Transcript

Aaron: Okay. I want to tell you about something that happened to me this week, Jay, which is my brain has been so fried that I was taping another episode of my podcast Stoner, which is about creative people and marijuana, and I started doing the Medium throw from this show during the introduction with a guest there. So Medium, you got a freebie.

Jay: Do they want to be associated with weed?

Aaron: I cut it. I actually was going to leave it in there as a joke and then I was like, ā€œThereā€™s no joke here in this world.ā€ But actually the special episode I was taping was about Elon Musk hitting the blunt on the Joe Rogan show, which actually made me think some about some stuff weā€™ve talked about, about who is the ideal crypto leader and whether you take your view on the market from technical fundamentals or the hero myth of the leader.

Aaron: I canā€™t think of anyone like Elon Musk right now where the entire fate of his company in a publicly traded stock really are just riding on so person so fundamentally.

Jay: Yeah. The closest to it would be like Zuckerberg and Facebook. Or Jeff Bezos and Amazon. But both of those seem to have an infrastructure around them that could probably both insulateĀ ā€¦ I donā€™t know about Amazon. But I know that Facebook could figure out a way if Zuckerberg was doing something strange, like for example, going around the country and trying to figure out how people live and maybe running for President.

Aaron: Hello. Fellow country fair attendees.

Jay: What a wonderful family dinner that you have made for me here in Iowa. I think they can control that narrative a little better, but with Tesla which has proven time and time again, they donā€™t really have a way to control Elon Musk because heā€™s the whole company.

Aaron: We wouldnā€™t sayĀ ā€¦ I mean Warren Buffet is the whole company for Berkshire Hathaway also. But if you donā€™t act recklessly no one notices that youā€™re the whole company.

Jay: Yeah. I think youā€™re right with Berkshire Hathaway. Even though thereā€™s that other old guy. Remember the other one who hated crypto and saidĀ ā€¦ The Berkshire Hathaway guys I will say were a little bit more agnostic about it, or at least polite about it.

Aaron: Yeah.

Jay: But the thing with Tesla I think is thatĀ ā€¦ and you know this is very similar I think to Ethereum maybe a year ago, maybe this is where weā€™re going, is that-

Aaron: I was planning to label this episode ā€œIs Ethereum the new Tesla?ā€ Regardless of what we say in it. I just think it could get us some traffic.

Jay: Thatā€™s definite good click baity headline. I think with Tesla, everybody is investing in Elon Musk. Theyā€™re not investing in a car company. Theyā€™re investing in ā€œOh, this one person is going to change the entire future of transportation around the world.ā€

Aaron: Well, I think they are betting on a car company. Theyā€™re betting that one personā€™s individual wealth is stronger than a million Toyota employees. Right?

Jay: Thatā€™s different than, for example, buying Amazon stock because youā€™re not really betting on just Bezos at that point. Youā€™re sort of-

Aaron: I think you kind of are though, because thereā€™s a few people I just believe like donā€™t bet against them, like I donā€™t bet against Elon Musk. I wouldnā€™t bet against Jeff Bezos. I donā€™t like him, but I wouldnā€™t bet against Peter Thiel. There are just people whoā€™ve got that like Kobe, asshole, never give up kind of drive. Itā€™s not something I love interpersonally and I seek in my friendships, but from an investor standpoint I do kind of believe in people like that.

Jay: Well, Jeff Bezos, I guess I would just put it this way. If youā€™ve invested in Amazon, what youā€™re doing is essentially is saying, ā€œThese people have such a huge advantage right now. This company has such a large reach and it has its fingers in everything; and therefore even if Jeff Bezos isnā€™t around I believe that the advantage that they have, like the step ahead that they have is going to be something that Iā€™m going to bet on.ā€

Jay: But with Tesla I donā€™t think you really do that. Youā€™re just like, ā€œOh, this guyā€™s a genius and heā€™s going to create the next genius thing.ā€

Aaron: I think that thatā€™s right. And I think that we like in this country free-thinking geniuses. The whole trend towards crypto-

Jay: Sure, like Steve Jobs for example.

Aaron: Yeah. And it would make sense that like Steve Jobs 2018 is even more extreme that Steve Jobs 1990. Weā€™re living in these extremely polarized, volatile times.

Jay: Do you have a penguin backpack on?

Aaron: Weā€™re going to get to that. Weā€™re going to get to that. I like that weā€™ve been doing this show long enough that we have inside jokes on the show.

Jay: And most involve the Jaxx Liberty presentation.

Aaron: Theyā€™re pretty much all about Jaxx. I would say if you looked at search terms that weā€™ve over hit, itā€™s pretty much all Jaxx Liberty and Excerptoshi. Weā€™ve among the leading crypto sources for information about those two topics which is actually a good segue into what Iā€™d like to do today, which is I donā€™t know if weā€™re at the bottom, but as a time to check back in on some of the narratives we talked about during boom times. I think this is an interesting time to re-evaluate some of the stories that have brought us laughter and sadness over the course of the show.

Aaron: So the first one is, one of the first people I feel like when we first were getting in, was that Mike Novogratz was going to start this big fund that was going to be mega crypto.

Jay: Yeah. Well, Mike Novogratz, I feel like if weā€™re talking about figures within crypto and what they actually mean, like you have Vitalik who is sort of the free thinking genius I would say. And then you have people like Jamison [Mop 00:07:24], who are defenders of bitcoins honor. I think basically that all of institutional money and the way that people think about how institutional money will fit into the crypto space, and I actually donā€™t think this is a good idea, but it seems to all be encapsulated in what Mike Novogratz is doing. So if he says something then everybody starts to believe that this is how institutional people think.

Aaron: I think thatā€™s true. I donā€™t think Novogratz is particularly well regarded in straighter business circles anymore. And I kind of get why based on how heā€™s behaved here on crypto. Heā€™s like, ā€œIā€™m starting the biggest fund.ā€ Market crashes. ā€œActually that was a bad idea.ā€ Like, ā€œYouā€™ll all think Iā€™m smartā€ but heā€™s been somewhat right and I do appreciate that heā€™s just being like open about it. Heā€™s kind of acting like we act, which is like, ā€œBuy. Sell. Sell. Buy. Going to zero. Going to a million.ā€ Itā€™s kind of incredible seeing a professional financial figure experience crypto like a 17 year old Redditer.

Jay: I will say this, I think that he probably when he was quieter I think he made a lot of money in crypto. I think he has been invested in it for a long time. And because of that I think that he owns way more crypto or has much bigger stake in crypto than he will let on publicly. Because he does make these big splashy public buys. But I think that the war chest is much bigger than that for him.

Aaron: Which means like, and I want to say that for all the people like him who have huge war chests, I know thereā€™s no sympathy for them. But those people have had a very, very bad 2018.

Jay: Yeah. Theyā€™ve had their net worth probably cut in half maybe.

Aaron: If theyā€™re all crypto.

Jay: Yeah.

Aaron: I assume that all these people are extremely diversified, etc. but itā€™s not like when you run a big fund. The thing that happened to Ethereum doesnā€™t happen to your fund.

Jay: They donā€™t cut you like a crack bonus.

Aaron: I mean, I donā€™t know. Maybe theyā€™re crazy like stop lossing. I assume they have better strategies around like being market neutral than we do. But I just donā€™t understand how you can be in crypto and be truly market neutral. I think youā€™re truly betting in crypto going up.

Jay: Well, thereā€™s one way, which is mining.

Aaron: And I assume that a lot of these companies are in mining. I assume a lot of these funds are either directly in mining or invested in things that trickle down from mining. So again, theyā€™re more diversified that we are, but probably were holding some Ethereum.

Jay: So what did Novogratz say?

Aaron: So he said, ā€œIā€™m calling the bottom.ā€ He tweeted out that heā€™s calling the bottom.

Jay: He tweeted out those word? ā€œIā€™m calling the bottomā€?

Aaron: Iā€™ll pull it up because I donā€™t want to misquote the man. It came across to me on Bloomberg. The headline is ā€œMichael Novogratz calls the bottom in the crypto marketā€. This was in tweet form.

Jay: He hash tagged Calling the Bottom?

Aaron: Yeah. Said this is the BCGI chart. I think thatā€™s the Bloomberg Crypto Index. ā€œI think we put in a low yesterday. Retouched the highs of late last year and the point of acceleration that led to the massive rallies/bubble. Markets like to retrace to the breakout. We retrace the whole of the bubble #calling the bottom.ā€

Aaron: So this was surprising to me. First before I looked at the chart I assumed it would be a bitcoin chart. And if youā€™re calling bottom on bitcoin, weā€™ve already been lower that this.

Jay: But we havenā€™t retraced the entire boom of bitcoin.

Aaron: That is correct. So what he is talking about is the BGCI, which is the Bloomberg Crypto Index, which I had look up.

Jay: Is it the Bloomberg Crypto Index?

Aaron: Itā€™s the Bloomberg Galaxy Crypto Index. So, yes, he is getting high on his own supply. I believe he is the founder of Galaxy Capital. So the way that this index works is itā€™s a weighted index of 10 cryptocurrencies. Itā€™s not actually the top 10. It works a little differently. And itā€™s also not weighted entirely by the size of their market cap or existing supply.

Aaron: So I looked up what goes into the BCGI. Iā€™m going to read it. ā€œ30% bitcoin. 30% Ethereum. 14% ripple. 10% bitcoin cash 3% Litecoin. 1.5% Dash. 1.5% Monero. 1% Ethereum classic. 1% Zcash.ā€

Aaron: So the huge wow on there is it represents Ethereum with weight as bitcoin.

Jay: Yeah. I donā€™t quite underĀ ā€¦ I mean, look, the few who made this are smarter than you or I in terms of this sort of stuff.

Aaron: Thatā€™s one way to look at it.

Jay: I donā€™t quite get why Ethereum would be equal with bitcoin considering that it seems like the way the bitcoin moves influences the way that everything else moves.

Aaron: But if you were Brian Armstrong you could see putting them on equal footing in terms of their perception of the future of the crypto space, maybe?

Jay: Yeah, or it might be a projection of where they think that the actual value will be in a while. Although I donā€™t know why you wouldnā€™t just do that when it actually happens.

Aaron: The way I assume this works would be that itā€™s the top 10 cryptocurrencies at any given moment weighted by the size of their market cap, which would mean that bitcoin was more than half.

Jay: So what are the big ones that arenā€™t on there? So itā€™s stuff like Stellar Lumens is not on there, right? Thatā€™s like a big market cap one.

Aaron: No Stellar Lumens. Well, letā€™s see. Letā€™s pull up the actual top 10. Someoneā€™s getting hosed, right. Someoneā€™s got to be getting hosed. So top 10 on coin market cap: bitcoin, Ethereum, ripple, bitcoin cash, es,Ā ā€¦ first excluded one is StellarĀ ā€¦ then litecoin, then tether, giant asterisk, donā€™t need to get into it. No cardano either.

Jay: Oh, Iā€™m okay with it.

Aaron: I think some of this methodology is about setting a single criteria at a certain point so that you can track it over time and it doesnā€™t keep adjusting itself. Because Stellar Lumens probably wasnā€™t in the top 10 when they made this.

Jay: Yeah. All those coins are old coins.

Aaron: So this is a different way to look at. We talk about the price of Ethereum and we talk about the price of bitcoin. But looking at this as all one single organism gives you a different perspective.

Jay: Yeah. And I like looking at it that way myself because I feel like that actuallyĀ ā€¦ It takes you out of the sense that small movements in price, or even large movements in price of one coin reflect the health of everything. So like if bitcoin goes down 15% in a day, which it does all the time, if everything else holds steady then that means something, right? If Ethereum, like for example what has happened is that Ethereum has crashed much harder than everything else. You can sort of be like, Well, itā€™s not that the entire crypto market is crashing. In fact, bitcoin is sort of holding steady with a floor at around 6200 it seems like.

Jay: So why is Ethereum crashing out? Does that mean that people are less interested in crypto? Or does it mean that people are less interested in Ethereum? Or does it mean that thereā€™s some sort of Ethereum price manipulation going on? Or some catastrophe that people donā€™t know about? It helps you keep some sort of level-headed perspective.

Aaron: Yeah. I agree. I think itā€™s notable that bitcoin hit that floor and Ethereum kept going and therefore the entire BGCI kept going down. Like even if bitcoin reaches a floor, if other things are falling through that floor I would like to sort of know about that when I trace the overall arc of these things. And generally what I do is look at the chart of bitcoin. Look at the chart of Ethereum. But Iā€™ve never really tried to blend it all together in this way in thinking about where we are.

Aaron: Like if you ask me, when we come in at the very beginning of the show, we put the bitcoin price index at the front of the show. That will be our historical record. Should we be putting the BGCI price on there?

Jay: Ah, no, because itā€™s more confusing. I have two questions. The first is like, we actually flirted with this idea a long time ago. Do you remember when you and I were trying to pick [inaudible 00:15:59] and we realized that the ones that were taking moonshots was just random. And your thought was that you were going to buy one of every single coin on bittrex?

Aaron: Absolutely, the bittrex index.

Jay: The bittrex index. The bittrex degenerative index.

Aaron: Iā€™d love to see a cryptopia index right now. It may be too small to fit on the four digit display, but itā€™s back.

Jay: I would actually as an investor, or as somebody who wants to put money into crypto, I think I would be much more willing to buyĀ ā€¦ If you were telling me, okay, the cryptopia index is if you really just want to flush your money down the drain, and thereā€™s some chance that youā€™re going to do a moonshot, or like the bittrex index which is a little bit more aggressive but not as aggressive as the cryptopia one, or just the coin base index, which is pretty solid. I think I would be more interested in that product than trying to fish out which one of these projects to buy into.

Aaron: I couldnā€™t agree more. Thatā€™s all I want. I donā€™t want to hold alt coins. I would just like light exposure to the alt market.

Jay: Yeah. Like an ETF based on, like the different exchanges. I think I would do that. It would actually be quite fun. The second question I have, is do you agree with Jamie Dimond, not Jamie Dimond, wow, what-

Aaron: I heard heā€™s running-

Jay: Heā€™s running for President.

Aaron: Heā€™s running for President?

Jay: Yeah, on an anti-bitcoin platform.

Aaron: I will never support a no coiner President.

Jay: Do you think that Mike Novogratz is right, are we at the bottom?

Aaron: Yeah.

Jay: And do you feel that way based on anything other than the fact that you want bitcoin prices to go up?

Aaron: It felt right?

Jay: Yeah, yeah. I kind of agree with you. The idea that all cryptos fully retrace to the beginning of the boom, which is about a month or two before you and I got into crypto, thatā€™s kind of convincing. And, look, I think that he makes calls based on self interest like everybody else, and he probably wantsĀ ā€¦ That is what you were talking about. It feels like heā€™s really not that much different than you or I, where we wake up and we feel good about it and weā€™re like, ā€œWeā€™re going up today.ā€ I mean, it canā€™t possibly go down any more. Itā€™s not like analysts are a different species.

Aaron: No.

Jay: They have more information than us and hopefully theyā€™re more cool and calculated but at a certain point you have to subjectĀ ā€¦ like if youā€™re going to call bottoms itā€™s going to be a subjective call.

Aaron: Yeah.

Jay: Now that call has been cemented for me because of thatĀ ā€¦ so Ethereum went down and hit like 170 and then ran almost back up to 220. And I would say that my call of that bottom was when it hit 220, not when it hit 171. Do you know what Iā€™m saying? Like if it was 173 right now Iā€™m not sure I would be calling the bottom.

Aaron: Yeah. Yeah.

Jay: Iā€™m not looking at Blockfolio because now that Iā€™ve said that it probably has crashed while weā€™ve been on the air. I havenā€™t bought yet. The second I buy it, itā€™ll crash. Look, I think that is actually is meaningful for somebody like Mike Novogratz to do something like this, outside of even just Bloomberg writing about it, right? Thatā€™s a somewhat big deal. I think that people actually have been waiting around to figure out whether or not all this was always a scam, if they had been investing completely in digital Beanie Babies. And I think that the way in which they make their decisions is that they feel that somebody who is ā€œinstitutionalā€ is back into it, then they feel like it has some sort of future. If everybody who is institutional money is completely out on it, then they think that, ā€œWow, this really was like a dumb craze, and we got fleeced.ā€

Jay: And so I donā€™t know. I would imagine that this is somewhat meaningful in trying to get something back together. Because I was trying to think about it, is like why was bitcoin ETF important? Why was everybody freaking out when they got canceled? And also why was there so much hype around it? And I think it was really just that people in this space know that for this thing to go back up and be legitimate again, it just needs some sort of big institution to be invested in it. So that it feels like peopleā€™s confidence is coming back into it.

Aaron: When you look atĀ ā€¦ Weā€™ve said a lot of terrible things about Ethereum, mostly Jay. But if you look at Ethereum at $170 when it had a high of over $1200. If you think that Ethereum is going to exist in a few years, I think thatā€™s a buy. I know itā€™s a tough buy, but itā€™s like a wow, thatā€™s low. Thatā€™s lost a lot of its value. So when I look at institutional money, or actually I think mining gives me the same narrative feeling, right? Institutional money making an ETF or a fund or whatever, it takes years. You canā€™t have like a one and a half month fund. And you canā€™t even get miners in a month and a half. You have to build a facility. You have to do all this stuff. So all sorts of activities that are driven by long time frames I think are saying, ā€œHey thereā€™s a bunch of other people that think this is going to exist in a few years, and therefore as an individual retail investor, now is a pretty good time to buy if you think cryptoā€™s even going to exist in the future.ā€

Aaron: So cheers to Mike Novogratz for calling his shot. I appreciate anyone whoā€™s at least putting something embarrassing on the internet that will either be good or come back to haunt you.

Jay: You know that Twitter account, Old Takes Exposed? It takes sportswriterā€™s tweets and then brings them back up when their predictions are wrong. Is there a crypto version of that? There must be.

Aaron: There needs to be, because definitely Dan Bilzerian said that he sold the top like three months after the top. He was like, ā€œLooking to buy crypto again because I sold the top several months ago when it happened.ā€

Jay: No one has ever sold the top, I donā€™t think, except Charlie Lee who basically nuked his own project by selling the top of it.

Aaron: As I said, I have a strong track record of buying the top to the bottom. You just buy all the time. So as we are checking back in on some of our favorite characters from the first round of the show, Iā€™ve been off Twitter. I know youā€™ve been off Twitter. Which mean I have not been catching John McAfee tweets.

Jay: Oh, no. Me neither. I havenā€™t seen one in months.

Aaron: And I think he kind of chilled out after the ICO boom ended. That was kind of his-

Jay: Or actually he was almost assassinated, right?

Aaron: Again, donā€™t know if that really happened. But, yeah. And he tweeted out a photograph of a young, intoxicated man who is said to have challenged him to a drinking competition on some sort of a blockchain cruise.

Jay: The young man was like in a wheelchair.

Aaron: Yeah. He was like passed out in a wheelchair. And he was like, ā€œThatā€™s another person who challenged me to a drinking contest.ā€

Jay: I would never, ever challenge John McAfee to any type of contest.

Aaron: I wouldnā€™t want to be on a cruise with him.

Jay: Yeah.

Aaron: Heā€™s the kind of person. You know how youā€™re like, thereā€™s nothing really stopping someone from just murdering you?

Jay: Yeah.

Aaron: Heā€™s exactly the kind of person I donā€™t wantĀ ā€¦ Like Iā€™m not worried about being murdered by random homicidal maniac like I encounter on a dark freeway at night. But I genuinely think that JohnĀ ā€¦ Heā€™s one of the few people who would like just kill someone. And he did.

Jay: Libel.

Aaron: He did kill someone allegedly.

Jay: Sure. And he was almost killed allegedly.

Aaron: I think heā€™s been almost killed allegedly like a dozen times.

Jay: Sure.

Aaron: So I donā€™t have that much to say about him. But I do have to say, Iā€™m shocked at how much all of these guys who are crypto figures seem to be at a crypto conference or cruise all the time. Do some of these guys even have their own apartment? Or are they just going from conference to conference, cruise to conference?

Jay: Okay, so I agree with you. Iā€™ve noticed this too that-

Aaron: Weā€™ve never talked about the crypto conference ecosystem.

Jay: So what is it then? Is it that these conferences obviously bring in a lot of money, right? Theyā€™re an event and the people who make them make a lot of money.

Aaron: When you look at a company like Coin Desk, I donā€™t think Iā€™m out of line to say this, itā€™s not very profitable putting sidebar ads, but itā€™s extremely profitable to throw consensus every year and charge a bunch of corporate sponsors hundreds of thousands of dollars for that privilege of their logo being on it.

Jay: And that we are at a point right now, that post crypto boom and post crypto craze, that probably anyone who had any sort of involvement at all, or connections, or ability to throw a technologically based, or tech based type of conference. They probably just did it, right? For crypto. So if you know the number.

Aaron: Sure.

Jay: If you know the number of somebody who works at a convention center, then you probably were like, well why donā€™t I throw a crypto conference because these people have tons of money.

Aaron: I mean we could throw Coin Talk Fest next month and get corporate sponsors from it. I donā€™t think you even need to be a real thing.

Jay: Why are we not doing that then?

Aaron: I mean you would probably get in a fight with half of the people there.

Jay: Would I even have to be there?

Aaron: Yes. You are expected to attend your own crypto conference.

Jay: I know, but can I make drinks or something like that?

Aaron: But I would say that that is salient, which is, I think to be on the crypto conference circuit, you need to go to a bunch of crypto conferences.

Jay: Because you need to meet the people who go to crypto conferences.

Aaron: I think itā€™s a whole culture. Iā€™ve watched some of the talks and a few of them I think, like Andreas Antonopoulos talks are really good. Iā€™m not saying that these are all frivolous, but it seems like thereā€™s a class of crypto enthusiasts whose whole life is just going from one conference to the next, which makes it seem like itā€™s hard to get anything done. Like when some of these guys who run coins, spend their whole lives talking at conferences, itā€™s not bullish for the coin.

Jay: Itā€™s kind of an amazing side hustle. I mean, I have always sort of envisioned an alternate life for myself where instead of writing about things that are not reallyĀ ā€¦ Like if people donā€™t necessarily really want to write about, that I was like a big ideas guy, you know. And that I just went from conference to conference to conference and pulled down speaker fees. I donā€™t know who actually ends up paying, footing the bill for that sort of stuff. It seems like one of those types of things where almost everybody profits and the only people who donā€™t profit are places like, I donā€™t know, like IBM or something like that, that has to pay the corporate sponsorship.

Aaron: I donā€™t know how it works in the black chain world. In the journalism world, you definitely donā€™t get paid for speaking at those conferences.

Jay: You donā€™t?

Aaron: No. I mean, theyā€™ll fly you there and get you a hotel room, but at most, youā€™re walking out of there-

Jay: Wait, so if Malcolm Gladwell speaks at a journalism conference he doesnā€™t get paid?

Aaron: I think Gladwell doesnā€™t show up anywhere for no money. But like most speakers at a journalism conference are just getting a flight.

Jay: Actually, you know what, I have given a couple talks at the Asian American Journalists Association, and now that I think about it, I have, and they didnā€™t even pay for the flight.

Aaron: You literallyĀ ā€¦ I was going to make that joke and then I was like, itā€™s not even worth making a joke about how you could be the number one speaker on the Asian American Identity circuit.

Jay: No, no, no. I am ignored at those things.

Aaron: Really?

Jay: Yeah. Because, you know, they like broadcast, so itā€™s a lot of TV guys.

Aaron: Yeah, so like Pablo Torre like get out of here Jay, youā€™re no one to me.

Jay: Pablo is definitely above me in the pecking order. My Overwatch buddy. Pablo and I have been playing a lot of Overwatch recently.

Aaron: Thatā€™s not good.

Jay: I guess my point being that it sort of does make sense to me that what crypto turned into was a bunch of conferences with the same people going from place to place to place, giving the same exact speech and that maybe there are four or five new people in each conference and everyone else is exactly the same. Itā€™s like a group of speakers thatĀ ā€¦ You know, itā€™s almost like literary fiction or something like that, where the only people who read literary fiction are literary fiction writers. If you somehow infuse billions of dollars and bunch of hype into the literary fiction world, I think something like this would happen.

Jay: And it does happen for them. They just got to book fairs and give talks in front of other writers. This is that times like 50, I think.

Aaron: I think this actually our best take on crypto so far. It doesnā€™t really tell you much about what to buy or what to do, but I think crypto is full of lonely people looking for community. I think thatā€™s probably also what animates movements like libertarianism. Like I think hanging out with other libertarians is as important as achieving liberty here while under-

Jay: Yeah, well you want to find-

Aaron: You want to find your tribe.

Jay:Ā ā€¦ like minded people and sometimes itā€™s hard, especially earlier in crypto where youā€™re the only people who are into it, you know?

Aaron: And also crypto can breathe life into existing older movements. Like when we talked to Saife Ammous, that dude really just wants a gold standard. But, this is a fun partying way to get a standard going. Is that part of the appeal of crypto is that itā€™s like sort of a new spin on some of these ideas and everyone can get together and go to conferences, meet people, start businesses? I mean, this is why I think alt coins had to happen also.

Jay: Because the people at the conference needed something to do?

Aaron: Yeah. I think that you have enough bitcoin conferences. Satoshiā€™s not speaking at them. At a certain point, youā€™re like we should do something. Like we want to have our thing, you know?

Jay: Okay, so if we do Coin Talk conference, what are we going to put in it?

Aaron: Itā€™s called ConCon by the way.

Jay: CoinCon?

Aaron: What are we going to do at it?

Jay: Yeah, what are we going to put in it? Who are we definitely inviting?

Aaron: I mean obviously our keynote is already decided. Itā€™s [Exer Toshi 00:30:23] will be like-

Jay: The unveiling.

Aaron:Ā ā€¦ the first public reading of his book and maybe like additional cryptogram in the notes.

Jay: Is it going to be a bunch of technical talks or is it going to be journalists who are writing about crypto. Itā€™s going to be memes?

Aaron: Thereā€™ll be a dunk tank with [Adrian Chen 00:30:41] in it for charity.

Jay: Are we going to cover memes? How would we put this together because I feel like this is a good chance for you and I to actually try and make some of the money weā€™ve lost in crypto is throw a ConCon.

Aaron: It think that ConCon is going to have no questions from the audience. Thatā€™s one of our big things. Weā€™re too skeptical. Thatā€™s the thing. Like no one wants to hear skepticism at conference, I donā€™t think.

Jay: I think thatā€™s our ultimate-

Aaron: Well I think ours would be crypto moderates con. Weā€™re known as the moderates convention.

Jay: Weā€™re like the hash tag resistance of Hilary supporters on Twitter.

Aaron: Because you know how thereā€™s like a community within Hollywood thatā€™s like the secret conservative community, I believe.

Jay: Yeah, whatā€™s it called, the Sons of Sam?

Aaron: Yeah, they believe theyā€™re persecuted? We need to start a similar crypto moderates community where its like the truth that dare not speak its name. I like only kind of believe in bitcoin and think that we should keep some Fiat currencies.

Jay: Yeah, but I donā€™t know anyone else even feels that way.

Aaron: Well thatā€™s because theyā€™re not comfortable saying it.

Jay: Thatā€™s true.

Aaron: Theyā€™re being oppressed.

Jay: What is that Hollywood thing called? Itā€™s like-

Aaron: Sons of Abraham Lincoln?

Jay: It was like Andrew Breitbart and James Wood and it was like a wholeĀ ā€¦ And like thatā€™s how Steve Bannon met Andrew Breitbart.

Aaron: I think Jon Voight is in it also.

Jay: Jon Voight, yeah. Letā€™s not start something like that.

Aaron: Okay. So, in conclusion, donā€™t go on a cruise with John McAfee. Donā€™t let your whole life become going to crypto conferences, unless youā€™re lonely, in which case, do. But something to keep our eye on, because think also, Vitalik was involved in Bitcoin Magazine, which is like a magazine that probably was primarily distributed at crypto conferences.

Jay: Yeah, he also likeĀ ā€¦ I just remember reading something where he was getting paid likeĀ .02 bitcoin a word. And this is when bitcoin was like $2 or something like that.

Aaron: Maybe the greatest word rate in history of journalists.

Jay: No, I thought about it, greatest word rate ever in the historyĀ ā€¦. Even right now, thatā€™s like what, like $140 a word or something like that.

Aaron: What do you think aboutĀ ā€¦ I donā€™t want to go to deep in this because I know that usually if I just bring up Ethereum itā€™s like five minutes. The show, just like on fire. But Vitalik has been saying pessimistic things. He was like ā€œCrypto space will never has 1,000 times growth again.ā€ How do you read all of that stuff, particularly in the Elon [Muskian 00:33:10] in like this guy is clearly driving public perception of a money pool.

Jay: Look, I want to clarify here and just say I like Vitalik. I like him because he says these types of things. I just like the fact that he says these types of things. Itā€™s probably not good for peoples confidence in his project, you know? And so when he says something like that, I think he totally feels that way. Thereā€™s no manipulation. Heā€™s just saying how he feels.

Aaron: You almost know itā€™s the truth because itā€™s a dumb thing to say.

Jay: Yeah, youā€™re like why would you say that? And he would look at you and be like, because thatā€™s what I believe. And then youā€™d be like, yeah but donā€™t youĀ ā€¦ And then heā€™s like would you like me to lie to you? And youā€™re like, okay, look.

Aaron: That would be kind of like in professional sports, like if someone on the Browns was like, well, weā€™re not going to make the playoffs.

Jay: After like game two or something.

Aaron: Thereā€™s a real taboo about that. Even if youā€™re onĀ ā€¦ Iā€™m sorry to talk so much sportsĀ ā€¦ Even if youā€™re on the Bills right now, you cannot publicly say ā€œWeā€™re not going to make the playoffs this year.ā€

Jay: Or like, yeah. I mean thatā€™s why the Jim Mora playoffs, like playoffs thing, is so famous because itā€™s so ridiculous that he said that. Heā€™s like the coach of the team and be like weā€™re not making the playoffs this year.

Aaron: But do you think heā€™s like setting up a certain truthy reputation because heā€™s now saying down things so that when the marketā€™s in mania, weā€™ll believe him?

Jay: I donā€™t think that heā€™s that calculating or cynical.

Aaron: He is the messiah.

Jay: I literally think he just says what comes to his mind and that when people are like what is Vitalik doing? Why is he doing this? Itā€™s like well, heā€™s doing it because thatā€™s how he actually thinks. Heā€™s just reacting. Thereā€™s no grand plan. Thatā€™s probably bad for someone whoā€™re leading a multi billion thing, but it is refreshing because I actually just believe what he says now. If heā€™s like ā€œOh the market is down and itā€™s never going to grow 1,000 times again.ā€ Iā€™m like, yeah, itā€™s probably true. I donā€™t know. Heā€™s probably looked into it and heā€™s just saying that because he feels that way. As a journalist, you hope people are kind of like that.

Aaron: He said that most intelligent, educated and informed people have heard of the block chain now, and therefore the ceiling is lower than it was.

Jay: Oh, that was his take?

Aaron: Yeah.

Jay: Thatā€™s interesting.

Aaron: He was kind of applying it across the board. He was just like, itā€™s not going to getĀ ā€¦ It doesnā€™t have as much to grow as it once did, because it grew that much.

Jay: Yeah and I think that probably is true because everyone knows what bitcoin is.

Aaron: I felt like I just got a glimmer of FOMO Kang there. Just a little bit. Youā€™re like, Vitalik is right.

Jay: Yeah, but Vitalikā€™s right about-

Aaron: And his product is on sale.

Jay: Well, Vitalikā€™s right about the market being bad, that we hit a ceiling because what the mania was was people being turned onto the idea of the block chain and of crypto currency, right?

Aaron: Thereā€™s always a ceiling in the world, though. Like Facebook is the first company that wrapped up against it. All the people in the world is the ceiling for any product. But, itā€™s different in this case, because itā€™s not really people. Thatā€™s why I always think itā€™s weird how DApps use active users as their metric. Iā€™m like, who cares how many active users it is. I want to know how much volume there is, how much money is running though it. I think DApps could be totally influential in the world with 1,000 users if those 1,000 users are like the biggest banks in theĀ ā€¦ You know, banks and bankers and extremely wealthy people. Most of these things I think are gauged on how much money is put into them.

Jay: Yeah, but for DApps I kind of get it because they want to show that theyā€™re creating a large ecosystem, right, and that the spiderweb or whatever is going out further. So I understand why they would think about themselves in terms of net users. I mean, do you find this convincing? Do you feel like there is sort of a cap now on how much crypto can grow because people have all learned about it? Or at least the people who would invest these types of things all know about it and have already made their declaration of whether theyā€™re in or out?

Aaron: This is something Iā€™ve been thinking a lot about. I think that thereā€™s obviously still more people out there. Thereā€™s a lot of people on this earth. However, I think about how bad an experience the last generation had. I donā€™t know if thereā€™s an endless supply of people who are willing to speculatively try crypto. Like we already got those people. Those people bought in 2017 and theyā€™re now down a lot of money. I almost feel like that generationĀ ā€¦ We have to make good on the last generation before we can get the next generation. There canā€™t be a new generation of crypto at least until I break even.

Jay: Well, okay, so if you think about it in terms of the tech boom, right, because there was that news that came out that said that the bitcoin crash is now bigger than the first dot com bubble bursting.

Aaron: Well it shocked me, because I did not realize the dot com bubble was that big.

Jay: I didnā€™t realize that it, I mean there are things like Cisco and stuff like that that spiked forever, butĀ ā€¦

Aaron: I thought we had passed that drop a long time ago just because I assume that crypto is the only place where youā€™re talking about more than-

Jay: Like 80% stock.

Aaron: Yeah. And I donā€™t know exactly what metric theyā€™re judging the dot com boom by. So this is an interesting question. How did people start buying tech stocks again after the crash?

Jay: Yeah, exactly, right? For people who are buying Google for example, right? When did people start saying, ā€œOh, this is not just another Pets dot com.ā€, where they started to really believe in tech stocks again and how long did that take? I guess if you look at the timeline, it was like five years or something like that. But at what point did the stink start going off the internet stocks? I guess that would be the question that I would have.

Aaron: I think thatā€™s part of why Iā€™m calling the bottom here. I feel like a little less stinky.

Jay: Oh really?

Aaron: Yeah.

Jay: Itā€™s been like five months.

Aaron: Well look, everything happens faster in crypto, right? So if it took five years for the dot com-

Jay: I donā€™t know if it happens faster than the first dot com bubble, though. It seems like the dot com bubble was about as fast as crypto.

Aaron: I think that you can go from like a criminal to a like established businessman in crypto in like two and a half months, so it must be somewhat easy to scrub yourself clean. I feel like the stink is coming off a little bit. But then again, I was a little bit earlier than most of the people who lost their shirt in this crash. So for me, I can tell you that if we can go up aboutĀ ā€¦ I mean if we can double from here, the stink will be gone, for me.

Jay: Really?

Aaron: Yeah, I think so, yeah. Because then weā€™ll be kind of at least at a break even point.

Jay: If we double from here and go up to like 12,000 or like 13,000?

Aaron: Yeah. Letā€™s say Iā€™m the BGCI, say bitcoin runs to 10,000 and Ethereum runs out a bit ahead of it, which is what Iā€™m hoping will happen.

Jay: To like 500 or something?

Aaron: Yeah, something, yeah. 10,500. To me thatā€™s like point A, you know? We can start fresh from there.

Jay: I totally agree, but you know, doubling in value is not that easy.

Aaron: Look, all we need to do is go from $200 Ethereum to $500 Ethereum.

Jay: All we have to do its take bitcoin and put it on black on a roulette wheel and have it double it down.

Aaron: Yeah, look, no, thereā€™s a lot of assumptions here. But I do think youā€™re right. I think the stink has to be washed off and itā€™s not just about the ceiling of people out there, itā€™s word of mouth, right? Itā€™s like we made a shitty movie and now weā€™re trying to sell people on the sequel or something.

Jay: Yeah. No, no, no, no. I think that Vitalik is right. I think weā€™ve had variations of this conversation before, and I think that in the end, I was always, I just kept thinking, well thereā€™s a lot of fucking people in the world, you know?

Aaron: Yeah.

Jay: Thereā€™s entire countries where people donā€™t know about bitcoin or know less about bitcoin. Or places likeĀ ā€¦ What percentage of China for example knows about bitcoin? Thereā€™s certainly people who know about bitcoin, but does your average middle class retail investor whoā€™s just screwing around on WeChat, like do they know about bitcoin? Because thatā€™s what matters, you know? So I felt like there were probably a lot of people still left who would want to know about it, but, I donā€™t know, Vitalik knows a lot about this sort of stuff, so if he feels like all those people probably already know about bitcoin, then maybe they do.

Aaron: Letā€™s talk about that China thing because I was just thinking literally about doing that. When you said that, I took it very literally. I was like walking up to a Chinese villager and being like ā€œHereā€™s a crypto wallet. Weā€™re going to put money in it.ā€ It seems so much more plausible to tell that person about bitcoin than it does Ethereum or some other alt coin. If Iā€™m like ā€œYeah, itā€™s digital money. Itā€™s like, you know in WeChat, you buy stuff. This is a purely digital one. Great.ā€ Me and you canā€™t explain Ethereum to each other.

Jay: No. At least not like that.

Aaron: Not unless you have at least two hours and a highly skilled threaĀ ā€¦ Can you imagine trying to explain Ethereum through a translator?

Jay: No. Thatā€™s the thing, though.

Aaron: Theyā€™re like ā€œamusement parkā€ and the personā€™s like ā€œI am not familiar with this term.ā€ I did like when Tony Shank fired back at us on the amusement park last week, though. He was like ā€œThis doesnā€™t make sense. Itā€™s like if you called the internet an amusement park, that doesnā€™t make sense.ā€ Iā€™m like ā€œI agree, but it doesnā€™t make sense.ā€ Our metaphor is bad because the thing weā€™re trying to make a metaphor from doesnā€™t make sense.

Jay: Also we are already invested in this metaphor enough, Tony, so we donā€™t needĀ ā€¦ We need it to kind of work. If you think back at Nathaniel Popperā€™s book, if you recall, he writes pretty praisingly of Roger Ver, not the current Roger Ver, but the old Roger Ver.

Aaron: Before he turned heel.

Jay: Roger would go around Japan and he would download bitcoin wallet onto peoples phones. He would say ā€œHey, this is a different form of money. Itā€™s really secure. Itā€™s not based on banks. Itā€™s outside of the whole government banking system and itā€™s really easy to use. I just did it for you.ā€ Right? You can still do that with bitcoin. You can go to countries that have, for example, growing authoritarian threats, like China, and tell people ā€œHey, you know how all the money, even on WeChat that you have, itā€™s linked to your Chinese bank account. If youā€™d like to have some sort of store of money that you can use internationally without incurring any sort of penalties or drawing attention to yourself, then maybe you should use this.ā€ You can still do that. I actually donā€™t even think it would take more than what I just said to somebody for them to be interested in it.

Jay: Every other alt coin and Ethereum is contingent on the idea that you understand what bitcoin is first. And theyā€™re much harder to explain outside of that. And so, I would think that if you believe that that is the currency in which coin should grow, like as word of mouth and people being excited about it, then I would still think that you and I are right to be like bitcoin maximalist over anything else.

Aaron: Doesnā€™t bitcoin also solve a problem that someone in China would actually have, which is ā€œHey, do you worry about the government seizing your money?ā€ ā€œUh, yes. Yes I do. That is a concern I have.ā€ I donā€™t think an average Chinese person who does not know about bitcoin is unfamiliar with money seizure, money laundering, the dangers of a state owned bank account, et cetera. I mean, look, weā€™re making this up. We donā€™t know shit about China. Weā€™re all spit balling here. Itā€™s easier for me to understand why that person would be interested in it than Ethereum except, and I wonder what you think about this, why is Korea crazy about Ethereum then? Is it because Korea is such an intensely wired, already living in Ethereum world society?

Jay: I looked into this a little bit. What I found was that it was because the price was really easy to manipulate and because a lot people in Korea, because they were a little bit ahead of the curve in terms of the crypto craze, a lot of them got really rich off of Ethereum.

Aaron: You donā€™t think thatĀ ā€¦ I believe Korea has like the fastest and most widespread internet of any country. You donā€™t think that that contributes to a culture that can imagine something like the Ethereum future?

Jay: No, I think that is part of it, and I think thatā€™s why they were interested at it in the beginning. But in terms of the craze that youā€™re talking about, like where-

Aaron: Thatā€™s the bubble.

Jay: Yeah, people onĀ ā€¦ You know like moms and dads on buses and on the subway are buying crypto through Bithumb. That I think was because it was a mass mania that was sparked by the fact that a small group of people became fabulously wealthy and then figured out how to really, sort of severely, manipulate the market and thatā€™s why everyone became obsessed with it.

Aaron: We talked about the power of bitcoin in the third world, but I hadnā€™t thought until right now about how Ethereum is like a total first world idea.

Jay: And bitcoin is not.

Aaron: Bitcoinā€™s not. You donā€™t really need bitcoin in the first world. You might be excited about Ethereum, but you donā€™t need bitcoin. The more unstable your country is, the more you need bitcoin.

Jay: Yeah and the more appealing it is for you. Which again, I think in terms of word of mouth, I just think that itā€™s a much better story. If Vitalik is saying that these stories matter, then I tend to believe him and I think that thatā€™s probably something he thinks about with his own product, you know? He canā€™t even explain Ethereum. Iā€™ve seen all the YouTube videos where Vitalik tries to explain Ethereum. You know, theyā€™re like ā€œWhat is Ethereum?ā€ And they show Vitalik and thy for some reason have him brightly lit, and heā€™s saying ā€œEthereum is aĀ ā€¦ ā€œ and youā€™re just like oh my God. This thing is like six minutes long. Itā€™s just him talking, you know looking off camera, like why did they do this? And itā€™s just because thereā€™s no easy way for him to explain it or anybody to explain it.

Aaron: I mean Ethereum is smart contacts.

Jay: Okay, but what is a smart contract.

Aaron: We know what a smart contact is, we just donā€™t know why you might need to use them. Weā€™ve gotten that far. I do think that the narrative of this planet is also bullish for bitcoin and bearish for Ethereum, as of the laĀ ā€¦ like the Trump era. Youā€™re country might be destabilized and you lose all your money narrative seem