Episode #20: The Return of FOMO Kang w/ Doug Kim

Cambridge Analytica-coin, crypto-weed, why alts hurt at tax time, and the mysterious hackings of crypto-personalities like Ian Balina

Coin Talk
Coin Talk
Apr 20, 2018 · 40 min read

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COIN TALK is produced in partnership with Medium and hosted by Aaron Lammer and Jay Caspian Kang. Press “Listen to the story” above to play the episode or read the transcript below. (You can also subscribe on Apple Podcasts, download the MP3, or email us at hi@cointalk.show)

Poker shark / actor Doug Kim (check out his show Just Doug on Facebook) returns to the show plus:


Aaron Lammer: Welcome to Coin Talk, Jay, back another week on the upswing.

Jay Kang: Yeah, it is. It is fully now balmy spring, I think. I think we got past the short stay on campus and then it got a little bit cold and then there was one day where you just walk out and you’re like hot. It’s like May and it’s just gonna be warm for a while.

Aaron Lammer: Ultimate team is practicing. Everything is in order. The return of spring, also known as AltSeason of course means that we have lifted the curse and we can have back on our old friend Doug Kim, who we were kind of worried to contact during some low points there, but I think he’s sprung back enough that he should be good to talk to.

Jay Kang: Yeah, we’re like past the point where if we talk to Doug too much about Crypto and then Doug did something to hurt himself that we would feel complicit in it.

Aaron Lammer: Agree,

Jay Kang: [We’re no longer Doug’s stewards now, like Doug is on his own.

Aaron Lammer: He’s free to fly just as we are. We’ll get to that later. I’m definitely interested.

Some people have been asking online, “When will we see FOMO Kang again?” Don’t answer that question. More on that later.

Jay Kang: Yeah, I have a surprise announcement later in the show, so …

Aaron Lammer: You won’t believe which host of the show is experiencing FOMO. More on that after the break. Before this, I am sorry, there’s a couple of stories that have broken. I don’t want this show to all be about ridiculous Blockchain stories, but some of these stories that are coming out have been really excellent this week.

Jay Kang: Oh yeah. I think that if you believe as some in the Bitcoin community do, that there is like a COINTELPRO going on, there’s like a misinformation campaign and that people are disappearing and that fake stories are coming out, this was quite a week of evidence for you.

Aaron Lammer: I’m with you.

Jay Kang: The linkage to all sorts of bad actors in the internet world and in the political world has sort of come all about and if you could script a third act to the death of Crypto and this is all exposed thing, the linkages that are coming out right now are fascinating.

Aaron Lammer: I agree. It’s almost like we were playing news topics of the last year bingo and it’s not Six Degrees of Kevin Bacon at all. It’s like always one to two degrees Crypto story from every news story. This one, the story of Cambridge Analytica, most notably the extractor of data in the Facebook scandal.

Jay Kang: Yeah, the maker of very strange personality tests that somehow end up getting you to, if you believe the mainstream media’s narrative for some of the more conspiratorial people, the thing that got Trump elected.

Aaron Lammer: Okay, you believe that, don’t you? Come on.

Jay Kang: No, no, not at all. But I will say that that is a sort of implicit narrative right now that Cambridge Analytica had all this sort of power to influence the way in which people were receiving information and extracting information from them on Facebook.

And can you tell me how did Cambridge Analytica make it’s way into the Crypto world?

Aaron Lammer: Well, for starters, I wanna set the scene here with a previous appearance which was as the … I believe, the London leader of Cambridge Analytica was going down in flames. I believe it was a British journalist, some sort of a sting operation, filmed a video in which he offers services to a foreign government that I think include framing people or filming them secretly with prostitutes. Really deep, dark, spy world kind of stuff.

Jay Kang: Yeah, it’s like a Raymond Chandler novel where you have like a gumshoe who doesn’t wanna do the bad things, but he still does the bad things.

Aaron Lammer: Yeah, it’s kind of like we’re high tech, but also if you want us to plant some evidence on someone, there’s a price for it. We’re involved in all kinds of shit.

Jay Kang: Yeah, we have an entire portfolio service.

Aaron Lammer: Mercenaries, whatever you want, let’s talk.

So that was kind of why I was like, “Okay, well we’ve probably heard the last of Cambridge Analytica. They’re probably gonna like change their name and come back and it’s gonna be like some Peter Thiel backed Palantir derivative company or something like that. But then, news this week that Cambridge Analytica before, I believe, before David Nix left, had plans to issue their own Crypto currency.

Jay Kang: Okay, so were you surprised or not surprised by this news? Because I think there’s two ways to take it.

Aaron Lammer: Yes, I was surprised a little bit because these are events that took place one to two years ago. So this was like pre-Crypto craze. They were already thinking about getting into their own token.

Jay Kang: Yeah, they’re a little bit before the curve here.

Aaron Lammer: They were before the curve in a lot of respects. Hey, they were the first people who manipulated an election with a personality quiz.

Jay Kang: Okay, so I’m having some, there’s a lot of information, I think Nathaniel Popper and the Times did a pretty good job assembling all of it, but, Aaron, can you tell me what exactly they were trying to do? What is this coin they were trying to do and why were they doing it?

Aaron Lammer: Well, like many things about Cambridge Analytica, at first I thought they were just in it for the money, but then I concluded that it was even darker than it seemed. So at first I was like, “Oh, I guess they were just in some dumb Blockchain venture like every other business tacked a Blockchain, weighing on to whatever they were doing.”

But then at the end of the article, they describe… Do you remember this part, where they describe what one of the plans in Mexico was?

Jay Kang: Yeah, yeah, yeah, yeah. We should just go to the text itself. Let me just read it-

Aaron Lammer: Okay.

Jay Kang: And this is Joe Carlson who is a consultant who I think is on Twitter and is an active part of a lot of Crypto conversations.

“She’s worked with a lot of Blockchain companies. She went to Cambridge Analytica and sat in a couple of meetings in which the Cambridge Analytica employees bragged about their success in helping get Trump elected and their ability to carefully target advertising campaigns using data from social networks like Facebook.She also remembers, they spoke about an array of potential campaigns. The most unusual idea involves sending virtual currencies to people in far flung regions of Mexico. The payments would give people incentive to fill out surveys and get data that could then be used to help design campaigns for Mexican political candidates.”

Now, this kind of blew my mind.

Aaron Lammer: This is like when they were trying to hunt Bin Laden and they sent the fake NGO doctors around trying to get blood from people. This is the kind of shit that makes actually doing things kind of dangerous for everyone involved. This is COINTELPRO kind of shit.

Jay Kang: But it’s also like they were just gonna print fake money and give it to people in rural Mexico and say, “Hey, it’s a Crypto currency. It’s backed by so-and-so. You can do x and x.

Aaron Lammer: Yeah.

Jay Kang: There’s no way that this Crypto currency that they were going to make to send to rural areas of Mexico and maybe other countries would have any sort of real backing or value-

Aaron Lammer: [crosstalk 00:08:42] Hey, we don’t know how it’s gonna perform on Crytopia until it gets listed, okay?

There is no reason to talk down on this spyware Cambridge Analytica Mexican currency. It could be a hit.

Jay Kang: So another application that they were talking about, and again this goes into what we talked about Adrian with, what we’ve talked about a lot in the past few weeks which is the nebulousness of this term Blockchain. One of the things that they were talking about was that they were gonna use the Blockchain so that people could protect their personal information and that perhaps they could sell it to people who needed it or people who wanted it through a Crypto currency. I think that was like the second application of it.

Aaron Lammer: It’s kind of like a honey pot. It’s like, “Okay, we want a bunch of identity data so we’re gonna set up a way to secure that on the Blockchain, then we’ll have all that data, then we’ll leave.”

Jay Kang: Only things that seem so devious to me.

Do you understand why a Blockchain would allow somebody to encrypt their information and sell it to different people using Crypto currency? Like why it would be uniquely necessary there? Because one of Cambridge Analytica’s claims seem to be that like, “Oh, well, you can only do this through the Blockchain.” Do you get that?

Aaron Lammer: I mean, I get how their like copying other people’s ideas and then applying the dark Wario version of them, which is basically just like a data trap just the way that like a Facebook quiz is a data trap. None of this seems like that surprising I guess, in the sense that these guys were engaged in every kind of scammy internet activity that was out there and like certainly one of the scammy activities is trying to get a bunch of people involved in your weird coin.

Jay Kang: I don’t know if this is being fair to them, but they had a long history of Cryptos you said, but it wasn’t just like their own Crypto projects. My favorite paragraph I think in this piece or my favorite sentence is that “documents and emails obtained by the New York Times show that Cambridge Analytica’s efforts to help promote another group’s digital token the Dragon Coin, which should not be-

Aaron Lammer: Were you involved in Dragon Coin at one point?

Jay Kang: Wow, very racist.

Aaron Lammer: No, I mean, were you like selling it to me or something? I feel like I’ve heard of it before.

Jay Kang: No, no, no, no, that’s Dragonchain. That is a very different thing.

Aaron Lammer: Okay, okay.

Jay Kang: You’re saying like because dragons are Asians, I was gonna ask you, “Are you involved in Menorah Coins”-

Aaron Lammer: Jay, forgive, forgive me for conflating Dragon Coin and Dragonchain. Obviously those are different projects with their own merits.

Jay Kang: Yeah, like Dragonchain which is only sold on KuCoin, I believe, is very legitimate.

All right so Dragon Coin, not Dragonchain, associated the firm with a famous gangster in Macau who has gone by the nickname Broken Tooth.

Aaron Lammer: Yeah, now who’s racist.

Jay Kang: The back story of this is that in Macau, I guess there’s somebody who has a lot of connections with the gang scene in there, was trying to make a Crypto currency that worked for gambling which is something that you and I talk about all the time.

The reason why I was interested in her, I think it’s kind of funny is that of all the Crypto currency movies that you could make, wouldn’t this be a good one?

Don’t you feel like-

Aaron Lammer: Yeah.

Jay Kang: Crypto currency Macau triads-

Aaron Lammer: Michael Mann kind of production.

Jay Kang: Yeah, yeah, or like even just old school Hong Kong John Woo.

Aaron Lammer: Oh yeah, for sure, sure.

Jay Kang: Where like a whole bunch of people die and there is doves flying around all the time and a man is running with the box full of treasures and trying to get out of there.

Aaron Lammer: It’s inexplicably called A Better Tomorrow Four [crosstalk 00:12:31] even though it’s a different cast of characters.

Jay Kang: Yeah, and it has nothing to do with A Better Tomorrow Three, but anyone who liked three would see four which generally works-

Aaron Lammer: Is John Woo, is he still working? Does he still make movies?

Jay Kang: I don’t know. I have no idea why he would not be making movies because all of his movies are good. Can you name a bad John Woo movie?

Aaron Lammer: No, but I feel like all of those movies came out when I was like 20.

Jay Kang: Yeah, sure, but don’t you think all of those movies would work right now?

Aaron Lammer: Yeah, yeah.

Jay Kang: All right.

Aaron Lammer: All right.

Jay Kang: Let’s head to another Blockchain-based ICO type of thing.

Aaron Lammer: News, news, news.

Jay Kang: And this is right up your alley, and this is from CoinDesk and it is talking about a Yelp for Weed and that it is launching its own Ethereum network. You have said on this podcast several times that as you also host a weed-based podcast-

Aaron Lammer: I don’t know if the podcast is weed-based. It’s not actually made of weed, but it is about weed, yes.

Jay Kang: It is not like Cheech and Chong’s van that they try and smuggle across.

Aaron Lammer: You can’t smoke this podcast, Jay.

Jay Kang: This is sort of right up your alley where it is the actual intersection of weed information, and token technology.

Aaron Lammer: I mean, it’s both right up my alley and deeply emblematic of how sad and unstylish anything about the marijuana business or industry is. So MassRoots, it’s not a success per se, as far as I understand it.

Jay Kang: MassRoots being the company behind this.

Aaron Lammer: Yeah, it’s a little bit of came to like remember how Kick was gonna do an ICO and then Telegram did a giant one?

Jay Kang: Yeah.

Aaron Lammer: I feel like MassRoots is the Kick of the weed Yelp kind of game.

Jay Kang: What is the Telegram or even like the Facebook of it?

Aaron Lammer: I would say probably like Leafly and WeedMaps are probably the biggest companies.

Jay Kang: Oh yeah, I used WeedMaps when I lived in LA a couple times and there are so many dispensers around where I live that it was almost useless because there are so many dots and it was hard to tell the difference between them.

Aaron Lammer: Yeah, just figure it out. Just stop next time you’re driving your car when you drive by one immediately anywhere in that part of Los Angeles.

Jay Kang: Yeah, or just like walk in and be like, “What are your prices here?” Because you could just literally walk another block instead of consulting Leafly.

Aaron, how big is this sort of information business about different dispensaries? Like how necessary is it?

Aaron Lammer: Well, I mean, I think if you think that the future of the marijuana industry is basically a Postmates style of delivery business, then if you win the where people look for weed online, you eventually just sell the weed. So potentially I think the market is enormous, but there’s kind of a misperception as I see it that because the overall weed market is enormous, like if you’re in that business, you’re somehow like, “Yay, you’re in line for some big money.”

For most of these things, like most things in Crypto, if you’re not at the very top, you’re probably gonna be like not around in a few years.

Jay Kang: Yeah, and honest, the way that this token worked, right? It didn’t seem to be that great of an appeal. So like for, it’s pretty easy to incentivize potheads by just offering them weed, right?

Aaron Lammer: Come on, Jay, come on. Come on.

Jay Kang: Now I know who I’m working with.

Aaron Lammer: Yeah, you can use the tokens to purchase products and services within the MassRoots ecosystem.

Jay Kang: Yeah, and the way that you get this, and this is sort of a hell, like it actually reminds me of Toshi, Brian Armstrong’s theory on this.

Aaron Lammer: Yeah.

Jay Kang: Sort of platform that we discussed to provide additional information so that Cannabis consumers can make better informed purchasing decisions, we plan to utilize digital instruments as a form of reward-based currency within a MassRoots platform to encourage high quality reviews, including reviews of new products, which we believe will also incentivize user growth and simulate our platforms overall activity.

What that means is that they’re going to give you a little bit of token if you right a review that different people like, and that if you use the system a lot. So it’s almost like airline miles or something like that for using this platform.

Aaron Lammer: Yeah, I feel like, I can’t even spend like another minute of my life digging into these completely poorly thought out, band wagon jumpy things. The conclusion is always just the same, there’s no real idea here.

Jay Kang: Yeah, yeah.

Aaron Lammer: This is good though, the Cannabis, a marijuana industry news site reports that MassRoots provides a portrait of a negative net worth company that is burning through cash, missing IRS payments, and as you see reporting deadlines, handing out stock based compensation like Candid operating with no external sources of liquidity. Whether these issues effect MassRoots cryptocurrencies ambitions remains to be seen. It’s always these companies that are like early going down and flames that alley and we have a token now.

Jay Kang: Alright. So on to the next one …

Aaron Lammer: Let’s do one more thing I wanna throwout you before we bring on Dough Kim, there is a tweet that caught my eye. It crystallized certain things that I had been thinking about recently. It’s a tweet from Cheefy. Bitcoin Maximalist should happily denounce the word cryptocurrency. It means nothing to 99% of people and does not help them understand what bitcoin is. Other word, Doug is a last scam artist to imply that their MoonShot has bitcoin similar hard money uber return potential.

Is it just infernally provocative idea. I feel a little uncomfortable using the word cryptocurrency sometime. Do you ever feel uncomfortable?

Jay Kang: No, no. Why would I feel uncomfortable using the term ‘cryptocurrency’. Why do you feel uncomfortable, I don’t understand this.

Aaron Lammer: Sometimes I feel like … It’s like a blanket term that’s like come to encompass a bunch of things that I don’t find particularly interesting, while I do find the central idea like bitcoin interesting.

Jay Kang: Okay. But does the term cryptocurrency push you away from Bitcoin? Does it diluted for you?

Aaron Lammer: Sometimes I wonder if … We’ve talked about this before where I’m like, “ Eh, these things that are like pre mind and just like issued, does these things belong in the same bucket?” That’s I guess the question of my mind. Are all these things like each other?

Jay Kang: Oh yeah. I mean there is like I … Well, I think we’ll talk about it in a later podcast, who says that there are only two types of coins, Bitcoin and shit coins, right. And it includes Ethereum, Lightcoin and Monero, all of them are shit coins and they are just distractions. And he is the real Bitcoin Maximalist. Like he doesn’t need vegetables, he doesn’t need bread, he only eats meat. He believes that a hyper Bitcoinization is inevitable. You know, the messaging for him is super important because he feels like all the rest are pretenders, there are all just trying to beat Bitcoin. They all sort of, in their small way take away attention into these things that are ultimately not real and not going to succeed.

So, I don’t know, I don’t think that the terminology necessary … Like what else would you call those things then. Whatever you call them, it’s going to be a different word and so …

Aaron Lammer: Let me ask you a question then. Do you think that once Satoshi came up with the idea for Bitcoin, he imagined that it would be like forked, cloned, taken on as like an entire genre, and iterated upon taken on? I’m curious.

Jay Kang: I don’t think so. Because I can’t imagine that he can see that fore down into what Bitcoin success would be. It’s just theoretical. And obviously even when you are coming up with a theoretical outcome, you’d say, “Well, this would be probably more complicated but this is what I hope would happen.” You would have to be an actual person, who could see in the future to be like. And then, you know, like Roger Ver is going to put this thing after Bitcoin cash and that there is gonna be a whole scammer community that’s created and there’s gonna be this thing called Cryptopia where you can buy like [inaudible 00:20:55]. I’m not saying even specifically, I think it was hard for him to imagine that there would be this sort of blossoming branching out economy associated with cryptocurrencies.

Aaron Lammer: I’m gonna take the other side on that idea. Which is … Well, I agree with you. No one obviously was gonna predict exactly what happened or like how many there would be or of what kind. I think if someone with a background in software, and particularly like open source software and publishing work in that kind of thing would probably be familiar with the idea of forking and that like most important, like programming languages, don’t just follow a linear singular path but eventually become multiple languages and like get recombined and reused in different ways. So I would think, at least in his own Maximalist vision, you would expect that the 21 million tokens were not the end of all of this entire idea and that’s mark upon the world.

Jay Kang: Yeah. But that’s different than what the Maximalist believe. You know, I agree, like obviously he …

Aaron Lammer: This is so religious. I felt like we are talking about like early Mormonism verse of the year.

Jay Kang: Yeah. We have a tent and nobody can see the tablets.

Aaron Lammer: Yeah.

Jay Kang: The Maximalist believe that it should just be the amount of Bitcoin that is produced and it should just be mind and that there should be no other currencies ever out there and that Bitcoin should just be divided up infinitesimally and take over the entire economy. That’s the idea, that’s why their language pleasing people, who use word cryptocurrency, which I find appear ironic as well, give most of those peoples’ politics, but yeah, I don’t know. I mean I think that bitcoin is still king at this point. People generally believe, who know anything about the space would say that there is no world of cryptocurrency where it gets bigger and bigger and expense more without it being sort of well, I’d buy Bitcoin do you?

Aaron Lammer: Yeah. I guess, I’m like … I feel increasingly sympathetic towards Bitcoin Maximalism recently. I don’t know I …

Jay Kang: Oh no, oh no. Are your politics changing?

Aaron Lammer: No. And I’m not gonna anything about … Look, I love all of the brands of crypto phonetic. I love the world of …

Jay Kang: You love the alt right?

Aaron Lammer: No, no, no. I’m just saying, I like all the weird off brand coin, but I also like the central, core ideologies. I like each of the worlds in … for a while, I was very interested in exploring all of these microcap coins. But for some reason, I felt a little full circle recently and just kind of have been interested in Bitcoin.

Jay Kang: Yeah. Well, I mean …

Aaron Lammer: I’ve been off the microcapcoins for a while. Speaking of people who also are not Bitcoin Maximalist. We should call up our old friend Doug Kim here, who is usually hovering at somewhere from 95–100% alts. And usually can’t explain that world view to us. Should we give him a call?

Jay Kang: Yeah.

Aaron Lammer: Alright. Here we go.

Doug Kim: Hello.

Aaron Lammer: On the line, Doug Kim. Hello Doug.

Doug Kim: Yo, what’s up?

Aaron Lammer: Welcome back to the show.

Jay Kang: How are you just doing? We are trying to get in touch with you for the past 20 minutes. What were you doing?

Doug Kim: Oh. I was basically setting up my mic, literally by before you guys called but before that I was also selling weekend two passes to Coachella from craigslist people because I bought both weekend tickets, not sure which one I was gonna go to. I went last weekend so. I was selling my tickets, thankfully that’s over with.

Jay Kang: How was Coachella?

Doug Kim: Coachella was an experience. I mean … I give a little background. I’m 34.

Jay Kang: (laughing). That was actually going to be our question. That’s what we were talking about offline.

Aaron Lammer: Is Doug 25?

Doug Kim: No. I’m like 34 and I feel like I’ve gotten into the whole live music scene, maybe a few years ago and the friends that got me into it, they were kind of like, “Oh, we’re retired from festivals and shit.” And I was kind of like, “Well, I wanna go to a festival and see what it is like.” You know, before, I have to eventually retire.

Aaron Lammer: So Dough. So you gave up your youthful prime to the poker table. Now, you’re coming around for the last swing of the Rock n Roll festival.

Doug Kim: Exactly. I’ve done all the poker shit. Now, I’m like, “Let’s get the other degenerate activities out away, that I haven’t done in my 20s.” I just need the full generate experience, crypto, poker

Aaron Lammer: Did you stay up for the Beyonce performance?

Doug Kim: Oh yeah. I couldn’t miss that. I mean that was just …

Aaron Lammer: How far away from the stage were you at that point?

Doug Kim: I was probably like … I’ll say like, I wasn’t too close. I mean like, if you get too close, there’s probably going to be a problem, I’ll be accused of stereotyping, but women go … They just transform when Beyonce comes on stage and you do not wanna be near a woman if you’re a man. When they get into that transformation.

Jay Kang: Whoa, whoa, whoa, whoa. It sounds like you’re talking about, like, fucking werewolves. [crosstalk 00:26:34]

Aaron Lammer: Doug was afraid of getting jumped at the Beyonce concert, so he kept his distance.

Jay Kang: A bunch of hysterical, like, weeping werewolves. Doug, the reason why I asked you this question was because we see crypto currencies and Bitcoins swag in marketing showing up but also it’s a weird places now. Was there a Bitcoin or a crypto present at Coachella, like were they selling Coachella coin or shit like that?

Doug Kim: No. Actually I was surprised, there is no crypto going on there. I actually did really check my Blockfolio or Delta at all that we can be just surprising.

Aaron Lammer: Wow. Your first moment of peace for many years.

Doug Kim: No, no. That’s not true.

Jay Kang: I don’t believe you at all.

Doug Kim: Yeah, no. I checked Bitcoin price. I always check the price of Bitcoin. But I didn’t check my profile, my portfolio or whatever. There was just kind of like a quick glance because, in the venue when you are like among hundreds of thousands of people, your internet just doesn’t even work. You don’t even bother trying to use it.

Aaron Lammer: So Doug, I heard there’s gonna be an announcement by Jay. Jay tell me he … Okay, so let’s just recap Doug. We’ve been talking to Jay through this whole crypto winter and Jay has been saying things like, “I don’t even know what Doug is doing, Doug is crazy.” It’s just gonna [inaudible 00:28:04] there’s a huge altbags into the ground.

Jay Kang: I love that Aaron is, like he was all sound like he was defending you in all these conversations.

Aaron Lammer: No I was like … Yeah. He should totally be hodling a higher percentage Bitcoin, I agree.

Jay Kang: Yeah. If I was Doug, I would by the depth right now. He knows exactly what he is doing. Just for listeners, who don’t know who you are, Doug, I think that we should introduce you a little bit and just say that you are in the Waze token hall of fame, that is certified.

Aaron Lammer: Big Ubiq bags, big Monero bags.

Jay Kang: Huge Monero bag. These are all bags that you bought, at the beginning of 2017 generally, large quantities using money that you had made playing poker and that you then did not sell any of them ever. Which is very different than almost everyone else in the alt market who are mostly day trading them. Is that correct?

Doug Kim: Right.

Aaron Lammer: Are most people day trading them? I feel like most people are sitting on a huge cashes.

Jay Kang: I don’t think that’s true. I think most people are using to day trade. Or just helping from moonshots and when the moonshots don’t hit, they get out and when the moonshots do hit, they also get out. Where’s Doug? Doug, this is not pejorative at all. Doug hits the moonshots and doesn’t sell, and then it doesn’t.

Aaron Lammer: Yeah. But I always think like has Doug get to poker, he is like playing some sort of a hand on higher level than me here. So Doug, we go to a little bounce back here.

Doug Kim: No. There is no higher strategy. It’s just kind of like …

Aaron Lammer: There is no higher strategy. This is it. And what you see is what you get.

Doug Kim: Well, well, no. I mean like, I would say that the coins that I’m holding though are less shit, like I’m not holding like Verge or Chronos or some bullshit like that, you know.

Aaron Lammer: Yes. Now we understand you. You’re respectable.

Doug Kim: Right. I’m not holding Sumokoin or anything like that.

Aaron Lammer: Hey, hey. I’m gonna have to admit that I actually no longer have my SUMO holdings.

Doug Kim: Oh, he sold your bag. That’s fucking horrible.

Aaron Lammer: The SUMO baroncy has been vacated. Well, someone kept trying to hack my Cryptopia account. I don’t wanna keep coins on it anymore. Someone kept trying to reset my password. The only place I can have those, there was a SUMO, it was on Cryptopia and I did not wanna mess with the SUMO desktop wallet. So I’m sorry to say that my … I probably will resume my affair with SUMO. Maybe I wanna move over to a new microcap exchange that happened in my account there. But so, as I understand that after a cold winter of nay saying. Jay, have your feelings started to turn that all here?

Jay Kang: Yes. And I wanted these podcast announce the fact that I think that we have finally seen the return of FOMO Kang.

Aaron Lammer: Oh my god.

Jay Kang: Which was a staple. A staple of the early shows. A staple of the basement tapes.

Aaron Lammer: Mister Buyback.

Jay Kang: Yeah. Buying every single shit coin. Talking shit about every single moonshot. Telling false narratives, incomplete in complete hindsight, whenever a coin went on 10% and he’s like, “I knew that was gonna happen.”

Doug Kim: That guy is back. He is back

Jay Kang: Oh no. He’s back?

Aaron Lammer: Once he start seeing those 20% greens all over Bittrex, you can just set your watch to the arrival of the FOMO Kang trend.

Jay Kang: FOMO Kang, yeah. FOMO Kang, two weeks ago is nowhere to be seen. He was like, “oh man …”

Aaron Lammer: He was like, “I might buy at 3000, I might …”

Doug Kim: We are like come on.

Aaron Lammer: 3000. Jesus fucking Christ.

Jay Kang: Yeah.

Doug Kim: 3000 is a little much.

Aaron Lammer: We are glad to have you back.

Doug Kim: Well, I do have some caveats.

Aaron Lammer: Okay, okay.

Doug Kim: They are complicated.

Aaron Lammer: Asterisk.

Doug Kim: The first being … Yes, the first being that I have not bought any more of these coins. And that’s mostly out of laziness. But-

Aaron Lammer: Your friend have.

Doug Kim: -I have gotten the itch, and I would say that FOMO Kang is not necessarily, either you’re buying these things, is that you’re seeing a sea of green and then you start to feel bad about yourself.

Aaron Lammer: Yup.

Jay Kang: Oh yeah, sure.

Doug Kim: And that is happening.

Aaron Lammer: You got that feeling that pretty much any bet you would have made probably would have been a good idea?

Doug Kim: Yeah.

Jay Kang: I think that’s kind of like the mentality with hodling too, because sure, when everything goes down and like shit, it’s terrible, you feel like shit and you feel like an idiot. But then like you’d know the wave is coming where the sea of green is just gonna shine again and make your life just awesome when you’re like, “Oh yeah, I have the entire time, yeah, that’s right.” You know, I’m like a true hodler.

Aaron Lammer: I don’t understand that the environment you just sell the top and then re-buy the bottom if you can.

Doug Kim: Oh well, I mean like yeah. If I had a fucking like a glass ball, yeah sure. Yeah.

Aaron Lammer: We’re now at FOMO Kang ends like, know which way the Market Kang is, both come back at the same time.

Jay Kang: FOMO Kang is still a dick.

Aaron Lammer: FOMO Kang is still calling a shot.

Doug Kim: I’ve had as much money as the Winklevoss twins if I knew exactly when the top and bottoms come.

Jay Kang: Yeah. Like I don’t know you, that I was gone for 3000 myself. I have no idea what’s happening. I also could see FOMO Kang Going away next week, when everything crashes again, if [crosstalk 00:33:50].

Doug Kim: Oh yeah. I mean like, I don’t think it will crash significantly from here but it’s definitely possible. I mean who knows right? I was just thankful for taxes that it didn’t like die completely. And something I realized just filing taxes this past weekend or day, it was a shit show, but basically like back of the envelope, calculation I did was kind of like you have to outperform Bitcoin by 33% in order to break even on short term for as long term. If you held on to Bitcoin and never sold it and just got like long term capital gains on that, first it’s trading alts, you have to outperform Bitcoin by 33% break even. So that kind of like changed my mindset going into this year in terms of like how much I wanna trade.

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Doug explains his tax math on Twitter

Aaron Lammer: Well, why are the alts tax so much higher than Bitcoin? Just because they are less than one year trades?

Doug Kim: Right. Exactly. Like it doesn’t apply any more, I mean not that it really applied before but like people were kind of skirting by before with it. Not to say that I have IRS, I correctly reported my taxes. But yeah. Now, it’s just kind of like the playing field is different I feel like in terms of trading alts and people are kind of like, “Well, that doesn’t make sense.” I mean they should be like … It should have make sense to trade alts as much unless I’m really confident. You know that I’m gonna do better than bitcoin with this.

Aaron Lammer: Yeah.

Jay Kang: But yet, the all much, it is booming, right. Like right now …

Doug Kim: Oh yeah. I have a plenty of lubes that don’t have that much money invested so they are probably evading taxes and skirting by under the radar, or larger fish, I don’t think that’s more of an option anymore.

Aaron Lammer: Even when you say 33%, it’s like, if there’s a huge alt run here, 33% is gonna be like the last couple days of it. There is people who’re still with … Like yeah, I’m still an alts, like yellow.

Doug Kim: If you think about Bitcoin dominance right, it’s sitting around 40% right now and last year was the first year, it really depth below 90%. It’s kind of hard to say like … I always ask my friends like, five years from now, let’s say crypto market cap is $10 trillion, what percent is bitcoin? And they are like … It ranges. Some people say, it’s gonna be 10%, some people say it’s still gonna be 40–50%. So it’s hard to determine, is Bitcoin gonna be the big dog still? And if so, then, maybe it’s not smart to trade into alts, because alts do fall. I mean there still is a following of alts and Bitcoin. They’re still tethered together in terms of price.

Well, we might see changes in terms of like when Bittrex and whatever start opening fiat pairing and what not.

Aaron Lammer: I have no idea what’s gonna happen. That’s why I feel like every single strategy seems about equally good.

Jay Kang: Well, I will say that given the fact, and Doug, I tried to do calculations to in it. It seems like your number is pretty close. And I trust your number above my number, which is like sitting in my head at work. I just reading an article about it and been like hah. So you’d have to outperform it by a lot, and you said 33%, which I was like yeah that seems like a lot, so yeah.

Doug Kim: I mean it depends on what state you live in and what’s your marginal tax rate is and such things. But that essentially if you are going by the highest tax rates, that’s what I came up with.

Jay Kang: It does seem like it’s probably a better solution to just keep bitcoin than right? Because he is just saying about it in gambling terms, right, which is something we are both familiar with. There is 33%, they’re just gonna lose like you’re drying dead.

Aaron Lammer: Wait. Does that apply to your alt holdings that you hold from more than a year though. Like you’ve been holding these bags from more than a year now.

Doug Kim: Right. So like, if you do believe in an alt for more than a year … So you could sell those off. I’m just talking about like you said, “The majority of all traders don’t hold for a year.”

Jay Kang: Is there an alt over the Monero that you would wanna hold for a year Aaron?

Aaron Lammer: Yeah, I think so. I think [crosstalk 00:38:11] no, no, no, no.

Jay Kang: Then Ethereum?

Doug Kim: You can even hold this SUMO [baroncy 00:38:18] for a year.

Aaron Lammer: Well, look. I would not hold SUMO though for multiple years. But what you are saying is that the best tax situation is to hold all through over a year. I think you would put together a portfolio of the alts that you want to make them more than a year bet on and just hold that. That seems like the overall best situation to be in.

Doug Kim: Right.

Aaron Lammer: And yeah. I put money into Zcash for over a year, I put my money to 0x for over a year and now I’ll probably take that back.

Doug Kim: Wait. Zcash and 0x?

Aaron Lammer: Yeah.

Jay Kang: Those kinds. I mean …

Doug Kim: But it guess the problem is that in typical scenarios like stocks, it makes sense with that. What like that one year making that long term capital gains is like a good marker in general. But for cryptocurrencies, shit changes so fast that a month is like a year, pretty much for crypto. Obviously, they are not gonna change the rules for crypto in terms of tax liability, but it almost would make sense if they did. There was like a special rule for crypto. Like if you hold it for a year or a month, then there is more long term gains. And I think that would encourage more trading of alts, but it’s just trade.

Aaron Lammer: Tax helping for a special alt trading exception [inaudible 00:39:35] bags. I think you’re too deep on the alt trading. [inaudible 00:39:38]. I’m asking is, for a special active congress to help out the alt trading industry.

Doug Kim: But I mean, you know what I’m saying like in crypto, the news is just like …

Aaron Lammer: A year is maybe not the right time cycle. Like if it’s a year in the stock market, may be that’s represented by three months and some of these projects won’t even last for whole year.

Jay Kang: Well, that’s why I feel like it’s crazy to say that you should lock into these alts for a year. You have no idea these projects are gonna continue. Doug, I’m gonna say this. I’m a little bit concerned because this does not sound like the Waves hall of fame that we know. But it seems like you are slowly turning into a Bitcoin Maximalist here. Everything that you’ve said has basically been like maybe I shouldn’t have bought all these alts.

Doug Kim: I kind of think that way nowadays. Like, it would have been … I mean I probably would have broke even, if not, I’d perform better if I just stuck to Bitcoin. But also the amount of stress is just, you know … I have a friend who is also trading and he said, he sold of like most of his stuff into Bitcoin and maybe just like a little bit of Monero and all this. Maybe a very tiny amount in ICOs, like an obscenely tiny amount, like upper set or something. So he just says he sleeps a lot better. So I’m just like, maybe that’s the way to go.

Jay Kang: Wait, wait. But you being the guy who is famous for never selling a single alt, have you sold any into Bitcoin?

Doug Kim: I have here and there. Just like project that I definitely wasn’t gonna hold for a year. I’m still in the Waves hall of fame and still have most of my Waves. Actually I never sold Waves actually. But year mark since when I bought it is coming out so that will be the time when I can consider selling it but I still believe in Waves in general. I think it’s got some momentum, that’s gonna come sooner or later. Maybe I’m wrong but hopefully I’m not. Even if I’m not, like I said, “In a month, I’ll have the option to offload some if I want it to.”

Aaron Lammer: Okay. So I wanna talk about, Doug, you are my original alt enabler, which is to say you texted Jay a bunch of altcoins and I did buy them all and I didn’t know what they were.

Jay Kang: Oh god, sorry about that.

Aaron Lammer: And you explain to me what some of them were.

Jay Kang: I also had no idea who Doug was. I was like, “I know this guy Doug, I’ve met him once and he plays poker.”

Aaron Lammer: As like he plays poker. What alt coins does he have?

Jay Kang: Which alts was it?

Aaron Lammer: This was like some class x like Decred, medal.

Jay Kang: So you want me to explain Decred [inaudible 00:42:28] medals.

Aaron Lammer: So Doug, what is staking. Like you stake Decred what does that mean?

Doug Kim: It’s different from coin to coin and it looks different from coin to coin but I guess the idea is proof of stake is kind of like this way of securing the network in a different way than proof of work. I mean obviously, you know, how proof of work works, right. Computers mining using algorithm. You have like a fundamental understanding. So because …

Aaron Lammer: Yes. I have a fundamental quasi understanding.

Doug Kim: Right. So I’m gonna portray this explanation terribly but what I’ve heard from a friend is that the Lightning Network on Bitcoin or the Lightning Network that’s being developed, it’s like this proof of stake thing, where there is gonna be these nodes that validate transactions and they are gonna serve as like they have a bunch of Bitcoins available to trade with different places. They are almost like … So this is why people don’t like Lightning a little bit because it almost resembles centralization a little bit where there these nodes and entities that will have Bitcoin that they can stake it and in return for staking transactions they get out of a wallet, right. But it’s not gonna be as much as the [inaudible 00:43:44].

Aaron Lammer: Yes. Some [crosstalk 00:43:47].

Doug Kim: So that’s kind of like how …

Aaron Lammer: And you do that what Decred like you lend you Decred out to the Decred Network.

Doug Kim: So what Decred is, it’s a little different where you buy tickets. And what these tickets do is they allow you to vote on certain protocol changes. Let’s say I buy a ticket for … I think the going price is around 85 Decred right now or something, which is, I don’t know, it’s a lot I think in terms of money. I think it’s like 5k actually. Back when Decred was really small, it wasn’t that much. But anyway, let’s say you buy a ticket and upon maturation of a ticket, which could be anywhere from like a few days to four months. The average time is around 28 days, I think, they said. Within that time, you get your Decred back plus you get a reward for staking that Decred.

I’m not exactly 100% sure how …

Jay Kang: It’s like bank interest. Like you just …

Doug Kim: Yeah.

Aaron Lammer: Yeah. It’s like you’re becoming a lender on the network.

Doug Kim: You [inaudible 00:44:55] Decred and the price of voting is I guess lending your Decred to the Network.

Aaron Lammer: What are people so juiced on voting on … They’re like willing to pay into the network for democracy say.

Doug Kim: Well, this is actually I like about Decred. Because you know you saw a lot of the political grandstanding of like Roger Ver and everyone, Bitcoin and actually like Decred, some of their core developers were originally core developers of Bit coin, and they split up because they saw this infighting whatever. And so Decred actually is a coin that has a proof of stake and a proof of work mechanism. It’s this thing where minors have control but also these people that actually have Decred, have control over the network. So it’s like a users plus minors can direct where the protocol is going.

Whether they want Lightning Network, whether they want these different improvements or if they want two megabytes, they want four megabytes.

Aaron Lammer: It’s kind of an experiment in governance [crosstalk 00:46:00] as much it is. As it is like a currency. I mean there is a currency but it’s like …

Doug Kim: Exactly. So it’s like trying to improve the Bitcoin model.

Jay Kang: So yeah. It is a system in which people who buy and have some sort of say in decisions that happen and you can buy more influence by lending more Decred.

Doug Kim: Yeah. So you buy tickets as much as you want. I mean I just like load …

Aaron Lammer: It’s bribery on the blockchain.

Doug Kim: Yeah. But you have to buy, say, Decred, which isn’t gonna be … Like you keep on buying and it’s gotta move up the price and people are gonna be incentivized to sell, so it kind of balances out too in that way.

Aaron Lammer: Okay Doug. So did you catch the story this week about noted fellow alt trader in Balina getting hacked.

Doug Kim: I did. I did catch that story. I mean I didn’t look into the specifics particularly the group that I chat in, talked about whether it was a scam to avoid taxes. But I don’t buy into that. I think he just legitimately got hacked.

Aaron Lammer: Jay, what do you think?

Jay Kang: Oh, let’s introduce Ian Balina a little bit. He is an alt trader who specializes in ICOs, he does a YouTube channel in which he rates different ICOs. I have gone through his ratings, I have looked through the ICOs that he likes, the once that he doesn’t like. I can’t tell a difference. I mean some of the ones that he likes are the stupidest ideas ever.

Aaron Lammer: He is a noted crypto personality.

Doug Kim: Without knowing much about his background, I would say that he is generally like an engaging, fun and very transparent guy for crypto. Like he is not a jerk.

Aaron Lammer: And he literally posts his portfolio every day like straight half of Blockfolio.

Doug Kim: Right. That was probably not smart.

Aaron Lammer: Which is I know like, lots of people are saying that they have huge amounts of Bitcoin but he was very specifically exposing exactly what he had in his overall holdings at all times.

Jay Kang: Yeah. So it seems like he got hacked from almost everything, right. Because when he does post this Blockfolio screenshot, it seems like he generally had about $2 million and isn’t that the amount that you get hacked for.

Aaron Lammer: I think he built a hundred thousand dollars into a million dollars and that was a while ago he gone into millions. So I guess, now he gone into $2 million. And he is like live on the air and then someone says, “You got hacked” and then he goes offline and says there is a power outage and he comes back and he’s like, “Oh, and like, I need peoples help,” he said on Twitter, “because I got hacked.”

Doug Kim: I think he actually had $5 million or something at the peak, when Bitcoin was at 20k or whatever. But yeah, I think recently, it was like $3 million or something.

Aaron Lammer: Yeah. At peak Doug. Yeah. Actually says that he got hacked. He says, “I got hacked, my college email was listed as recovery email to my gmail, that email is compromised, blah, blah, blah.” They used his college email to get access to his Evernote, reset his password, his private keys, whatever in his Evernote, which had encrypted text passwords. And he now says that the people who hacked him have hacked a bunch of crypto personalities.

Jay Kang: Aaron, do we count as crypto personalities?

Aaron Lammer: I don’t know. After this happened, Adrianne Jeffries who listen to her appearance on the show. Dian and me was like, “I’m writing a story about all these crypto personalities getting hacked do you ever worry about getting hacked?” I was like, what? No. We’re not crypto personalities. But I do worry about getting hacked just because I’m obviously not using incredibly elaborate OPSEC. Because I have a podcast.

Jay Kang: Are you sure as a crypto personality that you want to be saying that?

Aaron Lammer: I’m just saying, doing this show is not very good OPSEC. Not for me, for you, for Doug Kim who has talked about his large altbags.

Doug Kim: I mean he made so many mistakes. I mean like, first of all, putting all your private keys in your Evernote.

Aaron Lammer: That’s crazy. I mean, even I won’t do that and I’m like the ways this human being.

Doug Kim: That’s just like, you can do that but if you’re doing that, why would you post your portfolio every day. You’re just asking to get wracked. You could do one or the other, but not both. If you are posting your portfolio every day, make sure your shit is fucking locked in some fucking vaults somewhere [inaudible 00:50:40] I think they’re like, they set all these copies and haves of 24 word keys all over the planet or something like Voldemort-style, putting his Horcruxes all over the planet. And it’s just like you have to have that kind of vigilance to protect your shit in crypto.

Aaron Lammer: Jay, we put on your conspiracy kang half for a moment. This is a little strange. It’s a little weird.

Jay Kang: Yeah I mean I’m kind of with the people on your chat Doug. I mean, as much as I enjoy Ian’s videos and as much as I like to see someone who is not sort of a simpering 15-year-old, trolling everyone all the time in crypto. I don’t know how much I believe this. I don’t quite get if you’re hacked for that amount, why you’d also be so public about that? He either was really, really, really, really, dumb about all of this, which I find hard to believe. Or maybe like the whole thing was a lie, which is may be an option. Like maybe, he never had made that amount of money.

Aaron Lammer: Oh wow! Reporter in the room going for the deep conspiracy that away. I like it.

Jay Kang: Yo, maybe he never had any coins to begin with.

Doug Kim: Or it’s like one one-hundredth of what you said it was, or one tenth of you said it was.

Aaron Lammer: The part that feels weird to me about is the part where it happens live on the air. I feel like … It’s a little bit like, “Did you really got hacked but you’re staging yourself discovering yourself getting hacked.” It might seeing an exact verbatim copy of what happened, is always my question.

Jay Kang: Did you watch the video? I haven’t watched that.

Aaron Lammer: I did. He doesn’t seem super freaked out. He is like calm about the whole thing. I don’t know what to think, I don’t like to doubt someone, who maybe just had something horrible happen to them, but strange time. Strange times.

Jay Kang: I guess, my take on it is like if he did … Let’s say he is who he is and he made his money and whatever Diary of a Made man all that is real. I’m just thinking, let’s say, my intention was to evade taxes right. I feel like doing it two days before tax day and in such a way like that, I just feel like that’s just asking the IRS to have a truck load of S.W.A.T. IRS team come up to your house and go through all of your fucking records with the files [crosstalk 00:53:17].

Doug Kim: That doesn’t even make sense. Because it’s not like you pay taxes on your earnings between April 15th 2017 and April 15th 2018.

Aaron Lammer: People also debunked that because they said that he lives in the UK and the taxes have already been done in the UK, so it’s not even when you withdraw. [crosstalk 00:53:37]

Jay Kang: I don’t buy the tax there. I mean it makes … there’s no way.

Aaron Lammer: No I don’t buy necessarily that it’s like a fore private conspiracy, I just always wonder with things like this. Jay, would you say as a journalist, you can’t quite report something that happens on a YouTube show. You can’t say like happened, you can say, “This happened on a YouTube show.” Probably like a Jack Paul video or something.

Jay Kang: Yeah. You would say like, it’s like there is two guys, who are YouTube stars or wine stars, who won on the delta plan and they got thrown out and then there was like … They are claiming that it happened because the Delta agents were racist when in fact they were like gladly doing a stunt or they talked about bombs on the plane before it took off and that why they get kicked out of flight. And then you watch them do it in real time and it’s very emotional, because it seems like it’s real but it was all stunt. They just did it to get attention. Yeah, so it becomes very, very fuzzy. I’m not saying Ian Balina is doing anything like that, but I agree wit Aaron and that is sort of like dips its toes into that sort of bad feeling.

Doug Kim: Okay. I can understand.

Aaron Lammer: Alright guys. Anything else on your mind before we dip out for another week.

Doug Kim: Yeah. I’m just happy alt season seems to be somewhat back. So my whole theory was once tax season is over, maybe we’re gonna rock it back to moon town, but do you guys share any of that sentiment.

Aaron Lammer: I kind of … Jay has been skeptical, but I kind of buy the like, no one’s like feeling particularly great about. They are bank account, when taxes are due, particular people who like put money in and out of a basement. I’m not saying that I expect an instant rocket, but it doesn’t surprise me that just after that we’re starting to see a little bit like a flight and just a little bit of constant up pressure for [crosstalk 00:55:38].

Doug Kim: Well, I was washing the candles. There was a big 30 minute candle at the end of yesterday at midnight. There is like a lot of pots, probably programed to buy out shit right as fact they ended.

Aaron Lammer: Yeah. I still don’t know how that really greatly affect it’s worldwide market though. we’re the majority of people, who are involved in it don’t even live in the United States.

Doug Kim: I guess so [crosstalk 00:56:04]

Jay Kang: I mean haven’t got fair. It’s a small fact that …

Doug Kim: It is a small enough market and a new enough market, that American do make a lot of the money that’s going in and out of it. I guess like, I’m biasing this because I do have friends who are like, “I don’t wanna cash out now because I wanna wait, so Bitcoin goes back, then I’ll cash out so I can pay my taxes whatever.” I guess like anecdotally I know there are some people who are waiting till last minute pay, so we’ll see. It’s fun to speculate like what cause and the factors [crosstalk 00:56:39].

Jay Kang: That’s what we do here. You’re just like speculate and tell hindsight stories that we believe 100%. It seems like a lot of crypto and it’s fun. That’s why we do it. It sells stories to them [inaudible 00:56:50] alright.

Aaron Lammer: And that none of this is ever investment advice, not even if it comes from an extreme poker player like Doug Kim. Doug, I understand that you have a series loosely based on your own life. It is on the Facebook platform. How can people find it?

Doug Kim: You can search just Doug on Facebook or you could search it on DramaFever. It’s now up on that platform, but if you want to catch a screening, I will be in San Francisco next month. It’s playing at CAAMFest. It’s the biggest Asian-American film festival in the country. I’ll be playing on may 12th in San Francisco. So you can meet me or watch the show for the first time yourself, if you haven’t in a big screen.

Aaron Lammer: If you are a Coin Talk fan and you’re at this Asian-American film festival, just go out to Doug, say hi.

Doug Kim: Yup.

Aaron Lammer: Very nice talking to both of you. Let’s do it again soon.

Jay Kang: Great.

The official podcast of Bitcoin crashes. Hosted by @aaronlammer and @jaycaspiankang. Mailbag/contact: hi@cointalk.show

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