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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. (You can also subscribe on Apple Podcasts, Google Play, download the MP3, or email us at email@example.com)
- 🧙♂️Satoshi in the whitepaper: “We can gain a territory of freedom for several years.” Only several years?
- 🧙♂️GRIN and the MIMBLEWIMBLE protocol
- 🧙♂️Monero (XMR) makes a guest appearance on Fortnite and in the saga of a Norwegian kidnapping
Aaron Lammer: This is a quote from the whitepaper. One of the things that we talked about on the show was are we imparting the Libertarianism onto Satoshi or is it in the text. He says, “With Bitcoin, we can win a major battle in the arms race and gain a new territory of freedom for several years.” Bitcoin is now 10 years old. Why say only for several years? Most of what I hear kicked around in the crypto Twittersphere these days suggests that Bitcoin is going to last for 1,000 years and become the reserve currency for a new age of man. What do you think he meant by that?
Jay Kang: Well, I don’t know. I think that we are getting a little bit too much into originalist thinking if we are trying to interpret what he means for a few years, but I think that he thinks what we think, which is that there is not really a form of technology that has become a firmament for everything that hasn’t at some point itself been challenged and improved upon and then swapped out. You can talk about original protocol layers on the internet that haven’t changed that much. I can say that that might be constant.
I wonder if he thought of Bitcoin, which was an improvement as he cited many times in the whitepaper on existing digital coin projects … I wonder if he just assumed that there was going to be an improvement on Bitcoin too.
Aaron Lammer: That’s how I read it also. I had always thought of Bitcoin being by definition anti-altcoin because the firmest believers in Bitcoin are the most firm critics of everything else being a shit coin, but it almost sounds like he … I guess it’s a very loose interpretation to say that the alternative to Bitcoin would be some kind of an altcoin, but he does seem to be suggesting that Bitcoin is the first step in some sort of evolutionary process that will potentially have multiple stages and that Bitcoin is not the end all of the project.
Jay Kang: The biggest evidence I would say for that is the whitepaper makes it pretty clear that he doesn’t even really think that Bitcoin is Adam and Eve being birthed out of … I guess Eve was birthed out of Adam, but Adam being spit out of the mouth of God or whatever happens in Genesis, into the Garden of Eden. He cites other projects.
Aaron Lammer: Yeah.
Jay Kang: He’s like, “This is kind of like the thing Wei Dai was talking about. This is like the thing that other people were working on five years ago.”
If he had been a little bit more, I don’t know, religious about it or even like big bangish about it in saying, “I have birthed upon the world this great technology and it is perfect,” I would think that he would be like this is it, but he didn’t say any of that stuff. I don’t know how you can really believe that he wasn’t thinking that this thing was going to get improved upon and it has been. The Bitcoin that people use right now is not the exact same thing that was put out at the Genesis block.
Aaron Lammer: Well, it reminds me a little bit of something like philosophy or a humanities discipline which is when you create your grand master treatise, even if your master treatise is, say, Marxism and it’s supposed to take over the world, you don’t expect that all thought will just stop then, that you will have been the last philosopher. You expect that you will be seen in some sort of grand historical continuum. I think maybe, as we said, our themes to look in on in 2019 … If 2018, I believe we said it was the year of the Bitcoin maximalist …
Jay Kang: Yeah.
Aaron Lammer: I’m looking very closely at where does Bitcoin fit into the historical continuum. Is Bitcoin step one of a grander step? Is Bitcoin the devourer that stops all these other movements? That seems to be the narrative that’s the most interesting to me right now.
Jay Kang: Yeah, but do you think that narrative has been disproven at this point? Think about the crowd of people that we saw at the … Which I assume are mostly Bitcoin-related people. They weren’t all maximalists. There were people who worked in different industries who had some skepticism. There were people who worked on different projects. If you think of Bitcoin, as I think you should, as a social movement, that’s something that our friend Joe Wiesenthal brought up, then it doesn’t seem like it’s possible for this thing to go forward without it having a lot of different factions and a lot of different parts to it. I just think that the Bitcoin maximalists are the loudest on social media and so maybe we even give them an outsized presence.
Aaron Lammer: Let me give you a counter take. Last year, I would say was the year of the Bitcoin maximalist and the year of the dead ICO. Things like ICOs and to a lesser extent all the other projects in crypto are so new that they’re going through rapid half-lives where entire segments of the industry die out in a one-year period. Comparatively, Bitcoin is very old and its half-lives are massive compared to basically everything else in crypto.
It’s possible in my estimation that in the entire time that you and I have been following crypto closely, which I’d say is going on two years now, there hasn’t been a real turnover of Bitcoin. It hasn’t experienced that kind of a leap forward or a real change. I think we’re still waiting to see … Potentially it’s a major crisis, potentially it’s a jump forward, it could be a bull run. It could be a lot of things, but I think that Bitcoin is due to shed its skin once again.
Jay Kang: I have a hard time believing that. Let’s go through those one by one. I don’t think you’re totally wrong, but I just want for the purpose of thinking it through.
Aaron Lammer: Okay.
Jay Kang: Another bull run I find hard to believe is going to happen in the next couple of years or at least the next year, which will then have been 20 months or something like that. The reason why I think that’s significant isn’t because I think a bull run has to happen now, I just think that the crypto space will probably change a lot before there’s another bull run and that people will start to lose their faith in Bitcoin and other projects will come out that are interesting. One of which I think we’re going to talk about today. I think that I’m not quite sure is going to have some effect.
In terms of Bitcoin radically changing, shedding its skin and becoming something new, what’s the evidence of that? What is the project that’s on the horizon or the update that’s on the horizon that would change people’s conception of Bitcoin? We’ve already had the Lightning Network. We’ve had other things that have been significant improvements that people have been waiting upon for a while and it hasn’t really changed adoption at all.
Aaron Lammer: Wow. I don’t feel like we can really see it on the horizon. It’s like how is Apple going to make the next iPhone? It’s either they will fail or it will be something that we can’t conceive of now.
Jay Kang: Sure. I agree with that, but why would that be Bitcoin and why wouldn’t that just be a completely different project?
Aaron Lammer: I think that’s a realistic question, but coming off the year of the Bitcoin maximalist, it’s also hard to imagine how that’s some other project. Certainly, none of the other projects are looking like that to me right now despite some very nice Ethereum price action over the last month or so.
Jay Kang: How’s that going of you?
Aaron Lammer: There was setbacks in recent days, but I would say as a bounce off the bottom, you can’t complain that ETH is trading around 130 right now when it was trading for $80 pretty recently.
Jay Kang: That was a pretty small dip though, a short-lived knife down. It’s been ranging between 95 and 150. I guess that is a big range.
Aaron Lammer: That’s a huge range. It’s a big range. There’s nothing to cheer about. It’s just a giant gain after a giant loss and it’s still got a long way to go.
Jay Kang: After six giant losses. I guess just-
Aaron Lammer: We should talk about Ethereum and Constantinople later in this show. We’ll get to that.
Jay Kang: I was thinking about this space during our live show while I was talking to some guys there who they work for a VC fund. It really did reemphasize I think what my general take has been for the past few months that I think that basically there’s a lot now that is brand independent and you just see that all the time. There’s been a two-year long fight now I guess for what gets to be called Bitcoin. While people haven’t made too much headway in that, do people really … If they suddenly swapped out Bitcoin Cash with Bitcoin tomorrow and didn’t tell anyone, would you know the difference?
Aaron Lammer: I think that’s sort of an extreme view. I would say that speaks to the power of Bitcoin the brand. If you asked me why-
Jay Kang: No, no, no. I agree with that.
Aaron Lammer: Yeah.
Jay Kang: I think my point is essentially that a lot of what’s been floated along is based more on branding. It’s based on the name and the ideas behind the name. To revitalize all that, I just think it’s a lot easier to have something new come along that’s like, “Hey, all those things that pissed you off about Bitcoin like the energy … “ Regardless of how real or not real they are, the price manipulation, the energy use, the slow transaction fees, all these things that have been addressed ad infinitum in crypto, but are still thought of as problems.
If something came out and was like, “We’re the magic bullet where everything that you wanted about crypto is here and all the scammy things that you hate that make you turned off are gone,” I think that has a much better chance of appearing than some brand revitalization for a Bitcoin.
Aaron Lammer: I disagree with that. There’s a quote from Hal Finney that’s like, “Every day that Bitcoin continues to exist, you can take more faith in the chain and that it will continue into the future and into stability, et cetera.” I think that the brand Bitcoin is both a goofy orange logo and it’s this uninterrupted, 10-year chain that hasn’t totally shat the bed during that period. I just think it’s very hard …
You can imagine things that are more advanced than Bitcoin. There’s things more advanced than Bitcoin a couple years after Bitcoin or five years after Bitcoin. It seems to me there’s an accrued Biblical power of the canonical text that your newfangled religion, a few hundred years later, doesn’t have the old book.
Jay Kang: Why would it not have the old book?
Aaron Lammer: Well, the Bible existed for hundreds of years before and that oldness and that solemnity and the fact that it had endured those hundred years meant something. In crypto years, for Bitcoin to endure for 10 years is a really long time and I think, particularly with the nature of a blockchain and the trust issues associated with it, I think we’re going to trust the oldest thing and the thing that has endured more so than something new that solves certain problems with that old thing. That’s how I’ve come to feel about it. I think I started off closer to your viewpoint and I’ve probably drank in the Bitcoin Kool-Aid at this point.
Jay Kang: Why? Can I ask you why?
Aaron Lammer: Look, Jay-
Jay Kang: I’ve always been curious about this.
Aaron Lammer: … the price is never going to come back up. My bags are never going to come bag up unless Bitcoin comes up-
Jay Kang: No, no, no, no.
Aaron Lammer: … and so I need Bitcoin to come back so that all of my bags can rise and I just don’t see that future without a strong Bitcoin.
I got really into a new protocol this week. Have you heard of Grin?
Jay Kang: A little bit, but I think you should just refresh me on it.
Aaron Lammer: Okay. Grin is based on Mimblewimble which is sort of a new-
Jay Kang: What a sentence. Grin is based on Mimblewimble.
Aaron Lammer: Yeah. I really don’t know very much about where the etymology of the Mimblewimble protocol comes from, but it’s called Mimblewimble. There’s actually two projects that are based on Mimblewimble. One of them is called Beam and one of them is called Grin. One of the primary differences between them and why I’m more interested in Grin is Grin, unlike many of the projects we’ve talked about, did not have a pre-mine, did not have an ICO, did not allow certain investors or VCs to buy coins at a discounted rate earlier. In fact-
Jay Kang: What is it? Is this an actual crypto project?
Aaron Lammer: Not only that, it actually hasn’t launched yet. It launches on January 15th so the people who’ve been mining it now, I know some miners who … I won’t say. I’m not supposed to talk about their operation, but they were interested in it also. There’s a community of people who are mining it on testnets, but those coins are dead. Those coins are not part of the actual protocol. Zero people have them and-
Jay Kang: So, they have a zero-incentive beta testing round or something like that?
Aaron Lammer: Basically, yeah. The whole thing is designed to be high-emissions so that people are not as incentivized to hold onto the coins, but are incentivized to spend them and actually use them. The part of Mimblewimble that’s interesting as per your ‘what would actually be better than Bitcoin’, this is a project that’s aimed very directly at people using and spending and getting back to what originally interested us about the whole fake internet money as a product. Grin is along those lines.
The difference between it and Bitcoin as a blockchain is Bitcoin and Ethereum, every single transaction forever is on the chain. I think that chain in Ethereum is over one terabyte now. Remember when we were doing Augur? We would have to sync this enormous Infura node and you can’t even sync the whole real chain. You can only do this weird cached version. They’re getting enormous and it’s a realistic ‘what happens if this gets bigger and bigger’ big question.
The way that Mimblewimble works, it does not maintain a full history of all the transactions. It just knows how many coins there are and what their location is right now. If me and you do a transaction and you send coins to me, your ownership of those coins is erased forever. The coins just know where they are right now. It’s a very small amount of data because it’s basically just erasing itself every time they move.
Jay Kang: Yeah. I have not heard a single thing … Look it. Let’s go through our list of things that make us as two-year in, Bitcoin people who think about Bitcoin roll our eyes, Bitcoin moderates. ICOs-
Aaron Lammer: ICOs.
Jay Kang: If those words are attached, I’m out. I’ll never again be interested in any project that had an ICO.
Aaron Lammer: Coins backed by VCs.
Jay Kang: Yeah, VC coins where a bunch of money goes to the coin, I’m out. You know?
Aaron Lammer: Yeah.
Jay Kang: It seems like they went through a checklist.
Aaron Lammer: I feel dirty about our Zero X dabbling, Jay. I think we might have to come out of that.
Jay Kang: I’m out on that too.
Aaron Lammer: I’m not out, I’m still deeply in, but we might have to take showers after for that one.
Jay Kang: Okay, I don’t want to erase my own history here, so I don’t want to be the purity guy who was so much deeper into Zero X-
Aaron Lammer: I’m just saying, we’re-
Jay Kang: … and now be like, “I can’t believe you’re still into that.” I’ll take that shower with you.
Aaron Lammer: We warned very early on about Satoshi feudalism and Brian Armstrong’s Satoshi ambitions and there’s a thing where you can watch a video about how Zero X works and get paid a small amount of Zero X to watch it.
Jay Kang: Yeah, yeah, yeah. That’s depressing. That is also rolling the eyes. Let’s put that on our rolling our eyes checklist.
Aaron Lammer: Yeah, rolling our eyes.
Jay Kang: Okay, another thing that makes us roll our eyes are completely impenetrable whitepapers and use-cases that don’t make any sense.
Aaron Lammer: I’ll say that anything that we can’t describe to each other makes us roll our eyes and I would say we just discussed Grin for one to two minutes there. There’s a few things that were kind of interesting about it. Yeah.
Jay Kang: No, but I actually understand the project just from … Just out of full disclosure, I read a 200-word article about it before and then you explained it to me and now I’m just like, “Well, I get it.” It’s not like Initiative Q where you talked about it for seven minutes and I was like, “I don’t understand why this is not a pyramid scheme.”
Aaron Lammer: I think we actually do get Initiative Q. It’s a very thinly disguised pyramid scheme.
Jay Kang: Yeah.
Aaron Lammer: Beam is basically based on that same Mimblewimble it only knows where the coins are and not the whole blockchain thing, but there was some sort of a pre-mined, people invested, bought at preferential rates. It’s like a good version and the dirty version. Now, you could tell me that in six months Beam is worth 20 times more than Grin and I would be like, “Yep, that’s crypto for you.”
Jay Kang: You could also tell me that after all this good faith stuff that Grin, they say like, “We’re airdropping seven coins,” and I would also believe that.
Aaron Lammer: I think there was already a massive leap in the Beam wallet, but the interesting thing I saw … Wow, my voice just broke there. I’ve been on the Grin forums and it’s interesting ’cause all these people are excited about it, but they’re like, “Hey, how do I buy some grin?” You can’t buy any Grin now. It reminds me of remember when certain apps came out and they were like, “We’re sorry. We can’t handle the volume. You’ll have to go on this waitlist?”
Jay Kang: Yeah, yeah, yeah.
Aaron Lammer: That’s a little how Grin feels right now where you’re like, “Yo, give me some Grin,” and they’re like, “You know what? You probably don’t even want it. It’s not very speculative. There’s going to be high emissions. Just chill out.” And, you’re like, “What? Now, I really want some.”
Jay Kang: Yeah, yeah. Okay. I have a question for you.
Aaron Lammer: Yes.
Jay Kang: I want to first note that this is the most excited we’ve been about a crypto project in maybe a year.
Aaron Lammer: Yeah.
Jay Kang: The fact that we’re scratching our chins and saying, “Hm.”
Aaron Lammer: Are you about to propose that we become Grin whales, ’cause I’m in?
Jay Kang: I’m in. I’m totally in on Grin whales. We should call up Doug Kim and ask him.
Aaron Lammer: Doug’s probably already mining it on the testnet.
Jay Kang: Here’s the only question I have for you is that what this feels like to me is that somebody smart went down a checklist of things that make not only us roll our eyes, but everyone roll their eyes, and then just made something that was the exact opposite of it. Now, I don’t know if that’s a bad thing. If they’re like, “No ICO,” they’re not going to do an ICO I presume. That, in effect, is good, but I do wonder if this is a PR-type of thing because if you and I are going to design a coin that had credibility, we would design this coin. Then, we would sit down and be like, “Okay, we’ve got to make the coin,” and I’d be like, “All right. How do you make a coin?”
Aaron Lammer: I feel like you’re like espousing a bit of the logic where you’re like, “This guy is so cool. He must be an industry plant.”
Jay Kang: Yeah, exactly. Yeah.
Aaron Lammer: Well, to further-
Jay Kang: No, that’s basically my style of journalism. I’m just like, “I don’t believe this.”
Aaron Lammer: To further your conspiracy, I believe that the founders of Grin or the founding team of Grin were anonymous in the Satoshian tradition, but I think somehow it was revealed who the main people are now. They basically, not only are they behind the project, but they’re basically doing it for no rewards. The only rewards they’ll get are if people donate back to the project.
I did notice that some of the dexes that are saying they’ll be trading Grin early on are saying that they’re going to give the Grin fees back to the Grin team.
Jay Kang: Okay, can I ask you a question?
Aaron Lammer: Yeah.
Jay Kang: Why are these people doing this then?
Aaron Lammer: Well, so there’s a thread that is it a good idea to speculate on Grin? A guy’s like, “Is it? The founder said blah, blah, blah, blah, blah, blah. That it’s going to be high emissions and it’s meant for use and it’s not designed for the price to go up.” Then, this other guy was like, “Whatever, I’m fucking loading up my bags, bro.” He was like, “I don’t really know what this guy is talking about. It is high emissions, but it’s like only four times the emission of Bitcoin, so plan accordingly. If it takes off, it’s going to be worth something.”
I think there is a little bit of that question of, is this just good marketing there? Insofar as my guess is that the founding team will be heavily involved in the early mining efforts. If this really takes off in a Bitcoiny way, everyone’s going to win.
Jay Kang: Oh, huh.
Aaron Lammer: Right? That’s just a-
Jay Kang: I don’t disagree with it. Do you think for a crypto project to succeed right now, it basically needs to check all these boxes of good faith because I’m just going to go ahead and give my answer, which I think will be honest which is yes. I think that you need to get, not me necessarily, but at least you excited about because you have some more faith in this stuff than I do, but I’m even excited about this. The only reason I’m excited is because it checks off those good faith boxes now. You and I can do more research into and see if it’s real, but I don’t know.
Aaron Lammer: Put it this way. I think you need to dazzle people one way or another. This is one way to dazzle people. Could you also dazzle people with something that was weird and centralized and shady, but somehow amazing? Probably. The way I feel right now is that there’s no room for average crypto projects. Something needs to feel truly new and truly like, “Wow, if this worked, that would be big.” I haven’t really found that many things recently that checked off those boxes and I do think whether it’s just good marketing or it’s truly good principles, we both caught onto it very quickly. Something succeeded.
Jay Kang: Yeah, yeah. I don’t pay that much attention to crypto Twitter right now because I’m embroiled every day. My New Year’s resolution was to get into more media Twitter fights, which might seem to you like a bad resolution-
Aaron Lammer: Jay.
Jay Kang: … but I’ve decided to stick with it.
Aaron Lammer: Jay.
Jay Kang: Do you know how many-
Aaron Lammer: Jay.
Jay Kang: … media Twitter fights I’m getting into?
Aaron Lammer: We don’t actually see each other. The only time we basically talk is in our crypto telegram channel and here, so I’m really excited that you’re here on air. Get off Twitter for your own health. Get off Twitter.
Jay Kang: Oh, my God.
Aaron Lammer: You’ll be happier.
Jay Kang: I’m not even mad about these things though. This is a diversion, but I just realized that the six months I was off Twitter completely and I didn’t even have an account, I did feel like I was letting things slide that shouldn’t slide. I don’t really care because the reason to get off Twitter is that people think it’s unhealthy and it makes you mad, but I found that it hasn’t made me mad. I’ve actually kind of enjoyed getting in these fights.
The other reason is that they’ll say, “Oh, it will hurt your career because people will think you’re an unhinged asshole.” Guess what? People already think that and I don’t care. My career is whatever. It’s either fine or it’s not fine, but I don’t think it hinges on this.
Aaron Lammer: I’m not making any of those arguments. I’m just saying, “Jay, get off Twitter.”
Jay Kang: Fair. Fair.
Aaron Lammer: Much in the way I would tell you to get off Fortnite if you were playing Fortnite constantly, which I was for a while but I’ve now stopped.
Jay Kang: Yeah, that’s fair. That’s fair. Aaron, get off Fortnite.
Aaron Lammer: I don’t play it anymore because I broke my Nintendo Switch.
Jay Kang: Shocking that the Nintendo Switch that you got from Craigslist out of some guy’s basement to save $25 on the cost broke. Mine is just fine.
I have a question.
Aaron Lammer: Okay.
Jay Kang: The reason why I brought that up was to ask if people on crypto Twitter and in the general crypto space are talking about this project in excited ways.
Aaron Lammer: I think they are, but there’s that weird nascent thing when something hasn’t actually launched where I feel like it’s very hyped up and it could fall on its face or it could be a big thing. You don’t really know. It’s a buzz band.
Jay Kang: Fair. Fair.
Aaron Lammer: And, it’s about to happen. It’s January 15th. I have a feeling by the time this show is up, by next week, we should have more to say about Grin, I think.
Jay Kang: How do we line up our assets to become Grin whales?
Aaron Lammer: I don’t know. I think we got to get on one of these weird dexes like Bisq network or something and get an account there.
Jay Kang: I’d say that’s terrifying. Okay.
Aaron Lammer: Jay, you’re experienced with signing up with shady, decentralized gambling sites. I’ll send you the thing, get us a bag. ’Cause I did the Augur thing, so I think you’re due unless you want to buy the land in Decentraland, in which case, I’m willing to buy the Grin. I feel like I’m more hyped off Grin as the investment, but Decentraland, yeah.
Jay Kang: Me too.
Aaron Lammer: All right. Well, let’s get ourselves some Grin. Come on.
Jay Kang: Okay. I do agree with you that as much as I’d like to play the pure one here, I think I’ve probably put money into more shady crypto sites than you have and it might not actually be close. I actually don’t think it’s close at all. I’ll try and figure it out.
Aaron Lammer: I think there’s something very funny about the general crypto phenomenon if people are like, “Hey, man. This is not for speculation,” people are like, “Where can I speculate on this?”
Jay Kang: Yeah, exactly. Okay. I just want to say the words speculate, but how do I buy this and then sell it for more money?
Aaron Lammer: Yeah, I’m interested in the technology. How do I speculate on it? Okay, Monero.
Jay Kang: Oh, wow. Blast from the past.
Aaron Lammer: Well, in some ways it’s bittersweet for me to get into Grin because Monero was my first love. It’s a privacy coin. It’s been in the news twice since we were last producing shows. First, in the case of being accidentally added to the Fortnite store, although we didn’t know at the time that it was accidental. It seemed for a while Fortnite had added Monero payments, which I would not know how to read. Also, there was a kidnapping in Norway in which the kidnappers who demanded a $10 million Monero ransom.
Jay Kang: Oh, $10 million?
Aaron Lammer: Well, so this is the interesting thing about that. Some people are saying there’s no way this can actually get paid ’cause that’s like one percent of the supply of Monero.
Jay Kang: I know. I know. Wouldn’t it actually kind of be traceable at that point?
Aaron Lammer: The only way I feel you could launder $10 million in Monero quickly would be adding to the Fortnite store.
Jay Kang: Fair. This man in Austria seems to have like-
Aaron Lammer: Yeah, I need to move $10 million of Monero. You’re like, “Here’s this weird suit.”
Jay Kang: This guy has bought like 15 Thanos skins and every single Power Rangers skins.
Aaron Lammer: As far as I know, those two things are not actually related to each other. It is weird that they happened adjacently though. I don’t know what to make of the ransom. My first reaction is to be weird and defensive and be like, “Look, man. Monero doesn’t kidnap people. People kidnap people,” but in a practical way, I don’t really understand. If you want to pay a $10 million Monero ransom, what do you go to an OTC desk and try and buy $10 million and put it in a wallet?
Jay Kang: The buying it wouldn’t be a problem because it doesn’t matter who bought it, right?
Aaron Lammer: But, who is selling $10 million worth of Monero? That’s one percent of the supply. That’s a whale trade-in. I guess some people maybe can set that up for you.
Jay Kang: There’s so many privacy coins too. Why not ask for $2 million Monero, $2 million Dash, $2 million Verge, $2 million Zcash.
Aaron Lammer: What are these like shit coin kidnappers?
Jay Kang: [inaudible 00:35:40] ask for $10 million of Monero. I don’t know if one solution is much more crazy than the other.
Aaron Lammer: Okay. I would go the other way that Monero seems a little fringe to be used in this context. I can see the privacy things, but it’s a big lift to get a $10 million in Monero together. It’s not like Bitcoin.
Jay Kang: Why not just ask for it in cash or something like that?
Aaron Lammer: Well, they’re trying to do this without ever being somewhere physically.
Jay Kang: Without having to do a pickup?
Aaron Lammer: Yeah. They don’t have to do anything. I assume that this is not going to work and they’re not going to pay them though because I don’t think the police are in the business of helping you arrange $10 million Monero drops. If this kind of thing was successful, it would be kind of unprecedentedly easy.
Jay Kang: How many people do you think right now are speculating in the price of Monero based on a potential $10 million buy?
Aaron Lammer: I don’t know. I also don’t know how easily you can … I know Monero does weird ring transactions but I don’t know how easily you can hide transfers when they account of one percent of the supply like that on the blockchain. I do think-
Jay Kang: No, that’s not even going to happen. How do you launder that?
Aaron Lammer: I really don’t know. In the case of the Mt. Gox hack, that guy basically established an exchange to launder it. That’s the only way when you own a multiple percentage points of supply that you could possibly trickle them out into the market.
Jay Kang: Sure.
Aaron Lammer: Then again, wouldn’t you believe that maybe kidnappers do have a contact at some shady exchange that somehow is going to make this whole thing work? It will be interesting to see. Same with the Fortnite store. Apparently, it was just an accident, and it was the processor also has a Monero hook. I was just surprised to see the price of Monero did not react really at all to being added to the Fortnite store. I know it was an accident, but you’d at least like to see it bounce there.
Jay Kang: It is literally the best news that could possibly happen.
Aaron Lammer: This is how we all think that mainstream crypto is going to happen is in some way through gaming. That would be both of our bets I think.
Jay Kang: Yeah.
Aaron Lammer: If there’s any real development in there, you’d expect it to be big.
Jay Kang: Yeah, and I don’t think we’re the only people who think that and so you would think that there would be more talk about it. I don’t know. I’ve been playing a lot of the video games recently and-
Aaron Lammer: Shocking.
Jay Kang: … for research purposes.
Aaron Lammer: Of course.
Jay Kang: No, it had zero [crosstalk 00:38:25], yeah. I think that we’re right fundamentally that everything is going to go through that. However, I think we’re maybe far away from open marketplaces where this type of stuff will be useful. I just think there’s too much incentive right now for games to have closed economies and if they are closed economies, they’re just going to function off PayPal or whatever because they have less regulatory problems and it’s more reliable.
I think in three years maybe we could start seeing that. I’m not saying it’s 10 years away, I just think it’s going to be a little bit … Especially, since most games that are going to be coming out in the next three years, the big ones at least with big economies, they probably started their development a long time ago.
Aaron Lammer: Well, my guess and maybe why Monero doesn’t really move the needle in a Fortnite context is Fortnite and these kind of economies are big enough now that Fortnite is trying to build their own portal where they’ll be a gaming store. I would expect that we won’t really see crypto inside gaming until it’s built natively within it and yeah, you’re right. These giant, multi-player game economies are probably bigger than the crypto economy right now. Not in terms of how much money, but in terms of how many active users are using them on a daily basis.
There’s real cause for scarcity. There’s real cause for bartering and trade and prizes and all these sorts of drivers of an economy that are way more interesting than all of us just trading coins, speculating on speculation and doing all this degenerate gambler stuff. It’s still degenerate gambler stuff, but it’s next-level gamer, degenerate, gambling stuff.
Jay Kang: I still think that the pain point that they have to get over is not the functionality of these economies using cryptocurrency, but the chance that the people who are playing the games will be willing to use cryptocurrencies if that makes sense.
Aaron Lammer: I feel like gamers are resourceful and good at building things themselves, so my guess is that whatever crypto product comes out of gaming will not be used as intended. It will probably start off as some sort of a weird end-game economy that slowly bleeds further and further out. What I’m waiting for, and what I feel like gaming can supply, is this massive and solid user-base that’s already pouring hours and hours and all of their free income into it.
It’s a weird thing to ask people to just go out and buy Bitcoin because you’re not using Bitcoin. There’s something about if your first purchase is to buy a skin or a weapon or something where it’s like, “Oh, of course, I’m going to do that.” It’s like, “All right. Well, here’s your change, sir. It’s eight game bucks.” It’s like, “Okay. Well, now I’m in the economy without even realizing.”
Jay Kang: Yeah, that is true. Yeah.
Aaron Lammer: Even kids could do it.
Jay Kang: Yeah, exactly.
Aaron Lammer: Even kids can take place in these economies.
Jay Kang: Yeah, like all great projects it starts as scamming 12-year-olds and 14-year-olds.
Aaron Lammer: I went down into a rabbit hole watching these big YouTuber videos, which I usually … That’s not really my world, but it was like an h3h3Productions video criticizing Jake Paul and this other YouTuber named RiceGum for doing these videos where they promote these mystery boxes. Have you ever seen these mystery boxes?
Jay Kang: Yeah. I actually have. This is the second RiceGum conversation I’ve had in a week.
Aaron Lammer: Wow.
Jay Kang: Yeah.
Aaron Lammer: I’m curious what the other one was. Basically, for people who haven’t seen it, it’s like you pay out $100 or $200 bucks and it’s like, “You might win an iPhone, but you also might win nothing. If you win something, you can trade it in for more mystery boxes.”
Jay Kang: Oh, my God.
Aaron Lammer: It’s just basically like gambling for kids.
Jay Kang: That’s terrible and should be illegal. As someone who believes in legalization of gambling everywhere, that should be illegal. It’s the one form of gambling that should be illegal is YouTube influencer mystery boxes.
Aaron Lammer: The crazy part is, so they show RiceGum and Jake Paul doing it and in the one they show, they win. So, it’s like, “Well, of course.”
Jay Kang: Of course, yeah. Yeah.
Aaron Lammer: Yeah, it’s pretty wild. I actually bought, to bring this full circle, I actually bought a little Bitcoin this week on the Cash App.
Jay Kang: I thought you were all in?
Aaron Lammer: I am all in. I have the Cash App. You have to fund it with $100 to use it. It’s Apple Pay thing. So, I had 100 bucks and you can just buy Bitcoin on it. It’s like how I’ve always wanted to be a Bitcoiner. It’s like, “Oh, yeah, 100 bucks. I’m going to buy 20 bucks worth of Bitcoin.” Bitcoin feels low to me. I’ll buy 20 bucks worth of Bitcoin. This week, I’ve bought 10 or 20 bucks of Bitcoin several times.
Jay Kang: What does several mean?
Aaron Lammer: If I bought $50 worth of Bitcoin total this week.
Jay Kang: Yeah, that seems like what … The people who do small, recurring buys, that seems similar to that.
Aaron Lammer: My portfolio would be infinitely better if I had been buying the same amount in $50 increments spread out over the whole time I’ve been interested in crypto.
Jay Kang: I don’t think that’s true because-
Aaron Lammer: The period where it was high was very short.
Jay Kang: Oh, yeah. That is when you bought [crosstalk 00:44:17] Bitcoin.
Aaron Lammer: It’s based on buying the same amount each time regardless of what the price is.
Jay Kang: Yeah, that’s true I guess, but it was, for a lot of our time, at like six, $7,000. Then, you went and bought some at $20,000
Aaron Lammer: There was a long period where it was two to $5,000 though.
Jay Kang: I know, but we really weren’t in crypto before it got to 3,000, were we?
Aaron Lammer: All I’m saying is, it seems like a better way to get people to buy into Bitcoin to let people just keep rolling small amounts of money in, particularly in an app like this where it’s just like-
Jay Kang: Does it have fees?
Aaron Lammer: No, it’s like you don’t get a great price. Today, I think Bitcoin was 3,670 and it was like 3,720 on it, so you paid maybe 40. A slightly high fee, which I think you-
Jay Kang: That’s not so bad.
Aaron Lammer: … do that in Coinbase if you … It ends up being-
Jay Kang: Yeah, you do it with Coinbase too. Fees, yeah.
Aaron Lammer: Yeah, so it’s not a great price but whatever. When you’re buying 20 bucks worth, it’s like whatever.
Jay Kang: I agree with that. Some people might yell and write into the show and be like, “A percentage is always the same even if it’s a dollar,” but you know what? Those people aren’t us and-
Aaron Lammer: Those people-
Jay Kang: … they can be mad.
Aaron Lammer: … can find Jay on Twitter. He’s very interested in hearing from you. He came here for it, so check him out.
Jay Kang: How’s everything else?
Aaron Lammer: Things are good. I have to say I’m cautiously optimistic about crypto in 2019. I feel like we’re on the upswing.
Jay Kang: Do you have a ‘well it can’t get worse mentality’ or are you …
Aaron Lammer: No, I’m pretty clear at this point that it could get worse. I think Bitcoin could dip to $2,000, which I think would be significantly worse than where it is now.
Jay Kang: Yeah, yeah. That is. 2,000 would be worse. 2,500 would also be worse.
Aaron Lammer: I feel like there’s really no point … Maybe in real all shit coin bags, there’s no way it could get worse where it’s like down to one cent. It could get to half a cent. With any of these things that have soared higher, I don’t know, I feel like it could always get worse.
Jay Kang: Yeah, fair. Fair.
Aaron Lammer: Where are you at?
Jay Kang: I don’t know. I’m actually mostly excited about Mimblewimble and-
Aaron Lammer: If you bought the Kang line, you did well.
Jay Kang: Yeah, I bought the Kang line, but then I had a rough go betting the NFL playoffs.
Aaron Lammer: We don’t allow your gambling losses onto our crypto ledger. Just because you’re-
Jay Kang: That’s fair.
Aaron Lammer: … denominating them in the future world currency reserve, Bitcoin, doesn’t mean that your NFL losses are crypto’s fault.
Jay Kang: That’s true. That’s true. The Bitcoin that I no longer have that I bought at the Kang line it would be doing well if I still had it.
Aaron Lammer: Did everyone who had a bye win this weekend? They did.
Jay Kang: Yeah, they went four and O.
Aaron Lammer: I could have sworn I had an idea to bet that way. I could have sworn it.
Jay Kang: I bet all the underdogs.
Aaron Lammer: Jay, what were you doing?
Jay Kang: Some covered though.
Aaron Lammer: You were betting against the Patriots?
Jay Kang: Yeah, because I’m a good person who believes in good people having good outcomes. Okay.
Aaron Lammer: Okay. Well, there’s a couple things let’s save for next time. Here are a couple things I want to talk next time.
Jay Kang: Okay.
Aaron Lammer: Think we do for a big Ethereum conversation. Constantinople’s coming. They’ve changed the whole mining regime.
Jay Kang: Oh, my God.
Aaron Lammer: The difficulty bomb, things are getting changed again over there and I’m interested in where you think that project’s at. I think we’ve got to talk a little TRX and BitTorrent ’cause there’s some fairly hilarious shit there.