Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I heard podcast,
Speaker 1: and I'm Stacy Marie Ishmael, Managing editor of Crypto for
Speaker 1: Bloomberg News. It's Monday, October three. Perhaps you've heard of
Speaker 1: Molly White. So one thing that I really care about
Speaker 1: is taking information that's not always the easiest to find
Speaker 1: and trying to make it more accessible to people. The
Speaker 1: software engineer and crypto skeptic has been profiled in The
Speaker 1: Washington Post, in Fast Company, and The Boston Globe. She
Speaker 1: has more than eighty thousand followers on her personal Twitter
Speaker 1: account and more than a hundred thousand on an account
Speaker 1: called web three is Going Just Great, which is based
Speaker 1: on her website of the same name. These are as
Speaker 1: you might guess, a chronicle of all the ways at
Speaker 1: web three is not going so great. Molly, delighted to
Speaker 1: have you on the show. Thanks for having me. It's
Speaker 1: my absolute pleasure. Why don't you tell our listeners a
Speaker 1: little bit more about you. I'm a software engineer and
Speaker 1: a researcher um and I've been focusing pretty heavily on
Speaker 1: researching crypto, blockchains, web three everything related to that, and
Speaker 1: I run the website web three is going just great
Speaker 1: where I keep track of some of the hacks and
Speaker 1: scams and other general disasters that have been happening in
Speaker 1: the crypto space. In other words, Web three is not
Speaker 1: going just great. It's a bit of a sarcastic title. Yes,
Speaker 1: what got you interested in becoming kind of the chronicler
Speaker 1: of our time as it were, of these various as
Speaker 1: you put it, hacks, scams, and disasters. I'm a bit
Speaker 1: of a chronicler by nature. I think I have kind
Speaker 1: of Wikipedia editor for you know, over a decade, and
Speaker 1: that's just something that I've always been really passionate about.
Speaker 1: But around the middle of last year or so, it
Speaker 1: felt like crypto was really reaching a bit of a
Speaker 1: fever pitch when it came to the marketing and the
Speaker 1: hype and the social media coverage. It was, you know,
Speaker 1: it was pretty extreme around everyone should be investing in crypto,
Speaker 1: you should be putting your retirement money into it. You
Speaker 1: could become a millionaire overnight, all these types of things,
Speaker 1: and I felt like we weren't seeing as much of
Speaker 1: the other side of things, where projects were getting hacked
Speaker 1: for sometimes hundreds of millions of dollars, people were losing
Speaker 1: their money because of individual hacks or because of you know,
Speaker 1: not securing their crypto well enough. And there was sort
Speaker 1: of a very serious, you know, predatory side of things
Speaker 1: that I felt like wasn't getting enough coverage, and so
Speaker 1: you know, I felt like I would do my part
Speaker 1: to try to change that. Well, you've certainly redirected a
Speaker 1: lot of the conversation in ways that are arguably more
Speaker 1: constructive from a consumer protection standpoints then had necessarily been
Speaker 1: the case before. But one of the things I'm sort
Speaker 1: of most interested in, and we have a very nerdy audience,
Speaker 1: so it's like, feel free to go deep into this.
Speaker 1: When you call yourself a natural kind of chronicler, an
Speaker 1: archivist as it were, how do you even keep track?
Speaker 1: Because I say this as an editor whose literal job
Speaker 1: is staying on top of, you know, the various things
Speaker 1: in crypto and every morning and I'm I wake up
Speaker 1: and I'm surprised by something like, what's your curatorial process?
Speaker 1: How do you decide what things kind of rise to
Speaker 1: the occasion of being worthy of inclusion? For you, it's
Speaker 1: a pretty uh holistic process, I would say, you know,
Speaker 1: it's kind of just based on vibes. Typically all include
Speaker 1: things if there was, you know, a major monetary amount,
Speaker 1: so anything over like a hundred thousand dollars they'll typically include.
Speaker 1: But I also will try to include things that show that,
Speaker 1: you know, sometimes the things that are going really wrong
Speaker 1: are affecting individual people really badly. And so even if
Speaker 1: a monetary amount might not be enormous compared to what
Speaker 1: an institutional loss might be, it still feels useful to
Speaker 1: describe that, you know, individual people are sometimes losing their
Speaker 1: entire savings in crypto, you know, even if for an
Speaker 1: institution it might not be that much money. As far
Speaker 1: as how I find things, that's pretty all over the place.
Speaker 1: There's a lot of I'm an RSS, you know lover,
Speaker 1: so I have a pretty active RSS feed that I follow,
Speaker 1: and then a lot of stuff comes through on Twitter.
Speaker 1: But you know, one thing that's been great is as
Speaker 1: the site has gotten a little bit bigger and there's
Speaker 1: become more of a devoted readership, a lot of people
Speaker 1: will just send me things, and that's really helpful because
Speaker 1: you can never find everything yourself. That's true. Shout out
Speaker 1: to RSS. I want to pick up on one thing
Speaker 1: that you said, which I think distinguishes your approach from
Speaker 1: that of others who are cropping up in this space,
Speaker 1: and which is the allowance for the individual and the
Speaker 1: highlighting of individual harms and not just institutional ones. I
Speaker 1: think one of your more recent and frankly harrowing threads
Speaker 1: was around the individual letters sent by creditors who had
Speaker 1: lost everything in a big kind of crypto bankruptcy sort
Speaker 1: of fall out. Can you talk a little bit more
Speaker 1: about what motivated you to do that and if there's
Speaker 1: anything that you learned, you know, as you undertook that project. Yeah,
Speaker 1: I mean, so, one thing that I really care about
Speaker 1: is taking information that's not always the easiest to find
Speaker 1: and trying to make it more accessible to people. And
Speaker 1: that's really what I was trying to do when I
Speaker 1: highlighted some of the excerpt from the letters that were
Speaker 1: being sent to the judge in the Celsius and the
Speaker 1: Voyage of bankruptcy cases, because you know they're online, but
Speaker 1: they're in a very obscure place there in these pdf files.
Speaker 1: You know, they're very long and it's a lot of
Speaker 1: reading to do, so I was just trying to sort
Speaker 1: of distill down some of the examples of how people
Speaker 1: were really materially harmed in those particular their cases. And
Speaker 1: you know, in a lot of cases, it wasn't individuals
Speaker 1: losing millions of dollars, but it was people losing substantial
Speaker 1: amounts of their savings. You know, some of them were retirees,
Speaker 1: some of them had been working for decades and just
Speaker 1: scraping together what extra money they could. You know, some
Speaker 1: of it was earmarked for their children's education. And it
Speaker 1: was really I think illustrative of how sometimes people who
Speaker 1: are getting into crypto are not necessarily what people picture.
Speaker 1: A lot of the time. You know, people will often
Speaker 1: picture young, usually male people who have a little bit
Speaker 1: of extra money that they want to just wildly gamble
Speaker 1: away on crypto, and they're taking these moon shots and
Speaker 1: you know, they might lose it all, they might become rich,
Speaker 1: but you know, ultimately it's not a big deal whatever
Speaker 1: happens to that money. But in this case, that was
Speaker 1: a market difference from what we were seeing in the letters,
Speaker 1: which was people who really thought that this was the
Speaker 1: savings account, that they could actually make interest rates that
Speaker 1: they weren't able to find in the traditional financial market,
Speaker 1: and who were really relying on this money. I mean,
Speaker 1: some people were sending letters about how they couldn't pay
Speaker 1: medical bills. They couldn't you know, they were risks, they
Speaker 1: were at risk of losing their homes because of this bankruptcy,
Speaker 1: and so, you know, I just felt really important to
Speaker 1: make sure that people understood that, you know, there's actually
Speaker 1: real people being harmed out here. It's not just the
Speaker 1: crypto bro moonshot folks who it's like, oh, well, they
Speaker 1: lost their gambling money. I'd like to read one of
Speaker 1: the ones that you highlighted because I book Market, because
Speaker 1: I think it it really described the disconnect in what
Speaker 1: you're describing in terms of you know, people think it's
Speaker 1: like dudes with laser eyes. But here's an example of
Speaker 1: the reality. This was on. You posted this on the
Speaker 1: twenty one of July. I'm a Celsius customer with a
Speaker 1: little more than fifteen thousand dollars worth of deposits that
Speaker 1: are locked up in Celsius. Fifteen thousand dollars may not
Speaker 1: mean a lot to some people, but it is about
Speaker 1: six of my life savings. Losing all my savings will
Speaker 1: have irreparable consequences on the well being of myself and
Speaker 1: my family. I'm ashamed, humiliated, and quite frankly disgusted that
Speaker 1: I put all my trust into this company. I'll be
Speaker 1: spending years trying to make back the money I lost.
Speaker 1: That was one of of these kinds of letters. And
Speaker 1: how are you finding that people are responding to this
Speaker 1: work that you're doing, Because, as you said, you sort
Speaker 1: of started as a countervailing wind right, everything was going
Speaker 1: up in the markets at that time. You know, like
Speaker 1: nobody really wanted to hear from somebody being like, I'm
Speaker 1: not sure if this is all such a good idea.
Speaker 1: I think even in you know, a bearer market, a
Speaker 1: lot of people don't really want to hear what I
Speaker 1: have to say. Um, you know, I think with crypto,
Speaker 1: there's just an overwhelming incentive to be really positive about
Speaker 1: crypto at all costs because so much of crypto it's
Speaker 1: value is based on the belief that the token or
Speaker 1: the n f T or whatever the asset might be,
Speaker 1: will go up in price, and so anyone questioning it
Speaker 1: or criticizing it, you know, is presenting a risk to
Speaker 1: the actual value of the asset. And so even you know,
Speaker 1: when things are going pretty poorly overall in the market,
Speaker 1: you know, individuals really want to keep that hope alive.
Speaker 1: I think, but you know, I think there has been
Speaker 1: more openness to hear the critical perspectives, as you know,
Speaker 1: people have seen that things have gone poorly overall, as
Speaker 1: some skeptics have been predicting. You know, I think that
Speaker 1: it's really easy to brush off critics when you're seeing
Speaker 1: tokens double in price overnight and you know the lines
Speaker 1: are going up. But as we see these collapses, you know,
Speaker 1: of these different crypto projects that were all sort of
Speaker 1: dominoes knocking each other over in this you know, spring
Speaker 1: and summer, I think people have realized that there really
Speaker 1: are serious issues with the industry as a whole, and
Speaker 1: sut the media and the general public have been a
Speaker 1: little more receptive to those viewpoints. Coming up, you'll hear
Speaker 1: more from Molly Whites around what ordinary people need to
Speaker 1: understand about crypto. You've spoken in the past about the
Speaker 1: fact that you have experienced online harassment, you know, in
Speaker 1: kind of various iterations of in the life of a person,
Speaker 1: particularly a woman who has been very visible and very
Speaker 1: online for a long time. I can share because I
Speaker 1: have shared here before that you know I have on
Speaker 1: my team. We will have a report to publish a
Speaker 1: story and then in their d MS or their emails
Speaker 1: or you know, kind of like directly and aggressively. Folks
Speaker 1: will be like, why are you everything from very mild?
Speaker 1: Or you must be a paid shill who is trying
Speaker 1: to you know food bitcoin food being a phrase used
Speaker 1: in crypto world to mean fair uncertainty and doubt um
Speaker 1: or you know, kind of to the extremes of threats
Speaker 1: and you know, other types of things for you know,
Speaker 1: what I would consider as an editor to be like
Speaker 1: a pretty straightforward story about a market movement or or
Speaker 1: or a company doing something. Is there anything in your
Speaker 1: experience of having navigated this world that you think leads
Speaker 1: to this heightening of both emotions and a kind of
Speaker 1: like violent nihilism as it were in some cases. Yeah,
Speaker 1: I mean I think it's related to what I alluded
Speaker 1: to before, which is the financial incentive to be positive
Speaker 1: to you know, promote the idea that the token prices
Speaker 1: or the market as a whole are going to go up.
Speaker 1: But I think there's also a strong ideological component to
Speaker 1: it as well, where people really see crypto as the
Speaker 1: solution to a lot of serious problems, and when someone
Speaker 1: is speaking against you know, the potential of crypto, they
Speaker 1: see that as someone saying, you know, I don't want
Speaker 1: to solve those problems, or you know, you are a
Speaker 1: bad person for trying to solve those problems, which I
Speaker 1: think it's really not the message that a lot of
Speaker 1: people are trying to get across, but it's become twisted,
Speaker 1: I think in the eyes of a lot of people.
Speaker 1: But yeah, I think, you know, generally speaking, when you
Speaker 1: threatened someone's bottom line, you know, when when they have
Speaker 1: a lot of investment into you a you know, a
Speaker 1: specific asset and you do something that might cause that
Speaker 1: asset price to change, even if it is fairly unbiased
Speaker 1: reporting or just you know, just describing what is happening
Speaker 1: in the real world, people will respond very, very aggressively
Speaker 1: to that. And I think, you know, the culture in
Speaker 1: crypto has really contributed to that, where people are somewhat
Speaker 1: encouraged to do that and it becomes you know, insular
Speaker 1: movement where that behavior is just completely normalized. Is there
Speaker 1: anything in addition to that financial incentive that you find
Speaker 1: either unusual or distinct about how some of this takes place.
Speaker 1: I think the level that it happens in crypto is unusual.
Speaker 1: I mean, I've definitely experienced harassment because of my involvement
Speaker 1: with Wikipedia, my coverage of you know, right wing political
Speaker 1: movements in the US, and it's definitely, you know, pretty
Speaker 1: serious in that particular group as well. But with crypto,
Speaker 1: it's a very it's very strange. I think the degree
Speaker 1: to which it's normalized and I don't know if it
Speaker 1: has to do with the amount of people who are
Speaker 1: really anonymous in crypto and so they feel you know,
Speaker 1: protected in saying some really heinous things, but the level
Speaker 1: to which the toxicity has really emerged from crypto is
Speaker 1: pretty unusual, and I think that has been recognized sort
Speaker 1: of in the main stream, where people have this view
Speaker 1: of you know, crypto bros who are you know, have
Speaker 1: the laser eyes and it's sort of everyone. I think
Speaker 1: there's this sort of perception of crypto people as very
Speaker 1: intense and often aggressive, and I guess I would say
Speaker 1: it's not unearned, right. I want to go back to something,
Speaker 1: you know, a couple of months ago, when you were
Speaker 1: invited to give a statement to the Financial Stability Oversight
Speaker 1: Counsole and regulating to just all assets, you talked about
Speaker 1: the trade offs of anonymity and pseudonymity, And one of
Speaker 1: the things that you said is it's actually really easy
Speaker 1: for people who think their transactions or privates or that
Speaker 1: their identities are obscured to inadvertently out themselves because the
Speaker 1: the level of technical proficiency that you have to actually
Speaker 1: be secret the whole time is relatively high. Can you
Speaker 1: say a little bit more about why highlighting those kinds
Speaker 1: of things for what you called, you know, the quote
Speaker 1: unquote average user is important to you. Yeah, I mean
Speaker 1: I think crypto has, you know, historically been something that's
Speaker 1: been used by people who are very technically proficient and
Speaker 1: who are capable of doing things like self custodying and
Speaker 1: you know, keeping track of all the different wallet addresses
Speaker 1: and secret keys and all these different things. But you know,
Speaker 1: in the past couple of years, we've seen these attempts
Speaker 1: to mainstream crypto and to make it something that you know,
Speaker 1: everyone's got an app on their phone and their trading
Speaker 1: crypto day to day and everyone should be putting money
Speaker 1: into it. To some extent, I don't think that it
Speaker 1: is you know, achievable for average people to be using
Speaker 1: crypto in the way that people say that you should be.
Speaker 1: So you know, someone might be able to download an
Speaker 1: app and trade some crypto, but you know, not your keys,
Speaker 1: not your coins. You know, you're supposed to be keeping
Speaker 1: in it in a wallet yourself, maybe a hardware wallet,
Speaker 1: something like that. And when you start to actually look
Speaker 1: into what it takes for someone to do that, it's
Speaker 1: not something that you know, your average person who's not
Speaker 1: a software person, they're not online all the time, can
Speaker 1: really do. And so I think it's alarming that people
Speaker 1: are pushing the idea that crypto is something that you know,
Speaker 1: should become the backbone of a financial system that is
Speaker 1: widely used in society, when that's not achievable at the
Speaker 1: current moment, and they're enormous hurdles to it becoming achievable. Well, first,
Speaker 1: I'll say I find it interesting how many of the
Speaker 1: folks who have spent so much time in and around
Speaker 1: software are some of the biggest skeptics of this message
Speaker 1: that like anyone can do it's totally fine, just like
Speaker 1: slap our user into face one and it's great. But
Speaker 1: if you were asked the question, so someone who is
Speaker 1: not the most tech savvy, but you know, like reasonably
Speaker 1: away of what's going on, at a minimum, understands two
Speaker 1: factor authentication, and they insist, absolutely insist, that they want
Speaker 1: to get involved in crypto. And you could give them
Speaker 1: one piece of caution or advice, what would that be.
Speaker 1: I mean, it's pretty cliche, but don't invest more than
Speaker 1: you can afford to lose. There is no predicting what's
Speaker 1: going to happen in the crypto markets, and you should
Speaker 1: really assume that anything you put in could be worth
Speaker 1: zero tomorrow. And so, you know, it's really tempting, especially
Speaker 1: when the line is going up and people are, you know,
Speaker 1: advertising all these returns that they're making, to put a
Speaker 1: lot of money into it on the hopes that, you know,
Speaker 1: you might be one of those people who triples their money.
Speaker 1: But you know, I've seen so many times that it
Speaker 1: goes in the other direction too, and you know, people
Speaker 1: over expose themselves. Well, I'll share, just as a closing remark,
Speaker 1: a quote that you highlighted on your blog from you know,
Speaker 1: Michael Sailor, who very famously said, you know, mortgage your
Speaker 1: house on by bitcoin, which is the the exact opposite
Speaker 1: of the kind of prudence and caution that you are recommending. Well,
Speaker 1: thank you so much for taking the time to be
Speaker 1: on the podcast. It has been an absolute pleasure and
Speaker 1: you know, hope to have you back again. Thanks for
Speaker 1: having me. You can find her work, of course, on Twitter.
Speaker 1: On the next episode of Bloomberg Crypto. When crypto prices
Speaker 1: were high, you know, around this time last year, a
Speaker 1: certain class of crypto officianados took full advantage of the
Speaker 1: digital nomad lifestyle. They showed up in places like Portugal
Speaker 1: and Miami and San Juan, leaving behind their lives in
Speaker 1: New York and London. How's that going now, you ask, Well,
Speaker 1: let's just say there's less sun see and sun in
Speaker 1: their lives these days. This is Bloomberg Crypto, a daily
Speaker 1: podcast from Bloomberg and I Heart Radio. For more shows
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Speaker 1: your comments, questions or suggestions for the show to Crypto
Speaker 1: at Bloomberg dot net or find us on Twitter. We're
Speaker 1: at Crypto. The supervising producer of Bloomberg Crypto is Vicky Verglina.
Speaker 1: Our senior producer is Janet Babin. Our producer is Sharon Barriro.
Speaker 1: Associate producer is Ty Butler. Desta wonder At is our engineer.
Speaker 1: Original music by Leo Sidran. I'm Stacy Mariachmal. We'll be
Speaker 1: back tomorrow.