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Episode #62: 🏝 Fyre Fest Was the Original Airdrop

Billy McFarland, GRIN, and how a 1989 Topps Carney Lansford baseball card explains why altcoins will never go to zero

  • 🔥 Fyre Fest’s Billy McFarland is an icon for the ICO age
  • 🎸 Is GRIN an industry plant? Why does everyone agree that no one should buy it yet?
  • 📱 Would you use a crypto Venmo?
  • ⚾ All Your Altcoins Are “COMMON” Baseball Cards


Aaron Lammer: Hey, you’re not here, so I’m going to tell you the crypto cave is freezing right now.

Jay Kang: Oh, I bet. I mean, do you have a space heater or some sort of heating alternative down there?

Aaron Lammer: I only have one space heater, and it’s currently heating my child, so I’m just grinning and bearing it down here. It’s very in keeping with the crypto market, which after some light signs of optimism, does not seem particularly optimistic right now.

Jay Kang: Yeah, I’m back in my echo chamber office out here in Brooklyn, and nothing has changed in here. Except that they opened up that gigantic Japanese Eataly down here, and-

Aaron Lammer: Ooh, ooh yeah, I like the sound of that.

Jay Kang: … yeah, I’ve actually gained weight from it. I weighted myself and I was like, “Oh no.” This is not good.

Aaron Lammer: I feel like Japanese food is healthy unless you eat it like an American. It’s like, if you ate as much Japanese food as you should, it’s a very healthful diet. If you look at Sushi as an all-you-can-eat endeavor, the sky’s the limit.

Jay Kang: Well, remember what happened to Tony Soprano. He got super fat eating Sushi because he had thought that it was healthy. I don’t even do it. I just go and get everything fried. You know, I get-

Aaron Lammer: I feel the same way. Like why not Tempura.

Jay Kang: Yeah, exactly.

Aaron Lammer: Whether it’s a Sushi roll, or just a single vegetable.

Jay Kang: Like, every fried chicken opt-in they have, I’ve generally ordered. And then I stood there and eat it by myself in sadness. But yeah, it seems like we’re back in our usual places here. So yeah, let’s get started.

Aaron Lammer: I have one non-crypto question before we start.

Jay Kang: Yeah.

Aaron Lammer: Have you watched either of the Fyre Fest documentaries that came out in the last couple weeks.

Jay Kang: No, I won’t do it. And the reason why is not because … well, I don’t know. Honestly I’m not that interested in Fyre Fest. But I just … there’s this volume at which something will finally, will be talked about on Twitter, that to a certain extent will make me want to watch the thing. But then it passes a certain point, and then I just realize that I have no interest in seeing it. I still haven’t seen Crazy Rich Asians, I haven’t seen Black Panther, you know? There’s just this point where I feel almost overwhelmed by the expectations that are placed on the thing that I decide that I don’t need to even see the thing. And I don’t want to have an opinion on it, so I just bail.

Aaron Lammer: I recommend seeing Black Panther, Crazy Rich Asians, and the Fyre Fest documentary. But, more relevantly, as a connoisseur of the 21st Century scam, I think you’re denying yourself a great pleasure by failing to acquaint yourself with Billy McFarland who, if anything you could say was just a little too early for the ICO boom.

Jay Kang: Like, he could’ve turned, yeah …

Aaron Lammer: I mean, he’s custom made for it. A lot of the dynamics are the same. It’s funny, the Fyre Fest really reminds me of crypto in a lot of ways. In that, it was a scam that had no chance of succeeding. Like, you can’t not plan the festival. There’s no way it’s going to come off. It’s one of those scams that’s a ticking time bomb, that eventually you will be discovered as the guy with the fake beard, who’s the fraudster from before. And people would be like, “Oh, how did we to know?” So it has that kind of weird, depressing, almost like terminal velocity to it, the scam.

Jay Kang: Yeah. It’s not like crypto where you can just be like, “Oh I’m not a … “ You know, like, “We’re going to delay the project, or we’re going to release something that’s fake.” You actually have to put out a concert and have accommodations for people.

Aaron Lammer: But, when you get to really know Billy McFarland, I’m just going to spoiler alert for you.

Jay Kang: Yeah, I’m not going to watch it.

Aaron Lammer: You don’t enjoy enjoyment. So, when you actually learn what he did, he had this company before Fyre, where it was like a card you could get that got you exclusive access to stuff, and it was for wealthy millennials. And so they look into it, and they’re like, “It was weird.” Like, he would a special deal for Beyonce tickets, and they’re like 100 bucks, and they’re like 500 bucks on the internet. We don’t know how he was doing it. And the way he was doing it was just buying tickets on the Fyre Fest credit card, and then selling them at a loss to prop up interest in his other failed ventures.

Jay Kang: Oh my God, that’s incredible. So he was taking 80% like loss in terms of a loss leader? Like these Beyonce ticket sales are going to be an 80% loss leader so that I can promote this other thing.

Aaron Lammer: So what he does once the whole thing falls apart, it’s revealed as a scam, whatever, he’s out on bail. He’s facing multiple years in prison. He goes back to his roots, and he starts another company using the Fyre Fest’s mailing list to email … he emails them from VIP access, and again they’re selling concert tickets, Grammy’s tickets. And some of the things he’s selling don’t even exist yet, like pre-sell Burning Man tickets before they’re released. So people are like, “What the hell?” I think there’s actually Vice brought this story.

Jay Kang: You need burning man tickets?

Aaron Lammer: Yeah, you need tickets to go to Burning Man. What do you think you just show up?

Jay Kang: Yeah. I assumed you just showed up. Like, how do you buy the tickets if there’s no money?

Aaron Lammer: You buy them with money. It’s just like Bitcoin. “Well I want some Bitcoin.” “Well give me some money then.” Anyway, he starts up this VIP access and they’re just selling fake tickets. Like, you send him the money and there are no tickets.

Jay Kang: That’s pretty good.

Aaron Lammer: That’s the end state of the scam. So like, something to keep our eye on. These ICOs are not yet out of money. There’s another desperation, like yes I’ve already been indicted and I’m on the run, but I got one more great scam left in me, that I think we’re still going to get in 2019.

Jay Kang: Yeah, like there’s always one last … it’s kind of … like do you know how when people run for office, sometimes they’re just running for office to empty the campaign funds that they got from a previous run from office?

Aaron Lammer: Sure, sure. And they end up like paying a bunch of their relatives to be on [crosstalk 00:08:08] campaign.

Jay Kang: Yeah. And this is how like some people who you’re like, “Why is that person running for president?” They’re like, “Well, they have to spend some money. They need to redistribute this in some way.” I imagine that there’s a lot of Bobby Jindal for president type of thing that are going to happen in crypto. The one thing that I do think though Aaron, when you were talking about all of this, is that you and I are never above ways to try and make money in dubious ways. And why, doesn’t it kind of make sense that there are music festivals for crypto people that involves a token? That the only way to buy goods and services at the festival would be through this token?

Aaron Lammer: That was one of the ideas they had in Fyre

Jay Kang: Really? Like a Burning Man cryptocurrency?

Aaron Lammer: Jay, I can’t believe you won’t watch it because it’s so up your alley.

Jay Kang: Apparently they’ve been stealing my ideas.

Aaron Lammer: As they’re bottoming out, the bank account’s empty, right? But they still are supposedly putting on the festival. They’re like, “We need money badly.” And he’s like, “Okay. What if we get these RFID bracelets that people will wear at the festival, and they’ll have to pay for stuff with them?” They’re like, “Great.” So we’re going to send them an email and be like, most people are putting like at least 1000 bucks on their bracelets. So, these people who have already gotten scammed though they don’t know it yet, but are kid of already suspicious of it, but have already in for thousands of dollars for cabanas that don’t exist, they double down on the scam. And they’re like, “I mean, you’re not going to get any food and drinks without the RFID bracelet. I’d put at least a grand on there.” And they get like another million dollars from people filling up their bracelets.

Jay Kang: Oh my God. See, I feel like this guy chose the wrong industry, you know? If he had been in finance, or in tech, or in crypto, I think he would have gotten away with all of this. And he would be way richer than he is right now. He just chose something that actually has to have a physical product, and has thousands of people who are customers that are expecting an actual product. He should have just started a cryptocurrency that doesn’t make any sense, and had tens of thousands of people invested in it, and never have to deliver anything at all, you know? I think you’re right, this was like the ultimate crypto dude and it makes sense that like the only reason he didn’t … someone should have just told him about Bitcoin before.

Aaron Lammer: Absolutely. I mean, for all we know he probably was involved in some crypto nonsense that’ll come out later. But, it reminds me of crypto in that like, you know when something’s wrong they do an air drop to get interest? There’s always this like, “What if I do this?” So actually Fyre Festival was not the idea. They had this scam-y startup, maybe it wasn’t event scam-y, where you could book celebrities to come to your party. And Fyre Festival itself was just a way to market the Fyre artist booking platform. So it also reminds me of crypto in that it’s like, “Doing a thing? What if we did another thing and you have to use this thing to get on top of that?” So you go from like, it’s a way to Ja Rule for your frat party, to very quickly, like two or three day steps away, you’re putting $1000 on an RFID bracelet on an island where people have confirmed RFID doesn’t even work, because there aren’t cell towers.

Jay Kang: Okay. Maybe I’ll watch this. I mean, I was in the Vice newsroom when the reporter who did a lot of this reporting was there. So I guess I kind of knew about some of it. And maybe that was my exhaustion from it. It wasn’t because the reporter was being annoying or anything like that. It was just like, there was such a steady stream of the news. Where I was just like, “Maybe I kind of have a grip on this and I don’t need to see it.” But apparently I don’t, apparently I don’t.

Aaron Lammer: I find that in 2019, until you’ve seen all the first hand footage, a lot of times you don’t really know these full stories. Because these are the kind of stories where everyone is filming themselves.

Jay Kang: I did see the footage. I saw it on Twitter when it happened.

Aaron Lammer: These guys were filming themselves with their new scam, where they were selling fake tickets while they were under indictment.

Jay Kang: That’s pretty good, that’s pretty good.

Aaron Lammer: There’s footage of everything. So, okay, if I asked you right now, who is the Billy McFarland of crypto? Who’s the most brazen, just like, come on, that’s out there right now?

Jay Kang: I don’t know. A lot of them have gone away. Like that guy who was in everyone’s pop-up ads for a while, everyone’s targeted ads. What was his name? He has glasses.

Aaron Lammer: Oh yeah, yeah. James Altucher.

Jay Kang: Yeah, James Altucher I think would have been it, right?

Aaron Lammer: Well, I feel like James Altucher was like a little bit more downmarket. He’s a little closer to selling boner pills on the internet or something. And I do wonder what he’s up to now. Because you’re right, I have not … can someone check on him and make sure he’s okay? What happened? But to me, it’s Justin Sun from TRX. At this point, if you still TRX is actually building something, you’re actively deluding yourself. You’re like the person getting on the plane to the Bahamas while people have warned you repeatedly that this seems like it was scam. But, when you talk to people, when people talked about Billy McFarland there were like, “Yeah, I don’t know. He was just such a great entrepreneur.” And when people talk about Justin Sun, they’re like, “When you get in a room with him he’s very convincing. He’s a very good marketer.” And maybe that’s all you need to be in crypto is a really good marketer. He’s acquiring all kinds of things. He’s at least creatively using the money he got-

Jay Kang: Not even like marketer, you know? It’s more like … I’m sorry, that skill is not just in crypto though, right? It’s in almost everything right now.

Aaron Lammer: It’s in humanity.

Jay Kang: I just don’t know anything that isn’t just … I don’t know, this sounds like very grad school stoned Baudrillard talk, but like, what isn’t just sort of the base layer of marketing to get people excited that … you know, and then whatever is real doesn’t really matter. It’s just, yeah … I mean this is too stoned talk. But I don’t know, like do you want to talk-

Aaron Lammer: No, I agree with you, I mean I-

Jay Kang: Do you want to talk about Grin now? Because we were very bullish on it. And I think it got the annual award for the one thing that Aaron and Jay agreed, might a crypto idea. And almost immediately it fell apart, which is not shocking.

Aaron Lammer: Oh no, it didn’t really fall apart. It fell apart in what way?

Jay Kang: Well, I mean there were questions about it I guess. Some of the altruism about it, some of the idea that it was like the one pure crypto project, that started to fall apart a little bit.

Aaron Lammer: I didn’t really see that.

Jay Kang: Okay. Well, what did you see then?

Aaron Lammer: Well so, okay. Several things happened early on that are unusual and left me scratching my head a little bit. The main one was, so me and you last week were like, “Hey, let’s get some Grin as we normally do whenever we’re excited about anything, we’re like, “Let’s get some Grin.” The minute I started actually looking into getting some Grin … so I talked to a couple miners I know, and people who are involved in OTC stuff. I was like, “How do you actually get some Grin?” Because no Grin was on Galleon. I looked, and even within 12 hours of when it was minable, the Grin hadn’t really shown up for sale anywhere. And to a person, and this is true of people I had interpersonal interactions with, and the sort of general sentiment online I saw. People were like, “Don’t buy Grin.”

Jay Kang: That to me constitutes falling apart Aaron.

Aaron Lammer: No, no. But they weren’t, they were like, “No, this is expected. The price is going to be way too high out of the gate, and it’s going to come down. So don’t be the sucker who buys it when there’s really a small supply. This coin is so designed to have huge supply. And it’s not going to perform well in the short-term price wise.” Which is interesting, because it’s the opposite of what most people are saying when they’re launching a coin. Most people are saying, “This is going to go massively. Get in before everyone else.” This is going to-

Jay Kang: Did the Grin people say that though? Were they like, “Don’t buy this.”?

Aaron Lammer: I don’t know about the development team. But I’m in the Telegram Channel for it, like the investor’s Telegram Channel. And generally it’s just like, the people who are the most bullish on Grin will tell you not to buy Grin.

Jay Kang: Okay. That is slightly different, I will just put in the perfunctory note that Telegram Channels for all coins have traditionally not been the best investment [inaudible 00:17:25].

Aaron Lammer: I know. But then, if you read that the opposite way. So if they’re saying, “Don’t buy Grin,” should I then buy Grin?

Jay Kang: Exactly. That’s what I was thinking.

Aaron Lammer: So my question was like, with this general sentiment, and Grin came out and was trading for points over $10, then for a while between $5 and $10. And everything I had heard was kind of like, “Grin should be down in the $2 range, and don’t be like chasing it into double digits.” So someone was buying it I guess. I mean, the volume was so small that it’s kind of unclear how to read anything. The way that these exchanges are set up and all this price tracking, isn’t really designed to capture pricing when the volume is that low. Particularly when, from what I understand, a lot of the action is probably over-the-counter anyway, even for the the tiny supply that they have. So when you go on Galleon, when I was on Galleon the volume was less than $500 ever.

Jay Kang: Wow. How much of that was you? Or people we know?

Aaron Lammer: I didn’t buy. I got scared off. I got scared off. But I guess what I’m saying is like, how accurate is pricing when there’s been $500 of volume? The Galleon price is in Blockfolio right now, I think, maybe not. But other exchanges that also have very low volume are being tracked in Blockfolio. I don’t know if it means anything. So when you look at it and go, “Oh, it went from $12 down to $2,” the $12 and the $2 point I just kind of like, “I don’t even know what these mean.”

Jay Kang: Yeah. Isn’t that kind of true with any launch though? Remember when they would have those airdrops? The coin that was going to drop and start surging, and then the new coin would be birthed, and then it would slide all over the place. And it was generally just a bad idea unless you really were arrogant and felt like you could time everything to just be involved in it at all. I’m just curious how it’s different.

Aaron Lammer: Well, I think there are people who are saying it’s very similar to how Zcash came out, where it was very high, had a lot of bonafides, and it was very high to start with and then came down a bunch, and had to build from there. That’s basically I think what people are saying about Grin. But the thing that seems different about Grin, and I guess I wasn’t around during the Zcash launch, our good friend Ledger Status was like, “It’s exactly the same.” So I trust him. But, there’s a huge interest amongst miners in Grin, before it’s really established anything else. I’m going to read a quote from Eric Meltzer who I follow. And he’s part of Primitive Ventures. They’re a big investor in these Grin exchanges.

Aaron Lammer: So they’re inside, take it with your massive grain of salt. He says, “There is by our conservative estimates, $100 million of mostly VC money invested into special purpose investment vehicles to mine Grin. This does a lot of weird things. It turns a bunch of people who would’ve been buyers of Grin into sellers of it, changes the composition of the early holder roster, and it means the chain will launch with an extremely high degree of security via high proof of work hash rate.” A lot of interesting ideas in that. And it sort of lines up with what we were talking about when we were like, “Is Grin an industry plant?”

Jay Kang: Okay. Remind me of that take.

Aaron Lammer: Okay. Well, for people who have never heard the term industry plant. Sometimes an independent artist will come out, Chance the Rapper was one, and will be very successful, and will get a huge amount of buzz in a short amount of time. And conspiracy theory minded people of the internet, of which there are many, will say, “Oh, he’s an industry plant. He’s actually an artist developed by the industry that the independence is part of his marketing, but it’s fake.” This is not true about Chance the Rapper. It’s a crazy conspiracy theory. And it’s not true literally about Grin. But when you hear how much mining interest there is, and how much interest there is in the investment, and in things like exchanges, regardless of price, crypto is a very profitable industry for people in certain places within that industry. And it seems like Grin is like … if you have a bunch of money on deck that would like to invest in profitable mining, here’s Grin, here it is.

Jay Kang: Yeah. I mean, the industry plant stuff is interesting here because … and I think it goes into what we talked about last time about Grin which is that, an industry plant … if you’re asking what are the reasons why a company would do this? And this is not saying anything about Chance the Rapper or anybody who’s accused of being an industry plant. But from the minds of the more conspiracy minded, it’s the idea that the record labels have an authenticity problem, and they have a lot of baggage. And that what people really want, is they want something that is refreshing and does not remind them of all the shitty experiences they had at the last thing, right?

Jay Kang: And so then that makes … I think that’s a useful metaphor for this. So we talked about Grin, what got us excited is basically the same thing. It’s like, “Oh, well it’s not part of the shitty industry,” like it’s not an ICO, it’s not headed by the same dudes. It’s not something that we can’t decipher through reading a white paper. And that’s why I think we asked is it too good to be true? I mean, I think we were almost theorizing last week that it was an industry plant, right?

Aaron Lammer: Well, there’s one more thing that the record industry needs, it needs hits. It needs hit artists. Because all they’re doing is earning a percentage of the overall artist earnings. And crypto’s the same way. When crypto is surging, and expanding, and creating new products and new opportunities for mining, it’s profitable for all of the people whose primary financial exposure to crypto isn’t price, it’s some sort of a different equation with electricity, and mining, and fees on exchange transactions, et cetera. So while some of those companies like Bitmain were pretty deep in the like BCH. I think a lot of people are just making money by investing in crypto, and getting a great return.

Aaron Lammer: And like the record industry, those people need hits in order to earn that return. And so, if it gets a little quiet, and you kind of think, “Hey, this is the kind of thing that could really take off,” if I’m say, a miner who’s buying new equipment right now. Because each one of these things is kind of a reboot. Where getting into Bitcoin mining right now, you’re a little bit late. But could you be a premier Grin miner? You sure could.

Jay Kang: Yeah. Are you suggesting something right now? Can we take our shit bags and upgrade immediately into being at the premium level of Grin miners? Can I push back a little bit here?

Aaron Lammer: Push away, shove if you have to.

Jay Kang: Okay. You and I are big believers in the dumb person model of crypto, right?

Aaron Lammer: I would say expand that to [crosstalk 00:24:49]. Like it’s not just crypto, I’m like, in surveying life we should definitely think about the dumb perspective of things.

Jay Kang: Yeah. And the reason why we know about the dumb perspective on things, is because we know how we reacted to them, right? And so we use ourselves in crypto as models, for how maybe somebody who is two steps ahead of us will try and trick us, right? And so, using the dumb model that we used before, saying like, somebody who bought Bitcoin and got bored, would then go and buy Ripple, and bought Ripple because they Googled what crypto is to buy next, and Ripple came out so they bought Ripple. I don’t know. I think that maybe there is a part of me that is a little bit wary of something that seems to be pushing all the right buttons, you know? Even down to the point where it launches and people are just like, “Buy, buy, buy, buy, buy.”

Jay Kang: I feel like we’re being set up for a long cod, and that somebody who is smarter than us has gone through the things that people are most frustrated about in crypto and thought, okay, we’ve lost some people forever, right? There are some people who got into crypto who got burned, who will never once again get into crypto again.

Aaron Lammer: Let’s call those people, for our historical purpose, orphans. Their crypto parent generation was murdered, and they have no future.

Jay Kang: Yeah. But like in the real live they’ve moved on and they’re never going to think about crypto again, except with a great deal of resentment. And then there are people who got super rich, and those people are fine. And then there’s some population which is us, right? The people who are still crypto curious, did get burned, and still might invest some in crypto, but are much more wary. Grin, if you were to reverse engineer something, or even just engineer something that was going to make all those people feel super comfortable before pulling the rug out from underneath them, I think it would be Grin, you know? It’s a little bit too good to be true to me right now. Maybe they want to funnel people into mining so they have some sort of base of users, and people who are invested in the project. Every step, I just think, “Oh, that’s cool. Oh, that’s great. That’s not like the last thing that I got burned on.”

Aaron Lammer: I know. But why are we so suspicious of someone doing a good job?

Jay Kang: Well, because we-

Aaron Lammer: Crypto has broken our minds we’re like, “Where’s the super airdrop”

Jay Kang: Yeah. I think it’s almost like we would prefer the scammer that we know to this new guy who showed up but is saying all the right things.

Aaron Lammer: It’s really like, “There’s got to be a catch.”

Jay Kang: Yeah, we’re definitely like jilted spouses in some sort of way.

Aaron Lammer: Well, there is one part of it that is too good to be true for someone like me, who’s holding some depressed bags. Which is, if Grin actually makes good and does everything it says it’s going to do, it’s going to be this fungible, usable cash. And it’s not going to be worth a bunch more. Like, all the things that you said early on in this show, which I think were prescient, where you’re like, “Where I’d give a Bull Case for Bitcoin, or Monero,” or whatever. And you’d be like, “Yeah but, why would the price go up?” You’re just saying people would use it. There’s no reason the price has to go up if people used it. That is what the Grin people are saying. They’re like, “We’re going to print this pretty aggressively.” Oh, we had a user question, we had a question from … actually, no way, this came from our editor. You know that you’re too deep into crypto when your own editor is confused by terms you use on the show. So last week we said that Grin was high emissions. What does that mean?

Jay Kang: Yeah, I don’t know what that means either, what does that mean.

Aaron Lammer: So, it means that the amount of new Grin being added into the world, being mined, is aggressive and high, and continues to be aggressive and high over the years, rather than slimming itself down like Bitcoin. And that means that each year there’s going to be more and more Grin. And theoretically, you shouldn’t see Grin being traded over $1000, because there’s going to be so many new Grin coming into the supply. And it’s going to be a large supply, and this is all meant to encourage people to not think, “I don’t want to spend this Grin, it’s going to worth more in years,” but to give you confidence that you can just use it as cash, and it will actually fulfill the sandwiches and coffee premise that Bitcoin has felt to it.

Jay Kang: Is there much known about the people who are behind this outside of …

Aaron Lammer: Very little. They were pseudonymous. I think the guy who wrote the white paper is named like Tom Elvis Jedusor or something.I also neglect another update from last week’s show. Feel pretty bad about this one Jay. I consider myself pretty Harry Potter knowledgeable.

Jay Kang: Oh, yeah. We’ve had this conversation. I’ve never read any of the Harry Potter books.

Aaron Lammer: Okay, well, I should have called it out. MimbleWimble, the protocol behind Grin, that is a spell from Harry Potter. And in fact, all of the branding of Grin has Harry Potter echos in it. So if you didn’t already love it, it’s Harry Potter related.

Jay Kang: I don’t know. That makes me a little bit concerned.

Aaron Lammer: Did you also not read Harry Potter because people were too excited about it on Twitter?

Jay Kang: No, like Harry Potter predated Twitter. I don’t know. I just like, I think I …

Aaron Lammer: I’m going to tell you, Harry Potter is better than you imagine.

Jay Kang: I’m sure. I just like, I don’t have … like, there’s no excuse for any of this. You know how people … I’ve been very frustrated recently because, you know, I’m trying to make plans with people and everyone seems super busy. And I don’t understand how people are busy. I’m like the least busy person ever. But I somehow have more jobs and more things to do than these people. I just don’t understand how young people schedule their time. So, I’m not going to sit here and be like, “I don’t have to read Harry Potter because I’m reading Priest,” or something like that, you know? I could definitely read Harry Potter instead of like … I could get in three less fights on Twitter a day and I could the entire Harry Potter thing in a week. I don’t know.

Aaron Lammer: Would you read it with your child? Or are you just going to wait till it comes around on the second [crosstalk 00:31:23]

Jay Kang: Yeah, maybe, I don’t know. I think it’s more like I just … at some point you’ve missed it, you know? And then there’s no point in doing it. I guess that’s more what it is like. With Harry Potter, everyone had already read it, and I had not read a word of it. And I was just like, “What’s the point of that?” I wish I had done that with crypto by the way.

Aaron Lammer: I have a question for you here. I truly don’t know what the answer will be. Do you think crypto, or Harry Potter itself, has a higher daily active user base? And which is to say, it’s one person, if you do anything related to crypto, trade exchange, whatever, and it’s one person, like anytime anyone opens a Harry Potter book.

Jay Kang: Oh, I don’t know. I would think that probably Harry Potter.

Aaron Lammer: I think so too. Harry Potter’s huge.

Jay Kang: And then you like expand it to people who go to Harry Potter World, and people who-

Aaron Lammer: Sure. The Broadway Musical, everything counts. Harry Potter is the real Ethereum World.

Jay Kang: I know. And maybe in the next, like the next Harry Potter series, I don’t know if that’s even going to exist or not, JK Rowling can create a coin that was used at Hogwarts or whatever it’s called. And maybe she’s behind Grin. That would actually be super bullish for Grin if it was, and JK Rowling, like crypto currency to make her even richer. So okay, here’s my other question about Grin, right? Which is like, you generally have no reason to need a Blockchain based currency in your life, right? Am I right or wrong Aaron? Are some of these things you’re buying Craig’s List, like you hope that nobody knows that you bought a half broken Nintendo switch?

Aaron Lammer: I don’t need it, but I would use it if it was cool.

Jay Kang: And so like, let’s say you went on … Amazon is too lofty a goal, but let’s say that you went and you bought something on eBay. And they were like, you can either use Grin, or you can use your credit card, or PayPal. Would you use Grin in that instance?

Aaron Lammer: If I thought that there was something superior about it, or at least like totally complementary on par. Let me give an example.

Jay Kang: Yeah, I need an example.

Aaron Lammer: I think the dominant service of this kind right now is Venmo. Venmo is … if I just need to quickly give someone some money, or do some sort of a person-to-person transaction, generally Venmo is my go-to. And I use Venmo for everything from like paying babysitters, to yesterday I saw … I went to the Nets/Kings game. And I was like, “How much do I owe you?” “42 bucks,” would have been happy to send him Grin. And the person I was sending it to, if like Grin fulfilled the ultimate promise of crypto, I would have been equally confident that he would have had Grin. And there’s the possibility that Grin is just settling dollars there. Where I’m like, I send him Grin and it makes him like last hop, and goes as money to his bank or something.

Jay Kang: Why wouldn’t you do that instead of just Venmo-ing the guy though?

Aaron Lammer: Well this is, I mean look, there is a very real problem here, which is the system is pretty good right now. Venmo is pretty well done. It didn’t exist 10 years ago. There was a time when this was a bigger problem. It’s pretty easy. I’d be more likely to use it if I didn’t really want the government knowing exact … I still think about, I’m paying all these babysitters, you know? It’s like under the table, you know? What are their tax repercussions for them? Or, let’s saying our podcast editor, James, right? I just send him money on PayPal. I assume that he’s going to handle whatever Canadian tax situation he has … wow, I just really dox’d James.

Jay Kang: James, edit that out if you could.

Aaron Lammer: And so, those are all kind of like, yeah it’s fine. But if I could completely shield that transaction, why not?

Jay Kang: Yeah, I guess. I mean, I agree with that. There are things that I don’t want people to know that I am putting money into.

Aaron Lammer: Well look, you’re a gambler. So you’re like the tip of the spear.

Jay Kang: Yeah. And it’s all gambling.

Aaron Lammer: But gambling is often the first use case. Like, that was one of the … what got people into PayPal in the first place? Gambling and eBay, right? Okay. So I think you’re in the right zone. It’s somewhere in that nexus. It doesn’t need to be for every transaction. I’m not suggesting that like, I’m going to go to Starbucks and use Grin. I think it’s more for that like netherworld of semi-legit transactions. If I just had a privacy button on Venmo or PayPal that was just like, completely shielded in crypt and privacy everything on this, I’d do it.

Jay Kang: Yeah, I agree. I would do that every time, just like for basic ops like stuff. But at that point, not that different from any other cryptocurrency, right? Like it’s not different-

Aaron Lammer: I think that’s true. Although we pretty clearly can’t use Bitcoin that way. Because if we could, we would be already.

Jay Kang: Yeah. And international stuff I think is, you know … that makes sense to me. I mean, there’s a lot of … like for gambling for example. If you want to, let’s say, if you don’t live in New Jersey, and you want to bet on sports in New Jersey, and you VPN in, I’ve never done this completely honestly. But I know some people who have. And you want to put money in there. It’s difficult, because, I think that your bank account, basically they track where it is and then, you know … but if you just put in a cryptocurrency, whatever it is, then it’s a lot easier. You don’t have to deal with where your bank is and stuff like that. And so, I think that it solves that type of problem. But then again, that’s not really coffee and sandwiches. That’s a pretty limited use case though.

Aaron Lammer: I think that remitting people for labor and goods probably makes more sense than like coffee. You know, I mean like larger things. It’s like, it’s the same thing with PayPal. Is it worth using PayPal to pay someone in the store? No, you’re not going to do that. But there’s this whole other side. And like, do you use the Cash App from-

Jay Kang: No.

Aaron Lammer: So like, the Cash App is from Square. I got it because I wanted to try buying Bitcoin on it. Remember I got like hosed, and I bought that Bitcoin sweatshirt because I thought it unlocked Bitcoin purchases in the Cash App, but then it didn’t?

Jay Kang: Yeah.

Aaron Lammer: But now my wife just wears around this Bitcoin sweatshirt, very bizarre like.

Jay Kang: That’s amazing.

Aaron Lammer: But now I am able to buy Bitcoin within the Cash App. And the Cash App does all the same kind of simple transfer stuff that you’d expect from a Venmo. I do wonder, like now that, like let’s say me and you both have the Cash App. You can send Bitcoin I believe by just denominating it in US dollars.

Jay Kang: So you can be like, “I’m sending $12 here,” and then it’ll send the underlying Bitcoin price without you having to calculate it?

Aaron Lammer: Yeah. I mean, well that’s what happens when I buy … like, I’ve been buying Bitcoin in the Cash App. Sort of like you would buy lottery tickets. I’ll just buy $5 or $10 worth if I think the price feels low, 20 bucks, 25 bucks. And I never put in how much Bitcoin, I’ve never even looked at how much Bitcoin I have. I just put in a US Dollar amount, and I just buy as many Bitcoin, and it tells me what the price is. So, there is a level at which all this crypto stuff is like, yeah, it feels weird that I bought .00558 worth of Bitcoin. But if that was just kind of dynamically working within a US Dollar context in an app, I could see getting pretty into that. I could even see an app where I could like switch it between Bitcoin and Grin, you know? It’s just like a toggle.

Jay Kang: Yeah, that stuff was being developed in the Philippines when Bitcoin seemed like it had a big future in the remittance markets, to get around Western Union fees. I remember I talked to a bunch of … not a bunch of people, but I would say three developers between … let’s just say in Asia broadly, who were working on these types of things. Where they would have an app where the underlying currency was crypto, but you didn’t really see that ever. You just sent … you were like, “Oh I’m going to send $800 Hong Kong dollars to the Philippines, which converts to however many Pesos.” That’s the only thing that the people there will see, but the underlying currency will be crypto, and they can cash it out immediately. So that sort of stuff is happening.

Jay Kang: But still, that does seem like it’s most useful in either inner state or international transfer events. And I don’t know if Grin specifically is … the only thing I would say, I don’t think anything you’re saying is wrong, I just think that it’s a broader case for crypto than it is a specific case for Grin.

Aaron Lammer: Did we accidentally make the Bull Case for Ripple again? I think we might have.

Jay Kang: Yeah, I think we basically have. All roads lead back to us becoming secret Ripple people stance.

Aaron Lammer: Not to show my non-existent XRP bags, but I think this idea does make more sense to people who do a lot of international transfers, and people who just move money and don’t use the dollar as their default currency. We are the world’s reserve currency, so it feels weird to us that anyone would want to try and create the idea of a reserve currency. But let’s say you’re moving large amounts of money between, let’s just say, the Yen and the Peso. You’re like shipping fresh seafood from Mexico to Japan. If you send the money, it’s making a hop step on the dollar, whether you know about it or not. Like the Yen, is probably being sent, and then turned into dollars, and then dollars into Pesos, all through an elaborate series of frictionless bank moves. Actually I guess friction was probably the wrong word. Because there’s a lot of like fees and waste associated with it.

Aaron Lammer: But through some sort of a hop step it’s getting there. So I think a lot of the stuff we’re circling around, and this again unfortunately, I think we just made the Bull Case for Bitcoin maximalism with Bitcoin as the reserve currency. In all these transactions, what that middle man currency is, is like a pretty powerful position to be in. And it seems like, if someone like Grin, if you’re imagining what’s the absolute pie-in-the-sky scenario, it’s kind of like Bitcoin. It’s just under everything. And people are using it by hand, and maybe like Grin trades against Bitcoin for big transactions, and that all trades with the dollar. It’s all like this grand system.

Jay Kang: And I guess I just … I can believe in a world where Grin becomes that thing other than … and I think this was the only point that I wanted to make about all this, which was that, we don’t really know that much about the tech behind this, right? Is that a fair thing to say?

Aaron Lammer: I think we know about how it’s being presented, but we have no particular insight into how true it’s claims are. Mostly we’re gaging this based on other influencers, like lots of OG people being … the fact that someone like our former Jameson Lopp, said he was like running a Grin note. I was like, “All right, well I guess it’s at least serious enough that he’s interested.”

Jay Kang: Yeah, for sure. That is all just kind of like basic marketing stuff still though, right? It’s like finding influencers to Tweet about it.

Aaron Lammer: Which is again the Fyre Festival model.

Jay Kang: I just think that, at this point, I think that a full audit of Grin would just not be like, “Oh, is this a good idea?” I think it’s a good idea. I think I would now have to move on to the tech of it. The only thing that we keep saying about Bitcoin, which is why we support it, is that it still hasn’t had any massive failures, right?

Aaron Lammer: Yes.

Jay Kang: It hasn’t. And Grin would need that type of track record I think, to compete with Bitcoin. And I think that’s hard. It’s hard to make a system that has tons of people working on it in an open source sort of way that seems to still work after 10 years. And for Grin to launch into that type of space and having not all these speculative, it kind of needs to build up a backlog of actual service time. Which obviously it can’t do, because it just launched. But, I don’t know, before we start theorizing about that-

Aaron Lammer: I think that’s a fascinating question though. Like right now, people are like, “Don’t buy Grin, we’re just going to mine the shit out of it. There’s going to be more supply.” If Grin does in some ways bear out, we can expect it to have a shorter half-life than Bitcoin.

Jay Kang: Oh yeah, for sure.

Aaron Lammer: Like are we going to expect the next time that someone skies this course, they will be skiing faster, because someone has skied it before. So I think we’re in kind of a weird nether realm where like, I agree, what’s the most amazing, miraculous part about Bitcoin? It’s that the chain has lasted for more than 10 years. Whenever someone else sort of starts running the same steps and getting some momentum, and starts looking like, “Wow, this could be really something.” I just wonder like, how long we should expect it to take for something like Grin to mature? And I have no idea. You could tell me three months, or you could tell me it’s not really viable for five years.

Jay Kang: Yeah. No, I think we’re on the same page. But you’re going to buy it.

Aaron Lammer: If the price comes down to the $2, like below $2 I’m interested. But, I will say that, you can’t just fake development out of thin air. I mean you can, TRX does, but you can’t, if you’re actually trying to do something real that works, just fast forward through all of the development phases. So, I don’t know how quickly they’re going to be able to build something that’s viable. It would be exciting if they did it quickly. It would be exciting to see something really, really go mainstream all in one year. Because I think that’s the kind of world we live in now. Where like, we’re used to these rapid ascents.

Jay Kang: Yeah, it really doesn’t take much either. I mean, it really just takes … CNBC for example. No I’m serious-

Aaron Lammer: No, I agree.

Jay Kang: … you know what I saying. Like, “Hey, here’s a real crypto project. And it doesn’t have all the problems with the old crypto project. And people would get excited about it.

Aaron Lammer: Could Grin be on the cover of Wired in the next 12 months? I would say it could.

Jay Kang: No, I don’t believe that. But I think there could be a story about Grin in Wired.

Aaron Lammer: Should we start an Augur market about this?

Jay Kang: No. Because I don’t want to wait four days for the chain to link, or whatever.

Aaron Lammer: Do you want to take a few mailbag questions before we get outta here?

Jay Kang: Yeah, let’s do it.

Aaron Lammer: This is from the Twitter mailbag. Thanks to the Twitter mailbag. Question, I don’t know who these are from because I copied the [inaudible 00:47:05]. If we read your question, you know in your heart that it was yours. Why don’t bad projects go to zero, they just zombie on?

Jay Kang: Oh, that’s a good question. That is a question that I have too. Like about stuff like Kodakcoin in there, or Dentacoin. Although those are even more … but something like Bananacoin for example.

Aaron Lammer: And Cryptopia. We didn’t talk about this in the show, because I think it maybe happened over the holidays. Cryptopia was hacked. And they said that they lost a ton of coins. They said they lost ERC-20 assets. But you can’t log into Cryptopia anymore. So that’s unverifiable if they still have my Sumo coin. I believe that Sumokoin at that juncture was only being traded on Cryptopia. It’s possible there was also on Trade Auger. But assuming it was, it still has a value. It’s still not at zero.

Jay Kang: Do you think that some of it is though that it’s just people who like … I’ll be completely honest, there are some bags that I can’t remember if I sold or not, you know? And they’re not a lot of money obviously, but maybe like $40 here or there. And if I opened one of my shit accounts which I haven’t opened in nine months, there might be some crypto there. Do you think it might just be people have not sold the holdings, or that even the people who are founders haven’t sold their holdings? If it all went to zero, it would mean that everybody exited, right? I find that hard to believe. It’s kind of like the AOL scam, or old magazines where at some point, even if nobody reads your magazine, some people are still getting it.

Aaron Lammer: I mean, it brings up an interesting philosophical question, perhaps we could bring back Stone [inaudible 00:49:01], which is, how can everyone exit? For you to exit, someone has to buy your bag. But then they’ve got a bag. How do you achieve true zero. Isn’t there always someone holding the bag? And I think most people as, this would be my take, which would be, as you approach worthlessness, there’s always someone there’s who’s like, “Well, I’m not going to like literally throw it away.” It’s not until it’s in the trash can, to whoever has just deleted their wallet and overwritten the data.

Jay Kang: Don’t you still have … I would say that your bag of Darcrus got D-listed from Bittrex, oh, I don’t know, maybe a year ago. Do you still have that?

Aaron Lammer: I still have … well, it’s an interesting philosophical question do I still have it. Because I haven’t sold it.

Jay Kang: Yeah, so you still have it.

Aaron Lammer: But it doesn’t trade anywhere. It’s only on my Bittrex account, but it’s grayed out and you can’t move it. So I am still the owner of that Darcrus, but I am no longer driving the Darcrus ship.

Jay Kang: Is it worth anything?

Aaron Lammer: It’s worth like $20 maybe.

Jay Kang: But you could take it off that-

Aaron Lammer: I don’t know how.

Jay Kang: … exchange, with like a hardware wallet or something.

Aaron Lammer: Well but there is … and that’s the thing of it, these coins at the bottom, and I think this speaks to the, why don’t bad projects go to zero? Most of them don’t have hardware wallets. There’s no Sumokoin hardware wallet. So a lot of these projects basically only live on exchanges. Then an exchange eventually will D-List them or get hacked. In the case of Cryptopia. If Cryptopia is gone forever, and we just never can log back in or access your coins, think how many coins went down with that ship. And I mean, there was a lot of coins that were only traded on Cryptopia. That means, those coins are effectively … that’s I think when the exit happens, when everyone loses access.

Jay Kang: Yeah, but that’s hard to track on, you know.

Aaron Lammer: I think it kind of goes also just back to what we said about Grin, where we were like, we don’t know if we can trust these numbers. So all these coins that are not at a true zero, but are like worthless, may actually be worth zero right now, and that there are no buyers below. You put on your whole bag on the market, and no one’s buying it no matter how low you lower the price. And you couldn’t find any liquidity anyway, because it’s not listed on any exchanges.

Jay Kang: Yeah, it’s like old … like baseball cards had a moment like that, where they printed so many of them that it was impossible to sell any of them.

Aaron Lammer: I was thinking about baseball cards too.

Jay Kang: But there’s still like a price associated with it. If you looked it up on like Beckett Baseball Card Pricer or something like that. But it had actually nothing, like your actual value, if you tried to sell all of it, it was nowhere, you know it was probably zero. Like you could give it away I bet, but you certainly couldn’t sell it.

Aaron Lammer: I think baseball cards are a great example. I thought of that too. I was like, if you look in Beckett right now, a common Topps card, let’s say 1989 Topps, that was probably the biggest-

Jay Kang: Yeah, the height of like the overprinting.

Aaron Lammer: That was my biggest baseball card bag. So a common card, absolutely like a zero value, I’m going to say like a Carney Lansford third baseman for the Oakland A’s. Let’s say Carney Lansford ’89 Topps worth two cents. So, well why hasn’t Carney Lansford gone to zero? It’s one of the most common cards, of one of the most common years, of one of the most overprinted baseball cards. Let’s say I quartered out the market of Carney Lansford. I’ve been buying Carney Lansford the whole way down, and I have 50% of the world’s supply of Carney Landsfords. I can’t go to sell those, there’s no market for half of the supply of Carney Landsford baseball cards.

Jay Kang: There might be … well, you could find like one buyer. Carney Landsford. Or like Carney Landsford’s biggest fan.

Aaron Lammer: If Carney Landsford ends up being a Coin Talk listener, this show will have served it’s purpose.

Jay Kang: Carney Landsford is really like, this is a total aside, but he was one of the most fascinating baseball players from a statistical standpoint, which is like … the question was always just if Carney Landsford had been on the Red Sox and not, and played in Fenway instead of playing in the Oakland Coliseum, which has like large, large amounts of foul ball space. Where your foul balls can go into outs, as opposed to Fenway, which has very limited foul ball space. So if you foul a ball off it’s likely not going to be caught. That he would have been Wade Boggs instead of Carney Landsford.

Aaron Lammer: I like this take, I haven’t heard it.

Jay Kang: Its a Bill James take, yeah it’s-

Aaron Lammer: Oh, it’s a Bill James take, okay.

Jay Kang: It was one of his early ones that was used to sort of explain the power of ball park effects. So I don’t know why I brought it up. I just like to share some [inaudible 00:54:02] knowledge.

Aaron Lammer: Well, I hesitated when I brought up Carney Landsford too. Because I was trying to think of someone who was common, you know? Who was like … an then I was like, is that unfair to Carney Landsford? Is he more like a five cent-er, or an eight cent-er?

Jay Kang: No way, no. I think that was-

Aaron Lammer: He seems like a dead average baseball player to me, when he was playing.

Jay Kang: Oh now, he was definitely above average.

Aaron Lammer: Above average? But you don’t think his card is more than common?

Jay Kang: No, I don’t think his card … I think his card probably is worth the same amount as like, let’s say like a 1989 Chili Davis card or something like that.

Aaron Lammer: Another person might have a question if he was maybe worth more than common. Chili Davis?

Jay Kang: No, that’s what I’m saying. I don’t think there’s any difference between a Chili Davis and let’s say, Rich Gedman or something like that, who was like at that point the backup catcher for the Boston Red Sox. Or maybe he wasn’t even on the Boston Red Sox anymore, or Tom Brunansky who was the right fielder for the Red Sox I think in ’89, who was a very [crosstalk 00:55:03].

Aaron Lammer: I really came to the right person with this querie.

Jay Kang: I know.

Aaron Lammer: I was like going through the whole area’s roster, and I was like, “Walt Weiss? He’s definitely worth more than that.” That’s his rookie card.

Jay Kang: Walt Weiss’ rookie, when was that? Is it-

Aaron Lammer: Oh that was ‘90.

Jay Kang: … ’88 or ’89. Or maybe [crosstalk 00:55:18]

Aaron Lammer: ’89 was Mark McGwire I think. Mark McGwire rookie card probably worth 100 bucks. But I can tell you from experience that if you-

Jay Kang: No, it’s definitely not. I don’t even think the 1986 Mark McGwire USA Olympic Card, do you remember that one?

Aaron Lammer: Yeah.

Jay Kang: That was like … yeah, I don’t even think that’s worth 100 bucks now. The baseball card market is so depressed. It’s like they’re all coins basically.

Aaron Lammer: I think this is a take we need to bring up next time we do a live show, which is like, are all coins to do baseball cards?

Jay Kang: Yeah, the near ’80s baseball cards.

Aaron Lammer: I took my baseball cards to the hobby shop, and it’s like, they will buy the ones that are worth 20 bucks. All of the two cent cards in the world are worth nothing. Like, there’s no market for two cent cards, no one will bulk buy them from me. You could have a million two cent cards, it wouldn’t matter. So, I think we’re actually, I think we’re on to something here. This is why things can’t go to zero. Why won’t Beckett just print that they’re worth zero cents?

Jay Kang: Well, there are completists who would buy it, but yeah, I agree that there’s-

Aaron Lammer: Right. It’s true, the whole set is probably worth more than the sum of it’s valuable cards. So the only way you could create a market for that would be to compile all those commons into sets with the valuable cards. But I think the mining cost is too high there to really justify going into this line of business. Though I think me and you would be the people to do it.

Jay Kang: Yeah. The 1989 Topps card is really ugly.

Aaron Lammer: I was kind of a Fleer guy myself.

Jay Kang: Well, I think it’s an interest … I was Donruss, the interesting thing-

Aaron Lammer: What is the etymology of Donruss?

Jay Kang: I don’t remember. It’s probably two people’s names, like there might have been a Don and a Russ.

Aaron Lammer: Do you that there was shitcoin baseball cards, where like beyond the big companies, like some idiot just tried to make their own baseball cards?

Jay Kang: Oh yeah, there were, there were for sure, yeah. And then there were like … remember, starting in the early ’90s, there were attempts to make premium baseball cards, like Leaf.

Aaron Lammer: Oh yeah, hologram stuff.

Jay Kang: Topps Stadium Club was one, do you remember that? They had what felt like a photograph.

Aaron Lammer: That’s kind of the super airdrop festival of baseball cards, when they-

Jay Kang: It really was. It was definitely the super airdrop festival.

Aaron Lammer: … were like, okay, all these cards are common and not worth anything, but there’s a few hologram cards.

Jay Kang: Yeah, yeah. And then it just got worse, and worse and worse, and that was the end of it all, right? Because when it just got super scam-y, and it was just about trying to find like the … actually I remember there was a year … I had gotten way out of baseball cards at this point, but like, do you remember there was a time when they were taking a piece of a player’s jersey and cutting it up and putting it in baseball card and you’d get that? And then when it would launch, they would be like, “This is worth like $1500.” And then all these kids would spend all their money on that.

Aaron Lammer: There would also be the intentional misprint cards, or like-

Jay Kang: Oh my God, yeah.

Aaron Lammer: It’s a super rare [inaudible 00:58:29] bat. Like-

Jay Kang: Well, that one was … was that unintentional?

Aaron Lammer: That’s what I’m saying, there’s like serendipity strikes, and then people try to fake the serendipity.

Jay Kang: I know. Basically baseball cards went from being like a scam market, to becoming the [inaudible 00:58:45] their children. And that’s when I think everything went wrong. It’s unethical. Like, if my kid was spending all of her money on baseball cards to try and get a jersey fragment that some idiot said was worth like $1500, but the real sale price was like $200, I would be furious.

Aaron Lammer: I don’t know Jay, I think you’d just get into it. You’d be like, “We collect the ball rightie.”

Jay Kang: Yeah.

Aaron Lammer: “I have a sure fire scheme for us to flip these.” I mean, baseball cards are kind of an interesting parallel for Bitcoin, where like, there must have a point … so, our parents generation, baseball cards were worth a lot. And the people who bought a lot of baseball cards made a bunch of money, the early collectors. And then-

Jay Kang: Right, okay. I don’t know if that true, but yes, it was more of the …

Aaron Lammer: That was what I told myself when I was 13. Well, people were like … there was a much lower supply. We know that empirically, that far fewer were printed. So the kids of our generation were getting scammed by buying baseball cards that they thought were rare and scarce like their parents baseball cards, but they weren’t. Then, once that market fell out, and I kind of remember this, it was even clear when we were kids, that baseball cards weren’t really going to be worth millions of dollars, you know? Like rare cards just weren’t worth that much. Then all of these other people just started printing their own cards.

Aaron Lammer: And it went from there being just Topps to Donruss and Fleer, and all the way on down. And there must have been an existential crisis for Topps at that point, where people were like, “Topps is done, anyone can just print their own baseball cards.” It’s sort of the fork era of Bitcoin.

Jay Kang: Well they couldn’t, because they would still need to get a license with the major league and the players Association.

Aaron Lammer: But it seemed like the Player’s Association was just like taking all comers there. There was a huge swelling in the number. I remember the first year that they would have the whole rack. And that kind of comes back to some of the stuff we were talking about. Like, how I’m saying the industry wants Grin. All these hobby shops must have been juiced, where they like made all these different series of baseball cards. Because now they have way more stuff to sell.

Jay Kang: I think the actual history of all this is that it was very opened for a while. And like chewing gum, and tobacco places would print cards.

Aaron Lammer: Oh, that’s true.

Jay Kang: But then, I think Topps had a monopolistic hold on it. And then it just like eased up, and that’s when you started seeing other card companies come out.

Aaron Lammer: It’s true, they weren’t originally printed as collectibles. They became collectibles, and then they started issuing collectibles. It’s just like crypto.

Jay Kang: Yeah. By the way, 1989 Topps baseball factory complete set unopened, guess how much it costs?

Aaron Lammer: Less than one Bitcoin.

Jay Kang: It’s $17.

Aaron Lammer: $17?

Jay Kang: Yeah.

Aaron Lammer: Oh my God.

Jay Kang: That’s what I was telling you.

Aaron Lammer: That probably costs more than $17 when you bought it at Costco. Did you buy baseball cards at Costco? Were you a Costco kid?

Jay Kang: No, they didn’t have Costco where I was growing up. There was a card shop that was within walking distance of my home in North Carolina.

Aaron Lammer: That was for me too, but it was cheaper. If you could go there you could buy the cases at Costco, and have like 24 packs.

Jay Kang: We didn’t have Costco back then. I guess it was a West Coast thing. But I bought them almost all at the baseball card shop. And the guy there would scam me all the time. I still feel resentful for it, because I had some good cards for a while, but you’re like 12 years old, and you’re making deals with like a 45 year old man, and he keeps scamming you, at some point, you know, it’s kind of like how we bought and sold crypto. You’re always selling the bottom and buying the top, you know?

Aaron Lammer: And the asymmetry of information means that those guys are selling you worthless cards that they know are going to crash, and holding what they know has long-term value. And it really feels similar to me, in that like, they keep needing new products to sell. I remember when it was a baseball card shop was mostly used baseball cards. Then they started selling new sets, new packs. And then it was like, now they have seven things, and then I remember the day I walked in. It was like, and now we’ve also got Magic: The Gathering cards.

Jay Kang: Well yeah. That was the beginning.

Aaron Lammer: And that was a whole new industry. They restarted baseball all over again with the first season, and it’s again, the first season Magic: The Gathering cards are still quite valuable. They ran the scam-

Jay Kang: Yeah, those are still really powerful.

Aaron Lammer: … and then printed a shitload of the later editions. Kids were probably buying those, thinking like, “Oh that Shivan Dragon’s worth like a grand now.” It’s probably good to get a rare card from this new edition that they’ve printed seven million of.

Jay Kang: Yeah, yeah. I had a lot of Shivan Dragons. I think I had like four of them at some point. But I didn’t have any of the Black Lotus cards or anything like that. I think I had like one Black bordered, I don’t remember. One of the artifacts that was worth a lot, invader or something like that. And I ended up trading it for Shivan stuff. But what did I trade it for? Oh, I remember, I think I traded it for a working Nintendo entertainment system, and like 25 games or something like that. Which I think in the end-

Aaron Lammer: Wow, I think that deal looks good in retrospect.

Jay Kang: Yeah, I do think in the end I came out ahead of that one.

Aaron Lammer: I like that one. I mean, if you look at the entire history of the industry, tobacco cards, not intended to be collectible, they create a real collectible out of that. Then they overprint that collectible, they create another collectible, Magic cards, overprint that, and then someone is like, “These Magic cards are at least verifiably unique non-sports crap,” and it’s like, we need an exchange for them. They formed Mt. Gox Magic: The Gathering exchange. That becomes the first crypto exchange. I mean, not only are these things similar, they are the same history. They are logical outcroppings of scarcity.

Jay Kang: And if you add in the types of people who played Magic: The Gathering who became the first real heavy doctrine of online poker, you know? Then you have like the whole ecosystem basically, right? Like it all started with us getting scammed on our baseball cards. Like, you could have done like … were you a successful baseball card trader in the fourth grade? And if the answer is no, then you shouldn’t get into crypto. But if you were, then you probably should get into crypto. I had it just free and full circle here, and we’re running out of time here. But I wonder like, baseball and basketball seem to be open to experimenting with a lot of new things recently.

Jay Kang: There’s a lot of new rule changes in baseball, and both of them have embraced gambling. Do you think that the baseball card companies would ever embrace a Blockchain related thing, like CryptoKitties, to sell baseball cards? Because you know, the one place where this really did work at all was in collectibles and CryptoKitties, right? Do you think there could be a sports collectibles market that was on like Blockchain? I mean is this something … I’m sure someone thought of it, to like track things like jerseys and stuff. But I wonder if you could do that?

Aaron Lammer: I mean, it feels to me in today’s pop cultural interest sphere, that gaming and verifiable uniqueness in gaming, whether it’s a true card game like Magic: The Gathering, or a shooting game or whatever, is like 1000 times bigger than baseball. I’m not sure anyone even cares enough about baseball anymore to try to like innovate the baseball collectibles.

Jay Kang: What about like basketball?

Aaron Lammer: But, I kind of agree, like what we’re describing as a convergent evolution, and there does seem to be a lot of interest in verifiably unique items. And the NBA is like about is like hot a property as you get right now. So I don’t know, there’s something in there. I can’t figure out exactly what it is, but I can see why after selling people a bunch of really common things like hats and jerseys and everything, why people would want there to be sort of a secondary collectible tier over the top.

Jay Kang: I think you can sell almost anything in the economy of like an NBA game, as long as it’s verifiable and unique. And so, I don’t know, I guess I just keep thinking back to that crypto auction, art auction I went to for Vice. And the woman who was selling the Twitter Fail Whale. And the idea was like that you could buy the original of it, and the FunBrain space, back to Stone [inaudible 01:07:49] to end the show, was that this is like one of the most replicated images that so many millions and millions of people have seen at a time. But there is an original of it, almost like Fiat. They’re just saying, “Hey, this is the original and we’re going to prove it.” You could do that in the space of a basketball game, right? I mean this sounds stupid right now, but you could sell moments or shots and stuff like that. And somebody might be interested in buying it.

Aaron Lammer: Definitely. I mean, you also could sell Steph Curry’s shoes and have them stamped in some ways. I always feel like these things, that when you bring up the Fail Whale or whatever, I’m still not totally convinced that any of this stuff has moved beyond novelty. And like, yeah, you sell the Fail Whale, but are people really out there selling digitally, like unique memes now? No, no one cares. It’s a gimmick, you know?

Jay Kang: But I think that will happen. And the reason why I think that’ll happen, I do pay some attention to young artists right now. And it’s mostly out of speculation. But also, just like I’m interested in the way that the art world has dealt, has almost made like online controversy into it’s own performance art, et cetera, et cetera. Like I find that all to be interesting. But I would say like, I don’t know, if a very healthy percentage of young artists right now are literally just making memes, you know, an tossing them on Instagram, and some of them are incredible. There’s this one woman in LA whose memes are so funny. And so kind of amazing in the way that they’re made. Like they look so shitty that like it’s impressive. But I think that when those people come to have to sell something, or something like that, they’ll get really interested in it. And so you have … they’ll be some pressure to create a market for these types of memes, and you know, like art students have loans and stuff they have to pay back. I think it will happen.

Aaron Lammer: I like this bullish Kang take. I’m going to go the opposite take, which is like, I expect to see lots of people selling Fortnite skins long before I ever [crosstalk 01:10:03] artists to scan my tag for verifiable uniqueness. But, all right, should we pick it up next week?

Jay Kang: Yeah, yeah.

Aaron Lammer: We didn’t even get to a bunch of the stuff I wanted to talk about. We didn’t even get to talk about a theory on bull. Let’s pick that up next week.

Jay Kang: Okay, cool. I’ll talk to you then.

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

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