Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Reagan. I'm a senior editor at
Speaker 1: Bloomberg Numbled On, a higher across asset reporter with Bloomberg,
Speaker 1: and this week on the show. Well, for years, many
Speaker 1: traditional financial companies were a bit skeptical and cautious when
Speaker 1: it came to cryptocurrencies. But that's all changed, and in
Speaker 1: the last few years some of the most important trading
Speaker 1: firms have started to make big investments in the space,
Speaker 1: and not just a trade bitcoin and ether and all
Speaker 1: the other digital assets, but to actually play a role
Speaker 1: in building out the infrastructure that connects these global decentralized
Speaker 1: markets together. We're gonna talk to the president of a
Speaker 1: trading firm that has taken a big plunge in a
Speaker 1: crypto about what they're up to and where they see
Speaker 1: the industry going next. But filled down before we bring
Speaker 1: him in, I've I've got a bit of a bone
Speaker 1: to pick with you in that I was going through
Speaker 1: the brackets on the Bloomberg terminal. You know, if listeners
Speaker 1: aren't familiar, you can enter it an n C A
Speaker 1: A Brackett right on the terminal. You did not enter
Speaker 1: a bracket. I'm very just. I didn't I know nothing
Speaker 1: about march madness. That's what thinks. That's exactly You're exactly
Speaker 1: the type of person who wins these things. Though. Then
Speaker 1: you know the rest of us, Yeah, we think we're
Speaker 1: a bunch of geniuses. We pick all the upsets for you.
Speaker 1: You you know, you could look at it like, oh,
Speaker 1: they gave me the answers. I'll take one over sixteen
Speaker 1: and two over fifteen. Although my track record was with
Speaker 1: this type of stuff is so bad, as you know,
Speaker 1: and let the listeners know, I asked you who should
Speaker 1: I be betting on, and you never gave me any answers,
Speaker 1: So I have nobody to cheer for. I did tell
Speaker 1: you about on the Delaware Blue Hens, and that was
Speaker 1: probably not It was not a good call, not a
Speaker 1: good call at all. I should have said St. Peter's
Speaker 1: New Jersey City the truth, right, So yeah, from our
Speaker 1: native New Jersey. Yeah. Anyway, I want to bring in
Speaker 1: our guest. His name is Dave Olson. He's the president
Speaker 1: and chief investment officer of Jump Trading Group. Dave, Welcome
Speaker 1: to the show, and thanks so much for joining us.
Speaker 1: Thanks for Donna, Hi Mike, Thanks for having me. Thanks
Speaker 1: Dave and Dave. I can only imagine if you put
Speaker 1: some of that brain power at Jump Trading to work
Speaker 1: on the brackets. I'm just throwing that out there. You know,
Speaker 1: Jump Trading in bracketology. You guys, you guys could be
Speaker 1: uh could be on this something there. But but why
Speaker 1: do you talk to us um a little bit? Uh,
Speaker 1: let the listeners know about your background. I know you
Speaker 1: came from a long career at JP Morgan, uh to jump.
Speaker 1: Jump was a uh computerized trading firm in derivatives and
Speaker 1: and a lot of asset classes. You've sort of made
Speaker 1: that migration into crypto in recent years. Talk us through
Speaker 1: sort of the history of your career and how Jump
Speaker 1: got involved in crypto. Yeah, sure, so quite right. I
Speaker 1: was at JP Morgan for about twenty five years. I
Speaker 1: had a chance over that span to work in a
Speaker 1: lot of different areas of the bank. The bank changed
Speaker 1: a lot. I think it was about employees when I
Speaker 1: joined in the corporate fans inning program, and I think
Speaker 1: when I left it was something like two hundred and
Speaker 1: seventy thousands. So uh, nothing like the merger and getting
Speaker 1: into the retail business to amp those numbers up UM.
Speaker 1: It was a terrific place to be right in the
Speaker 1: middle of a lot of the inner workings of finance
Speaker 1: UH and the global developments, you know. The derivatives market
Speaker 1: grew a lot while I was there. I was involved
Speaker 1: in those markets quite a bit. I did some fintech
Speaker 1: venture capital work around one point, oh we didn't call
Speaker 1: it that back then, but the dot com days UH.
Speaker 1: And then the last several years of my career I
Speaker 1: spent running the clearing businesses and got to know a
Speaker 1: lot of quantitative trading firms UH, and got to know
Speaker 1: more about Jump. And it was a natural progression to
Speaker 1: to be able to work for a company like Jump
Speaker 1: that I had seen handle a lot of alto markets,
Speaker 1: a lot of tough decisions, and really got to know him,
Speaker 1: at least from the outside before I had an interest
Speaker 1: in in coming over. It was actually shortly after I
Speaker 1: started at at Jump that we we started to scale
Speaker 1: into crypto. I joined Jump in starting in around we
Speaker 1: had been incubating an experiment with a group of students
Speaker 1: at University of Illinois. They had come to work in
Speaker 1: a laboratory that we had set up in conjunction with
Speaker 1: the computer science and computer engineering departments there, and crypto
Speaker 1: was really a frontier back then. UH there were no
Speaker 1: organized exchanges to speak of. There are a lot of
Speaker 1: homegrown solutions to liquidity in the crypto markets. We were
Speaker 1: interested in it, and it fit a really nice spot
Speaker 1: to work on with this group of students and interns
Speaker 1: where we wouldn't expose a lot of intellectual property of
Speaker 1: the company. There wasn't much to trade in crypto. Bitcoin
Speaker 1: was still under a thousand dollars, Ether had not traded
Speaker 1: even one coin yet pretty early days, and as an exercise,
Speaker 1: UH several of several of the Jump Labs UH students
Speaker 1: and employees set about the work of building a really
Speaker 1: high performance infrastructure almost as a proving ground to trade
Speaker 1: crypto for the first time. It's never something you would
Speaker 1: have invested in as a business plan kind of matter.
Speaker 1: There wasn't enough volume, the risks were too high, their
Speaker 1: whole litany of problems in solving the post trade and
Speaker 1: movement of FIAT. But as an exercise it was great,
Speaker 1: and it was just very fortunate timing that at the
Speaker 1: end of it we had really a world class infrastructure
Speaker 1: ready to go as soon as bitcoin started to lift off,
Speaker 1: in terms of both price action and volumes. So that
Speaker 1: was really the genesis of how we got involved. It's
Speaker 1: so interesting to hear this backstory because I actually wanted
Speaker 1: you to talk about what building that crypto infrastructure actually
Speaker 1: looks like, what it entails, and then correct me if
Speaker 1: I'm wrong. But the Crypto division, the Jump Crypto division,
Speaker 1: you you announced that officially last year, right, and so
Speaker 1: how what do your goals look like in terms of
Speaker 1: how large of a player you want to be in
Speaker 1: the crypto space? Yeah? Um, yeah, so a bunch of
Speaker 1: that question. The early days of connectivity were wild and wooly. Uh.
Speaker 1: I think one of the coolest thing about being a
Speaker 1: participant in the crypto markets is we're interacting with really bright,
Speaker 1: really talented people, many of whom have had no exposure
Speaker 1: to finance whatsoever. Uh. They might be uh cryptographers, they
Speaker 1: might be a couple of guys in Slovenia that that
Speaker 1: ran a computer parts repair store that we're mining bitcoin
Speaker 1: after hours on the rigs that people had brought into
Speaker 1: fixed and all of them had come at similar problems
Speaker 1: with a totally fresh perspective. Um, And you know that
Speaker 1: leads to a lot of idiosyncrasies in how a matching
Speaker 1: engine works, or where the where the where the data
Speaker 1: center is hosted, or how the cloud is used. So
Speaker 1: we really had our first opportunity to do um you know,
Speaker 1: sophisticated quantitative trading in the cloud because of cryptouh. So
Speaker 1: that was, you know, and now that is starting to
Speaker 1: lead into a lot of other areas of finance, and um,
Speaker 1: you know, we'll see where it goes from here. That
Speaker 1: was a big topic at the Futures Industry Association annual
Speaker 1: meetings which took place last week. Um So crypto is
Speaker 1: really on the on the front edge of that because
Speaker 1: there's not not a lot of baggage with how things
Speaker 1: have always worked or what the cookie cutter approaches to
Speaker 1: building something in finance. That's a very very fun that's
Speaker 1: a very fun part of it. So you're you're right.
Speaker 1: Crypto did start, as you know, combination of a skunkworks
Speaker 1: h stroke experiment. Also, I think we were careful in
Speaker 1: the early years to not tip our hand to the
Speaker 1: market that we were investing as much as we were
Speaker 1: in crypto, it was still relatively green field. There was
Speaker 1: still a lot of first mover advantage out there, so
Speaker 1: We were very tight lipped externally for sure. Even internally,
Speaker 1: we didn't promote or publicized too much, and we had
Speaker 1: a pretty small team working on things for the first
Speaker 1: couple of years. But as it started to scale, so
Speaker 1: seen when it hit ten thousand in bitcoin for the
Speaker 1: first time, and through the crypto winter that ensued in
Speaker 1: and then kind of the grind up from there. We've
Speaker 1: been constantly investing, We've been adding talent. We've become a
Speaker 1: pretty big part of the marketplace, not only trading that's
Speaker 1: where our heritage is, but we've become a pretty big
Speaker 1: venture capital investor in the infrastructure that we see as
Speaker 1: necessary to have crypto and DeFi flourish, and really, starting
Speaker 1: in the last couple of years, a lot of our
Speaker 1: focus has moved to building, so we've hired a lot
Speaker 1: of blockchain engineering talent. We acquired a firm called Service One,
Speaker 1: we believe to be the best blockchain engineers in the
Speaker 1: world we were able to acquire, and we've been adding
Speaker 1: to that team. So all told, we're well over a
Speaker 1: hundred people in Jump Crypto. It is its own business unit.
Speaker 1: It's part of Jump Trading Group, but run really is
Speaker 1: a separate enterprise and continues to scale pretty substantially. I
Speaker 1: find it fascinating that, uh, you know, the origins date
Speaker 1: back to the University of Illinois. You know, it used
Speaker 1: to be back in the day you try to hire
Speaker 1: the smartest coming out of undergrads are coming out of
Speaker 1: grad school. Now you go right to the school. It's
Speaker 1: all that I think. I'm gonna go back to college,
Speaker 1: maybe get get another degree, I don't know, get a
Speaker 1: fun internship. Good to get get that internship, get on
Speaker 1: the ground floor. But Dave, I want to talk about
Speaker 1: some of the the infrastructure projects. UM. Obviously, one big
Speaker 1: one that you guys are heavily involved in, UH is
Speaker 1: what's known as Wormhole. And U me if I'm butchering
Speaker 1: the explanation of this, but the way I understand it,
Speaker 1: it's basically a bridge that lets you take assets trading
Speaker 1: on the Salona blockchain and carry them over the bridge,
Speaker 1: which is Wormhole, onto the Ethereum blockchain. UM. So you know,
Speaker 1: so that there's sort of connectivity between the blue two blockchains. UM. Obviously,
Speaker 1: something uh what was it a month or two ago,
Speaker 1: went went horribly wrong. Someone was able to figure out
Speaker 1: UH software exploit on the Bridge and basically take what
Speaker 1: was it three million worth of ether uh and and
Speaker 1: sort of disappear. Walk us through exactly what happened there
Speaker 1: and sort of how Jump was involved not only with
Speaker 1: the development of Wormhole, but but this whole escapade and
Speaker 1: how you guys came sort of the rescue of the
Speaker 1: project at the end. Yeah, um, the you're right. I
Speaker 1: think your description of Wormhole being across Chain Bridge is
Speaker 1: dead on. I think the you know, the way I
Speaker 1: think of it in UH. An analogy that I think
Speaker 1: of when describing Wormhole is, let's say I've got a
Speaker 1: PayPal account and I go out to dinner with some friends,
Speaker 1: and if they're all using PayPal, were on kind of
Speaker 1: the same quote layer one payment system, and it's very
Speaker 1: easy for us to settle the bill or page other
Speaker 1: for the cab fare or whatever's going on. But if
Speaker 1: one of us uses the cash app or Venmo or
Speaker 1: or some other payment mechanism and I don't, there's no
Speaker 1: way that I can communicate at all. They're just completely
Speaker 1: separate ecosystems. They're closed off from one another. You can't
Speaker 1: pay twenty bucks from from PayPal into UH into the
Speaker 1: cash app. UH. You have to either have them download
Speaker 1: the app, which is a big pain, or you know,
Speaker 1: heaven forbid. By the way, that's usually that's usually me
Speaker 1: when I'm out to dinner with a bigger up, I'm like, oh, sorry, guys,
Speaker 1: I got the app. None of you guys, use I'll
Speaker 1: get the next one. All right, It's gonna cutch up
Speaker 1: with them to sign the check on the dashboard of
Speaker 1: the car. I'll be a parking lot, uh doing that. Um,
Speaker 1: And you know, for a long time, that's how that's
Speaker 1: how the blockchain world worked. If you had ether on
Speaker 1: the Ethereum network and and you were using that layer
Speaker 1: one blockchain, you had this very vibrant community. There were
Speaker 1: smart contracts written their n f T platforms. You could
Speaker 1: do a lot with your ether, But if you wanted
Speaker 1: to spend that ether, or get yourself involved in a project,
Speaker 1: or buy an n f T on a different chain,
Speaker 1: you you either had to convert downstream into FIAT and
Speaker 1: then reload a different wallet and have different providers. It
Speaker 1: was very clunky. So wormhole Um isn't really linked to
Speaker 1: any one specific chain. So the only thing I would
Speaker 1: take issue with with your description is, uh, they're now
Speaker 1: eight layer ones it's totally interoperable. We expect that number
Speaker 1: to grow well into double digits by the end of
Speaker 1: the year. There's a new layer one being added every
Speaker 1: couple of weeks or so. Uh. And that if if
Speaker 1: you've got Ether and you wanted to move that Ether
Speaker 1: to the Oasis network or Terra or Salana or Finance
Speaker 1: smart Chain or a bunch of different chains out there, Uh,
Speaker 1: You've got the ability to do that, uh pretty easily.
Speaker 1: And important to note it's not just token movement. Uh.
Speaker 1: So this could be n f T s, this could
Speaker 1: be messages, it could be data. Really, anything that can
Speaker 1: exist on any of those blockchains can be ported over
Speaker 1: through wormhole to another blockchain. UM. Importantly you don't. It's
Speaker 1: not a hub and spoke model. So let's say that
Speaker 1: you moved Ether over to Salana and then you wanted
Speaker 1: to move that wrapped ethereum over to Tara. You don't
Speaker 1: have to go back all the way through all the
Speaker 1: hops back to the home chain and then start back up.
Speaker 1: You can just move straight from one to the other.
Speaker 1: So a lot of functionality there. Uh. We first got involved,
Speaker 1: actually I've already mentioned Service one. UM. They were they
Speaker 1: were the group writing the first lines of code to
Speaker 1: develop Wormhole, and it's one of the elements that attracted
Speaker 1: us to that team. Um and the community started to
Speaker 1: rally around the idea of across chain bridge. We're very
Speaker 1: enthusiastic about it, so we became UH sponsors and backers
Speaker 1: and and road code and tried to evangelize its use
Speaker 1: to the best we could. It is a decentralized project,
Speaker 1: so you know, it's it's out there and is a
Speaker 1: community effort. But we've had we've had a pretty high
Speaker 1: share of some of the early work that went into
Speaker 1: the thinking. UH. One of the reasons why we've got
Speaker 1: such conviction in a cross chain world is there's a
Speaker 1: lot of creativity happening with layer ones right now. Some
Speaker 1: are really well designed for one attribute, let's say, extremely
Speaker 1: high throughput, very high performance. You know that's Salana right
Speaker 1: now is leading the layer one pack in terms of
Speaker 1: transactions per second to end low gas fees. That's very
Speaker 1: well suited for some areas that start to bleed into
Speaker 1: what looks more like traditional finance. And then you've got
Speaker 1: the Ethereum blockchain, which has got this incredible community of
Speaker 1: passionate developers that are writing smart contracts and UH creating
Speaker 1: n f T marketplaces and things like that. And our
Speaker 1: firmly held belief is that the future is a multi
Speaker 1: layer one future, and that the comparative advantage of the
Speaker 1: different attributes of layer ones is something that should be
Speaker 1: celebrated and that we would expect to continue to scale.
Speaker 1: So you know, right now, if you're an artist and
Speaker 1: you wanted to sell n f T s, UH Ethereum
Speaker 1: is where there is the most liquidity. It's where the
Speaker 1: biggest community for n f T s exists. But it's
Speaker 1: also one of the most expensive places to mint a
Speaker 1: new series of n f T s. So now you
Speaker 1: don't have to force fit yourself into doing everything on
Speaker 1: one layer one. If you wanted to mint on a
Speaker 1: much more efficient home layer one blockchain, you could pay
Speaker 1: much lower gas fees, importantly to a lot of artists
Speaker 1: and certainly to me. You can use a much lower
Speaker 1: energy footprint, and then you've minted a thousand n f
Speaker 1: T s. If you wanted to move a dozen over
Speaker 1: the of those, your most rare copies over into open sea,
Speaker 1: you can use wormhole to do that, and you kind
Speaker 1: of get the best of both worlds. So that's some
Speaker 1: background on on what wormhole is and why we're so
Speaker 1: excited about it and uh and quite right. Uh. In February,
Speaker 1: we had uh, uh just so happened that about two
Speaker 1: dozen of us at Jump Crypto were down in Miami.
Speaker 1: We were in some rented office space. We were spending
Speaker 1: time together going through our plans for the year, doing
Speaker 1: some deep dive on research, debating white papers, you know,
Speaker 1: figure out where we wanted to build next. Uh. And
Speaker 1: in the middle of the afternoon, one of our one
Speaker 1: of our team members who who watches a lot of
Speaker 1: things that are happening on the blockchain like a hawk,
Speaker 1: noticed that there started to become a discrepancy between the
Speaker 1: amount of wrapped eth so uh, the amount of ethereum
Speaker 1: that should have had a one for one deposit locked
Speaker 1: in a smart contract on the ethereum blockchain started to
Speaker 1: those numbers didn't didn't match anymore. So he pressed the
Speaker 1: proverbial big red button. We all happened to be uh
Speaker 1: in a tiny, tiny little room together, uh, and we
Speaker 1: we immediately identified that there was an issue. You know,
Speaker 1: The way I've described to people is it's it's basically
Speaker 1: a high tech check forgery where the attacker or attackers
Speaker 1: were able to spoof the destination chain. In this case,
Speaker 1: that was Salana into believing that ether had been locked
Speaker 1: up on the Ethereum blockchain, so they were able to
Speaker 1: kind of print out of thin air some new rappee.
Speaker 1: Once you've got wrapped ether, you can do a couple
Speaker 1: of things. You can go back kind of to the
Speaker 1: cashier stand and say, okay, I've got this rapteef, I'd
Speaker 1: like to turn it in for the original please. Uh.
Speaker 1: And because of the way the system worked, that uh
Speaker 1: other ether that had been locked previously was made available
Speaker 1: to that person tendering the rap teeth. And you can
Speaker 1: buy stuff with wrap teeth on different chains. So a
Speaker 1: little bit of a little bit happened if the second one,
Speaker 1: a lot happened to the first one, and all told,
Speaker 1: about a hundred two ether was compromised. Our first step
Speaker 1: was to try to bring the system down. UM. One
Speaker 1: of the one of the trade offs of decentralized world is,
Speaker 1: you know, you can't kick the plug out of the
Speaker 1: wall like you if it was all your own. Uh.
Speaker 1: You have to you have to put the word out
Speaker 1: into the community. UM. The way wormhole works, they're nineteen
Speaker 1: guardians that attest to the transactions, and they're all independent.
Speaker 1: So we had to get the word out in the
Speaker 1: Wormhole community that there was there was an attack and
Speaker 1: we we needed to bring the system down. UM. That
Speaker 1: probably took twenty minutes. I would guess, Uh, there was
Speaker 1: a tense twenty minutes because obviously the vulnerability still existed
Speaker 1: and and you know, there was more value locked beyond
Speaker 1: what had been compromised. UM. And then the next step was, Okay,
Speaker 1: what happened and is it over? Like? Have we have
Speaker 1: we effectively taken everything down? Do we know the totality
Speaker 1: of the problem? And then what what caused it? What
Speaker 1: was the was the root issue that was able to
Speaker 1: be exploited? And can we fix it in a way
Speaker 1: that's totally robust. In parallel, we had to make the determination, okay,
Speaker 1: what do we do about the stolen stuff? UM? You know?
Speaker 1: Do we you know? We we don't. We don't have
Speaker 1: any Jump Trading group. Jump Crypto doesn't have any contractual responsibilities.
Speaker 1: We're not liable for anything. Um. But we made an
Speaker 1: elective decision, uh to swiftly make all the participants whole, uh,
Speaker 1: and to go out and acquire a D thousand eight
Speaker 1: ourselves and then inject that into the wormhole smart contract
Speaker 1: to replenish what the attacker had had stolen. And let
Speaker 1: me just put in a sight if for listeners not
Speaker 1: familiar with the price of eight, you're talking about three
Speaker 1: thousand dollars roughly a token at that time, right something,
Speaker 1: so talking about what it was a round million dollars
Speaker 1: that we have to do that. Yeah, I feel like
Speaker 1: when someone pulls off a caper like this in crypto,
Speaker 1: eventually they get caught. It might not be right away,
Speaker 1: but you know, was that in your think, in everyone's
Speaker 1: mind at all? Like, you know what, we can make
Speaker 1: everyone hole in this project, but we're gonna find whoever
Speaker 1: did this eventually and and recoup at least some of that.
Speaker 1: You know, is that part of the thinking that that
Speaker 1: motivates you to to sort of come to the rescue
Speaker 1: for the project like this, Uh, you know it. You
Speaker 1: don't know what is going to happen at the end
Speaker 1: of all the paths that you chase down. All we
Speaker 1: know is we're going to chase down every path. We're
Speaker 1: working in very close consultation with government resources, with private resources.
Speaker 1: There is a lot of firepower that is expert at
Speaker 1: tracking down criminals like this, and we are in this
Speaker 1: fight permanently, UM, So this is not something that we
Speaker 1: will become distracted by next month or next year or
Speaker 1: or whenever this is Ah, this is a permanent condition.
Speaker 1: But I would say that didn't really factor into the
Speaker 1: question as to what our action should be in the
Speaker 1: moment um. That was really motivated by a belief that
Speaker 1: not doing so would have been an enormous setback to
Speaker 1: a cross chain world in crypto and defight in general. Uh.
Speaker 1: Quite quite logically, it may have been the end of
Speaker 1: Wormhole entirely. Uh, And that that kind of a setback
Speaker 1: at this moment when such exciting foundational technology is being
Speaker 1: laid down, UM, would have been a terrible outcome, not
Speaker 1: just for the marketplace. And you know, we're community minded
Speaker 1: for sure, but this wasn't totally an act of altruism.
Speaker 1: You know, this was an investment and what we believe
Speaker 1: is going to be an incredibly robust future for uh,
Speaker 1: for a lot of other projects that we're working on,
Speaker 1: investments that we've made, coins that we hold, just the
Speaker 1: the the entire scaling of a lot of DeFi capabilities Uh,
Speaker 1: we think wormhole is going to be central too. So
Speaker 1: whether or not we ever recoup the money or what
Speaker 1: we do with the ether if we get it back,
Speaker 1: wasn't really top of mind in in thinking about it.
Speaker 1: It was more about this, this event could have blown
Speaker 1: up the your all your future ambitions and goals. I
Speaker 1: guess yeah, and and look you it. You don't know
Speaker 1: where these coins are. You don't know you know, you
Speaker 1: don't know who the attacker is, what type of attacker
Speaker 1: it is. Um, you know it. Uh, they're just too
Speaker 1: too many uncertainties, especially as it's unfolding, to try to
Speaker 1: handicap you know, chance of success, of of trying to
Speaker 1: recoup it. You you already started answering part of my
Speaker 1: next question, which is I wanted to ask you who
Speaker 1: exactly you're working with in terms of recovering the funds,
Speaker 1: and then how close are you to recovering them. Well,
Speaker 1: you are quite a distance away from recovering the funds
Speaker 1: until you have them. So there's um uh, there's really
Speaker 1: two states of the world. Uh. The the the agencies
Speaker 1: of the US government are uh both incredibly engaged and
Speaker 1: incredibly well resourced and expert. Um. This is thankfully, not
Speaker 1: something that we've had a lot of repetitions doing. So
Speaker 1: this is a little bit of a learning experience for
Speaker 1: for everybody a jump that has been involved in the
Speaker 1: in the pursuit of what's going on. But I've been
Speaker 1: terribly impressed by the resources within the US government to
Speaker 1: uh to to go after these type of criminals. Uh,
Speaker 1: it's obviously a big number. Um. It's again it comes
Speaker 1: at a time when when hacking is at the top
Speaker 1: of the consciousness of of government and private industry. Um.
Speaker 1: It also happened to occur uh just a few days
Speaker 1: before the bitfin x successful capture was announced. So that
Speaker 1: timing was not only great because it made us feel
Speaker 1: good like, Okay, there's a there's precedent for success here,
Speaker 1: but I think also is motivating for the government agencies
Speaker 1: that are involved in a hunt that this is this
Speaker 1: is not a waste of time. You know, it's not
Speaker 1: a it's not necessarily a cold case that you're never
Speaker 1: going to go anywhere with. And I also think that
Speaker 1: that case showed just how hard it is to move
Speaker 1: illicit funds around if they're in crypto form. You know,
Speaker 1: the bitfin x attackers, you know, it was reported that
Speaker 1: they were resorting to trying to spend was a four
Speaker 1: and a half billion dollars one dollars at a time
Speaker 1: with Walmart gift cards. You know, like that is not
Speaker 1: a scaled solution. Um. And you know, the the great
Speaker 1: thing about crypto is it's a permanent, immutable movement by
Speaker 1: movement record that is available for everyone to see. The
Speaker 1: ether that was stolen in the wormhole attack has made
Speaker 1: exactly one move into the wallet that it was moved into.
Speaker 1: It has not moved since. Um, everybody is watching that wallet. Uh,
Speaker 1: every every big exchange and stable coin provider was fantastic
Speaker 1: in their response. That was something that happened minutes after
Speaker 1: we knew that the money had moved. Was we called
Speaker 1: in blacklisted those wallet addresses. Everyone just dropped everything and
Speaker 1: blacklisted him except for one, uh, one pretty big provider who, um,
Speaker 1: for understandable reasons, I suppose said, listen, we need a
Speaker 1: we need either a court order or a police report
Speaker 1: to blacklist Waltz. We can't just have somebody call up
Speaker 1: and you know, blacklist of wallet. And so we looked
Speaker 1: at each other and one of the one of the
Speaker 1: folks in the room, a pretty senior person to jump.
Speaker 1: Uh walked out of the office building into Miami and
Speaker 1: found the closest police precinct to where we were and
Speaker 1: walked in middle of the middle of the afternoon, walked
Speaker 1: into the police precinct and said. The officer behind the
Speaker 1: desk looks up and says, uh, yeah, And he says, yeah,
Speaker 1: I'd like to report the theft. And the officer nods
Speaker 1: and he goes cell phone, he goes, no wrapped either,
Speaker 1: like the worst day. This coff is seen behind the desk,
Speaker 1: and it's fantastic. You know, we got the Maybe this
Speaker 1: is better for Chicago to paperwork, but you know, God
Speaker 1: bless him. We got the police report and uh went
Speaker 1: on our way. So a lot of a lot of
Speaker 1: weird stuff like that. That's amazing story. Well, Dave, you
Speaker 1: have my word that it wasn't me. Okay, I promised you.
Speaker 1: I wouldn't know how to even begin to do this.
Speaker 1: I don't know about vil Donna. She is mysteriously in
Speaker 1: a condo in Florida. Now all of a sudden like that,
Speaker 1: you want to you want to give him up talking
Speaker 1: later sen million Dollar Valley. Wow, that's amazing. So all
Speaker 1: I was just just glued to that wallet forevermore. I guess,
Speaker 1: uh be fascinating to see how that turns out, Dave.
Speaker 1: I wanted to ask about another one of sort of
Speaker 1: the infrastructure projects that you guys are very heavily involved with,
Speaker 1: and that's pith Um. And for listeners who aren't familiar,
Speaker 1: pith is basically UM. I kind of think of it
Speaker 1: as the SIP, you know, the stock market SIP, which
Speaker 1: is basically just the data feed of all the trades
Speaker 1: that have happened that's available to all market participants UM.
Speaker 1: And obviously with crypto it's much more complicated than that.
Speaker 1: There's everything from derivatives to crypto trades to to I
Speaker 1: guess equity and currency trades on it UM. But I
Speaker 1: wanted to tell us a little bit about that. But
Speaker 1: I'm also curious how UM. Both Wormhole and pith to
Speaker 1: me have some common motivation, and that's that UM you're
Speaker 1: trying to sort of solve problems UM that seemed to
Speaker 1: originate with with ethereum, and the fact that it can
Speaker 1: kind of be sort of slow, you know, it's it's
Speaker 1: obviously the newer blockchain after Bitcoin, but compared to some
Speaker 1: of the more faster ones Um that have been developed
Speaker 1: since then. It's got this very dedicated community, as you
Speaker 1: pointed out of the developers building projects on top of it.
Speaker 1: It got this core audience. But I can't help but
Speaker 1: wonder if you know, having to develop these you know,
Speaker 1: type of solutions for Ethereum problems, if if in your
Speaker 1: mind that sort of bodes poorly for the long term
Speaker 1: future of Ethereum. You know, is it you know, to
Speaker 1: to use sort of a tortured analogies that kind of
Speaker 1: putting you know, a new radiator and slick tires on
Speaker 1: an old super room when when really you know you're
Speaker 1: waiting for that tesla to to arrive um. You know,
Speaker 1: is there a Salana or a more advanced blockchain that
Speaker 1: that really eventually we'll be able to do everything on
Speaker 1: you can do it on Ethereum just better, and that
Speaker 1: you know Ethereum is kind of doomed as a result.
Speaker 1: Is that? Is that to sort of pessimistic towards Ethereum,
Speaker 1: to to think of it that way? You know, it's
Speaker 1: You're right on the score that a lot of the
Speaker 1: motivations for what we build are driven by problems or
Speaker 1: inefficiencies in the in the marketplace that we think I
Speaker 1: have got a big addressable market and the building blocks
Speaker 1: of using crypto and blockchain tools are really well suited
Speaker 1: to solve um. But you know, the way I think
Speaker 1: of PITH especially, it is it's because of ethereum success
Speaker 1: that that the motivation for PITH really really started. I
Speaker 1: think that the you know, the development of smart contracts
Speaker 1: and the types of creativity that you see, you know it,
Speaker 1: We've used the analogy before, but it really does feel
Speaker 1: like the app store moment for finance, that instead of
Speaker 1: having to wait for you know, big software company to
Speaker 1: figure everything out and release it, you can have a
Speaker 1: small number of folks in a garage or a living
Speaker 1: room or the basement or or something like that come
Speaker 1: up with a great idea, start coding it, and then
Speaker 1: release it into into a very welcoming environment. So I
Speaker 1: think that the you know, the the success of Ethereum
Speaker 1: is um is a necessary condition for something like that
Speaker 1: to exist. Uh. And I go back to the comparative
Speaker 1: advantage idea that there there are a lot of features
Speaker 1: with Ethereum that are terrific, that are going to endure,
Speaker 1: that are going to be part of this marketplace. I
Speaker 1: think for a very long time there are gonna be
Speaker 1: other ones. You know. Um, the way the oasis layer
Speaker 1: one handles privacy uh and the ability to interact and
Speaker 1: do research on data in a partition way without exposing
Speaker 1: that data to the public. Blockchain very cool, very different
Speaker 1: than a lot of other layer ones. The speed of
Speaker 1: Salana and the low cost, so I think we see
Speaker 1: a multi chain opportunity for PITH. It's really the distribution
Speaker 1: of high fidelity market data that comes from the firsthand
Speaker 1: knowledge of having executed the trade or been the matching
Speaker 1: engine where the trade has taken place. And then you know,
Speaker 1: instead of a top down approach, which has traditionally been
Speaker 1: how market data has been distributed in finance, this is
Speaker 1: really bottoms up. So the so are the risk takers,
Speaker 1: the participants that have that were there at the moment
Speaker 1: that the trade was consummated, being a beacon to say, hey,
Speaker 1: you know, we we think the price of ether is
Speaker 1: you know, thirty one oh three, or we think the
Speaker 1: price of uh tesla is a thousand, or that you
Speaker 1: know dollar yen is is trading at one twenty or
Speaker 1: whatever the whatever the instrument happens to be. You've got
Speaker 1: now more than fifty firsthand data participants, all streaming that
Speaker 1: into a arbitration engine on the chain and then feeding
Speaker 1: that out to anybody who wants to take it. It's
Speaker 1: a pretty radical change in the way data is distributed. Dave,
Speaker 1: I have one more question, sort of a bigger picture
Speaker 1: question that actually one of our colleagues sent over to
Speaker 1: me emmilin Nicole in London. She covers script and she's
Speaker 1: been following your story and writing a lot about Warmhole,
Speaker 1: and she was wondering if the kind of contingency planning
Speaker 1: that or making everybody whole, is that the type of
Speaker 1: contingent planning that anybody in your type of role in
Speaker 1: crypto should be thinking about, And is there sort of
Speaker 1: a is that a dystopian way to be thinking about it? Um?
Speaker 1: You know, we've we've seen in traditional finance and in
Speaker 1: defy and in crypto. You know, even the original Ether
Speaker 1: hack where the Etherean blockchain had to react very quickly.
Speaker 1: These are realities, you know, the Equifax hack, the You know,
Speaker 1: there are reasonably sophisticated code bases that harden over time,
Speaker 1: and part of the way they harden is by uh
Speaker 1: finding their vulnerabilities when you go from a few hundred
Speaker 1: people reviewing the code and looking for problems to a
Speaker 1: few million people where there are very high stakes two
Speaker 1: and very high values associated with with vulnerabilities, and that's
Speaker 1: how they get identified sometimes. So I think that's a reality,
Speaker 1: whether you're on chain or off chain, or a big
Speaker 1: company or in a hacker house or no matter where
Speaker 1: you are. Uh, that's kind of the progression that complex
Speaker 1: software has to go through. UM. You know, you're hopefully
Speaker 1: you don't have to do too many iterations of that. UM.
Speaker 1: You know, we mentioned a couple of minutes ago the
Speaker 1: ten million dollar bounty for the return of the hacked
Speaker 1: Wormhole funds or the conviction of the perpetrators. We've also
Speaker 1: got a ten million dollar bug bounty for finding new
Speaker 1: unrelated bugs, where you can be a white hat hat
Speaker 1: hacker not be chased, you know, by governments around the
Speaker 1: world the rest of your life, but get an eight
Speaker 1: figure payoff from finding a critical vulnerability that's out there. UM.
Speaker 1: So I think, you know, we it wasn't the first
Speaker 1: time we had thought of how we would react when uh,
Speaker 1: something went wrong. It wasn't that afternoon when we discovered
Speaker 1: the wormhole exploit. UH, you do, you do contingency plan
Speaker 1: for that sort of thing. You know, you hope it
Speaker 1: doesn't happen, and if it does, you don't you hope
Speaker 1: it's not of that magnitude. Um. But thankfully we had
Speaker 1: the financial resources in the in the conviction to to
Speaker 1: react immediately when it did. But I don't think it's
Speaker 1: discoping at all. I think it's it's pragmatic and realistic
Speaker 1: that you gotta think that way kind of trial, trial
Speaker 1: under fire, you know, it's Uh, well, I'll say, if
Speaker 1: any listeners know where all that stolen EA through is,
Speaker 1: tweet tweets a thel Dotta and I will get you
Speaker 1: that ten million. I know, I'm not even gonna ask
Speaker 1: for a cut of a day, but yeah, something something
Speaker 1: like that day. If I wanted to sort of ask
Speaker 1: you a big picture question, um about sort of the
Speaker 1: state of the world and how crypto fits into it. Obviously,
Speaker 1: for the world really changed about a month ago with
Speaker 1: Russia's invasion of Ukraine and the financial sanctions uh that
Speaker 1: came as a result from the U S and its allies.
Speaker 1: A lot of people sort of talking about while are
Speaker 1: these oligarchs using crypto to to hide their money? Uh,
Speaker 1: it's also sort of I think, put some urgency behind
Speaker 1: the idea of central bank digital currencies at least you know,
Speaker 1: people thinking about, well, um, you know, should chin to
Speaker 1: make the digital uh e c N y um something
Speaker 1: that can be used internationally with a digital ruble a
Speaker 1: Russia to get out of, you know, around some of
Speaker 1: these sanctions. And to me, you know, when you get
Speaker 1: back to the idea of like, well, all are sort
Speaker 1: of the sanctioned Russians trying to hide out in crypto,
Speaker 1: To me, that actually goes to one of the sort
Speaker 1: of you know, main fundamental selling points of crypto, getting
Speaker 1: around that financial censorship that a lot of people, um,
Speaker 1: I think is important. But at the same time, I
Speaker 1: feel like it's also the biggest risk to crypto if
Speaker 1: you know that type of thing is being done on
Speaker 1: scale that uh, you know, the government regulators could really
Speaker 1: sort of crack down a lot harder and a lot
Speaker 1: faster than than maybe they would otherwise with with regulations.
Speaker 1: How are you all thinking, how are you thinking sort
Speaker 1: of the state of crypto given all these crazy current
Speaker 1: events that we've seen, you know, is it, um, you know,
Speaker 1: is this a danger from their regulatory side to crypto
Speaker 1: or is it doesn't help it evolve into sort of
Speaker 1: the more mature version of the industry. You know what
Speaker 1: what's all mean to you? David give you props if
Speaker 1: you followed any of that all the way through and
Speaker 1: you actually know what the question is. I've got a
Speaker 1: sentence diagram like we used to do in grammar school.
Speaker 1: Followed all of it. It's like when you go to
Speaker 1: the doctor and they say three words and they ask
Speaker 1: you to repeat the three words at the end of it.
Speaker 1: Uh and the So I think, you know, first things first,
Speaker 1: I think I can't imagine a worse tool for an
Speaker 1: oligarch to try to siphon money out of a bank
Speaker 1: account or a sanctioned country. I think, you know, we
Speaker 1: we talked about the bit fitex hackers have any resort
Speaker 1: two hundred dollar Walmart gift cards it You know, if
Speaker 1: you've got a couple of thousand dollars and you want
Speaker 1: to sneak around in crypto, you know it, you might
Speaker 1: get lost in the See if you've got fifty million,
Speaker 1: and this is not oligarch money or or sovereign state money,
Speaker 1: we're talking about that these fifty million dollars a lot
Speaker 1: of money. It is tiny compared to the billions that
Speaker 1: that are at issue with sanctions. There's nowhere to go, like,
Speaker 1: there is no off ramp that you can find to
Speaker 1: liquidate a crypto asset into something usable in the real world.
Speaker 1: It just it you're stuck. You know, firms like chain
Speaker 1: Analysis and a lot of other private companies are getting
Speaker 1: better and better and better at identifying the provenance of
Speaker 1: each coin's movements, where it came from, what the on
Speaker 1: ramp was, where the off ramps going. You've got all
Speaker 1: the eyes in the world on it, and it's totally public,
Speaker 1: you know. The I think that, um, you know, I
Speaker 1: don't know. I don't know a good way to evade sanctions.
Speaker 1: I hopefully there are none, but I would imagine the
Speaker 1: crypto has to rank among the worst possible ways. Um.
Speaker 1: The you know, I will say for the record, Jump
Speaker 1: Jump Capital, Jump Crypto and Jump Trading Group are not
Speaker 1: involved in minero, you know. We you know, there are
Speaker 1: some coins designed to specifically allude the types of analysis
Speaker 1: that we're talking about. We we have not traded one
Speaker 1: minero coin in our history. We've made a conscious decision
Speaker 1: not to. Uh, we don't want to be a conduit
Speaker 1: for something that would um, you know, veer into that
Speaker 1: territory even if permitted by by rule or or regulations. So, UM,
Speaker 1: we're very much on the side of a transparent blockchain model,
Speaker 1: uh that authorities can use to hunt down bad guys
Speaker 1: and uh and bring him to justice or or enforced sanctions.
Speaker 1: So I'm much more in the camp that this will
Speaker 1: be an educational moment for the market that crypto is
Speaker 1: not some you know, another world back alley where you
Speaker 1: can't see what's going on and billions of dollars can
Speaker 1: move and no one knows where they are. Um, you
Speaker 1: know exactly where they are, and there's just no liquidity,
Speaker 1: uh to get off the bus. It's uh. Maybe Speed
Speaker 1: three can be the sequel that Center Bulk is looking
Speaker 1: for for trying to find a crypto off ramp, but
Speaker 1: but it's not out there. Yeah. How about the the
Speaker 1: idea of cb D c S, I mean, does does
Speaker 1: this um, this whole financial sanctions environment sort of? Um,
Speaker 1: do you think it will hasten the development of CBD
Speaker 1: season And how how do you see them fitting in
Speaker 1: to the crypto world? Are they just a completely different beast?
Speaker 1: You know? Were they in some ways. Could they be
Speaker 1: a competitor to to crypto, you know, at least in
Speaker 1: terms of just the the efficiency of a digital currency
Speaker 1: versus the old fiat currency. You know, I think that
Speaker 1: they'll be another tool in the toolbox. But it would
Speaker 1: be a big deal if a major sovereign nation decided
Speaker 1: to to take their central bank currency digital um. Crypto
Speaker 1: has got a lot of elements that make it really
Speaker 1: well designed for the way global commerce works, for the
Speaker 1: way trading and markets work. You know, we've seen the
Speaker 1: introduction of seven markets at scale really for the first
Speaker 1: time with crypto. Banking is not seven. So there's a
Speaker 1: little bit of a disconnect there, and that's one of
Speaker 1: the reasons why stable points have come to such such
Speaker 1: prominence is that they're immediately available in liquid no matter
Speaker 1: what hour the day it is, without the you know,
Speaker 1: the FED wire being up or the bank in Japan
Speaker 1: being open for business or or whatever you're trying to do.
Speaker 1: So I think that some of the elements that that
Speaker 1: crypto is well designed for central bank digital currency would
Speaker 1: be fantastic. You know, it would be great to have
Speaker 1: a digital dollar that you could use for settlements at
Speaker 1: any moment, any any time throughout the day without regard
Speaker 1: to which bank your banking at. You can do that
Speaker 1: in kind of limited scale today. So, UH, if if
Speaker 1: you've got an account at at City Bank, and I've
Speaker 1: got an account at City Bank, and I transfer a
Speaker 1: hundred dollars UH using their app, that actually does move
Speaker 1: from my account into your account at two o'clock in
Speaker 1: the morning on Sunday. You don't have to wait for
Speaker 1: the FED to be open for that movement to take place.
Speaker 1: But if you want to go from you know, your
Speaker 1: accounted City Bank to the ldna's account at JP Morgan,
Speaker 1: you've got to wait for you know, Monday morning when
Speaker 1: when the fedwire comes back up and gets open. So
Speaker 1: I think that it would be extremely well suited there.
Speaker 1: I think that would be It would promote growth in
Speaker 1: crypto overall. UH, and we would just kind of move
Speaker 1: the rails of traditional finance one step further to being
Speaker 1: digitized and efficient and modern and safe and UH and
Speaker 1: more easily regulated. Frankly, all right, Dave, Well, we've got
Speaker 1: one tradition here. We can't let you go until we've
Speaker 1: heard the craziest thing you've seen in markets this week.
Speaker 1: But let's start with Phildon. I'm curious what Fildona's craziest
Speaker 1: thing is this week. Well, actually, I have a question
Speaker 1: for you, Mike. Do you know what Doorja Kat and
Speaker 1: David Solomon have in common? They're both playing Lallapalooza. Yes,
Speaker 1: this is the thing everybody's talking about. You're in touch,
Speaker 1: You're you're with the cool people. So David Soloman, he's
Speaker 1: the CEO of Goldman. We learned his week This week
Speaker 1: he'll be performing at Lallapalooza. I think it's in July. Anyway,
Speaker 1: the most interesting thing about this and following it for
Speaker 1: a couple of years now, is that and Mott Levina
Speaker 1: Bloomberg Opinion has written about this is that a lot
Speaker 1: of people thought that maybe he'd have to give up
Speaker 1: his djaying side gig when when he became the CEO
Speaker 1: of Goldman. But he has sort of just ignored all
Speaker 1: of that advice and he just keeps on playing. So
Speaker 1: it's it's amazing to me. It's been good. It's been
Speaker 1: good for his DJ career being Yeah, it's been great.
Speaker 1: Spinner's got to spin, it's that easy. Yeah, So all
Speaker 1: you kids out there were aspiring DJs. That's one way
Speaker 1: to get famous, as the DJ is just go go
Speaker 1: get yourself a CEO job at one of the major
Speaker 1: Wall Street banks. That's pretty good. Filled down. I'll I'll
Speaker 1: set my hat to you on that one. How about you, Dave,
Speaker 1: Have you see anything crazy this week? So crazy? Um?
Speaker 1: You know it? It's it's the lem story, uh and
Speaker 1: the saga that continues there the you forget this week.
Speaker 1: It's it's one of the craziest things I've seen in
Speaker 1: my career that a major exchange where there have been
Speaker 1: bona fide matches between buyers and sellers, no bad data
Speaker 1: feed or technology quirk on a rye or something like that,
Speaker 1: but you had the bulk of pretty much a full
Speaker 1: day of trading result in outcomes that were seen as bad.
Speaker 1: Then go retroactively cancel all the trades. That is just
Speaker 1: bananas crazy, It really is. It's one of the craziest
Speaker 1: stories of the decade. I think we'll let me ask you, David.
Speaker 1: You know, is there a difference when you're talking about
Speaker 1: a physical uh commodity like nicol or safe it was
Speaker 1: oil or some something that's sort of you know, important
Speaker 1: to the functioning of the global economy versus a uh,
Speaker 1: financial asset. You know, does it kind of make sense
Speaker 1: for the elementy to do that? I mean, I know
Speaker 1: everyone's mad at them, and they're they're never gonna live
Speaker 1: this down. I don't even know if they'll survive this.
Speaker 1: You know, there's so much anger towards them. But you know,
Speaker 1: in a way I can kind of see what where
Speaker 1: they're coming from. When it's you know, when you're pushing
Speaker 1: the price of a commodity that's needed to keep sort
Speaker 1: of the global manufacturing industry rolling. Is there a distinction there?
Speaker 1: Do you think that that should maybe be codified into
Speaker 1: the rules of exchanges? So a couple of reactions to that.
Speaker 1: I think A specially because it's a vital commodity that
Speaker 1: the marketplaces decision of what the right prices with it
Speaker 1: where it should trade needs to be respected. And the
Speaker 1: buyer that needs nickel and is willing to pay a
Speaker 1: ton or whatever price and has arranged themselves so that
Speaker 1: they can afford that payment because it's vital to their UH,
Speaker 1: to their business, needs to know that they bought it um.
Speaker 1: So I think it's it's probably an even heightened expectation
Speaker 1: that that bona fide trades need to stand when you're
Speaker 1: talking about real world goods UM, you know, no less
Speaker 1: so for for financial products. But I think that it's
Speaker 1: certainly the case with oil or nickel or anything else.
Speaker 1: And in the event that there are some price bands
Speaker 1: or or some circuit breakers or something like that, absolutely
Speaker 1: that is a sound market practice position. Limits should be
Speaker 1: in play. But all that needs to be done before
Speaker 1: you start trading after. It's easy to say now in
Speaker 1: the REB mirror, like, well, you know, if they've just
Speaker 1: done these three things, that would have been pretty straightforward,
Speaker 1: except for the fact that those three things are done
Speaker 1: by almost every other major commodity exchange in the world
Speaker 1: UH and and have been for for decades. But the
Speaker 1: the I think, once you've got a trade and hedges
Speaker 1: based on that position and UH and you know to
Speaker 1: to either save the institution or or stay u off
Speaker 1: other outcomes, I think you just have to kind of
Speaker 1: live with the trade and either step up and and
Speaker 1: recapitalize UM or UH or or take the medicine and
Speaker 1: and and have the consequences be that other capital needs
Speaker 1: to come in or you know that the bad outcomes
Speaker 1: have to kind of play out. Nobody's rooting for those outcomes.
Speaker 1: But yeah, craziest thing I've seen quite a while, and
Speaker 1: certainly no one should accept that raped ether for an
Speaker 1: exchange for yeah, give me a buzz. All right, that's
Speaker 1: pretty good the good answer, Dave. I like that answer.
Speaker 1: You made me rethink how I'm thinking about all this.
Speaker 1: Now I'm gonna give you my crazy thing. Vildana. Are
Speaker 1: you much of a gamer? You play video games at all? No,
Speaker 1: not at all, not at all. Me neither. No basketball,
Speaker 1: no video games. She watches grammar videos on YouTube. That's her.
Speaker 1: That's her main vie and I sports bet during football season,
Speaker 1: remember the bills only on the bills only on the
Speaker 1: pretty good season for you last year, then thank you
Speaker 1: bad ending. But yeah, anyway, I'm not much of a
Speaker 1: gamer either. Back in the day though, back in the
Speaker 1: seventies and eighties, I was pretty good. And have you
Speaker 1: ever heard of Pong? Bildana, the game? I want to say, no,
Speaker 1: So this was, like I have told me about, I
Speaker 1: have a film, Dave played a mean game upon So
Speaker 1: this was probably I think the first video game it was,
Speaker 1: you know, in an actual arcade game. I don't know
Speaker 1: how many quotas I pumped in playing Pong and it's
Speaker 1: really simple. It's basically video ping pong. You know, you
Speaker 1: got one line on one side of the screen that
Speaker 1: goes up and down, another line on the other other
Speaker 1: screen side of the screen that goes up and down
Speaker 1: in a ball in between. Anyway, A Tori made the
Speaker 1: first home version of it. I guess they made the
Speaker 1: arcade version two, but they made the first home version
Speaker 1: of it. In n Um. It's sold originally under the
Speaker 1: brand name of Sears for fifty bucks. Um. It's not
Speaker 1: bad for today's dollars. I guess that was probably pretty expensive.
Speaker 1: In anyway, the guy who created it, uh, saved one
Speaker 1: of the prototypes, so pre manufacturers one of the first
Speaker 1: two prototypes, and this is what they took around the
Speaker 1: Sears and whoever else and tried to sell them this
Speaker 1: video games. The actual console, not the software for polling itself,
Speaker 1: but the hardware piece the home Yeah, the home console,
Speaker 1: the box that you would buy with the box. Yeah,
Speaker 1: and it was um it was a hardwired circuit board.
Speaker 1: In other words, it wasn't you know. They eventually made
Speaker 1: it with a computer chip. I think there's kind of
Speaker 1: a pretty innovative as far as computer chips. UM and
Speaker 1: sort of accelerated the you know, development of smaller computer
Speaker 1: chips back in the day. Anyway, he sold this prototype. So, Dave,
Speaker 1: this is where we play prices right? What do you
Speaker 1: think the prototype for the original Pong home video game
Speaker 1: sold for at auction just recently? Weld you go first,
Speaker 1: what's your what's your bid? I'll go with two million.
Speaker 1: I feel like the gamer community is pretty intense. Two million,
Speaker 1: All right, I'm gonna keep a straight face. This wasn't
Speaker 1: an n f T. This is the actual divice. Just
Speaker 1: my valuation a ten times the actual physical good. Who
Speaker 1: knows you could you could buy it and blow it
Speaker 1: up and turn that into an n f T. But
Speaker 1: what do you think prices right? Rules are in effective? Okay,
Speaker 1: so I can if i'm over, I'm dead, I could
Speaker 1: get a dollar and if it's above two million, if
Speaker 1: it's if it under basically yeah, yeah, right, all right,
Speaker 1: I'm gonna I'm gonna take the over. I'm gonna I'm
Speaker 1: gonna say it's two point one million. You know what,
Speaker 1: I agree with both of you. I thought it would
Speaker 1: go for a few million. Actually went for a twitter
Speaker 1: and seventy thou come on that it's going to be
Speaker 1: some exorbitant number set up. You know, the series story exactly,
Speaker 1: the whole spiel it should hire you the next time
Speaker 1: that they don't want to. Yeah, but then everybody will
Speaker 1: fall asleep and they'll wake up for the many product.
Speaker 1: The whole story got me thinking like, oh, this is important,
Speaker 1: this must be big. That's why he's beating it up.
Speaker 1: If you had never heard upon, you were still ready
Speaker 1: to bid two million for picture it in my mind, yeah, yeah,
Speaker 1: I Anyway, Dave, we'd love to get you back sometime
Speaker 1: and talk more about all this stuff. We're really really
Speaker 1: insightful conversation and good luck to you and everyone at
Speaker 1: jump uh in your your endeavors. Well, longtime listener, it's
Speaker 1: fun to be on for the first time. I would
Speaker 1: love to be back any time I get the invite.
Speaker 1: Appreciate the opportunity. Thank you, Dave. Thanks what goes up?
Speaker 1: We'll be back next week and something. You can find
Speaker 1: us on the Bloomberg Terminal website and app or wherever
Speaker 1: you get your podcasts. We'd love it if you took
Speaker 1: the time to rate and review the show on Apple
Speaker 1: Podcasts so more listeners can find us. And you can
Speaker 1: find us on Twitter, follow me at Reaganonymous. Bildonna Hierarch
Speaker 1: is at Bildonna hierarch. You can also follow Bloomberg podcasts
Speaker 1: at podcast What Goes Up is produced by Magnus Hendrickson.
Speaker 1: The Head of Bloomberg podcast is Francesco lev Thanks for listening.
Speaker 1: To see you next time. Just not wanting