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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)
- Brian Armstrong’s open to letter for a (former?) friend
- Facebook’s GLOBALCOIN is debuting with a… .whitepaper?
- GLOBALCOIN is pegged to fiat currencies, so the only way to gamble on it is… buy Facebook stock?
Aaron Lammer: Hello, Jay?
Jay Kang: Hey. I just heard your intro, and I was wondering, are we actually trademarked? Like is Coin Talk trademarked?
Aaron Lammer: Let’s talk about that off air. We don’t want to expose ourselves to any predation here, if I may not have ever-
Jay Kang: I was wondering if there was like a coin collecting chat show or something like that that was going to infringe on our copyright.
Aaron Lammer: If what you’re asking is, if you put the trademark emoji after a word, is it trademarked? The answer is, of course, yes.
Jay Kang: Okay. So we got it, cool.
Aaron Lammer: But I should also say, none of this is financial advice, more so now than ever. I would actually say that we started at zero, but it’s less financial advice than when we started.
Jay Kang: Why? Just because the market’s up?
Aaron Lammer: No, because we’ve been proven to be terrible financial advice. We’ve even, I would say, backed away from most of our like predictions about the market.
Jay Kang: Yeah, we never do that anymore.
Aaron Lammer: We don’t want to touch giving advice with a 10 foot stick, not because we’re overly cautious people, but simply because I think we’ve been proven over and over again that we have no idea what we’re talking about.
Jay Kang: Do you remember when we started the show, and I was talking to you and I was like, “Well, I think that we have to say this is not investment advice legally, so that people can’t sue us if they lose money in a trade.” I think that it is true, but I don’t think that’s why you and I say it so much now. I think we literally say it as a like a defensive reflex, but it’s out of true concern for the listeners being like, “Please do not listen to what we’re saying about the markets or investment.” I think it’s a sincere one now. It’s not like how people say, “Allegedly,” in this ironic way. We are sincerely employing you to not listen to our investment advice.
Aaron Lammer: If I can get philosophical about it for a beat, I would say that over time, I’ve learned that I think what I’m selling people is an interest in Bitcoin and crypto is not a buy signal to buy and invest in crypto. They are two different things. They often overlap, and I do encourage people to try it out, but I don’t necessarily think that because you find Bitcoin fascinating, you should be a Bitcoin mega whale with a huge amount of like portfolio risk in Bitcoin. I can tell you that’s not a great idea.
Jay Kang: Okay, I’m sorry to derail us. What do you want to talk about this week?
Aaron Lammer: Well, I’ve got a couple of news items I wanted to run down and then I feel like we maybe talk about this too much on the show, but I think it’s actually circling around a lot of interesting issues, so I’d like to talk a little GlobalCoin.
Jay Kang: Okay, yeah.
Aaron Lammer: AKA Facebook Coin, AKA the vision of Marktoshi Zuckermoto.
Jay Kang: I don’t think there’s enough that we could actually talk about Facebook GlobalCoin.
Aaron Lammer: Well, I feel like it’s kind of our corner now too. I don’t feel like anyone else is really taking it as seriously as us.
Jay Kang: Really? Because it seems to be like by… Maybe this is just our breeding in the mainstream media, but like is there a Crypto project that’s more interesting that has greater implications on a lot of different things than GlobalCoin? I don’t think so, so I don’t mind talking about it all.
Aaron Lammer: Wow. Jay, I love the thrill. You come in with the controversial take and then say more on that later. I like it. Let’s before we get that, let’s talk about a little news this week. Brian Armstrong of Coinbase who I feel like we’ve moved away from making fun of individuals on this show, but we still reserve the right to make fun-
Jay Kang: Wait, we have? I don’t think-
Aaron Lammer: Well, I feel like most of we’ve already made fun of most of the people that we wanted to make fun of, and it’s not like new ones are being minted every single day.
Jay Kang: That’s true.
Aaron Lammer: Brian Armstrong is the gift that keeps on giving. I would say that he’s approaching Kyrie level like weird transparency where obviously he should not say things, and he continues to say things, and the things he says continue to be pretty weird.
Jay Kang: The Kyrie is the comparison for you? It’s not like Elon Musk or another super rich guy?
Aaron Lammer: The part that gives me Kyrie vibes is that I think he thinks in his mind that he’s being really reasonable. I think Elon Musk know he’s a kind of a lunatic and is kind of like basking in it a bit. Brian Armstrong I think is just like… For starters, just Tweeting a public response to an email you got asking to borrow money-
Jay Kang: That’s insane. Yeah.
Aaron Lammer: I just want to put the mega brake pumps. That’s in PR school-
Jay Kang: I think you have to explain. Explain what happened to the listeners first.
Aaron Lammer: Okay. I guess we don’t know who the email is from, but it’s someone who is I guess a friend of Brian Armstrong’s must have emailed him asking him to borrow money, which I’m guess is probably something that happens a lot when you’re the founder and CEO of a multi-billion dollar company.
Jay Kang: To a clarify a little bit, this was a somebody who he was very close with in his younger years. Had grown up I think with more or less, and they had-
Aaron Lammer: Oh, is that true? I didn’t know that.
Jay Kang: Yeah. They had drifted apart a little bit as Brian [crosstalk 00:05:54].
Aaron Lammer: I like it. You’re sketching out the story as we go. Brian Armstrong, he tweets in response to this email. He says, “Here are my thoughts.” He’s doing this kind of like notes in your phone style. I think it’s like an image of text. It’s like, he’s like, “I see this an opportunity to publish like 600 word response to you asking for money.” Just wow. If the brakes are not pumping in your mind as a PR person, they should be. Anytime you see like, “I wrote an essay in response to an ask for money,” that’s the time when a publicist should tell you, “Please give me your Twitter password for a week.”
Jay Kang: Or like, “What’s wrong with just sending him the email again?”
Aaron Lammer: Hot takes. We loved the email. We don’t think it’s great for Twitter, but we think it would be perfect for the Brian@coinbase.com address.
Jay Kang: This email is a great email, but I’m not sure if it’s a great tweet. What does he say to this friend who is asking for money?
Aaron Lammer: It says, “Number one…” He has three points to make for this person. “In general, I think giving money to friends is a bad idea, because it ruins the friendship. You and I aren’t super close lately, but I still consider you a friend.” Wow. One of the most backhanded pieces of advice ever. First of all, it’s a bad idea to give money to friends. Also, eh. You’re kind of borderline my friend.
Jay Kang: It does, it actually does, performatively contradict itself, because if he’s, “Eh, we’re not really friends, but I think it’s bad to give money to friends because it’ll ruin our friendship, but our friendship kind of doesn’t exist, but I still consider you a friend,” yeah, I think it’s basically just constructed to be as mean as possible. All right. What comes next?
Aaron Lammer: “However, I think there is an even more important reason not to send you money, which may sound cliché, but I think it is true. It will rob you of the experience of going through this on your own,” and then he goes on to say, “I finally paid down $18,000 in credit card debt at one point after many years, and it was an amazing feeling.” Wow, this one kind of burns also. In a way this one burns maybe more than the last one. This one is like, “I don’t want to give you money, because I want to see you bottom out. I want you to experience-”
Jay Kang: You missed the best part though. Let me just read it to you in the middle. The part where you skipped over is good too. “If I solve it with the stroke of a pen, you won’t have the pride of knowing that you eventually made it through on your own and took control of your own life, whether through bankruptcy, finding a way to pay it, whatever.” This guy’s in debt, I think, and he wants Brian Armstrong to help him out.
Aaron Lammer: I think in that parenthetical, at one point whatever was like working at a fast-food restaurant, and he liked deleted that.
Jay Kang: Or like taking classes at Khan Academy in like the Ethereum.
Aaron Lammer: Through one of our paid coin-based internships.
Jay Kang: My response to this, though, is I think it’s very Silicon Valley in the paternalistic, libertarian type of sense of extreme individualism. I just I’m so sick of this stuff at this point. There was a period of time where I felt like it was somewhat interesting to have people come out and argue for things like Austrian School Economics and Murray Rothbard. I’m not even talking about Bitcoiners here. I’m talking about people like Meg Whitman or Peter Thiel. This seems like the third iteration of it where it’s not really a radical idea of individualism, but it’s really just like kind of being an asshole. Do you know what I mean? The ideas have been whittled down, and it’s just like, “Yeah. I’m going to be an asshole to you.”
Aaron Lammer: It would be cooler if he was just trolling this dude. The part that’s embarrassing is that he takes this shit seriously. “Despite having a high net worth on paper, 99% of it is all tied up in illiquid coin-based stock at the moment, so it’s not like I have one billion dollars in cash.” First of all, I don’t think this guy was asking for a billion dollars.
Jay Kang: I bet this guy was asking for like $15,000 or something.
Aaron Lammer: Yeah. Maybe he’s asking for like a million to bail his failed company out or something. My guess is I would’ve put the over/under at like $50,000.
Jay Kang: I’d go severely under.
Aaron Lammer: You’re going to the under?
Jay Kang: Not severely over. I’d put it at like $20,000, and I think I would take the under.
Aaron Lammer: Then he goes on to say, “Anyway, I don’t know the answer, but there’s a ton of good content on this. Here’s one I recently liked from Naval. I try to listen to something self-improvement wise every day.” Wow. That one’s harsh too. It’s like going broke.
Jay Kang: What is Naval?
Aaron Lammer: Naval is Naval Ravikant, the founder of AngelList, who’s like a major crypto influencer dude and VC guru kind of dude. He’s basically like-
Jay Kang: You missed another good part which was, “Anyways, your writing is amazing, as usual. That was an epic note.”
Aaron Lammer: Wait, what if Brian Armstrong is a secret genius, and he’s just like zinging people and trolling them?
Jay Kang: “There are so many ways someone with your talents can generate wealth. I have confidence in you. Smiley emoji. Part of me wonders if you should start a blog, podcast, write a book nights and weekends, whatever. There is nothing stopping you if you want it badly enough.” Oh my God.
Aaron Lammer: Yeah. Good times. Good times. I mean, that’s what leadership really is all about in this world. This all says, “Hey, I’m not even that rich. I just own some stock in like the future of finance. I’m just a normal guy, and if you can’t do what I can do, probably your problem. Probably-”
Jay Kang: I just have these things that say they’re worth like a billion dollars, but who knows?
Aaron Lammer: Who knows? It’s not like there’s any way to sell them for Fiat.
Jay Kang: Yeah, there’s no way to like generate money from the billion dollars for these things that I have. I mean, good Lord.
Aaron Lammer: I wouldn’t even know how to turn them into cash if I wanted to. I mean, is there a business for that kind of a thing?
Jay Kang: Oh my God. Look, I find this note to be exceedingly funny when I read it on Twitter, or when I read somebody who had screenshotted it on Twitter, because we should say that Brian Armstrong deleted this almost immediately. Do you think this says anything interesting about the crypto space and the types of people who are leaders in it, or do you think that Brian Armstrong is just kind of… He’s just kind of a douche?
Aaron Lammer: I find most of this note funny and one part interesting, which is he describes himself as like only rich on paper and totally illiquid, which, once again, this is a deleted tweet. We have no reason to believe it’s true. If it is true, it would mean that Brian Armstrong was not himself a mega whale in terms of not coin-based wealth-
Jay Kang: Jesus Christ. You’re going deep.
Aaron Lammer: Not coin-based wealth, but I just assumed all these guys who were in bitcoin early owned a ton of bitcoin which almost makes them double rich. They’re rich in their stake in coin-based, and they probably have a huge stash. Now, Brian Armstrong has always said that he has more of his money in Ethereum than bitcoin. It’s possible that Brian Armstrong literally is a lot less rich than he was at one point. Like, his on paper wealth may have been more than halved.
Jay Kang: I don’t know. That would assume that he bought all of his Bitcoin and stuff at the top, which is like you know not realistic.
Aaron Lammer: You’re completely right. I honestly don’t buy this at all.
Jay Kang: No, I don’t by any of this. I think he could probably send this guy like six Bitcoin and not even think about it.
Aaron Lammer: The right thing to do is to loan him some Ethereum. Okay, Brian? Come on. Be a good guy.
Jay Kang: Have him work it off as like a serf in Toshi-world. Can I tell you the one part that I find interesting?
Aaron Lammer: What’s that?
Jay Kang: It concerns your future and my future. It seems to indicate that Brian Armstrong believes that starting a blog or podcast can generate wealth. Now, you and I are… I think we are proof that starting a podcast does not necessarily generate a lot of wealth, but do you think that… It does make me think that maybe Brian Armstrong has a very skewed idea of how much a podcast advertising generates, and maybe if we went to Coinbase, and we were like, “Listen, our mid-roll ad costs like $35,000,” he would be like, “That sounds totally reasonable. I wish that my friend would do this and generate wealth.”
Aaron Lammer: We can get it to you for a mere 100F.
Jay Kang: Exactly. Which we’ll then employ into our own serfdom, our own like Bitcoin feudal system. I don’t know. I mean, look, I feel like we bag on Brian Armstrong, and I’m glad that keeps giving us content to talk about.
Aaron Lammer: Yeah. I feel the same way. I think it’s instructive about what these people’s worldview is, what they’re going to do with the company. I get why Brian Armstrong didn’t want Bitcoin to win, and he imagines a world in which people are micro-tipping with Ethereum on blogs, podcasts, or whatever. All the stuff he says is actually how he imagines it’s going to go. I’m personally just kind of shorting Brian Armstrong’s vision of the internet at this point. I’m not a micro-tipping guy. I imagine Bitcoin as a store of big wealth that moves very infrequently, and the whole Ethereum universe, I am increasingly like, “I don’t really know that I’m ever going to be crypto-tipping people,” to put it that way.
Jay Kang: I’m not just disagreeing for the show. I actually disagree with you. I think the past six months or so, this is just not necessarily interesting to our listeners, but as I’ve-
Aaron Lammer: Sell it. Sell it.
Jay Kang: As I’m sure the listeners know, I do a wide variety of different content things, much like the things that Brian Armstrong is suggesting his friend do.
Aaron Lammer: You farm. You farm.
Jay Kang: I guess over this last past six months, I found it much, much harder to understand how I’m going to rely on big companies and some of the ones that employ me currently or pay me to do things, which I just don’t understand how that’s going to continue at the rate it is right now. You know? I do see a lot of people who live off of Patreon or whatever, and I do think that crypto will have some say in that space of sort of micro-tipping, micro-subscriptions. I think I am too old and maybe too stubborn to actually enter that world fully, but I do find it interesting. I guess I’ve found it more and more interesting as of late as more and more media places go under, and as most of the video content world has been monopolized. It has to be some place for alternative things. I don’t think that micro-tipping is a fantasy. If Ethereum works because of it’s smart contract structure, then I can see it being a viable option.
Aaron Lammer: I’m going to agree with you, and then I think we have shifted our basic idea of what consumer product we’re looking for as sort of a front runner from a Venmo type experience, which kind of exists now but no one’s using, to more of like a Patreon type of experience. I am definitely interested in when someone nails that to a degree that it’s actually functional and fun and people are using it.
Aaron Lammer: I always imagine it sort of the way I imagine a private BitTorrent community. When you join a private BitTorrent community, you usually get given like 10 gigabytes of downloads free, and then you have to seed a much as you download. What I imagine is you’ll join a sort of Patreon-like thing. You’ll be able to give some tokens away free, and then at a certain point you start paying creators, and creators are able to pay other creators. I’m kind of interested in that.
Jay Kang: That’s like almost like an internet existential question that I myself grapple with quite a bit, which is that this era of massive platforms, which is relatively new after about what 30 years of the internet mostly being micro-communities, right?
Aaron Lammer: Sure.
Jay Kang: Where everybody is on YouTube or everyone is on Twitter, and we’ve ceded all this power to these platforms. You see it in all types of controversies where people are litigating the terms of service of YouTube and trying to break up other communities, et cetera, et cetera. Some of those communities being toxic and terrible. I’ve always just assumed that there would be a return to those types of micro-communities. My friend Max Read wrote a piece recently that I thought was interesting New York Magazine about how, group texts and group chats, how they’re different from Twitter and big messaging platforms. I thought that that was an interesting thought, because I find that most of my communication now happens via group text even though I do tweet quite a bit. I don’t understand why money couldn’t also, on the internet, couldn’t also follow that type of model, and why things couldn’t just re-splinter back. It almost feels inevitable as people start to get more and more frustrated with the centralized power.
Aaron Lammer: Yeah. It’s interesting. I’ve heard the term Dark Forest used, and I think it’s been used to describe both podcasting and newsletter writing. They’re basically media that can be directly distributed with no or minimal centralized authority. I mean, yes, newsletters are usually sent through MailChimp, but there are actually ways to send out a newsletter from your own server or whatever. Same thing with podcasting. You can basically start a podcast feed for free, and it’s just an RSS pointing you to a bunch of mp3 files. I think it’s no surprise that those two formats, as well as being career advice from Brian Armstrong, are the primary crypto media. I think that newsletters and podcasts seem to move the needle the most and be like where the community really is.
Jay Kang: On Twitter too, though.
Aaron Lammer: Yeah, it’s true, and Reddit. I mean, there’s a lot of things that complicate that notion, I guess, but I do think that crypto has a strong affinity for independently produced media, and I expect-
Jay Kang: Oh, for sure. Yeah.
Aaron Lammer: … all of that to be kind of where things take off in terms of actual commerce happening in a Patreon kind of way or a selling media directly kind of way. It’ll be pretty interesting. I’m really excited about that kind of media. I mean, it’s one of the things that’s exciting to me about being involved in podcasts right now. When I see what’s going on with like a YouTube right now, I’m like, “Man, I kind of like that podcasting is not something I do on YouTube. I just record this podcast, and then I upload it, and that’s what it is.” It’s not-
Jay Kang: Yeah, but we are held captive by like Apple, right? The podcast store.
Aaron Lammer: Yeah. Really Apple is not actually… We are because they own such a huge amount of the market, but it’s completely possible to distribute a podcast without involvement in Apple. It just wouldn’t appear on all the search and everything. Yeah, you’re probably right. They don’t see it.
Jay Kang: Yeah. For sure. I’m not trying to argue with you here about it, but you can also send videos out without YouTube, it’s just there is a centralized podcast hub that is 90% of podcast distribution.
Aaron Lammer: I wouldn’t be surprised if we do see… I mean, we’re already seeing a sort of decentralized YouTube products. I’m kind of like, “Hey, whatever happened to video podcasting?” You remember video podcasts? Get your iPad Mini going, and you can download a video podcast? Maybe that’s the solution. I mean, these are all skirting around the same issues that Satoshi was talking about. His evil was PayPal, but whatever you put into that central authority role, whether it’s government or PayPal, or it’s YouTube or whatever, everyone’s basically trying to figure out how to do things that never touch a central spoke.
Jay Kang: Yeah. It’s been difficult so far. Even within crypto with its gospel of decentralization, we still don’t really have a functional decentralized exchange, which seems relatively easy compared to making a fully decentralized YouTube or something like that.
Aaron Lammer: I don’t even know if decentralized exchanges really propose to actually solve that problem, because decentralized exchanges, at least so far as they’ve existed, don’t touch Fiat. They’re just like ways to take crypto and change it into other crypto. It still seems like this Fiat on ramp bump is a huge issue, and it brings me to our theme for this week, which is GlobalCoin, which I have been secretly pushing the idea that GlobalCoin is actually going to be the Fiat on ramp that makes crypto go big. We know a lot more about GlobalCoin than we did last time we talked about it Jay, so there’s revelations to drop in this show.
Jay Kang: What do we know now about GlobalCoin that we did not know a couple weeks ago?
Aaron Lammer: We’ve always known kind of that it was some kind of a stable coin, right? We’ve never had like, “Well, GlobalCoin’s going to start at .00001 Satoshis, and we’ll just see what happens.” It was always going to need to be tied to something real world, I think. Right? I don’t think people would just put their dollars into a free floating Facebook coin, do you? It’s an interesting question.
Jay Kang: No. They want people to use it, so it has to be a stable coin. They have to inspire faith that it’s not going to crash more than anything. If it just went up, I think it would be okay, but they need it to be stable.
Aaron Lammer: Brian Armstrong has said that you should keep all charity givings in crypto, because it can only go up. GlobalCoin, unlike the basket of cryptos in the coin-based charity quartet, is tied to real world Fiat currencies. It’s not going to be tied just to the dollar. It’s going to be tied to some kind of average of a certain number of world currencies. Theoretically, it’s even stabler than Tether I guess you should say, because it’s not susceptible to crash on the dollar crashing it or a run up in the dollar making it volatile.
Jay Kang: Yeah, but it also is open to other currencies, which might crashing as well.
Aaron Lammer: We also saw in that whole BitMEX thing that when you have a whole basket of currencies that define an overall average price, people generally attack the weakest one if they’re trying to manipulate that. Not that I think people are going to manipulate Facebook prices by altering world currencies, but Facebook is that big.
Jay Kang: Yeah. For sure.
Aaron Lammer: What else do we know? They may sell it at physical locations in some sort of an ATM like manner.
Jay Kang: Do you actually get a coin? Is there a physical coin that the ATM spits out, or do you get a barcode or something like that?
Aaron Lammer: I think the physical refers to the ATM itself, because I would assume that it was ingesting money, but I guess also potentially maybe you can withdraw Fiat with your GlobalCoin holdings from an ATM? I don’t know. It’d be pretty crazy. You get to an airport, and you’d be like, “Hey, I need to take some money out in the local currency.”
Jay Kang: Why would you need to do that though? Couldn’t you…
Aaron Lammer: It’s a pain to take out. If you have US dollar bank account, and you show up in Nicaragua, and you’re withdrawing money, it’s not great experience.
Jay Kang: Yeah, but that’s what I mean. The only application I could think of was for travel or moving to a different country or migratory patterns. I could see that way where you might not even have a bank account. You certainly might not have a credit card, but for the imaginary scenario of you walking down to the coffee shop near your house and using… You don’t need it for that. Yeah, sure. That’s interesting then that it means that they actually are thinking about international and also thinking probably about travelers.
Aaron Lammer: Jay, what am I passionate about?
Jay Kang: Keyboards?
Aaron Lammer: International bank transfers.
Jay Kang: That’s right. That’s right. You are passionate about keyboards, though.
Aaron Lammer: That’s true. That’s another thing I’m passionate about, but international bank transfers are a passion and a hobby and a career for me. So far, that’s been defined by Ripple Army that Jay joined a couple weeks ago.
Jay Kang: Still in it. I’m still in.
Aaron Lammer: Do you feel like GlobalCoin is coming for your Ripple, because this is basically what Ripple’s been saying it’s going to do all the time? Allow you to make international bank transfers.
Jay Kang: No. Not really, and the reason why I’m not is because I think that this is a peer to peer type of thing, right? It’s not like a B2B thing, which I think Ripple and XRP sees itself more for. I don’t think that XRP really thinks like, “Oh, well if you go and you need to get like a lunch somewhere, let’s say you go to like Kuala Lumpur or something like that, and you’re like, ‘Oh, man, I’m out of traveler’s checks or something. I’ll just Ripple some of my money from the United States to a bank account in Malaysia,’” that’s not going to happen. I don’t think that’s what they envision. I think they envision it for being businesses sending money to other businesses, banks sending money to other banks, right?
Aaron Lammer: Right.
Jay Kang: I think that’s a very different proposition than Facebook coin, which I think is, even the ATM thing that you told me about, it really does sound like something like, “Oh, well I’ll just take $200 US at this airport Facebook coin ATM, and then I’ll just load up my Facebook coin account, and I’ll just use that instead of carrying the cash around and having to convert at whatever rate that’s in the airport currency exchange.” I think that they’re a little bit different use cases.
Aaron Lammer: In a way, you’re kind of positioning GlobalCoin as a consumer Ripple, right?
Jay Kang: Yeah.
Aaron Lammer: I kind of like that. Like, look what is the big advantage that Facebook has here? There’s a lot of people who have Facebook account in a lot of countries, and a lot of the links of humanity all over the world across international lines are basically managed through Facebook. Facebook messenger. WhatsApp. Something in the Facebook archipelago. It makes a pretty good amount of sense to me that if you are working as a nurse in Saudi Arabia, and sending money back to your family in the Philippines, and everyone’s already on Facebook, everyone’s already linked on Facebook, you would walk into a mall somewhere in Saudi Arabia, put part of your paycheck as cash into an ATM, zips onto your Facebook or WhatsApp account, and it you send it to your family. That’s more believable to me than any case we’ve heard of someone else making that case in crypto, including Bitcoin.
Jay Kang: Yeah, I know. I totally agree with you, because the question before when we were looking at a remittances, which we talked about a lot at the beginning of our show, and even when I worked at Vice I did a lot of research on this for a segment that we ended up not doing because it was going to be actually… It wasn’t really worth it for me to go to Hong Kong and spend a week there for me to figure out how Filipinos there were using international remittances. I still think it would’ve been a good story, but it was like…
Aaron Lammer: That sounds great.
Jay Kang: They were like, “Well, can you do four other stories in Hong Kong?” That’s when I was like, “No.”
Aaron Lammer: Yes, but the other three are all food stories.
Jay Kang: Yeah, they are me eating different types of like weird dumplings that have like fish eggs in them and telling you whether they’re good or bad.
Aaron Lammer: Top dumplings rundown. Top buns rundown.
Jay Kang: Exactly. The issue with the remittance thing was that you didn’t actually know if you were getting scammed or not. Western Union is a scam, right? These remittance companies that are much more dark market, you are always afraid of getting scammed. In terms of trust, say what you will about Facebook, and I feel bad equating Facebook with trust in any sort of way, but a GlobalCoin that is pegged to four different currencies that is running through Facebook servers, they have zero incentive to rip you off. Right? They might take every single bit of information that you have and put it in their database, but you sending like $80 back home or $300 back home means absolutely nothing to them where it might mean something to like a remittance company that is a little bit shady. That is a type of transparency that doesn’t exist in any other type of existing crypto remittance ideas, which are mostly just like layers put on top of… They put a layer on top of a general crypto wallet exchange, and then you just use it, but you don’t really know.
Jay Kang: It also takes away the idea that maybe if you send $600 home during the height of the Bitcoin mania, and it goes to your family, and they need it to pay for everything, and then it’s worth $150 two days later, that that doesn’t happen. I’m sure that scared a lot of people off from using Bitcoin and other cryptos for remittances. For all those reasons, I agree that that is an incredibly compelling case for Facebook GlobalCoin.
Jay Kang: Can we talk about the name a little bit?
Aaron Lammer: Your family could go 3X on some Ripple. We can definitely talk about the name a little bit.
Jay Kang: What do you think about the name? I find the name to be so weird. GlobalCoin?
Aaron Lammer: GlobalCoin. I’m going to say that unlike Ripple, which I actually think is a crap name-
Jay Kang: Oh, I think it’s a good name.
Aaron Lammer: If this is like a Terminator II style movie where crypto destroys the world, like our going across feudal sand swept Europe where we’re trying to get to the Zappo bunker movie, the corporation that brought it all down is GlobalCoin.
Jay Kang: Yeah. That’s true.
Aaron Lammer: GlobalCoin is like a 1980s future movie. It was like, “All the world’s governments failed in the face of GlobalCoin. No one paid their taxes anymore. They just held their wealth in GlobalCoin.”
Jay Kang: I can picture this like art deco gigantic fortress building with like lights shining off in the giant G. Like, “Go, you’ve reached GlobalCoin headquarters.” Then inside there’s like Marktoshi Zucker.
Aaron Lammer: Marktoshi Zucker.
Jay Kang: In a bubble bath like laughing evilly. Yeah. It sounds evil. I guess that’s my only point. Look, I don’t want to tap into nay sort of tropes about globalism or anything like that, but that sort of stuff does factor in for a lot of people. This fear of globalism that’s rampant among the world right now, and its sort of antisemitic implications and all of that. Now, none of that is a good reason to not call it GlobalCoin, but it does sound like it’s playing into that, doesn’t it?
Aaron Lammer: Well, so first of all think in the movie version of this, Satoshi Nakamoto has been captured by Mark Zuckerberg and is like imprisoned alive under Facebook headquarters, because if there’s one person who would have inside information that might tell you who Satoshi Nakamoto is, it’s on a Facebook server. Now, I know that makes zero sense. Satoshi was like a totally paranoid OPSEC person, but if he did slip up in one way, and this is only in the 1980s version of the story, I think it would be like, “Except for that one message I sent my granddaughter on Facebook and brought me down. Now I’m like trapped in like an intricate web of deception with Mark Zuckerberg where he’s having me design new coins in the basement of Facebook, and GlobalCoin is the product.”
Jay Kang: Yeah, but has planted like a bug in GlobalCoin? Is that part of the plot, where he’s like… Like at the end of act two, he’s like, “Listen, there’s something I haven’t told you about GlobalCoin”? Maybe we should write this movie.
Aaron Lammer: It’s got some kabbala numbers that bring about the apocalypse coded into it, and they’re on the blockchain and can never be taken out.
Jay Kang: What do you think the price of Bitcoin has to be for people to wan crypto movies again?
Aaron Lammer: Got to be over 10,000. We’re kind of [crosstalk 00:34:56].
Jay Kang: Way high. I think it needs to be like $40,000 for people to want crypto movies again.
Aaron Lammer: You’re probably right. There is actually a weird Satoshi tie-in to this story, and this is probably the most unexpected part to me. On June 18th, which is next week, Facebook will be presenting the whitepaper for GlobalCoin.
Jay Kang: Oh, God.
Aaron Lammer: Now, GlobalCoin, I know you’ve been thinking about GlobalCoin as just something that runs on Facebook’s servers, and that’s the sort of comforting version I think, but as far as I can tell, and not a ton on information is out about this, GlobalCoin is actually a crypto. It actually will run on a blockchain. They’re going to present the ideas behind that blockchain in this whitepaper. It’s not actually launching shortly. It’s launching next year, but the ideas are coming out on June 18th. All we know about it is there is a real blockchain. For $10 million, you can purchase the right to run a node. $10 million.
Jay Kang: What do you get for running a node? Do you get transaction fees? Can you recoup that money?
Aaron Lammer: I have no idea. It definitely keeps out the riffraff. I’ll say that much. It’s sort of like we’re throwing a conference on this remote Swiss Alp location, and you need a private plane to attend the conference. You’re self-selecting pretty heavily right there when you say it costs $10 million to run a node.
Jay Kang: Yeah, but you’re also limited the market for nodes quite severely.
Aaron Lammer: The other part is that they don’t want to run this blockchain themselves. They want to create some sort of an independent foundation to govern the GlobalCoin chain. This is kind of the first step in Facebook dipping their toe in establishing an alternative government or at least establishing some sort of a Facebook created foundation that acts upon a project that they sort of say is theirs but sort of say, “Hey, it’s just out in the wild.”
Jay Kang: Do you think we can get on that board as the hosts of crypto’s fourth most popular crypto podcast? I think we’re at fourth. I would be comfortable saying we’re at fourth.
Aaron Lammer: I think that’s an exaggeration, and for that reason I like it. That’s the kind of talk that’s going to get us on the GlobalCoin board. I think that we have a decent chance so long-
Jay Kang: We’ve talked about Facebook coin the most.
Aaron Lammer: We’ve definitely taken it more seriously than anyone else, and I think we should be rewarded for that. I wanted to talk about one other thing that you brought up there, which is you brought up the word of trust and do we trust Facebook? I feel like there’s a kind of trust that’s like the trust talked about in the Satoshi whitepaper, and then there’s the kind of trust like, “Do I trust you not to do something nefarious?” They’re kind of different kinds of trust.
Aaron Lammer: We’ve always said, “We kind of trust Coinbase to exist, so we use Coinbase because they’re not going to fold up. They have a lot of money.” I very much trust Facebook to exist almost as much as I don’t trust Facebook. In this case, I actually think that’s kind of bullish. Thinking that Facebook is kind o nefarious but not going anywhere is basically what you want in a banking partner.
Jay Kang: Yeah, but also it’s like for when it comes down to remittances or very small transactions internationally, the trust is basically like, “Do you trust Facebook to not care enough to act individually and independently maliciously towards you?” As opposed to like the guy down the street who keeps trying to get you to use his crypto remittance business where you’re like, “I don’t trust that guy in any sense.” I think the size of it will probably inspire some trust.
Jay Kang: Let’s say that you go… This is the example we always use, but let’s say that, Aaron, you and your wife had decided that you want to go to Laos, and you get there and you’re like, “Listen, I want to be adventurous this time. I want to use crypto.” You get to the airport, and there’s a Facebook ATM, and then there’s this guy with like six ledge nanos standing around being like, “Hey, look, I’m going to sell you a bunch of Monero or something like that.”
Aaron Lammer: These are pre-loaded ledger nanos.
Jay Kang: Right. All you have to do is stick it in the USB drive… Of course, you’re not going to use that. You know? The remittance business, all this sort of stuff, is very complicated. It is very predatory, and you do kind of have to do this calculation of harm. Is it better to give Facebook the power to do that and make it so that people don’t have to pay 20% of their money to Western Union and all these predatory places as long as you’re relatively sure that this is going to work, or it worse to more empower Facebook? I don’t… Those are the types of questions that people like you and I ponder, but they are not the types of questions that the people using this service will ever ponder. They’ll just be like, “Yes, I don’t want to pay 20%,” as they should.
Jay Kang: I don’t know. I still find it extremely compelling, even if I find it somewhat distasteful and scary.
Aaron Lammer: I mean, when you meet crypto skeptics, or when you are a crypto skeptic in your case, or you meet people who just don’t know much about or care much about crypto, and you’re like, “Well, here’s Bitcoin,” they’re like, “Why would you want that? You could have US dollars. They’re backed by the government. The US government’s not going anywhere. Who knows where this Bitcoin shit is going?” I think that’s a valid criticism.
Aaron Lammer: If you’re talking about GlobalCoin, however, does anyone really think Facebook’s going anywhere? Facebook is basically being investigated by the government right now. There’s huge calls to break it up, and the market’s kind of like, “Eh, we’re a little worried about Facebook, but we’re not terrified.”
Jay Kang: Yeah. Yeah. I don’t know. I think about this in terms of like investing too like in the stock market where it just feels like there’s so much alarm every single week, and then these stocks like Facebook take a bit of a dive. They took a bit of a dive recently with all this antitrust stuff that came out. Then it snaps back. You can argue all sorts of things about why it’s snapping back, and how it’s not real, but I just have a very hard time at this point believing that the hegemonic power that these companies have will ever be dissipated, and that they won’t figure out ways to either steal other ideas or just buy them to keep adapting.
Jay Kang: What evidence do we have like 20 years now into this tech monopolization era that that’s going to change? When it does change, it’ll probably change cataclysmically and quickly. There’ll be some sort of revolution, but I don’t know. I just the more it grows globally, the less chance that even that happening in the United States really matters.
Aaron Lammer: Facebook going to zero kind of sounds like Bitcoin going to zero. I’m like, “Yeah, it could happen, but I’m not betting on it in the next couple years.”
Jay Kang: I’d be much more… I think that the risk of Bitcoin going to zero is much higher than Facebook going to zero.
Aaron Lammer: I’m agreeing with you, and I’m sort of like, “Okay, so we’ve made this mega case for Bitcoin for over a year on this show, right? What’s our go-to best argument?” I think it’s always the Venezuela case, the Zimbabwe case. “Hey, your country’s currency is going into free fall. What do you do?” This isn’t like a theoretical question. It’s something that just happens, and it’s happening, and you got to act. You can’t not do anything. You can not do anything, but you money’s basically going to be worthless.
Aaron Lammer: We’ve already seen what enterprising people do in those crisis situations with Bitcoin, which is basically set up in a coffee shop and do Local Bitcoins transactions with people. Oh, Local Bitcoins banned cash transactions. I don’t know if you saw that.
Jay Kang: I don’t know. [crosstalk 00:43:12].
Aaron Lammer: Twilight of the McDonald’s parking lot bitcoin transactions.
Jay Kang: Listen, I’m going to be at the Starbucks. I’m going to be…
Aaron Lammer: Maybe we root out those kind of transactions in America, but we’re not going to root them out in places where people are desperate, where people are migrating, and when people really, really have a strong need. I can easily see a future there were GlobalCoin is more competitive in that environment than Bitcoin. In fact, if someone called me, and was like-
Jay Kang: For sure. It’s more stable at least. All you really want in those situations is you’re not looking to 50X. You’re looking to 1X exactly. You’re just looking to keep your wealth, and so you have a coin that’s pegged to five other currencies and is relatively stable, or you can go get a USB drive full of Bitcoin, and the other one you can use almost anywhere. If you move from like let’s say you move from Venezuela and you move to Mexico, or you go to Aruba or something like that, lot of people around there are on Facebook. A lot of vendors that you’ll interact with are on Facebook, and so your money will retain a lot of value in terms of exchange for goods and services.
Jay Kang: If you can take it out in the local currency of the new place that you’re in, then that’s a real thing.
Aaron Lammer: Also, it’s like let’s just think about these two things as user experiences. The Bitcoin experience is, “Okay. So here’s your private keys. That will unlock the things on this wallet. Then you’re going to need to go sign up with no identity for a Fiat Bitcoin exchange in this other country and get your money back.” Or, it’s like, “Well, you can load up your Facebook account, and then, whenever you get where you’re going, try to remember your Facebook password.”
Jay Kang: Yeah. Yeah.
Aaron Lammer: Pretty easy.
Jay Kang: I’ve been having this thought a lot about crypto recently in terms of decentralization versus something like XRP or something like much more compelling. I think Facebook coin, GlobalCoin. It’s that like, I am interested in decentralization as a concept. I think that you and I, in addition to putting out a good argument for global stability, had also put out a reasonably good philosophical argument for Bitcoin as a decentralized currency that has some anarchic properties could help in all sorts of situations, but also philosophically is more in line with what we believe in, right?
Aaron Lammer: Sure.
Jay Kang: I wonder if Bitcoin’s fate ultimately is going to be sort of like a bourgeois type of rebellion if that makes any sense. If it will be people who are comfortable enough to think about money in that sort of way and that those are the people who will champion Bitcoin. It will sort of be like this discontent, upper middle class group of people who are interested in it philosophically and are always trying to yell at the rest of the world who just want to pay their bills to switch over? That’s kind of what it’s like now, but that doesn’t mean that the core tenants of the blockchain and cryptocurrency can’t just be siphoned off and turned into actual usable money. I just don’t know if the Bitcoin Maximalists are even going to be able to convince people who actually need to use this stuff that decentralization matters over ease and security and safety.
Aaron Lammer: Let me get this straight. I think what you’re arguing is there’s going to be a scenario in which people are like, Americans are like, “You can undermine this authoritarian regime. Defund the economy and put your money into a decentralized crypto. Don’t pay for your government.” Then someone in this country where there’s an authoritarian regime is like, “I did. GlobalCoin.” They’re like, “No. No. No. Not GlobalCoin. Bitcoin.”
Jay Kang: Exactly. Exactly.
Aaron Lammer: They’re like, “Well, I have Facebook on my phone.” They’re like, “No. All you have to do is download this Bitcoin app.” He’s like, “All my phone has is Facebook.”
Jay Kang: You how punk is the same way? Punk mostly starts with like upper middle class kids who are like super discontent, and you have all these movements in the suburbs of DC or the suburbs of Boston. That’s sort of where the hardcore scene is. Berkeley I guess had one as well. Right? Like a hardcore scene, and that it is-
Aaron Lammer: Berkeley’s a little different. It’s less hardcore based. It’s got more of a ska flavor over there on that side of town.
Jay Kang: Sure, but most of the people who start that are like middle class, upper middle class kids. It’s this sort of intense rebellion. I think the Bitcoin is kind of like that in that those people will just be sneering that everybody else listening to Mariah Carey or whatever, but most-
Aaron Lammer: This take is sizzling hot. I did not see this coming.
Jay Kang: There’s an even hotter version that punk that deals with malcontent, disaffected upper middle class youth who get indoctrinated into a certain type of monolithic thinking, but I won’t say it out loud, but I’m sure you can draw connections.
Aaron Lammer: I have one final question then, and maybe this is a good place to end, because I don’t think we’re getting hotter. If Bitcoin is the elitist, hoity toity decentralized coin, does that mean GlobalCoin is for the people?
Jay Kang: Yeah. That’s what I’m saying. It’s like generally… I don’t think it’s for the people in the sense that it is great for the people although I think it’s probably better for the people than Western fucking Union.
Aaron Lammer: Cold beer, a cheeseburger, and my GlobalCoins. Don’t come for my GlobalCoins.
Jay Kang: To further extend into Berkeley lore, right, Alice Waters has written many, many books, the chef of Chez Panisse, about how the key to cook is just, “Go to your local farmer’s market and buy a bunch of really fucking expensive and perishable items. Then use all of your free time to fucking make your own stock.” It is wonderful when you do that. I sometimes do it as somebody who has a lot of free time and lives like a block away from a farmer’s market, but it is not in any sense a widely popularized thing that could happen. Although Alice Waters and many other people will be like, “No, this is totally possible. All you need is community gardens and stuff,” it’s just not going to happen. People are just going to go to fucking Safeway. I think that-
Aaron Lammer: Wait a minute. Wait a minute. I just want to keep recapping your argument. YOu’re basically saying Bitcoin is farm to table. GlobalCoin is like reheated microwave meal?
Jay Kang: Yeah. Exactly.
Aaron Lammer: TV dinner?
Jay Kang: Yeah. GlobalCoin is basically like chicken nuggets.
Aaron Lammer: I did not think this take could get any hotter, but then you put it in the microwave and brought it to a full heat.
Jay Kang: I mean, look, we have… While feeding your child for example, right, I have these nights where I can really put a lot of effort in and have a very balanced meal for your kid, and sometimes you’re just tired or you don’t have time, and you just throw some chicken nuggets on there, and they’re 10 times happier. You know?
Aaron Lammer: My family eats tacos every night. I just buy a bunch of shredded chicken, and I just keep putting it into tacos.
Jay Kang: Really?
Aaron Lammer: I will say just to-
Jay Kang: That is GlobalCoin.
Aaron Lammer: I’m totally Global. I’ve never denied that I’m GlobalCoin. In fact, it’s a great disappointment to me that I cannot speculate on GlobalCoin because if all of our positive predictions about GlobalCoin come true, how are and you going to get paid out? We really do need to get on the board.
Jay Kang: You can speculate on GlobalCoin.
Aaron Lammer: How?
Jay Kang: You can just buy Facebook stock.
Aaron Lammer: Yeah. That’s completely true. That’s a great argument by the way. If you want exposure to crypto right now, I would buy Facebook. Not investment advice.
Jay Kang: This is terrible investment advice-
Aaron Lammer: Though I just told you to buy a stock that’s pretty high right now, it was not investment advice.
Jay Kang: You literally said, “If you want to get exposed to crypto, you should definitely buy Facebook,” which I think actually is beyond advice. It’s more of a directive, but yeah. Please don’t listen to us.
Aaron Lammer: Let’s stop while we’re ahead and well before these takes cool down. Great conversation. I look forward to following the Facebook GlobalCoin launch with you.
Jay Kang: Okay. Great. See you.
The official podcast of Bitcoin crashes. Hosted by @aaronlammer and @jaycaspiankang. Mailbag/contact: email@example.com
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