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CoinTalk™️ 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 firstname.lastname@example.org)
- Jay attempts to find his place in the XRP army
- Justin Sun of TRON wins the auction for a lunch with Warren Buffett
- The “Bitcoin is going to go to zero” narrative grows stale
Aaron Lammer: Now, this taping was nearly aborted as a result of a large earth-shattering oil-drilling kind of machine that has appeared outside of the crypto cave.
Jay Kang: You showed it to me, which I was a bit surprised about because you’re like, “You got to see this thing.”
Aaron Lammer: It looks kind of cool though, right?
Jay Kang: It does look kind of cool. It definitely looks like they’re drilling for oil. Do you remember those books? Did you ever read those books like Wayside School Is Falling Down?
Aaron Lammer: No.
Jay Kang: I might be wrong. Listeners, if I am wrong, then please correct me.
Aaron Lammer: Please correct him.
Jay Kang: It was about a school that was built next to an oil well, I think, and it was built vertically instead of horizontally, and so it was many stories high, but it only had one classroom per floor. It did remind me of that where you have a oil well in a very dense urban space here in Williamsburg. It’s probably not an oil well, first of all, but it really-
Aaron Lammer: I think it’s actually smashing up a parking lot [inaudible 00:01:43]-
Jay Kang: Oh, really?
Aaron Lammer: Yeah.
Jay Kang: Is that what it is? They need something that big to smash up a parking lot?
Aaron Lammer: For people listening at home, this… Well, A, this is a crypto podcast that has no actual financial advice. To me, that thing kind of looks like a modern-day There Will Be Blood. If they did a remake of There Will Be Blood but it was present day, it would have that machine in it.
Jay Kang: Yeah, yeah. You know what I realized?
Aaron Lammer: Yep.
Jay Kang: That I was not thinking of Wayside School. I was thinking about a episode of The Simpsons where Mr. Burns does a slant-wise drilling machine and starts drilling underneath the school because there’s oil under the school. Do you remember this?
Aaron Lammer: I do remember that episode.
Jay Kang: Okay, yeah. That’s what I was thinking about, so maybe there’s oil under the crypto cage, and somebody is trying to steal your sweet, sweet oil.
Aaron Lammer: Yeah, don’t come. Don’t come here looking for that sweet oil, and don’t come in here trying to steal my Nano cause I never actually loaded my Bitcoin onto it, and now I’ve lost it.
Aaron Lammer: Jay, it’s the, I would say, maybe 10-day anniversary of you becoming a Rippler. How’s it feeling?
Jay Kang: It is feeling all right. I mean Ripple has done pretty well. I don’t really care that much about it. I think that what your real implications are is have I bought into the mania? Am I now harassing people online and calling them?
Aaron Lammer: You definitely are harassing people online, but is it about Ripple?
Jay Kang: No. I am. I am definitely… Yeah. I haven’t transitioned into a pure believer yet, but the person who I talked about last episode, for those who didn’t listen, it was of my friends who I just… The only thing I will say about him is that he’s very lucky. He suddenly got into crypto and was very bullish on XRP, and just because I was like, “Well, this guy’s bets always go well, so I might as well just buy some XRP,” I also bought some XRP. The thing I will report about my friend is that he has fully gone into the cult of XRP. Something that he literally texted me yesterday was, “The thing that’s awesome about this is the community.” I was like, “Oh, my God.”
Aaron Lammer: I have a great idea. I mean we’ve been talking about these tee-shirts for a while, but maybe we can make the prototype and send it to him, which is just a tee-shirt that says Passionate About International Banking Transfers.
Jay Kang: Yeah, or we can-
Aaron Lammer: Maybe with a question mark at the end.
Jay Kang: Well, this guy, in his business, his legitimate business, he is a businessman, he actually does do a lot of international transfers.
Aaron Lammer: Oh, really?
Jay Kang: He did say, “I really do hate SWIFT. It does suck.”
Aaron Lammer: Yeah. No, I mean I think sometimes we talk about Bitcoin’s appeal in the developing world, somewhere like Venezuela, as if the world is a bunch of isolated islands, but actually, the first world is touching the second world is touching the third world. People who work in industries that involve things like SWIFT are like, “No, it doesn’t matter if you’re an American. It’s still a real pain in the ass to do international bank transfers.”
Jay Kang: Yeah, yeah. You know what? For people who do move a lot of money, that type of thing is actually a concern to them that they can put their heads around more so than something as abstract as the gold standard destabilized the entire all of Europe and led to forever wars, and we need to go back to the gold standard and get off Europe currency or whatever the argument is on either side. Just being like, “Hey, SWIFT sucks, and maybe this is better than SWIFT,” that’s a tangible thing. In our theory of who Satoshi is, that’s what started Bitcoin, right, like, “Hey, this PayPal thing that I’m using to buy my model trains is terrible, and I’d like to have a non-PayPal option.” I do think that that is actually a pragmatic reason why he’s into it.
Aaron Lammer: Well, I mean there’s a question about incremental change in technology, and this is not to ethically or morally condone any path, but I think we can say that technology is pretty amoral at this point. Something like Uber comes along, and it supplants taxis, basically, because it skirts regulation. It skirts regulation a bit, but it isn’t so far outside of regulation that it gets instantly shut down and eventually becomes too big to fail and takes over the market. I would assume that, if you looked at the bull case for Ripple, and I know that you’ve been looking at the bull case for Ripple to $120… Was that the target we were discussing?
Jay Kang: Yeah, that is not me. That is what the XRP community, apparently, is saying these days from my mole.
Aaron Lammer: Well, so the bull case for Ripple is basically that it’s a easier, less-regulated SWIFT transfer and, eventually, it supplants all SWIFT transfers on Earth the way that Uber’s valuation literally only makes sense if it’s every car doing business in America is owned by Uber or that, along the way, they also facilitate some new line of business that justifies the massive price. Now, does it give you any pause that some of this is already priced in with Ripple and, actually, even at whenever it is now, 40 cents is pretty high?
Jay Kang: Yeah. First of all, I am not the one who’s like this is some trickery you’re doing here where you’re saying you think it’s going to go to $230. No, I do not think it is going to go $230. I would be stunned if it went from its current position of about 46 cents to $1, but at $230 for-
Aaron Lammer: Pleasantly stunned.
Jay Kang: Yeah, $230, the total value of Ripple would be about half the GDP of the United States, so no, I don’t think that that will happen. Your Uber example is interesting because it does show that, in terms of pricing these types of things, it doesn’t necessarily have to be that every car in America is affiliated with Uber because, obviously, it’s not, that there will be this type of mania and speculation that might lead to a result that assumes that type of future.
Jay Kang: I have a very hard time believing that that would happen with Ripple or XRP, but the people… The only thing that I will say is that, according to my mole within the XRP society, that is what they’re thinking. They’re like, “Well, why is it impossible for it to be worth this much?” Then you just say, “Well, based on the laws of physics, math, and every role of economics, this is impossible,” but they don’t listen to that type of stuff.
Aaron Lammer: I’m really looking forward to our XRP tip jar coming alive after this episode. We got some good Ripple tips last time.
Jay Kang: I did see someone Tweeting from the podcast a excerpt of our transcript saying like, “One of the America’s most vocal XRP critics is now on board,” and I was like, “Oh, no.”
Aaron Lammer: I mean I like to think that if this $220 Ripple thing does happen and it’s basically the Ripple industrial complex, that me and you are championed as early friends of Ripple.
Jay Kang: Yeah, yeah. Look, hail ants, right? We need to welcome our new Ripple overlords.
Aaron Lammer: Yeah. I will say that the Bitcoin maximalist case looks more ridiculous if you make the maximalist case for anything else. I don’t know why I’m so forgiving on the idea that Bitcoin is going to become the standard currency in society. When you just like substitute XRP for BTC, I feel absolutely ridiculous even saying it.
Jay Kang: Yeah, yeah, yeah. XRP’s community has always been a mystery to us, right?
Aaron Lammer: Well that’s because some of them are not alive.
Jay Kang: Yeah. The Bitcoin community has been less of a mystery to us, right? This is the most bullish thing for XRP I will ever say, and I expect the XRP community at least send me a hat given that they sent you a fucking hat.
Aaron Lammer: No, that was [Neeraj 00:09:17] sent me that hat.
Jay Kang: Oh, Neeraj sent you that? Okay, Neeraj, send me that hat.
Aaron Lammer: The XRP community sent that to Neeraj, and he sent it to me.
Jay Kang: I think this is partially what you were saying. Is it more unlikely for the entire fiat currency system of the world to be overtaken by a Bitcoin standard, or is it more reasonable to say that every international transfer in the world will now be done in XRP instead of SWIFT or whatever financial swapping system there is?
Aaron Lammer: I know it would be better if I disagreed with you, but I think the XRP thing is more believable simply because there’s actually an existing protocol that it’s replacing. The US dollar is not exactly a protocol. SWIFT is a way that banks transfer money. I don’t really understand it. I don’t understand how everyone just decided on SWIFT, but it reminds me a little bit of… The way that I talked to these keyboards here is midi. Midi is the standard from the 1980s that is very weird, opaque. It’s powerful but kind of difficult to use, but it’s just built into everything, and so even when you buy a brand new keyboard now, it doesn’t… Often, they’ll have a USB, but it almost always has a midi port because midi is the standard. It makes sense for the SWIFT standard to be disrupted. Does it equally make sense for the US dollar to be disrupted?
Jay Kang: No, no.
Aaron Lammer: I don’t think so either, although I do think the Venezuelan bolivar is probably ripe for disruption.
Jay Kang: Right, and especially today.
Aaron Lammer: When we look at Bitcoin, maybe we should be thinking of it more like some of these currencies are above water, and some of these currencies are below water, and if you have a below-water currency, you’re kind of vulnerable to Bitcoin predation.
Jay Kang: Okay, Aaron. What will you do if XRP goes to $220 and you have zero of it?
Aaron Lammer: It’s kind of a greater cosmic joke, honestly, on me than if Bitcoin went to zero, where if I just broke even and you bought a mansion on Ripple money, that’s the worst-case scenario for me in the same way that a worst-case scenario for Kevin Durant is the Warriors winning the championship-
Jay Kang: Without him, yeah.
Aaron Lammer: If you were to win without me and through Ripple, can think of no worse outcome for me in this long long-standing bet game we’re in.
Jay Kang: I’m glad you’re thinking of my family’s goodwill or good fortunes.
Aaron Lammer: Well, look, if you really just believe that the shit rises and that… If nothing else, we can say that Ripple are skilled marketers, I think.
Jay Kang: Oh, yeah, for sure.
Aaron Lammer: We brought up this idea last week of maybe we should just gamble on marketers because it seems like marketing is moving the crypto market as much as anything else. Below that tier but maybe above that tier and marketing skill is Justin Sun of Tron who won an Ebay auction this week to have lunch with Warren Buffett.
Jay Kang: Okay, so-
Aaron Lammer: This is not a fever dream, Jay. This really happened.
Jay Kang: I want to report something interesting to you, which is that my friend who is super into XRP right now, he also bought, I think I told you last week, into BTT which is a derivative of Tron.
Aaron Lammer: It’s Tron’s BitTorrent Token, yeah.
Jay Kang: Yeah, but it is also controlled by Justin Sun.
Aaron Lammer: Yes.
Jay Kang: He was livid about this. He was like, “You were right. This guy, he’s all-”
Aaron Lammer: He was mad about the Buffett meeting?
Jay Kang: Yeah. He’s like, “He’s all hype and, what, he’s manipulating the Tron numbers in the market, and then he’s going to spend it all on a lunch with Warren Buffet?”
Aaron Lammer: He is Tron. Yeah.
Jay Kang: Yeah. I didn’t understand why he was mad about it because I was just like, “Well, whatever. He’s rich. He’s going to spend his money. He’s trying to get Warren Buffett on the Tron bandwagon. If Warren Buffett came out tomorrow and was like, ‘Every coin is stupid except for Tron and BTT,’ do you know what would happen to the price of those things? It would go crazy.”
Aaron Lammer: Justin Sun is the crypto equivalent of running on the field nude during a Champions League game with your website written down on your ass.
Jay Kang: Oh, yeah. Well, that did happen, yeah.
Aaron Lammer: I feel like these are his greatest works not his like worst works.
Jay Kang: I know. I respect it.
Aaron Lammer: Clearly, I mean we criticized many founders early in CoinTalk for refusing to reinvest in their business and basically cashing out as soon as possible, but it seems like Justin Sun is willing to burn increasingly large piles of money on larger and larger stunts like paying four and a half million dollars to have lunch with Warren Buffett. Now, what would you predict the conversation at this lunch is going to be like?
Jay Kang: I think Warren Buffett will, because this was his idea and because he has to play along, will be very… He’ll pretend to be open-minded to what Justin Sun has to say.
Aaron Lammer: Well, Buffett does this every year for charity, and it was only a matter of time between before a crypto guy was going to fucking buy it. Really, it’s kind of surprising that Brock Pierce didn’t do this in like 2014.
Jay Kang: I’m stunned that the people who put the yacht party in Chelsea Piers with the two Aston Martins… I’m surprised they didn’t do it. It’s amazingly good PR for your company because guess what? Everybody writes about it, and everybody now knows who you are. They’re like, “Oh, some crypto guy spent four and a half million dollars to have lunch with Warren Buffett. Isn’t that stupid?” But 5% of those people are like, “Hmm, who this crypto guy, and what is this Tron?”
Aaron Lammer: Well, I think it has enduring value also because one thing I noticed about Buffett is he hasn’t actually changed his mind about crypto, but he will say things now like, “Bitcoin’s rat poison, but the blockchain is promising.” Look at the JP Morgan coin, right, which I don’t think even really exists anymore. I don’t even know if we’re pretending that [crosstalk 00:15:14]-
Jay Kang: Oh, yeah. Does the IBM blockchain exist anymore?
Aaron Lammer: Who knows [inaudible 00:15:16]. The thing about Buffett is he only knows like four or five facts about crypto that he’s going to bring up every time someone asked him about crypto, which is every time he’s interviewed, particularly in a collegiate setting. Once Justin Sun is the only crypto entrepreneur Buffet knows, there’s a good chance he’s going to get mentioned, either made fun of, described as emblematic of crypto culture. Those are all wins for Justin Sun.
Jay Kang: I think he won’t be made fun of, though, because I think that, when you’ve paid four and a half million dollars for Warren Buffett’s time and that money goes to a charity that Warren Buffet wants that money to go to, Warren Buffett can’t really turn around and slander you. You know?
Aaron Lammer: What would the slander be from Warren Buffett? He doesn’t believe in Bitcoin.
Jay Kang: Tron is bullshit.
Aaron Lammer: Yeah. If he said, “Tron is bullshit,” that would be like the greatest day in Tron history. It’s like Buffett picks a fight Tron?
Jay Kang: Oh, yeah. That is true, so the worst-case scenario is not… I agree with you. The worst-case scenario is not a bad scenario. The worst-case scenario is if he never mentions it again. Right after these guys go to lunch, wherever they go to lunch… I’m picturing they go somewhere in Omaha and have a steak. You know?
Aaron Lammer: Yeah, it is at a steakhouse. I think it’s in New York, but it is a steakhouse.
Jay Kang: Oh, okay. I was picturing the place where they send out the Omaha steaks. They send those things out by frozen mail or something. Well, anyway, so that they go there, right?
Aaron Lammer: Yeah.
Jay Kang: Warren Buffett, for the next week, right, what are the questions going to be anytime he is in front of a reporter? “What’d you talk about with that guy about Tron? What’d you think of him?” You know?
Aaron Lammer: 100%. 100%. Well, how long do you think he has to sit at the… Okay, over under.
Jay Kang: Hour and a half.
Aaron Lammer: Hour and a half? That’s a long… that’s like a-
Jay Kang: He paid four and a half million dollars.
Aaron Lammer: That’s a two-martini lunch. I remember reading a story about Seinfeld doing one of these and spending like 17 minutes at the lunch.
Jay Kang: You can’t do it.
Aaron Lammer: Really?
Jay Kang: You can’t do it. Yeah.
Aaron Lammer: Hour and a half.
Jay Kang: Yeah, because guess what’s going to happen?
Aaron Lammer: I was going to say 30 minutes.
Jay Kang: If you do 30 minutes, what happens the next year?
Aaron Lammer: It’s just some dumb businessman buys it to get the love.
Jay Kang: All the rich guys get together and like, “Oh, he was only there for 16 minutes,” and then your price goes down. Just spend an hour and a half.
Aaron Lammer: Well, it’s true that it also… It gets you and seven friends lunch. It’s a party of eight who get to have lunch with Buffett. Now, I wouldn’t put it past Justin Sun to auction off each of those seats to other crypto entrepreneurs.
Jay Kang: I don’t think you can do that.
Aaron Lammer: Who do you think Justin Sun brings for his seven? Tron employees?
Jay Kang: Models?
Aaron Lammer: Yeah.
Jay Kang: If I was Justin Sun and I was running Tron, I would not bring anyone else. I would just have it be me and Warren Buffett, and the other seven slots would be out.
Aaron Lammer: I kind of agree. All those people are just eating into your one-on-one Buffett time.
Jay Kang: Yeah. What are they going to say, like, “Hey, here’s my chief of operations, Bill”? And Bill’s like, “Hey, Warren. Big fan.”
Aaron Lammer: Yeah, yeah, yeah. “Been with Tron with the beginning. So excited to be here.”
Jay Kang: Yeah. You don’t need a hype man if you’re Justin Sun. You are the hype man. He’s like every part of a rap group at once. That’s why he’s good at what he… I don’t know, Aaron. Do you think that the Warren Buffett news has been priced into the price of Tron yet, or do you think that we should buy it right now?
Aaron Lammer: It’s definitely on the dumb opportunities list, although if I’m betting on your friend, I find it fascinating that you keep saying that your friend is incredibly lucky because, generally, you evince a hard markets like there is no luck, blah, blah, blah kind of thing.
Jay Kang: Yeah, he’s the one exception.
Aaron Lammer: He’s the one exception.
Jay Kang: Yeah.
Aaron Lammer: Do you believe in luck?
Jay Kang: I don’t necessarily believe in luck, but I will say that… and this is true of every gambler, I think, right?
Aaron Lammer: Yeah.
Jay Kang: No matter how analytical and methodical, that, at some point, you just see somebody, and they’re just throwing money around, and it always works out for them. That’s who this guy is, and so you just kind of think, “Well, that guy is just lucky.”
Aaron Lammer: I think part of my Bitcoin maximalism comes from the fact that I don’t really believe in luck. When other people are like, “Oh, this guy bought Bitcoin in 2013. Talk about getting lucky,” I’m like, “That’s not getting lucky. It was quite literally the opposite of getting lucky.”
Jay Kang: Sure, sure, [inaudible 00:19:25]. If you’re asking does this guy have a high, high risk tolerance-
Aaron Lammer: Yes.
Jay Kang: … and a high-risk profile that can pay off huge…
Aaron Lammer: Yeah.
Jay Kang: Yes. That’s how he rolls, and that does lead to good situations. Now, I also have a high risk tolerance and a high-
Aaron Lammer: I’ve noticed.
Jay Kang: Yeah. I win much less than he does.
Aaron Lammer: Among the gambling pros, and I think that this speaks to our current Bitcoin-altcoin divide, do most gambling pros, and this, I guess, would be across types of gambling, make most of their money on long-shot bets that pay out, and then you grind, and you miss, miss, miss, miss, and then had a huge one, or are they people who look for a small edge, bet the money line, are making a lot of 57… basically, bets that pay out two to one, say, versus a hundred to one?
Jay Kang: Well, they’re grinders, right?
Aaron Lammer: Yeah.
Jay Kang: But even people who are now famous, everybody who is a big-time famous gambler went for it once. That’s how you build up your bankroll, multiplying it up and up. If all you do is grind a reasonable amount of money, you can grind out a living, but it’s a horrible living. That, to me, is not the same as these guys who try in 1,000 acts and then change their lives, quote unquote, like life-changing money. You have to go for it at some point, and so, yeah, I don’t know.
Jay Kang: I guess that’s the one question I wanted to ask you, and it’s something that you asked last time , and I’ve thought about it myself. Should we just be getting more into shit coins right now? There does seem to be some hype and hysteria around this stuff. The fact that a lot of people are not asking us about Bitcoin but are asking us about specific altcoins, that’s all recent. Last time this happened to us, we were trying to transition into being like OG real guys, and we were just holding Bitcoin while everything else went crazy, and then we missed out on it.
Aaron Lammer: No, but we weren’t. I mean that’s the thing. We already fell for the… We’ve already been here before in this exact same boat.
Jay Kang: I know, but I want to fall for it again.
Aaron Lammer: We were like, “Shouldn’t we just… If we think the whole market’s going up and altcoins go up more violently than Bitcoin, why would we not just buy lots of altcoins?” We did that. We bought lots of altcoins. We bought altcoins willy-nilly during the period where altcoins were going up. It’s not like we weren’t buying altcoins when the altcoin mania was happening.
Jay Kang: Yeah, that’s true. That’s true.
Aaron Lammer: We still somehow kept losing bitcoin value because we’re not good at trading.
Jay Kang: Yeah, that’s true.
Aaron Lammer: That’s the thing I think you don’t realize. I’ll just bring up my own personal experience. I haven’t done a segment about this because it’s a little too emotional, but I think this is the time, which is to say that my Sumokoin bag has officially been deleted from my Blockfolio.
Jay Kang: Why?
Aaron Lammer: Because Cryptopia is in bankruptcy proceedings anymore, and it’s gone. The money’s gone.
Jay Kang: You can’t get it out?
Aaron Lammer: I don’t know. Cryptopia is done. It’s closed.
Jay Kang: So what-
Aaron Lammer: If you go there, there’s just a thing that’s like Cryptopia doesn’t exist anymore.
Jay Kang: Where is your Sumokoin?
Aaron Lammer: It’s in the ether. It’s in the bankruptcy proceedings of the creditor, New Zealand creditor protection for Cryptopia.
Jay Kang: You can’t email them and be like, “Can I have those Sumokoins?”
Aaron Lammer: This is like emailing the Quadriga guy except they’re still alive.
Jay Kang: Oh, my God. What did you do? You hard exited on your Blockfolio, or you just deleted it?
Aaron Lammer: Well, I left it there for a long time. I mean it wasn’t worth much per coin. It was at rock bottom, but it was still at like four cents a coin from a high of over $10. It was comforting to me, and it was worth, actually, about $400, but I was like… Basically, the Cryptopia creditor thing has said no one’s going to get any money. If anyone gets any money, I think it’s going to be people who had a little bit of Bitcoin left on there, not people who had like absolute shit coins.
Aaron Lammer: It’ll be interesting to see if I ever get that back, but I’ve written it off for now. The way that this relates is I think Sumokoin is my most shit coin experience possible. It’s the one time I really caught a true pump and bought it under a dollar, and it grew to $10.
Jay Kang: Yeah, I remember it. Yeah.
Aaron Lammer: I didn’t know how to jump. I was not skilled enough to jump off the horse at the right time.
Jay Kang: I know.
Aaron Lammer: I rode it all the way down. I like hold all the shit coin for starters, but I also didn’t really know how to read the overall altcoin mania well enough to know when the good times were over there. I predict that if me and you bought a bunch of shit coins right now, we’d have-
Jay Kang: I mean I have bought a bunch of shit coins, yes.
Aaron Lammer: Yes. I predict you’re going to have a good few months. I think you’ll probably do decently overall in terms of fiat if the market goes up, but I predict you’ll lose money to Bitcoin just because that’s happened to us every time. It’s like we’re going into the playoffs and betting against the Patriots over and over again.
Jay Kang: Yeah, you’re right.
Aaron Lammer: The Patriots are Bitcoin, and we’re like, “No, they’re due.”
Jay Kang: Yeah, the old cliche of insanity is doing the same thing every time and expecting a different result, it does apply to us here.
Aaron Lammer: Yeah. I also haven’t heard about any new altcoins to get excited about. Someone’s got to give me a new narrative so I can be like-
Jay Kang: BTT coin, baby.
Aaron Lammer: I can be like, “Oh, this is nothing like last time.”
Jay Kang: Yeah, me too actually. All right. You wanted to talk about no-coiners.
Aaron Lammer: Yeah, yeah. This is another thing. This is a different thing. We’re putting a change in our life and sticking away from these altcoins. Actually, we’re not really going to do that.
Jay Kang: No. I have a lot of altcoins.
Aaron Lammer: I feel like last time we were on the way up, I was very critical of Bitcoin, and I was… It kind of ruffled my feathers when people within Bitcoin would be like, “The mainstream media doesn’t understand Bitcoin.” Now there’s this sort of secondary media, or maybe it just exists on Twitter, which is the no-coiner media, which I would say Bitfinex is maybe at the head of, right?
Jay Kang: Yeah, but that existed before, right?
Aaron Lammer: Well, they existed before, and I was really into them before. Now I’m kind of like, “Man, you guys are kind of some blowhards, and your FUD case for Bitcoin doesn’t make any more sense than the crazy maximalist case.”
Jay Kang: You’re talking about people like Izabella Kaminska at FT or…
Aaron Lammer: No. I’m actually talking about more like the… really the coming from around that Bitfinex, like the whole market is manipulated.
Jay Kang: Okay, sure, sure.
Aaron Lammer: Tether printing is out of control. It’s not the overall critique of Bitcoin. I think the overall critiques of Bitcoin are actually really valid. It’s the people who are like, “This is all a mirage. Everything you’re seeing is fake.” When something like the last Tether scandal hit, you have people being like, “Oh, everyone’s trying to get their money off of Bitstamp,” and like, “There’s all this stuff happening. It’s about to crash,” basically that the market was like… Sorry, not Bitstamp. It was the Binance hack that people were trying to get their money off these exchanges, and they couldn’t, and it was creating this huge price premium, and that was causing the whole rise above 8,000.
Aaron Lammer: Now we’ve had a little time. Everything’s back to normal. It’s like, actually, no. Bitcoin’s just trading above $8,000. It feels to me, in the same way that Bitcoin maximalists read everything as a bull sign, there’s this no-coiner take, which is that everything’s fake, nothing could convince me, and I’ll just call the market going down a bunch of times and then, when it goes up, I ignore it. I don’t know. I feel like it just misses something fundamental about there being that some real principle that is driving Bitcoin upwards that is not simply a single mirage.
Jay Kang: Yeah, I agree with that. I think that every message has a exhaustion point.
Aaron Lammer: Yes.
Jay Kang: I think that when Bitcoin was going up that these types of voices were necessary in opposition, and they felt kind of cool or at least somewhat appealing because you’re like, “Well, this doesn’t make sense to me either, so let me seek out some things that make sense.” Whether or not they’re right or wrong, I don’t know, but there needs to be a counter narrative to this.
Aaron Lammer: Yeah.
Jay Kang: Now, the problem that we have is that we went through a year of just death, right-
Aaron Lammer: Mm-hmm (affirmative).
Jay Kang: … in crypto, and these guys never really changed their tune at all. They just said the same thing. They’re like, “Oh, yeah? You think 3,000’s bad? What would you think about 800?” You’re like, “Dude, sure, I don’t know what the difference between 3,000 and $800 is in terms of what the actual fundamental sound structure of crypto is, and you don’t either, and so the price doesn’t matter.”
Aaron Lammer: Give me a framework, no-coiners, in which your hypothesis will be validated. You keep saying Bitcoin’s going to zero dollars, and it did go to like towards 3,000, and it was like-
Jay Kang: Sumokoin went to zero basically.
Aaron Lammer: No, it’s still being traded on some other exchanges.
Jay Kang: I know, but from $10 to 10 cents is like… That’s like a 99% drop.
Aaron Lammer: All you Sumokoin doubters out there are about to get wrecked. No, I’m talking about Bitcoin, right? Okay, yes, lots of altcoins are frauds, but Bitcoin itself, you keep saying it’s going to zero. It’s beginning to sound like the person who keeps predicting the end of the world and then, when it doesn’t come, it’s like this whole different set of things. To me, my understanding of Bitcoin is sort of a mix of no-coiner skepticism and Bitcoin maximalism. Because it’s a mix of those, I never thought it was going to go to zero because, for the zero case to be true, that maximalist case has to be completely worthless.
Aaron Lammer: It reminds me a little bit of an Orthodox religion that lapses and becomes a little sinful, and they start letting in the singing and the dancing, and then some people are like, “Screw you guys. We’re going to go over and do it the old way, more pure and a little bit more rational,” and they’re still overdoing that. It made sense, as you said, when it was a reaction during the time of mania and excess, but now that we’re in this weird, ambiguous situation, I wish there was a more nuanced skeptic take. Maybe that’s really what I’m ultimately asking for is I’m interested in a more skilled criticism of Bitcoin.
Jay Kang: I think those do exist. I agree that they’re not forefront, at the forefront. The thing that I think is happening here is that, basically, what has happened in the last three years is that the entirety of Bitcoin discussion has become prognosticating, right?
Aaron Lammer: Yes.
Jay Kang: You have people who are predicting the future of the world’s economy. That’s one level, right, but that is like a constant, and that message doesn’t change. Then you have people, and this is the majority of the discussion about Bitcoin, who are trying to predict the price, and 99% of those people have no idea what they’re talking about.
Aaron Lammer: Like the two hosts of this show.
Jay Kang: Exactly, right? Yeah, yeah. Just listen to our backlog. You don’t even have to go to the basement tapes.
Aaron Lammer: We have never predicted the price or asked other people to predict price on this show, has never happened.
Jay Kang: Yeah, exactly. When what you have is when you have a prognosticating economy and a prognosticating information economy that when things don’t really match up with the things that you are predicting, which inevitably happens to everybody because nobody knows why Bitcoin’s going up. Nobody really knows why it stayed flat at 3,000. We kind of know why it crashed, you know?
Aaron Lammer: Yeah.
Jay Kang: But we don’t really know why it crashed. Basically, that’s a lot of time for everyone to be wrong a lot and-
Aaron Lammer: Yeah, it’s a big vacuum.
Jay Kang: I think that, at the point where everybody has taken like 15 losses, 15 Ls, and maybe gotten four things right, and they have a bit of a following, and people know about them, and people like Bitfinex are almost famous, you just stop trusting people because people are wrong too many times. It’s not like a sports thing where they just… the majority of sports discussion is… A lot of that is prognostication as well, but a lot of it is entertainment as well, and a lot of it is analysis, and a lot of it is just talking about storylines.
Jay Kang: In sports, if you’re wrong every single time, it doesn’t really matter, but in crypto when you don’t have all the other things around it, when there’s not a game that people want to watch, all it is is being right or wrong. When people are always wrong and the market doesn’t behave, then any type of thing causing gloom and doom or calling for something cataclysmic like Bitcoin zero, it just starts to sound more and more like bullshit.
Aaron Lammer: Yeah. I think, in gambling terms, we’re [inaudible 00:32:15] being on tilt, right? We’re like-
Jay Kang: Yeah, yeah. Crypto’s been on tilt for a few years.
Aaron Lammer: Well, and no-coiners are on tilt also where it’s like, yeah, I’m calling for it to go to zero. I’m like I can see a situation where I’d call Bitcoin to go on zero like if there was some huge technical bug that brought the network down for a week, but that hasn’t happened. Maybe keep that in your pocket and don’t go full tilt just yet. It’s a little like if I was like, “Hey, Jay. Who do you think is going to win the NBA finals?”
Jay Kang: I think the Toronto Raptors will win [crosstalk 00:32:42]-
Aaron Lammer: Who do you think is going to win the 2030 NBA finals?
Jay Kang: The Toronto Raptors.
Aaron Lammer: Yeah. It’s like it would be ridiculous for you to call it a decade ahead. That’s basically what we’re doing with Bitcoin.
Jay Kang: Yeah, and that actually, remember, did happen. I can’t ever stop thinking about this one story that happened during our days in the basement tapes, so this would be a year and a half ago. Bitcoin was around… Let’s say it was around $5,000, I think. There was this really big report in a very reputable financial newsletter that said an analyst from a very reputable analyst firm or slash bank was saying like, “By our projections, Bitcoin will be 8,450 by next March.” You’re just like, “Dude, like what the…” What analysis went in… What possibly could have gotten to predict six, eight months in the future what the price of Bitcoin is going to be? It makes absolutely no sense. There’s nothing in this market that could lead to any sort of prediction that accurate. That’s basically what a lot of people were doing for a long time.
Aaron Lammer: Yeah. It’s kind of why did Pitchfork include the decimal point in their [inaudible 00:33:48]. What is the difference between a 9.3 and 8.9?
Jay Kang: And an 8.3? Yeah.
Aaron Lammer: Okay. We got to get out of here, so we’re going to call this like a slightly short one this week. We’re going to do a mailbag, I think, next week, so send us some questions for that mailbag, email@example.com. We’ve been getting some great ones. Send us your lightning tips. That’s tippin.me@cointalkshow. Jay, could you ask for some Ripple tips from your people?
Jay Kang: Yeah. I want some Ripple tips. Although, I think if I actually want the Ripple tips, I need to say XRP tips.
Aaron Lammer: Now, are you asking for personal XRP tips, or are you asking them for CoinTalk?
Jay Kang: I will ask for CoinTalk. I’ll split the XRP tips with you as long as you will have them.
Aaron Lammer: Would it be out of line for me to trade that, to swap that XRP for Bitcoin as it comes in?
Jay Kang: Yeah, you can’t do that. Don’t do that.
Aaron Lammer: I’m stuck in… A Ripple tip is forever Ripple.
Jay Kang: Yeah, yeah, yeah.
Aaron Lammer: Until the-
Jay Kang: No atomic swaps.
Aaron Lammer: Until the whole Earth flippening of the SWIFT system.
Jay Kang: Yeah, yeah, until 240 Ripple.
The official podcast of Bitcoin crashes. Hosted by @aaronlammer and @jaycaspiankang. Mailbag/contact: firstname.lastname@example.org
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