:38,359 --> 00:17:41,320 Speaker 1: You know, our original currency was gold and silver because 301 00:17:41,320 --> 00:17:44,840 Speaker 1: it was actually real. Merchants would bite into the gold 302 00:17:44,920 --> 00:17:48,760 Speaker 1: coin to see how truly gold it was, as opposed 303 00:17:48,800 --> 00:17:51,520 Speaker 1: to mixed with lead and other things. And that's because 304 00:17:51,760 --> 00:17:53,959 Speaker 1: they were looking for stores of value that actually were 305 00:17:54,000 --> 00:17:58,520 Speaker 1: stores of value. I don't quite understand how these cryptocurrencies 306 00:17:59,359 --> 00:18:00,919 Speaker 1: are a store of value. 307 00:18:01,720 --> 00:18:05,199 Speaker 2: I agree, I think that ultimately, if they want to 308 00:18:05,280 --> 00:18:07,640 Speaker 2: use them, they'll need to buy them, and that will 309 00:18:07,640 --> 00:18:10,399 Speaker 2: be the basis for their value. But the book is 310 00:18:10,480 --> 00:18:12,879 Speaker 2: called number Go Up because for a couple of years, 311 00:18:13,560 --> 00:18:16,760 Speaker 2: we were in this field of like unreality, where just 312 00:18:16,800 --> 00:18:19,360 Speaker 2: the prices of all these coins were going up and up, 313 00:18:19,720 --> 00:18:22,159 Speaker 2: and it really seemed like it might go up forever, 314 00:18:22,680 --> 00:18:25,160 Speaker 2: and people are willing to throw out these old notions 315 00:18:25,200 --> 00:18:32,960 Speaker 2: of like profits, value, earnings, revenue, business plans. It really 316 00:18:33,000 --> 00:18:35,840 Speaker 2: did seem like anything was possible. 317 00:18:36,119 --> 00:18:39,560 Speaker 1: One of the terms you talk about is blockchain. Exactly 318 00:18:39,600 --> 00:18:40,560 Speaker 1: what is blockchain? 319 00:18:41,680 --> 00:18:46,040 Speaker 2: So it really is just a word for this special 320 00:18:46,119 --> 00:18:50,040 Speaker 2: kind of database, which again sounds pretty fancy, but it's 321 00:18:50,080 --> 00:18:54,320 Speaker 2: really just this two column spreadsheet that I described and 322 00:18:55,160 --> 00:18:57,760 Speaker 2: there's little quirks and how they all work. This is 323 00:18:57,760 --> 00:19:02,640 Speaker 2: definitely like an oversimplification, but blockchain just means a way 324 00:19:02,720 --> 00:19:06,600 Speaker 2: to keep track of who has how many of something. 325 00:19:07,400 --> 00:19:10,240 Speaker 1: Is it just a massive data handling system. 326 00:19:10,680 --> 00:19:13,560 Speaker 2: Yes, And that's what this all boils down to, and 327 00:19:13,600 --> 00:19:17,760 Speaker 2: it's pretty amazing that this whole crypto world has built 328 00:19:17,760 --> 00:19:18,159 Speaker 2: out of that. 329 00:19:19,040 --> 00:19:21,000 Speaker 1: One of the things you talk about in your book 330 00:19:21,520 --> 00:19:26,840 Speaker 1: is celebrities you promote crypto gambling, walk us through crypto gambling. 331 00:19:27,800 --> 00:19:31,080 Speaker 2: Yeah, so this is something that I was looking forward 332 00:19:31,160 --> 00:19:35,440 Speaker 2: to talking with you about because I spent a lot 333 00:19:35,480 --> 00:19:40,560 Speaker 2: of time with one of the main crypto magicians, Sam 334 00:19:40,600 --> 00:19:47,000 Speaker 2: Bateman Freed, who ran this exchange called FTX, and he 335 00:19:47,119 --> 00:19:50,760 Speaker 2: was viewed as this like super legitimate guy, sort of 336 00:19:50,760 --> 00:19:56,399 Speaker 2: an honest, trusted crypto billionaire who was testifying before Congress. 337 00:19:56,600 --> 00:19:59,080 Speaker 2: People are asking him for advice about how the industry 338 00:19:59,160 --> 00:20:03,399 Speaker 2: is regulated. And it turns out that his exchange was 339 00:20:03,400 --> 00:20:06,040 Speaker 2: a big fraud and everybody lost their money. But even 340 00:20:06,040 --> 00:20:09,280 Speaker 2: setting that aside, it was obvious at the time that 341 00:20:09,359 --> 00:20:14,200 Speaker 2: best case scenario FTX, which was based in the Bahamas, 342 00:20:14,680 --> 00:20:18,960 Speaker 2: was essentially like an offshore casino where you sent them money, 343 00:20:19,440 --> 00:20:22,240 Speaker 2: and then you could bet on the price of bitcoin, 344 00:20:22,600 --> 00:20:28,159 Speaker 2: but also like doagecoin, Solana, Smooth Love Potion, all sorts 345 00:20:28,160 --> 00:20:32,280 Speaker 2: of crazy coins, and they'd offer like levered bets so 346 00:20:32,320 --> 00:20:35,760 Speaker 2: you could increase your gains and losses. And it was 347 00:20:35,800 --> 00:20:39,520 Speaker 2: in the Bahamas because it didn't comply with US law. 348 00:20:40,640 --> 00:20:44,359 Speaker 2: So it was another example of like just how crazy 349 00:20:44,400 --> 00:20:48,000 Speaker 2: things got that someone who's running was essentially like a 350 00:20:48,040 --> 00:20:55,560 Speaker 2: crypto casino can be testifying before Congress and frankly getting 351 00:20:55,920 --> 00:21:00,720 Speaker 2: fond over at these hearings. I remember one where Senator 352 00:21:01,440 --> 00:21:07,199 Speaker 2: Corey Booker was complimenting Sam on his AFRO. You know, 353 00:21:07,240 --> 00:21:10,360 Speaker 2: instead of talking about like what sorts of rules this 354 00:21:10,640 --> 00:21:13,640 Speaker 2: exchange might or might not be breaking, you. 355 00:21:13,680 --> 00:21:16,800 Speaker 1: Talk, as a key part of this about the concept 356 00:21:17,119 --> 00:21:21,040 Speaker 1: of initial coin offerings or icos, And you say that 357 00:21:21,560 --> 00:21:25,480 Speaker 1: in twenty seventeen, this is really stunning startups raised six 358 00:21:25,560 --> 00:21:30,480 Speaker 1: point five billion dollars with initial coin offerings. But does 359 00:21:30,520 --> 00:21:33,240 Speaker 1: that just means that when I'm starting out something, this 360 00:21:33,320 --> 00:21:36,520 Speaker 1: is my first coin offering, so it's initial and I 361 00:21:36,720 --> 00:21:38,679 Speaker 1: give you some of the coins in return for you 362 00:21:38,760 --> 00:21:40,840 Speaker 1: doing something, and what are you talking about? 363 00:21:41,680 --> 00:21:45,880 Speaker 2: Essentially I would announce like, hey, I've got this great 364 00:21:45,960 --> 00:21:48,080 Speaker 2: new idea. This is going to be a new way 365 00:21:48,160 --> 00:21:51,320 Speaker 2: to put restaurants on the blockchain. So we need food 366 00:21:51,400 --> 00:21:54,199 Speaker 2: Coin and it's going to be super useful. Everyone's going 367 00:21:54,280 --> 00:21:56,040 Speaker 2: to want it because the restaurants are going to need 368 00:21:56,080 --> 00:21:59,880 Speaker 2: it to better track their inventories and verify their suppliers, 369 00:22:00,080 --> 00:22:03,120 Speaker 2: things like that. So we're going to create all sorts 370 00:22:03,119 --> 00:22:06,200 Speaker 2: of cool stuff. But first I'm going to sell one 371 00:22:06,200 --> 00:22:09,400 Speaker 2: million food coins, and you should buy them. Get in early, 372 00:22:09,400 --> 00:22:12,080 Speaker 2: because these are going to be really valuable soon. Right now, 373 00:22:12,119 --> 00:22:14,400 Speaker 2: you can get them for just a dollar. How many 374 00:22:14,440 --> 00:22:16,520 Speaker 2: do you want. You can compare it a little bit 375 00:22:16,560 --> 00:22:20,600 Speaker 2: to like Kickstarter or a stock offering, where a startup 376 00:22:20,680 --> 00:22:24,160 Speaker 2: company that you know hasn't dug for its gold mine 377 00:22:24,240 --> 00:22:26,360 Speaker 2: yet can say, hey, we got a great plan. We've 378 00:22:26,359 --> 00:22:29,040 Speaker 2: acquired this property, we need money to dig the mine. 379 00:22:29,440 --> 00:22:32,000 Speaker 2: We're selling shares of stock to raise money to dig 380 00:22:32,040 --> 00:22:35,520 Speaker 2: the mine. It's pretty similar to a stock offering, just 381 00:22:35,640 --> 00:22:40,800 Speaker 2: for a crypto company. And for a while, these crypto companies, 382 00:22:41,880 --> 00:22:46,160 Speaker 2: despite that similarity, thought they didn't have to follow the 383 00:22:46,200 --> 00:22:50,800 Speaker 2: Securities and Exchange Commission rules that govern stock offerings. So 384 00:22:51,440 --> 00:22:52,920 Speaker 2: that was kind of nice because it made it a 385 00:22:52,960 --> 00:22:55,639 Speaker 2: lot easier, you save money on lawyers. But it was 386 00:22:55,680 --> 00:22:58,479 Speaker 2: also bad because people were telling all sorts of lies. 387 00:22:58,920 --> 00:23:00,760 Speaker 2: I can't remember what the studies, but it's something like 388 00:23:00,800 --> 00:23:04,160 Speaker 2: seventy five percent or more of these icos were found 389 00:23:04,160 --> 00:23:05,720 Speaker 2: to be fraudulent. 390 00:23:22,760 --> 00:23:25,400 Speaker 1: Do you tell this great story in your book that 391 00:23:25,640 --> 00:23:29,720 Speaker 1: you spent twenty thousand dollars on a cartoon monkey? But 392 00:23:29,880 --> 00:23:32,840 Speaker 1: before we get to that, the cartoon monkey is an NFT. 393 00:23:33,280 --> 00:23:34,320 Speaker 1: What is an NFT? 394 00:23:35,320 --> 00:23:40,440 Speaker 2: So these NFTs it's digital art, so it's a computer file, 395 00:23:40,440 --> 00:23:44,679 Speaker 2: it's an image, and people were paying big sums of 396 00:23:44,680 --> 00:23:47,080 Speaker 2: money to own it, which is kind of weird because 397 00:23:47,600 --> 00:23:49,960 Speaker 2: the monkey image is called the bored Ape Yacht Club, 398 00:23:50,000 --> 00:23:52,720 Speaker 2: and it was ten thousand cartoons, all of these different 399 00:23:52,760 --> 00:23:55,760 Speaker 2: kind of ugly looking monkeys with different hats and stuff. 400 00:23:56,119 --> 00:23:58,760 Speaker 2: You can go online. You can look at all these 401 00:23:58,800 --> 00:24:01,080 Speaker 2: images for free, and you could download them to your 402 00:24:01,080 --> 00:24:03,600 Speaker 2: computer also for free. You can put them on Twitter. 403 00:24:03,880 --> 00:24:06,000 Speaker 2: No one's going to stop you. But if you want 404 00:24:06,040 --> 00:24:09,960 Speaker 2: to prove that you own the monkey, you have to pay. 405 00:24:10,640 --> 00:24:12,760 Speaker 2: As recently as like a year or two ago, it 406 00:24:12,880 --> 00:24:15,120 Speaker 2: was like five hundred grand to buy one of these monkeys. 407 00:24:15,320 --> 00:24:19,800 Speaker 2: What makes it crypto is that your ownership is recorded 408 00:24:19,840 --> 00:24:24,400 Speaker 2: on the blockchain, So next to your name it would 409 00:24:24,400 --> 00:24:26,959 Speaker 2: say that you have you know, two bitcoins, and then 410 00:24:27,000 --> 00:24:29,960 Speaker 2: would also say that you have one monkey with a 411 00:24:29,960 --> 00:24:32,680 Speaker 2: silly hat, and now would be recorded for all time 412 00:24:33,200 --> 00:24:37,400 Speaker 2: in the blockchain. And people were really paying huge sums 413 00:24:37,760 --> 00:24:39,920 Speaker 2: basically for bragging rights to be able to say they 414 00:24:39,920 --> 00:24:43,119 Speaker 2: were the one who bought the monkey. I saw a 415 00:24:43,160 --> 00:24:47,920 Speaker 2: promotion for this on the Jimmy Fallon show, the Tonight show. 416 00:24:48,280 --> 00:24:52,280 Speaker 2: He had Paris Hilton on, and they're showing off these 417 00:24:52,320 --> 00:24:56,320 Speaker 2: board apes and saying, Oh, isn't this cool? And supposedly 418 00:24:56,320 --> 00:24:59,359 Speaker 2: they each paid hundreds of thousands of dollars for them, 419 00:25:00,000 --> 00:25:02,840 Speaker 2: and regular people started buying them too. It was one 420 00:25:02,840 --> 00:25:05,760 Speaker 2: of the craziest parts of this whole mania. 421 00:25:06,320 --> 00:25:10,720 Speaker 1: You paid twenty thousand dollars for a board ape yacht 422 00:25:10,880 --> 00:25:13,800 Speaker 1: club picture? Is that correct? 423 00:25:14,560 --> 00:25:19,480 Speaker 2: Yes? So the crypto people would often tell me, Zeke, 424 00:25:19,680 --> 00:25:22,280 Speaker 2: you don't know about crypto, you don't have any crypto. 425 00:25:22,600 --> 00:25:25,879 Speaker 2: Who are you to write about crypto? And I started 426 00:25:25,920 --> 00:25:29,919 Speaker 2: to think they have a point. Maybe there's something I'm missing. 427 00:25:30,280 --> 00:25:34,200 Speaker 2: Maybe if I got one, I would understand something new 428 00:25:34,240 --> 00:25:37,480 Speaker 2: about why this is appealing, and I think, I thought 429 00:25:37,480 --> 00:25:39,840 Speaker 2: to myself, I'm going to get one. I want to 430 00:25:39,880 --> 00:25:42,160 Speaker 2: go right to the top. I want a really cool one. 431 00:25:42,240 --> 00:25:44,879 Speaker 2: I want the one that Justin Bieber has, that Snoop 432 00:25:44,920 --> 00:25:48,000 Speaker 2: Dogg has eminem and that's the boord Ape Yacht Club. 433 00:25:48,440 --> 00:25:52,199 Speaker 2: And the good ones cost maybe five hundred grand. But 434 00:25:52,320 --> 00:25:56,600 Speaker 2: they also produce these sort of derivatives called mutant apes. 435 00:25:57,040 --> 00:26:01,440 Speaker 2: These are even uglier pictures of apes that have been 436 00:26:01,520 --> 00:26:04,200 Speaker 2: mutated by some sort of serum. They sort of look 437 00:26:04,280 --> 00:26:07,800 Speaker 2: like melted monkeys. If you got one, you could go 438 00:26:07,880 --> 00:26:09,959 Speaker 2: to ape Fest, which was like a week long party. 439 00:26:10,520 --> 00:26:14,399 Speaker 2: I'm a diligent reporter. I'm like, the reader wants to 440 00:26:14,440 --> 00:26:16,520 Speaker 2: go to ape Fest. I can't tell the reader. Oh, 441 00:26:16,560 --> 00:26:18,480 Speaker 2: I didn't go to ape Fest because it cost too much. 442 00:26:19,000 --> 00:26:22,920 Speaker 2: So I sat my wife down, I said, Nikki, I 443 00:26:23,000 --> 00:26:25,000 Speaker 2: got to talk to you about something important for the book. 444 00:26:25,960 --> 00:26:27,840 Speaker 2: In order to go to this party, I'm gonna need 445 00:26:27,840 --> 00:26:30,719 Speaker 2: to acquire one of these board apes. They're these pictures 446 00:26:30,720 --> 00:26:34,280 Speaker 2: of monkeys. Crypto people say it's a blue chip investment, 447 00:26:34,400 --> 00:26:38,720 Speaker 2: but they're pretty expensive. And I was like, maybe this 448 00:26:38,840 --> 00:26:40,639 Speaker 2: wasn't the nicest question for me. But I was like 449 00:26:40,880 --> 00:26:42,240 Speaker 2: so what do you think how much you think I'm 450 00:26:42,240 --> 00:26:45,280 Speaker 2: gonna ask you for? And she said, all right, well, 451 00:26:45,320 --> 00:26:47,119 Speaker 2: you sat me down, so it's probably a lot, maybe 452 00:26:47,160 --> 00:26:51,920 Speaker 2: like five thousand dollars. And I said it's actually forty. 453 00:26:52,560 --> 00:26:55,840 Speaker 2: When I asked her it was forty, and her face 454 00:26:56,600 --> 00:27:00,600 Speaker 2: contorted into this look of horror. And I know she 455 00:27:00,720 --> 00:27:03,680 Speaker 2: was thinking about, we get a new minivan that could 456 00:27:03,720 --> 00:27:06,639 Speaker 2: pay for like a semester of college. Maybe okay, maybe 457 00:27:06,680 --> 00:27:08,439 Speaker 2: like a couple weeks of college by the time our 458 00:27:08,520 --> 00:27:11,440 Speaker 2: kids grow up. But she understood that this was important 459 00:27:11,440 --> 00:27:15,280 Speaker 2: for the project, and she said go ahead. And it 460 00:27:15,320 --> 00:27:17,440 Speaker 2: was a couple weeks before I got around to buying it, 461 00:27:17,840 --> 00:27:21,000 Speaker 2: and luckily for me, the price had crashed to twenty 462 00:27:21,040 --> 00:27:23,800 Speaker 2: thousand dollars. But that was also kind of scary because 463 00:27:23,800 --> 00:27:27,439 Speaker 2: I'm thinking, wait, I'm glad I don't have to pay forty, 464 00:27:27,760 --> 00:27:30,720 Speaker 2: but the price can fall so much in just a week. 465 00:27:30,920 --> 00:27:33,320 Speaker 2: How much am I going to lose? But I saw 466 00:27:33,320 --> 00:27:36,800 Speaker 2: it through buying. It was horrible. It was like I 467 00:27:36,800 --> 00:27:38,679 Speaker 2: finally got to see how crypto worked, and I did 468 00:27:38,760 --> 00:27:40,919 Speaker 2: not like it. You have to sort of zap your 469 00:27:40,920 --> 00:27:44,640 Speaker 2: money off into the ether. It's very complicated and they 470 00:27:44,640 --> 00:27:47,240 Speaker 2: make you watch a video telling you that if you 471 00:27:47,320 --> 00:27:49,720 Speaker 2: mess anything up, your money's gone, and that you should 472 00:27:49,760 --> 00:27:52,359 Speaker 2: engrave your password on a metal plate and bury it 473 00:27:52,400 --> 00:27:56,520 Speaker 2: in your backyard. And I'm like, I don't have time 474 00:27:56,520 --> 00:27:58,919 Speaker 2: for that. But I did get to go to eight Fest, 475 00:27:59,359 --> 00:28:02,399 Speaker 2: and when I got there, it's just a bunch of 476 00:28:02,400 --> 00:28:05,640 Speaker 2: guys milling around. They're mostly drunk or stoned. I mean, 477 00:28:05,680 --> 00:28:08,440 Speaker 2: it was cool that Eminem and Stute performed. 478 00:28:08,840 --> 00:28:10,080 Speaker 1: Where is Apefest? 479 00:28:10,560 --> 00:28:14,159 Speaker 2: So this is in downtown Manhattan. It was on a pier. 480 00:28:14,640 --> 00:28:17,240 Speaker 2: There are a few thousand people there, and again it's 481 00:28:17,240 --> 00:28:19,359 Speaker 2: put on by the creators of this board Ape Yacht 482 00:28:19,359 --> 00:28:23,480 Speaker 2: Club and these guys. I mean, I'm just amazed. If 483 00:28:23,520 --> 00:28:26,479 Speaker 2: I sold these board apes. In the initial sale, they 484 00:28:26,560 --> 00:28:29,119 Speaker 2: raised a few million dollars. If I had done that, 485 00:28:29,640 --> 00:28:32,320 Speaker 2: I would be on the next plane to Dubai. I've 486 00:28:32,359 --> 00:28:34,400 Speaker 2: taken my millions. But they kept it going. They kept 487 00:28:34,440 --> 00:28:37,159 Speaker 2: releasing new products and raising more and more money. And 488 00:28:37,280 --> 00:28:39,840 Speaker 2: by the time I was there, they had just released 489 00:28:40,000 --> 00:28:44,920 Speaker 2: something called ape Coin, which was the unofficial currency of 490 00:28:44,960 --> 00:28:48,720 Speaker 2: the board Ape Yacht Club. And they're just like, hey, 491 00:28:48,720 --> 00:28:50,160 Speaker 2: this is going to be great for all sorts of 492 00:28:50,160 --> 00:28:53,600 Speaker 2: stuff in the future, and it started training for like, 493 00:28:54,000 --> 00:28:56,600 Speaker 2: I don't know, five ten bucks an ape coin on paper, 494 00:28:56,640 --> 00:29:00,600 Speaker 2: these guys were billionaires just off ape coin. And Snoop 495 00:29:00,640 --> 00:29:04,240 Speaker 2: performed a song at the concert where he was telling 496 00:29:04,280 --> 00:29:08,240 Speaker 2: people buy ape coin, dope by dodgecoin, it's not cool 497 00:29:08,680 --> 00:29:12,840 Speaker 2: ape coins the future. I couldn't believe it, but nobody 498 00:29:12,880 --> 00:29:14,920 Speaker 2: liked my board APE. I was getting teased left and right. 499 00:29:15,080 --> 00:29:18,280 Speaker 2: Is apparently the worst one, even like pimply teenagers had 500 00:29:18,280 --> 00:29:20,920 Speaker 2: better board apes. It was a horrible experience. 501 00:29:21,560 --> 00:29:24,640 Speaker 1: You now, of twenty grand and a board ape, what's 502 00:29:24,680 --> 00:29:25,440 Speaker 1: it worth today? 503 00:29:26,640 --> 00:29:28,880 Speaker 2: I could not sleep while I own this board APE. 504 00:29:28,960 --> 00:29:31,000 Speaker 2: I unloaded it as soon as I could on the 505 00:29:31,080 --> 00:29:33,800 Speaker 2: last day of Apefest. I took about a two thousand 506 00:29:33,840 --> 00:29:37,120 Speaker 2: dollars a loss, but most of the loss was actually 507 00:29:37,160 --> 00:29:39,480 Speaker 2: in all the fees involved in transferring the board APE. 508 00:29:40,000 --> 00:29:43,360 Speaker 2: Had I held it till today, the value of one 509 00:29:43,400 --> 00:29:47,080 Speaker 2: of these melty ones is down to six thousand dollars. 510 00:29:47,080 --> 00:29:49,880 Speaker 2: I think so better than you'd think. But I'm glad 511 00:29:49,920 --> 00:29:51,800 Speaker 2: I unloaded mine when I did. 512 00:29:52,600 --> 00:29:55,480 Speaker 1: The parallel to that in this whole idea of NFTs, 513 00:29:56,080 --> 00:30:01,280 Speaker 1: the NBA started selling basketball highlight videos like digital sports 514 00:30:01,320 --> 00:30:04,280 Speaker 1: cards as you put it that. In March of twenty 515 00:30:04,320 --> 00:30:06,160 Speaker 1: twenty one, the Wall Street Journal had a photo of 516 00:30:06,160 --> 00:30:09,680 Speaker 1: a twenty seven year old who made fifteen million dollars 517 00:30:09,720 --> 00:30:10,280 Speaker 1: flipping it. 518 00:30:10,600 --> 00:30:11,760 Speaker 2: Yes, and I think it's real. 519 00:30:12,240 --> 00:30:14,920 Speaker 1: Isn't this like insane? I mean, isn't it insane? 520 00:30:15,560 --> 00:30:18,480 Speaker 2: Yeah? I mean some of these things, the concepts kind 521 00:30:18,480 --> 00:30:22,160 Speaker 2: of make sense, right, Like I collected baseball cards. I 522 00:30:22,240 --> 00:30:25,280 Speaker 2: was pretty nerdy. I had magic the gathering cards, even 523 00:30:25,360 --> 00:30:27,240 Speaker 2: kind of ones that might have cost one hundred bucks. 524 00:30:27,640 --> 00:30:30,920 Speaker 2: But they've just taken it to this extreme where they're 525 00:30:30,960 --> 00:30:35,520 Speaker 2: acting like the value of these could be infinite, and 526 00:30:36,280 --> 00:30:38,280 Speaker 2: people are just making so much money on it that 527 00:30:38,440 --> 00:30:42,360 Speaker 2: others felt fomo. They jumped in that got the prices going, 528 00:30:42,960 --> 00:30:46,240 Speaker 2: And yeah, for a while, it seemed like you were 529 00:30:46,320 --> 00:30:48,400 Speaker 2: kind of a sucker if you didn't buy crypto and 530 00:30:48,720 --> 00:30:54,120 Speaker 2: become a millionaire flipping NBA cards virtual NBA highlights. 531 00:30:54,440 --> 00:30:56,280 Speaker 1: Do you think NFTs are just a fan or do 532 00:30:56,320 --> 00:30:58,959 Speaker 1: you think at the beginning of a new art form. 533 00:30:59,000 --> 00:31:02,760 Speaker 2: I could certainly see someone using them in an interesting way, 534 00:31:03,280 --> 00:31:06,960 Speaker 2: But nearly all the ones that were popular seemed very 535 00:31:07,760 --> 00:31:11,320 Speaker 2: fatish to me. I actually, when I think about my 536 00:31:11,480 --> 00:31:17,520 Speaker 2: book I think one day my grandkids are going to say, Papa, 537 00:31:18,280 --> 00:31:22,200 Speaker 2: why did Justin Bieber pay two million dollars for this 538 00:31:22,280 --> 00:31:25,320 Speaker 2: really ugly picture of a monkey? And I will say 539 00:31:25,840 --> 00:31:28,080 Speaker 2: it was a crazy time in history. And you've got 540 00:31:28,120 --> 00:31:29,760 Speaker 2: to read this book if you want to understand it, 541 00:31:29,760 --> 00:31:30,920 Speaker 2: because it makes no sense. 542 00:31:32,120 --> 00:31:35,920 Speaker 1: That's wild. One of the things is supposedly bitcoin was 543 00:31:35,960 --> 00:31:39,120 Speaker 1: so complicated that it couldn't be hacked into. But isn't 544 00:31:39,120 --> 00:31:42,239 Speaker 1: it a fact that in fact hackers did figure out 545 00:31:42,280 --> 00:31:43,840 Speaker 1: a way to break into the exchanges. 546 00:31:44,600 --> 00:31:48,840 Speaker 2: Yeah, so pretty impressive. Bitcoin itself has not been compromised. 547 00:31:48,880 --> 00:31:51,880 Speaker 2: But the problem is that like you probably hold your 548 00:31:51,920 --> 00:31:55,600 Speaker 2: bitcoin on some sort of exchange, or like nearly everybody does. 549 00:31:56,160 --> 00:31:58,360 Speaker 2: In theory, you could engrave the code on a metal 550 00:31:58,400 --> 00:32:01,239 Speaker 2: plate and buried it in your backyard, but nobody does that. 551 00:32:01,240 --> 00:32:03,880 Speaker 2: They keep it on the exchange. And that means that 552 00:32:04,080 --> 00:32:08,840 Speaker 2: essentially you don't really have that bitcoin the way that 553 00:32:09,360 --> 00:32:12,760 Speaker 2: you are counting on the promises of this exchange, that 554 00:32:12,800 --> 00:32:16,640 Speaker 2: they're holding the bitcoin on your behalf and again and again. 555 00:32:17,440 --> 00:32:20,840 Speaker 2: I mean, hacking is big. That's when you know, somebody 556 00:32:21,200 --> 00:32:27,120 Speaker 2: cracks into the computer of the exchange and sends all 557 00:32:27,120 --> 00:32:31,200 Speaker 2: the bitcoins off into the ether. But also so many 558 00:32:31,240 --> 00:32:35,520 Speaker 2: of these exchange operators have succumbed to the temptation to 559 00:32:35,720 --> 00:32:38,680 Speaker 2: just use the bitcoins or the other crypto they're supposed 560 00:32:38,680 --> 00:32:43,160 Speaker 2: to be holding for their own purposes. And this is 561 00:32:43,200 --> 00:32:48,680 Speaker 2: all happening largely outside of existing financial regulations. So like 562 00:32:48,760 --> 00:32:51,040 Speaker 2: it's a pretty strong temptation. We've just seen it again 563 00:32:51,080 --> 00:32:54,440 Speaker 2: and again that if nobody's watching, these exchange operators will 564 00:32:54,480 --> 00:32:57,640 Speaker 2: often dip into these user funds for other things. 565 00:32:58,200 --> 00:33:00,800 Speaker 1: One of the things you point out is topic that 566 00:33:00,920 --> 00:33:03,120 Speaker 1: my wife Coast was very, very interested in when she 567 00:33:03,200 --> 00:33:05,479 Speaker 1: was the ambassador of the Vatican. She worked on and 568 00:33:05,520 --> 00:33:08,800 Speaker 1: that is the degree to which there are some centers 569 00:33:08,840 --> 00:33:12,920 Speaker 1: that actually basically traffic in people and force them into 570 00:33:13,120 --> 00:33:16,840 Speaker 1: a form of slave labor working on cryptocurrency. I mean, 571 00:33:16,920 --> 00:33:20,920 Speaker 1: it's like the twenty first century meets the twelfth century. Yeah, 572 00:33:20,920 --> 00:33:24,120 Speaker 1: I gather there was, particularly in Cambodia, a real problem 573 00:33:24,160 --> 00:33:24,880 Speaker 1: involving them. 574 00:33:25,640 --> 00:33:27,800 Speaker 2: Most of the book is silly, but it also took 575 00:33:27,880 --> 00:33:32,600 Speaker 2: me to this pretty dark place, which was that I 576 00:33:32,680 --> 00:33:36,920 Speaker 2: learned that we all receive these spam text messages that 577 00:33:37,000 --> 00:33:39,840 Speaker 2: look like they're to the wrong number, like hey, David, 578 00:33:39,920 --> 00:33:43,720 Speaker 2: don't you remember me? Or things like that. And it 579 00:33:43,800 --> 00:33:47,360 Speaker 2: turns out that people sending these messages are often in 580 00:33:47,480 --> 00:33:52,320 Speaker 2: Cambodia or Me and mar. They've been lured there with 581 00:33:52,400 --> 00:33:55,480 Speaker 2: the promise of a good job in customer service, and 582 00:33:55,560 --> 00:33:58,840 Speaker 2: once they show up, they're told they can't leave and 583 00:33:58,920 --> 00:34:02,320 Speaker 2: they have to run scam. And I talk with people 584 00:34:02,320 --> 00:34:05,600 Speaker 2: who escape from these places. There's like these giant towers 585 00:34:05,640 --> 00:34:07,800 Speaker 2: that are just full of floor after floor of scammers. 586 00:34:08,320 --> 00:34:10,839 Speaker 2: I mean, the scammers are victims. I shouldn't insult them 587 00:34:10,840 --> 00:34:13,600 Speaker 2: by calling them that word. But the bosses are often 588 00:34:14,400 --> 00:34:20,080 Speaker 2: Chinese gangsters, and they are forcing these people to work 589 00:34:20,080 --> 00:34:23,360 Speaker 2: around the clock sending spam messages and trying to trick 590 00:34:24,120 --> 00:34:29,880 Speaker 2: people like me or you into fake investments, into sending 591 00:34:29,920 --> 00:34:34,160 Speaker 2: money to them. It's a big business. One crypto researcher 592 00:34:34,200 --> 00:34:37,640 Speaker 2: I spoke to estimated that ten billion dollars have been 593 00:34:37,680 --> 00:34:42,600 Speaker 2: lost to these crypto scams, and the United Nations actually 594 00:34:42,680 --> 00:34:46,319 Speaker 2: just put out a report that estimated as many as 595 00:34:46,360 --> 00:34:50,240 Speaker 2: two hundred thousand people in Southeast Asia have been tricked 596 00:34:50,280 --> 00:34:53,800 Speaker 2: into working in these scam compounds where they do crypto scams, 597 00:34:53,840 --> 00:34:58,360 Speaker 2: gambling scams. It's truly awful. In the book, it sounded 598 00:34:58,360 --> 00:35:00,600 Speaker 2: like kind of a conspiracy theory. I wanted to see 599 00:35:00,600 --> 00:35:02,560 Speaker 2: it with my own eyes. In the book I Will 600 00:35:02,600 --> 00:35:06,560 Speaker 2: go to Cambodia, I teamed up with two of the 601 00:35:06,560 --> 00:35:10,719 Speaker 2: top reporters in the country to check out some of 602 00:35:10,800 --> 00:35:15,480 Speaker 2: these frankly like cities full of workers who've been trafficked 603 00:35:15,520 --> 00:35:16,200 Speaker 2: and abused. 604 00:35:16,560 --> 00:35:19,880 Speaker 1: It's really staggering in a way of the dream of 605 00:35:19,880 --> 00:35:23,400 Speaker 1: this brand new currency and of the nightmare of this 606 00:35:23,520 --> 00:35:25,080 Speaker 1: kind of exploitation of people. 607 00:35:25,880 --> 00:35:28,799 Speaker 2: Yes, the people who like crypto, like some of them, 608 00:35:28,800 --> 00:35:31,520 Speaker 2: they really love it. They genuinely think they're going to 609 00:35:31,560 --> 00:35:34,160 Speaker 2: save the world with this. But I think you've got 610 00:35:34,239 --> 00:35:37,399 Speaker 2: to look at what's happening in the real world and 611 00:35:37,480 --> 00:35:42,680 Speaker 2: what are the real consequences of creating pseudononymous currency that 612 00:35:42,760 --> 00:35:46,080 Speaker 2: lets people in the US just zap their money to 613 00:35:46,400 --> 00:35:50,680 Speaker 2: Chinese gangsters in Cambodia with no refunds and no tracking. 614 00:35:51,280 --> 00:35:52,960 Speaker 1: I think the amount of time and effort you put 615 00:35:53,000 --> 00:35:55,560 Speaker 1: into those reruly shows, and the degree to which you 616 00:35:56,160 --> 00:35:59,880 Speaker 1: are able to help us everyday folks understand a various 617 00:35:59,880 --> 00:36:03,799 Speaker 1: sophisticated part of the evolution of our system is kind 618 00:36:03,800 --> 00:36:06,560 Speaker 1: of amazing. Zeke. I want to thank you for joining me. 619 00:36:06,840 --> 00:36:09,360 Speaker 1: I want to encourage our listeners to go get a 620 00:36:09,400 --> 00:36:13,400 Speaker 1: copy of your fascinating new book, Number, Go Up Inside 621 00:36:13,440 --> 00:36:17,360 Speaker 1: Crypto's Wild Rise and Staggering Fall, which is now available 622 00:36:17,400 --> 00:36:20,359 Speaker 1: at Amazon and bookstores everywhere. And I have to tell 623 00:36:20,400 --> 00:36:23,399 Speaker 1: you this has been a very fascinating conversation, so I'm 624 00:36:23,480 --> 00:36:25,879 Speaker 1: very grateful that you took the time to be with us. 625 00:36:26,280 --> 00:36:28,800 Speaker 2: Thank you so much for having me on. It was 626 00:36:28,880 --> 00:36:30,759 Speaker 2: really fun and it's my first book, so I really 627 00:36:30,760 --> 00:36:31,480 Speaker 2: appreciate it. 628 00:36:34,080 --> 00:36:36,120 Speaker 1: Thank you to my guest, Zeke Fox. You can get 629 00:36:36,160 --> 00:36:38,640 Speaker 1: a link to buy his new book, Number, Go Up 630 00:36:38,920 --> 00:36:42,840 Speaker 1: Inside Crypto's Wild Rise and Staggering Fall, on our show 631 00:36:42,880 --> 00:36:46,800 Speaker 1: page at nutsworld dot com. Newtsworld is produced by Gangrish 632 00:36:46,800 --> 00:36:51,440 Speaker 1: three sixty and iHeartMedia. Our executive producer is Guarnsey Slow. 633 00:36:51,760 --> 00:36:55,760 Speaker 1: Our researcher is Rachel Peterson. The artwork for the show 634 00:36:56,160 --> 00:36:59,399 Speaker 1: was created by Steve Penley. Special thanks to the team 635 00:36:59,400 --> 00:37:03,279 Speaker 1: at Gingriich. If you've been enjoying Newtsworld, I hope you'll 636 00:37:03,320 --> 00:37:06,359 Speaker 1: go to Apple Podcast and both rate us with five 637 00:37:06,400 --> 00:37:09,839 Speaker 1: stars and give us a review so others can learn 638 00:37:09,880 --> 00:37:13,359 Speaker 1: what it's all about. Right now, listeners of Newtsworld can 639 00:37:13,400 --> 00:37:17,800 Speaker 1: sign up for my three freeweekly columns at gingristhree sixty 640 00:37:17,840 --> 00:37:23,400 Speaker 1: dot com slash newsletter. I'm Newt Gingrich. This is Newtsworld.