Episode #3: We Survived the Crash w/ Douglas Kim

The biggest Bitcoin crash in over 2 years has come and gone — and we still don’t totally understand what happened

Coin Talk
Coin Talk
Jan 19, 2018 · 28 min read

Listen to this story

--:--

--:--

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 for our upcoming mailbag show).

Show Notes (42 minutes)

We talk hodling, panic selling, and why each successive crash in your own crypto history is easier (and funnier?) than the last with professional poker player and actor Doug Kim.

Note: Aaron totally mangles this quote on the show — sorry Matthew Green!

Transcript

Robot: This episode of Coin Talk was taped Thursday, January 18th at 4PM Eastern standard time. The Bitcoin price index was $11,888.

Aaron Lammer: Jay, pretty intense 24–48 hours we’ve just lived through.

Jay Kang: 48, yeah.

Aaron Lammer: Have you slept?

Jay Kang: Yes I’ve slept. How many times do you think that you checked Blockfolio in the past 48 hours?

Aaron Lammer: I would say approximately 1,000.

Jay Kang: You think actual 1,000?

Aaron Lammer: It’s actually been … So for people listening, Blockfolio is both of our portfolio app of choice. I’m not actually schilling Blockfolio right now, actually if you don’t have Blockfolio just never download it, maybe just keep your holdings on the desktop and don’t enter this darkness. My internet was also going in and out, they’ve been doing work on the internet on this block, so not only was I pull refreshing it, sometimes I didn’t actually have internet and it would just kind of freeze for a second, and I’d be like, oh okay, well at least the bleeding stopped. And then the internet would turn back on and it would refresh, and it would be way lower.

Jay Kang: That sounds incredibly unpleasant and frustrating on both levels. Yeah, I mean, I didn’t really check that much because I actually had a lot of work to do over the past couple days. But I will say that every time I checked, it kept getting worse and worse, and I think around the time when it was crashing through 11,000, is when it started all just becoming very funny to me. Did you reach a point where it was just sort of like humorous?

Aaron Lammer: Yeah. I think that there is a nature to the essential fakeness of this fake internet money that at a certain point it’s like very real and then it becomes very, very unreal, and then it becomes kind of funny.

Jay Kang: What side feels more real to you? Because you and I have been I crypto for not long at all, but for long enough to have days where our investment portfolio goes up like 40%, and we’re just like, haha, that’s amazing. Does that feel more real to you than when it crashes?

Aaron Lammer: Well, when it crashes I think it maybe confirms some of our essential suspicions about the universe, which is that it is rational.

Jay Kang: You mean the ex-CEO of Ripple (XRP) is not actually worth $57 billion dollars?

Aaron Lammer: Yeah. It’s like, it’s a little bit life affirming I think, that there is order in this universe, but then at a certain point in turns dark, un-humorous again if you pause to think about it for too long.

I want to have a discussion on this show, this is going to be kind of a mini show, we’re not going to be talking about a diverse set of topics, we’re only going to talk about probably for the most part one topic, which is this crash.

This isn’t our first crash, I think this is our worst crash though, right?

Jay Kang: This is the worst crash in two years I think, so it must be our worst crash. I would say that this is, between you and me , as @ParaboliocTrav likes to say, this “hero’s journey” that we’re taking together-

Aaron Lammer: I’ve got some Joseph Campbell up there on the Crypto-Cave bookshelf if you want to learn more about the “hero’s journey.”

Jay Kang: This is the fourth crash we’ve been through on our “hero’s journey.”

Aaron Lammer: Yeah. And each one’s had slightly different contours, and we bring a different self to each one because we’ve lived through these previous crashes.

Jay Kang: Yeah. I feel like we’re sort of leveling up like we’re playing Final Fantasy, and every time there’s a boss, we have a few more boomerangs and potions and spells, but I will say that this one was a tough boss.

Aaron Lammer: So I want to take us back to more innocent times. It was Monday, me and you were taping an episode, and-

Jay Kang: Yeah, and our robot said, “The Bitcoin price index is 14,400.”

Aaron Lammer: Right, okay. And so I think the last new segment which no one has ever heard … Should we throw it on the internet as a bonus segment?

Jay Kang: Maybe we should do it when we do a super cut of all the things that we were really wrong about.

Aaron Lammer: Yeah, this one was something we were so wrong on,. So, we did a segment where the basis premise of this segment was, when are you going to drop off the Altcoin train, because the Bitcoin powder keg is really starting to shake, and we’re going to see a big run here. I may have used the number $18,000 in this discussion, maybe, I don’t totally remember.

So we basically were talking about strategies around when you should get out of Alts when you see a big Bitcoin run happening. Now getting out of Alts would have not been a terrible idea, but for the opposite reasons.

Jay Kang: Yeah, I felt like we were the French on the Manginot line, and we were like, “They can only come from this one direction, so we’ll stand over here on this side of the wall.”

Aaron Lammer: Yes.

Jay Kang: And then just before we knew it, really at the time we stopped recording, they started running the other way. We were like, “We have no idea what to do. We are unprepared for this.”

Aaron Lammer: So people keep asking me why did this crash happen, and I have no idea.

Jay Kang: I have no idea either.

I will say, since you and I are citizens of the world, meaning we spend a lot of time on Reddit and Twitter-

Aaron Lammer: Gentlemen of leisure.

Jay Kang: Did you see any theory that you liked? Because I did not.

Aaron Lammer: I liked, I think his name is Matthew Green. He’s an academic cryptographer, and he said that CNBC had called him and had him on the show, and they asked him why it crashed, and he said, “This wouldn’t have been a politic thing to say, but crypto markets are kind of irrational, and there’s probably massive market manipulation happening.”

Jay Kang: Okay. I agree with Matthew Green here-

Aaron Lammer: Also, that doesn’t fully explain the crash. That explains the unexplainable.

Jay Kang: That is a statement of fact that I don’t think anyone who is reasonable-

Aaron Lammer: That’s a long term thematic thing to consider, as you consider this specific plot twist.

Jay Kang: Yes, it is a house built on sand and that there’s massive market manipulation, and that might have been what was happening. I guess the thing that I was wondering is, did you say a theory about what the market manipulation was at this time that you liked?

Aaron Lammer: I didn’t. Ones that came to my mind were nearing the end of the CME Futures, I think it ends on the 18th.

Jay Kang: CBOE did end.

Aaron Lammer: CBOE did end. So generally, like if I’m thinking about what’s new that’s gotten added to the mix, I know that you’ve brought up that the short volume is pretty low, but if you were really trying to hit a specific short mark at a specific time, maybe that could have contributed.

Jay Kang: Okay, let me explain why I don’t like that theory.

Aaron Lammer: Sure.

Jay Kang: And just for people who don’t know, a Futures contract in Bitcoin is a little different than stocks. Basically both sides are betting in cash and settling in cash-

Aaron Lammer: Lame.

Jay Kang: And so during the crash, the first set of CBOE Futures closed, and some people thought that some big money had bought Bitcoin during the run up, and that they had put a bunch of shorts down when the Futures market opened. When the Futures market was settled, they pulled it out so that it would crash so that they would win both bets, right. The problem with that, especially for CBOE, the number of short side volume was so low that it makes no sense. Like, it would make no sense, even if you had laid every single short bet on that date, you would still not profit enough where you should run the risk of pulling out your Bitcoin to crash the market to try to manipulate the market in that sort of way.

The last thing I’ll just say that sort of struck me before we talk to Doug, is that I thought of the conversation that we had with Nathan Clark who was the attorney who was on our last episode about how so much of the volume going through Korea is Chinese money laundering, right.

Aaron Lammer: Yes.

Jay Kang: And so if you are holding stuff in a Bitcoin exchange, or in Bitcoin, and you feel like your days of being able to hold that there before converting it in to cash are numbered, then you might sell.

Aaron Lammer: Yeah, another thing that Nathan brought up, I think, is that people who are using Bitcoin for money laundering, they’re in a way less price sensitive. Like, they’re not hodlers, they’re making a transaction, and that transaction works whether the price of Bitcoin is $8,000 or $12,000. It’s kind of the same transaction depending on whether you’re paying a little tax or anti-tax depending on how it’s moved while you’re holding it. I don’t know how fast these Chinese money launderers come in and out of Bitcoin. Come on the show Chinese money launderers, we’d love to talk to you about it.

But it seems like their influence on the market really can influence volume, but like their confidence or long term outlook is kind of irrelevant.

Jay Kang: Yeah, I agree with that, and if you are trying to move $500,000,000 through a Korean exchange so that you could eventually give it to Jared Kushner and invest in one of his buildings-

Aaron Lammer: Allegedly.

Jay Kang: Yeah, allegedly. That is actually a necessary allegedly, I think.

You’re not like, oh wow, it just bounced off the Cloud, and this is a great entry point.

Aaron Lammer: “Oh, I got rekt dude.”

Jay Kang: Yeah, I missed that entry point. You’re not worried about that, you’re just like, I have $500,000,000 and I need to get out of this country.

So do you want to give Doug a call?

Aaron Lammer: Yeah. So Doug Kim is a friend of ours, a friend of the show, somebody who’s actually been on the show before in our-

Jay Kang: Basement Tapes.

Aaron Lammer: … pre-gaming, Basement Tapes period. We really wanted to talk to … Well, first we wanted to make sure Doug was alive.

Jay Kang: I don’t remember what it was during the crash, but I definitely texted you, I think twice, being like, “Do you think Doug is okay?” Because I had looked on Facebook and there are these three to four word posts of despair from Doug, and I was starting to worry.

Aaron Lammer: So Doug is probably someone who is suited to taking a massive loss or a massive gain. He is someone who has played poker at a very high level. What year was the-

Jay Kang: The biggest world series of poker of all time, which was when Jamie Gold won. Jamie Gold won $14,000,000. I think Doug came in sixth or seventh place, made the final table at that tournament when he was like 21, 22 years old.

Aaron Lammer: So Doug was kind of one of the people who helped get us into crypto. Before we ever copied @LedgerStatus s bags, we were copying Doug’s Altcoin bags and leaning on him for advice. And I want to see how he’s fairing as we rebound a little bit.

Doug, how you feeling? Emotionally, I mean.

Doug Kim: Emotionally I’m not that crazy right now. I mean, today the market cap went up, back to like around 600 billion, from like, I don’t know what it was, well, I think it was close to 400, 425 or something. So you’re seeing signs of life, you’re seeing signs for recovery, and to be honest, even with this whole draw down, my actual Bitcoin value didn’t go down that much. Although I think I might have clocked in my first ever seven figure loss on paper in terms of USD, which was fun. I think overall, because we’ve got BTC, in a weird way I wasn’t as concerned as I was back in Alt Winter of last year.

Jay Kang: Just for the listeners, to clarify. You lost over a million dollars in the last two days, but your Bitcoin value stayed about the same, and so you weren’t that upset after losing over a million dollars in US dollars.

Aaron Lammer: Do you think that the whole thinking about everything in terms of Bitcoin value was invented by someone who just lost a lot of money in US dollar value? It kind of seems like that’s the historical legend of it.

Jay Kang: Because I will say, that even as somebody … Aaron and I both have learned to count things in Bitcoin value, but what you just said just struck me as a little bit crazy, Doug.

Aaron Lammer: I actually had a phone call with my mother yesterday in which I told her I wasn’t down that much in Bitcoin value.

Jay Kang: I said the same thing to my dad. He texted me, he was like, “Are you okay?” And I was like, “Look, my BTC value is only down 4%, or something like that.”

Aaron Lammer: The thing is, my Bitcoin was down a lot.

Jay Kang: You’re literally just lying.

Aaron Lammer: It wasn’t even true. I lost a lot of Bitcoin value.

Jay Kang: So Doug, this is something that I’ve always been interested in. And I’m proud of you for being able to say it on the show, like you were down a million dollars during the crash. What did that feel like at the very bottom of it?

Doug Kim: At the very bottom of it I was kind of like … I guess since … Well, I don’t want to go into the full details of my investment in case the IRS is listening right now, but I would say I would rationalize it, kind of like because, oh okay, I’m already up X dollars up anyway, I’m still above what I put in initially, so it’s like, all right, I’m still playing with house money so to speak. That’s kind of like how I frame it a little bit. I guess-

Aaron Lammer: I identify with this strongly. And we were talking at the top of the show before we had you on about why it feels kind of funny when everything’s crashing, and why you can feel humor about it, and I feel like the exact line in the sand for me is, it’s humor to lose profits, and then the minute it dipped past that it would stop being funny to me.

Doug Kim: Yeah exactly.

Jay Kang: Was there a point where you just saw this absolute wreckage and you started laughing? And you’re like, this is actually kind of funny and almost cool?

Doug Kim: I think I actually came to that point in mid July when I think I had 3X’ed or 4X’ed my initial investment, by like May of last year or something like that, and then in July, I actually almost got to the point where I would break even, and that’s when I was kind of like, I’m actually thinking in my head, I guess I’m just going to go down with the ship. They’re going to have to take these fucking coins from my cold, dead hands.

Jay Kang: You’ve been in crypto since the beginning of last year. Was this the worst crash that you’ve been through?

Doug Kim: In terms of US dollars, I would say yes. In terms of actual percentages, I think the combination of the first Alt Winter before the Bitcoin crash even came through. That was when Alt and Bitcoin value was going down significantly, because nobody knew what the hard fork was going to even do, and if it could crash the entire system. So I think that was more, I guess, painful so to speak because there was so much uncertainty to the whole crypto market in general.

This one doesn’t feel as bad because I feel like a lot of it is driven by the Korea FUD, and stuff that we’ve experienced in the past. We’ve experienced the ton of China flood in the last year, and Bitcoin’s just come out all the stronger anyway, even after China pulled out its exchanges.

I guess the mentality of this draw down is kind of like, all right, we went up so much in the past few months, something like this was bound to happen. And corrections in crypto are a lot more violent than they are in the regular industries, like 40–50% draw downs are kind of the norm. So I was like of like, all right, this is the game we played, this is what we signed up for when we invest in crypto. I mean, we all knew it wasn’t going to be a 45 degree straight line to the moon.

Jay Kang: A parabolic line.

Doug Kim: Yeah.

Jay Kang: Look, Aaron, I think that this is something that we get asked a lot from our coworkers and people that we know in our lives.

Aaron Lammer: I don’t have any coworkers, but yes.

Jay Kang: Okay, well people we know in our … I have coworkers.

Aaron Lammer: Jay, you’re as close to a coworker as I have.

Jay Kang: Yeah. From me.

But one of the things that people have asked me over the past couple days is, how are you handing this emotionally? Are you okay? And I think my answer to them is always just like, yeah, it’s just kind of like a joke, it’s not real money. If the stock market crashed, I think I would be upset. If someone stole money out of my bank account, I’d be upset, but-

Aaron Lammer: Jay’s acting all ice cold now —

Jay Kang: No, there is a layer of un-reality to all of this, right, that feels different. Is it different for you than … Doug I think you and I sort of have a similar background in this, not just because we’re both Korean, but we both have degenerate gambling problems.

Aaron Lammer: That was already implied by Korean.

Jay Kang: Aaron, you can’t say that. That’s not for you to say. Doug and I can make all of the Korean gambling jokes between one and other, and we will.

Doug, as a degenerate Korean gambler, do you think that, that sort of made you be able to stomach these sorts of swings a little bit better? Because I think that’s the only thing that has kept me sane through these crashes.

Doug Kim: Yeah, I mean, I think just … Not only being Korean and being degenerate, but also being a former, I guess, professional poker player, I think you just understand that there are going to be swings. And coming from a professional gambling background, you’re kind of used to those kinds of swings already from just playing and experiencing it yourself. I think the average person, like the average normie, is going to see this and be like, “Oh my god, I got to get the fuck out of this market.” And that’s why you see these draw downs because there’s all this new money in the market that at the slightest sign of panic, they’re just like snap exiting and just like, I don’t want to deal with this anymore.

And so that’s why I think we have this more, I guess, measured approach to it. It’s like, okay, we’re looking at the long run, we’re look at a longer time frame, we’re trying to zoom out, and that’s what I think —

Aaron Lammer: And it’s ironic that the term for that kind of panic selling is basically weak hands, like the analogy is direct poker.

Doug Kim: Yeah.

Aaron Lammer: And I remember very specifically my first crash, after my first Ethereum (ETH) buy, I was at a wedding in Montreal and everything just went into free fall and I was like, I had been on my Reddit forums and I was like, “you know what I’m not going to do? Panic sell”. And I panic sold 20 minutes into it, re-bought like 30 minutes into it, and then panic sold again like 45 minutes into it. Jay, what’s your history with panic selling?

Jay Kang: I’ve panic selled almost every single crash over the past four months, at some point. But I generally just do it quickly, and then re-buy in. But I will say that one thing that I find interesting about Doug, and I think the reason why we enjoy talking to him, is because there is part of crypto that does sort of require the gambling mentality. Like Doug, you were talking about it, how you can stay in during these big swings because you’re used to losing gutshot straights and getting stacked, and having to keep your cool and not get mad and fire up more money into every single pot.

Aaron Lammer: Didn’t they talk about banning Bitcoin table talk? What’s that subscription poker service?

Jay Kang: Oh yeah, yeah, yeah, Poker Go.

Aaron Lammer: Poker Go is like, “this is just bad for the audience. Stop talking about Bitcoin at the table.”

Jay Kang: I will say that I don’t play poker that much anymore, but I have played a couple times in the past six months or so, and that both times when I played, the only topic of conversation was crypto at the table.

Aaron Lammer: Doug, so you yourself were my gateway drug to all coin trading, which is to say-

Doug Kim: Really?

Aaron Lammer: Well I’ll admit, when I first bought in on Coinbase, I thought maybe there was like 12 coins total. I did not really know. And Jay was like, “I know this poker player, he’s got all kinds of crazy bags.” And I was like, “Jay, we’ve got to find out what bags he’s got.” And so Jay sent me, I believe it was a screen shot of a text you had sent him that just had-

Jay Kang: Aaron is really being a cop right now snitching on me.

Aaron Lammer: And I just went on and I was like, how do I buy each of these? And that was kind of how I learned.

So you’re kind of an unusual figure in me and Jay’s hero journey, which is to say-

Jay Kang: That must have been awesome, because when I met you that was like almost at the bottom of Alt Winter, so you must have experienced-

Aaron Lammer: It was great.

Jay Kang: … Megatron game.

Aaron Lammer: Everything except Metal (MTL) was a good choice. Metal (MTL) I took a hit on. I wish I could remember what they all were,I remember you were deep in the Decred (DCR), deep in Metal (MTL)-

Jay Kang: Waves (WAVES).

Aaron Lammer: Waves.

Jay Kang: Wings (WINGS).

Aaron Lammer: Waves, Wings. I mean, we’ve already discussed on previous Basement Tape episodes that you’re in the Waves hall of fame, most valuable investor in Waves.

Doug Kim: Oh, most likely.

Jay Kang: Waves (WAVES), if you’re hearing this in Russia, we know that the guy who you look at the bags and you’re like, this bag has never moved and it’s gigantic, maybe this man is dead, he’s not dead, he’s actually on our podcast right now.

Aaron Lammer: But I always assumed that most people who are into crypto were mostly into Bitcoin and Ethereum, and maybe had a few long shot bets on Alt’s. You’re the first person I knew who was like all in on Alt’s, like-I believe at the time you did not own any Bitcoin.

Doug Kim: Yeah, and I mean, right now I maybe have, I’d say, 5% Bitcoin at the moment. I haven’t increased my Bitcoin holding.

Aaron Lammer: Wow, so you will not yield. I mean, you’re all in. Have you always been all Alts? Did you start at Bitcoin and get into Alts, or have you been a Alt-er from the beginning?

Doug Kim: Oh no, I think I was a Maximalist in the beginning of the year because I was like, “what are these shit coins? If cryptocurrency will succeed, it’ll probably be like one winner takes all, and why would I invest in these idiot shit coins? If Bitcoin’s going to be king, et cetera, et cetera.”

But I think I was in a group that is mostly like poker players talking about crypto and whatever, and at some point you’re like, “Oh fuck, I’ve got to FOMO into this shit before I miss the train.”

Aaron Lammer: Yeah.

Doug Kim: And that kind of started around April/May of last year where I finally gave in. I think my first Altcoin that I bought … I had Monero (XMR) from the beginning because I thought that was good investment as well. But the first one that I got was Ethereum Classic (ETC), which was like a dollar something at the time, and I think it rose to like 10, 15, $20, so I felt like a genius at that time. Like, okay, Alts are in, it’s time to go ham, blah blah blah. I think I took a significant position into Ethereum and some other Alts, and stuff like that. And once you kind of go down the rabbit hole, you’re just like, I don’t know, I guess it is somewhat of a degenerate activity of where you’re just like, I just want all the Altcoins now.

Aaron Lammer: I feel like there’s, in terms of degening, it’s like a period where people who have bonds thinks the stock market is degening, people in the stock market think crypto is degening. Within crypto, people who think Bitcoin is conservative, but Altcoins are degening. And then even with Altcoins you can be like at the degen end of the pool or the prestige Alts.

Jay Kang: Sometimes I look at Aaron-

Doug Kim: If you’re not investing a top hundred coin.

Jay Kang: Sometimes I look at Aaron’s coins, and I’m like, that is disgusting. You disgust me, you degenerate. What is Zoin (ZOI)? And Aaron’s like-

Doug Kim: Zoin?

Aaron Lammer: We had a bad incident with Zoin earlier today, which is, Zoin is one of my Cointopia coins, and I was confused because it was sitting at the same price while the entire market was crashing and then rebounding. Zoin had just stayed there like a stake in a raging river, without moving a cent or an inch, and I was like, wait, is Zoin even connected to the API of Blockfolio anymore? And I logged on to Cryptopia and Zoin said ‘market paused’ on it, which I don’t know what that means. It doesn’t seem like a good thing.

Doug Kim: Yeah, anything on Cryptopia is very questionable. I mean, people call it Shitopia for a reason.

Aaron Lammer: A pro gambler is turning up his nose at this.

Jay Kang: No, I was going to say. Aaron, that’s two degenerate gamblers are calling you a degenerate for your Zoin investment. You can take that however you want.

Doug, one thing that Aaron and I were talking on before we had you was, one of the things that people always like to dissect after these crashes is why it happened. And so I wanted to share with you and Aaron a theory that I read this morning, and I wanted to get both of your reactions to it.

Aaron Lammer: Shoot.

Jay Kang: And it’s something, Doug, that you and I as Koreans, it’s very close to our heart.

This is the Financial Times in their Alphaville blog which blogs quite a bit about cryptocurrency. Most of it not so positive, but a lot of it very smart and good. I enjoy reading it. This is by Matthew C Klein, and he is basically arguing that China and South Korea were concerned because North Korea was getting Bitcoin rich, that North Korea had clearly started Bitcoin mining operations. I think this is true, and I think that North Korea does have a sizeable amount of Bitcoin. And they’re saying basically, we can’t have North Korea be rich because if North Korea gets Bitcoin rich, then that’s a problem for us.

And so that this entire crash was done to make sure that North Korea’s Bitcoin riches were cut in half. The sort of money graph out of this is that it’s possible the recent price collapse, below 10,000 per Bitcoin, is part of a coordinated effort by regulators to apply unconventional pressure techniques on North Korean elites. If so, well done.

Okay, what do you think about this theory?

Aaron Lammer: I just want to understand this theory a little bit better. What’s stopping the North Koreans from buying the dip?

Jay Kang: Look, more proof that Aaron might be more degenerate than the two degenerate Koreans, is that Aaron’s first thought in terms of this geopolitical problem that is exposed by the reputable Financial Times is that North Korea should just BTFD (buy the fucking dip) baby.

Aaron Lammer: Well my other thought was just like, the only part of the story that kind of adds up to me is, basically the best situation if you want to mine, is autocratic government, a bunch of your own coal plants, limitless factory warehouse space.

Jay Kang: And no regulations.

Aaron Lammer: And no regulations. It seems like a good place to mine.

Jay Kang: I mean one of the things that this article pointed out that was a fact that maybe North Korea wasn’t doing this and didn’t have that much Bitcoin, was he was like, “Well they don’t have that much PC power.” But like, you can bring the miners over from China, it’s really not that hard. It’s across one border.

Aaron Lammer: Yeah, I mean that’s what I was thinking. Isn’t there already like … Part of what Nathan Parks said when he was on the show in the last episode was, well why is China using Korea for its money laundering? It’s like, it’s close by, there’s existing trade.

Jay Kang: They have a lot of relationships.

Aaron Lammer: And it’s easy to hide this stuff in existing trade. If you want to get some money out on an exchange and then bring it back into your country, you want to do it with someone with a bunch of loosely regulated trade. As far as I know, China’s basically North Korea’s only trade partner.

Jay Kang: Yeah, I mean look … Before I go into it though, what do you think about this theory?

Doug Kim: Well, I’m not sure about the China angle. I do think that there might be a measure of that with the South Korean government because they are a little bit more hostile to North Korea than they are with China.

Jay Kang: A little.

Doug Kim: Yeah, just a tad.

So to me, I don’t know, I’m hearing a quadrillion different theories as to what’s going on. I think I heard on Twitter just yesterday that some officials were essentially selling and buying because they knew of this regulation news coming out and the time of it, and were essentially using it for their one advantage. So there is a little bit of that. There’s a little corruption in general in the Korean government that’s going on here.

Jay Kang: But what about the theory that they are coordinating with China to intentionally crash the Bitcoin price so that North Korea stops being so rich?

Aaron Lammer: But the price went right back up.

Jay Kang: Yeah, well-

Doug Kim: I think-

Aaron Lammer: What do they think, that North Korea’s the ultimate panic seller?

Jay Kang: Kim Jong Un has weak hands.

Aaron Lammer: He’ll fold in a second if we put any pressure on him.

Jay Kang: Did you see that big, big volume under that? That was Kim Jong Un’s panic selling the bottom.

All right. I just can’t figure this theory out. Of all the theories that I read, at which I will say that almost every single one of them I found to be highly unsatisfying and a bit ridiculous. This one … Look, I don’t mean to bash the Financial Times, I think it’s a wonderful paper, I think Alphaville is a good blog, but I just could not wrap my head around it, I just wanted to talk to you guys about it because I found it the most confounding, but also possibly the most interesting.

Aaron Lammer: Also, can you see where nodes are in the Bitcoin network? Are there a bunch of nodes in North Korea?

Jay Kang: There are.

Aaron Lammer: Okay. What other coins are they into over there?

Jay Kang: A lot of Monero.

Aaron Lammer: Have these guys heard about Sumokoin (SUMO) or what?

Doug Kim: It’s tough to say, because I don’t know to what extent North Korea has access to these exchanges, what their access is to actual Fiat currency for their Bitcoins, because you know, they’re not paying for missiles … Well maybe they are, maybe they’re paying for missiles and whatever-

Jay Kang: There might be the fist Monero (XMR) missile purchase. The other thing-

Doug Kim: Yeah so-

Jay Kang: If they don’t have access to exchanges, and all they’re doing is mining it and keeping the mined coins, like why would it matter if the price went down? They can’t actually sell the bottom then.

Aaron Lammer: Well, they probably have agents who can sell in other countries in exchanges. I mean there is … Okay. To give some credence to why this could be true- Like one reason it could be true is that generally countries that are trade isolated, that are subject to a huge blockade internationally, because of the import/export, they’re hungry for other country’s currency to buy stuff with. So if you had a bunch of Bitcoin and you were able to acquire local currencies and then bring them back into North Korea, that would be an advantage. But what volume are we talking about here? And also, how did they crash the market?

Jay Kang: I have no idea. I mean, I think that the theory is that they were announcing that there going to ban trading so that the market would tank, so that North Korea’s economic power would go down. Yeah, I also have a lot of problems with this theory.

Doug Kim: That would only make sense if they were long term trying to ban it all together, and kill Bitcoin itself. Otherwise, that strategy is just going to be a temporary dip because people will be like, “Oh, it’s just like the last time you banned it. You didn’t really ban it.”

Jay Kang: Yeah, because then Dan Bilzerian is going to BTFD and pop that thing right back up. There’s just not that much … Also can you buy a missile with Bitcoin, do you think? Can you buy a missile with Bitcoin, do you think?

Doug Kim: Probably not with Bitcoin, but with Monero, I think it would be possible.

Jay Kang: That makes no sense.

Aaron Lammer: I mean, I do think that probably our international arms traders are probably using crypto.

Jay Kang: I think they are too. I think you could probably buy a missile with Bitcoin.

All right. Do we have anything else we want to talk with Doug about?

Aaron Lammer: Okay, before we go, is there one project … I know that you had your initial set, which I copied directly for my own portfolio, since then, now that we’re past January 1st, is there anything that has newly excited you, or that you’re eager to add to your set of bags?

Doug Kim: I mean, I’m invested in Storm (STORM) and Blockv (VEE) now. I think those are good projects at the moment.

Aaron Lammer: Blockv. I haven’t heard of that one yet. What’s Blockv?

Doug Kim: The ticker symbol is V-E-E.

Aaron Lammer: V-E-E. Strong ticker symbol.

Doug Kim: Yeah, so what they’re trying to do, I think, is build a blockchain of things where real world items would be represented by the blockchain-

Jay Kang: Please, if you’re listening to this, the last thing we want you to do is to go out and buy VEE or Storm. Doug, I’m going to admit something that I don’t like to admit.

Doug Kim: I’m just shamelessly shilling my bags right now.

Jay Kang: I’m going to admit something that I don’t like to admit, which is that I own a little bit of Storm, and I don’t know what it is. Can you please explain to me what I bought?

Doug Kim: All right. So Storm is, they’re trying to gamify tasks.

Jay Kang: Oh no.

Doug Kim: What that is, I think it’s like-

Jay Kang: Oh no, what did I do.

And to clarify, I did not buy this on a reputable exchange. I signed up for HIT BTC which I don’t even know what that is, and bought it there.

Aaron Lammer: We did a segment in the first segment on Toshi. And isn’t part of Toshi that you do tasks and somehow you gain Ethereum through them, and then you go from a serf, to a merchant, to a feudal lord.

Jay Kang: Yeah, I think the two sort of abiding ideas that are in the Ethereum sort of crypto-world right now is that A, the blockchain can be used to sort thousands of tasks, right, and the second, is that once we establish that we should do tasks through the blockchain, we should make it as much like a video game as possible. And that does sound what this is like, but honestly Doug, this is not on you or anything like that, but I still have no idea what Storm is.

Aaron do you? Do you get it?

Aaron Lammer: I get everything I need to get. What does the logo look like?

Jay Kang: It’s terrible, it’s terrible, I was actually going to bring up the logo later, but-

Doug Kim: It’s like a lightning bolt.

Aaron Lammer: A lightning bolt.

Jay Kang: It’s very bad, but when you explained what Waves was to us in one of our Basement Tapes, you being in the Waves hall of fame, I actually did understand what Waves was because you said that, “Hey, what Waves can do is it can create a platform. For example, it created a platform where you can buy a token to reserve office space in a WeWork-like settling.” And I was like, that’s an incredibly stupid idea that I don’t understand why you’d ever need a token for, but okay. I can envision the that.

Aaron Lammer: I mean, I get the idea that there’s a bunch of competing projects that allow you to issue and create your own token, and that as with most things, like say a self-publishing platform, the first wave of projects on it is going to be very, very hard to digest, but that doesn’t mean that self-publishing has no merit as an idea.

We were talking about issuing Kangcoin the Waves platform.

Jay Kang: I know, we are definitely going to do that in a later episode.

Aaron Lammer: I feel like KangCoin —

Jay Kang: Watch out for KangCoin.

Aaron Lammer: KangCoinn should be like, you can exchange it for like sponsorship on the show, and Jay has to read whatever … Like, it’s like 10KangCoin for an ad read.

Jay Kang: Aaron, look-

Aaron Lammer: You want to think bigger than that?

Jay Kang: You’re way, way, way, way … No, we’re just going to print a bunch of words.

Aaron Lammer: Oh you’re saying my idea is too high concept.

Jay Kang: Yeah. Well, it’s too clear. Like, all others would be able to say gamify blockchain-

Aaron Lammer: Gamify podcast sponsorship on the blockchain.

Jay Kang: No, no, no, not even podcast sponsorship. We’ll just say, “Blockchain solutions to every day problems.” A string of crypto language, and then we’ll see if it takes off.

Aaron Lammer: Okay. KangCoin coming soon.

Doug, in addition to being a poker player, you are also an actor and have a show, as far as I understand, loosely based on your own life.

Doug Kim: Yeah, it’s loosely based on my real life. It’s not exactly accurate.

Aaron Lammer: The show is titled Just Doug?

Doug Kim: Yeah, Just Doug. It’s about my life as an Asian American actor in Los Angeles.

Aaron Lammer: Who plays Jay in the show?

Doug Kim: That would be a later crypto episode.

Jay Kang: Oh no.

Doug Kim: Season 2.

Jay Kang: Doug, this has show has had a couple nice write ups in the Verge and other entertainment tech sort of platforms. Where can people find it if they want to watch it?

Doug Kim: Currently on Facebook Watch. It’s on www.facebook.com/justdougseries. You can find it there, or just search Just Doug on Facebook.

Jay Kang: Okay. Thanks for coming on, Doug.

Aaron Lammer: Yeah, let’s talk soon yeah.

Cool, later.

Doug Kim: Bye.

Jay Kang: Thanks Doug.

Doug Kim: See yeah.

Speaker 3: This episode of Coin Talk was taped Thursday, January 18th at 4:00 PM Eastern Standard Time. The Bitcoin price index was $11,888.

How did we do?

Written by

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

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store