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COIN TALK is produced in partnership with Medium and hosted by Aaron Lammer and Jay Caspian Kang. Press “Listen to the story” above to play the episode. (You can also subscribe on Apple Podcasts, Google Play, download the MP3, or email us at hi@cointalk.show)


Transcript

Doug Kim: Hey, how’s it going?

Aaron Lamer: We just got a scintillating peak into Doug’s apartment when his webcam mysteriously turned on. Doug is living the swinging Los Angeles bachelor life with a electric guitar slung over the couch.

Doug Kim: Yeah. Yeah.

Jay Kang: And a lot of cool looking computer, and recording, and music equipment. It reminded me of Martin Shkreli’s room. Did you ever see that?

Aaron Lamer: That’s not a compliment.

Jay Kang: I feel like he’s been misunderstood. The-

Aaron Lamer: Wow. Jay! The takes are just coming. We haven’t even gotten to crypto and the takes are hot.

Doug Kim: Is he in jail right now? He’s in jail right?

Jay Kang: Oh yeah. He’s in jail.

Aaron Lamer: He is in jail, yes, he’s definitely in jail.

Jay Kang: He was railroaded by the liberal media and is now hanging out in jail. But yeah, he has a similar, he had at least, I’m sure now his set up is different. But in his old apartment, he had a similar set up. A lot of guitars and recording equipment in the background.

Jay Kang: Swinging life of a pharma bro.

Aaron Lamer: I feel like you’re casting aspersions on Doug right now. Doug has never been involved in any pharmaceutical takeovers that we know about.

Jay Kang: Well what about the coins that Doug owns?

Aaron Lamer: Oh God.

Jay Kang: They could also be involved in untoward stuff right?

Aaron Lamer: Well, Doug, for people who haven’t been long time Coin Talk listeners is the alt coin enabler who jumped me and Jay into the gang.

Doug Kim: Sorry about that.

Aaron Lamer: He took us to the initiation. No I mean it’s been a great ride and in fact that’s actually kind of what I think we should talk about today.

Doug Kim: Sure.

Aaron Lamer: If you guys are down. So here’s what I think. Doug, when I talked you into coming back on the program I think your first question is, “are you guys just going to ask me if I’ve committed suicide again, which is not our intention here. I think we need to let bygones be bygones in crypto. Sort of let’s heal from the past so that we can move into a bright future. I guess I’m wondering if we can perhaps do an episode where we pep talk crypto a little bit and try to let go of the past. What do you guys think?

Doug Kim: What do you mean by pep talk crypto? Talk it into a bull run?

Aaron Lamer: Yeah, I think personal …you know how in that really bad Biggie biopic they’re like “we can’t change the world until we’ve changed ourself.” I think…

Doug Kim: You’re the only person I know who’s seen that.

Jay Kang: I never heard that one in my life.

Aaron Lamer: I think Puff says, well I don’t think Puff actually said that. He said that in the movie about Biggie, but I think I guess what I’m saying is that the personal is also always the larger narrative in crypto so maybe we can go through our own crypto history.

Jay Kang: I’m not sure that’s true. But okay.

Aaron Lamer: Well how are we…

Jay Kang: It seems more like the institutions, and a few criminals are the story of everybody, but let’s continue. I’m with you. Spiritually.

Aaron Lamer: Well, we’re not the criminals, and we’re not the big exchanges. We’re just three guys who bottle out of alt coins that we had no idea what they were. And Doug…

Jay Kang: Hey, I had some idea what alt coins were, I feel like.

Aaron Lamer: I should say we all bought alt coins based on Doug’s research. Which we didn’t actually…

Doug Kim: Which is based on a website called Blue Magic I believe which turned out to be a 19 year old just spamming links.

Aaron Lamer: That guy is back I wanna say.

Jay Kang: Let’s not give Doug too much credit here but Doug I will say you knew more than we did going in given that everything we knew was some completely distilled and ten percent version of what you knew.

Doug Kim: Even what I knew was, you know, marginal compared- I just think that we’re in a time where or in the past year we’re still in a time where nobody really knows anything. I feel like people make these over confident assertions whether they’ve been in crypto for a year or two years or five years. And sometimes I’m just kind of like, “do you really know?” I feel like nobody really knows what they’re talking about if that makes sense over the past year, that’s kind of what I’ve kind of gained.

Jay Kang: So you’ve come around to my sort of know nothing vision of crypto where nothing that happens has any correlation with anything out there and that we’re basically just watching something random spinning around and trying to construct narratives out of it. Is that right?

Doug Kim: I would say I’m not 100% there but maybe around 80% there.

Aaron Lamer: Jay would you say you’re a crypto nihilist? Would that be the best way to describe your views on crypto?

Jay Kang: No, I mean I don’t think it’s really nihilism but it’s more close to certain strain of post modern thinking that emerged after World War II that basically says that we should construct the narrative out of symmetrical events that happened that seem symmetrical in our mind is uniquely destructive and can lead to narratives like the one that took over Germany in the ‘20’s and ‘30’s.

Aaron Lamer: So, if I was gonna put this into Doug Kimian terms, I would say it’s like sitting at a poker table and flushes are the winning hand, several hands in a row. And you’re like, “Wow, flushes are really hitting tonight,” right? We gotta play those flushes.

Jay Kang: Yeah yeah yeah, no that’s basically it. So my thought is that generally people at a poker table know how poker and random odds and probability work but in crypto we really don’t know even the fundamentals of the game I think and so we’re fumbling around for any type of narrative.

Aaron Lamer: Right.

Jay Kang: And it could just be like the entire narrative is the illuminati created something and is manipulating the price and suckering us all in. Or it could just be that a whole bunch of different people don’t know what to do. I have no idea but that’s my general crypto take. It sounds like your crypto take is inching towards that.

Doug Kim: Yeah. No, I think I’m definitely going more towards that. I think in 2017 it was easy to get lost in the hype a little bit when bit coins go from 1,000 to 20,000 in a year, you’re just kind of like, “Oh, everything is awesome.” Oh yeah, so the…we could see this hitting half a million a coin easy within the next few years, but I think the sobering of 2018 kind of was like, “Oh this is, I mean, we’re still not there yet in terms of adoption and overall use of crypto currency. We’re still in that point where it’s still a speculative asset and we’re still not quite sure how to price these things. It’s either gonna be really really useful in which case these coins believed to be worth millions of dollars, or…

Jay Kang: Would they though? As like a utility token for a really useful company might be really worth anything now.

Doug Kim: Oh yeah no. I’m…

Aaron Lamer: He’s talking about bit coins Jay…

Doug Kim: Yeah I’m talking about…

Aaron Lamer: …bit coins.

Jay Kang: Bit coins, okay yes. I agree that if bit coins are useful than bit coins are worth more.

Doug Kim: Right.

Aaron Lamer: I just like people to know that we use people s at when pluralizing bit coin and we always will, so don’t send us any email about it.

Doug Kim: Yeah, even when I say I have one bitcoin I will use the s. Just to-

Aaron Lamer: It’s part of my fundamental belief in bitcoin stock art, I see a lot of pluralization in bitcoin stock art and I feel like that that’s cannon, you know? Like photo of kid with many bitcoins, that’s how I think of it.

Jay Kang: Yeah, with a gigantic orange bitcoins logo.yes, so Doug, we like to have you on the show when we want to talk about the alt-market, not much has been going on there, I guess there’s been a slight, sort of, pick up. But, before wee do that, Aaron and I talked about something on our last show which I though was an interesting topic of conversation and we discuss a little bit online with you, but we want to get your take-

Doug Kim: Sure.

Jay Kang: For the listeners, which is, something like Civil, right? Which went through a very difficult time recently, but actually had a product and even had like, you know as part of a journalism outlet, a hit essay that came out that sort of tore up the internet.

Doug Kim: Mm-hmm (affirmative)

Jay Kang: Or project like Augur which, you know despite it’s flaws, actually exists. Do you think in the alt-market at this point that it is actually harmful and bad to have a product. Like, do you think it’s better to just be like a white paper and a bunch of academic bullshit?

Doug Kim: Well yeah, I mean you have like Maximalist all saying that pretty much every alt is a scam to try to scam you out of your bitcoin. So, I am kind of leaning more towards that kind of idea where there will be crypto projects that succeed, but maybe not, you know 2,000 of them, which I think there are currently right now. So yeah, when it is kind of like this white paper and theoretical thing, you know it’s easy to feel like “ oh yeah, it’s such a potential” whatever, but when you have a finished product like Augur, or something close to finished and kind of like the next step is kind of like “ oh okay, now how do we bring this product out to market and whose going to use this” then it becomes the sobering reality where it’s like “oh, we don’t know quite how to get to the used case part yet”. But I think because of the shroud of like- kind of- you know “oh this is a new project, oh this is going to change whatever” people- it’s easier to buy into that hype.

Jay Kang: Sure, like there’s just more to criticize. You can see it a little bit better. And so, Aaron, the question I had- I don’t know, you’ve obviously thought about this a little bit more since we recorded. I mean, do you still feel that way? Or that the more you see of a project, probably the worse it is for ICO speculation?

Aaron Lamer: Alright, well I think two things about it. I don’t like to leave bitcoin out of the party. I like to talk about this in bitcoinian terms too. So, to me, this is Satoshi’s great strength. Satoshi is not here sitting around to hear criticism of bitcoin and have to justify himself, or herself.

Jay Kang: Right.

Aaron Lamer: Just in the ether, and this is the same with alt-coin projects where, if you have a real product, people can look at that product and go “hey, it doesn’t work” or “hey, it works and people are ordering black market assassinations on it. All of these problems come in when you actually do something.

Jay Kang: Right.

Aaron Lamer: It’s much much preferable to be in a position where you don’t really need to defend yourself, you don’t really need to defend your value because everything is coming in the future. So I think that the best alt-coins for investors are probably projects that everything still remains in their future, that also is true about the scale of alt projects-

Jay Kang: Do you think it’s still true though? Do you think that’s still true?

Aaron Lamer: Well I think that’s sort of what I want to talk about with our good friend Doug Kim here, is can the alt market still continue these kinds of narratives these were definitely the narratives when Doug jumped us into the alt coin gang. Probably about a year ago, maybe a little over a year ago.

Doug Kim: Yeah.

Aaron Lamer: A year an a quarter ago, and now we’ve seen these all pump up to really big valuations and then completely fall apart. Will people use the same game theory when they come back and do this again. Did either of you read that most recent Tony Shang piece? It’s about a game theory problem that I think is referred to as the “ Kaynesian beauty contest”

Doug Kim: Why don’t you explain it to us.

Jay Kang: Yeah.

Aaron Lamer: Okay, I’m going to do a really bad job, I may have just mispronounced- is that right? Keynesian? Keensian or Kaynesian

Jay Kang: Keynes- this is the third different way that you’ve pronounced it by the way.

Aaron Lamer: I’m trying to lock in somewhere.

Jay Kang: On an earlier episode you said it was “kahneesian”

Doug Kim: Kanyesian

Jay Kang: I’m not going to-

Aaron Lamer: My co-host is very uneducated.

Jay Kang: The only reason I didn’t correct you is because I wasn’t 100 percent sure myself about it.

Aaron Lamer: Yeah, that’s embarrassing. But, okay so here’s what it is. At some point in history newspapers held beauty contests where they put 100 photographs of women, I guess, in the newspaper. This is not a particularly woke, modern analogy-

Jay Kang: Sure it’s not a proud moment in the newspaper business.

Aaron Lamer: Remember, this is from the time of canes- kenes- Kanyesians

Jay Kang: Kanyesians.

Aaron Lamer: So, different people could vote on the winner and if you were in the cohort that picked the winner you got a cash prize. So, instead of incentivizing people to necessarily vote their conscience, most people were trying to guess what the other people in the contest would guess and that becomes the dominant logic, basically trying- I think you and I have talked about this, Jay, as trying to act like a stupid crypto buyer.

Jay Kang: Yeah.

Aaron Lamer: Trying to act like a junior high student.

Jay Kang: That’s like the basis of technical analysis right, isn’t it?

Aaron Lamer: Yes. That’s exactly- we need to call up Ledger status, coming in hot. So that’s, I think a pretty fair way to describe the first alt booms and that’s a fair way to describe when mass crypto tourism came to Coinbase and bought bitcoin then Ethereum then Litecoin, and if there had been anything else to buy they would’ve so- but there wasn’t so they jumped over to Ripple. These are all people in some ways trying to figure out what other people would do and putting their money there, and I think that’s most of the ICO market also is basically like “what kind of a thing would buyers like? I’m just going to buy the thing I think other people are buying. Doug, you’ve actually bought into ICOs-

Doug Kim: Yeah.

Aaron Lamer: You tell me where I’m wrong.

Doug Kim: No, I think like- yeah when bought into ICOs last year, this year, I barely did any research. I just kind of like- kind of follow people that I thought were offering, kind of like it- almost the same thing, where I was like “oh, these people are in it so they must know what’s going on” so I’m going to buy into these ICOs and so, yeah, I mean like it’s been pretty hit or miss. Some of them were kind of like misses due to my idiocy and not selling during the alt boom. I think I five-X’d on an alt that I bought an ICO that I didn’t sell and now fifty percent of my BTC value in it and so I’m like- so that one’s on me but there is just like a ton of hype, you know, that are around these different projects, or there was in I think like 2017. But you’re really not really seeing in 2018 really that much just because the market’s pretty much dead.

Jay Kang: I mean, the way that Tony describes it, with his beauty contest things, does seem to be how the market behaved last year, right? Like, I don’t think that that’s debatable at all, and I wonder if that’s- if you basically present any type of scenario where somebody has to pick something and has some incentive to pick. You know this is something like Jim Suroweicki wrote in part of his book Wisdom of the Crowds. How many steps are they going to take to come to a conclusion, and is the sort of sweet spot in the number of steps that you can predict someone will take. So, for example Aaron, when you and I looked at some of the coins that were spiking in over a period of time- we could actually kind of reasonably correlate them to google searches, right? And this is not like in terms of google search volume, but in terms of like when you would type in “what coin should I buy next” or like.

Doug Kim: Yeah.

Jay Kang: What coins are not on Coinbase, the same articles would pop up.

Aaron Lamer: Ripple was a very effective SEO of “what coins should I buy next” yes.

Jay Kang: Zcash was too for a while, you know, it was like sort of the big prestige alt were all on there, and then stuff like Cardana and stuff like that started floating up as things to buy. And so, if you just stopped there then you probably could’ve done pretty well for a while just predicting things off of that type of action.

Aaron Lamer: Sure.

Jay Kang: And not off of any sort of fundamentals. The reason why Doug is always interested me, not to talk about you in the third person. But, it’s because you- your approach is different, you’re the only person I know who actually looked into a lot of these projects when you first invested. And I found that so fascinating when I first started talking to you about this stuff because you’re like “oh, well the fundamentals of this are good, it’s a real company, this is a person whose a founder, this is his background, this like the use case for it, this is what the competition is” when you look back at all of that, do you feel like all that research- you know, do you think it paid off in any sort of way? Or do you think it was just justification for making a bunch of random bets.

Doug Kim: I think it was half and half, I think the alts that I chose- I mean luckily some of them were actually pretty resilient through some of the death spiral that happened in the past few months.

Aaron Lamer: Big day for Dcred a few days ago.

Doug Kim: Yeah, Dcred-

Aaron Lamer: Doug, do you dance when one of these finally gets listed on Buynance do just like do a little dance in your living room?

Doug Kim: I mean, I think I used to in 2017 when we were making shit tons of money. But nowadays it’s just kind of like a relief, like I’m not losing my shirt today. I think it’s just kind of like, yeah because I guess I chose quote on quote “ solid alt” I got- I still got wrecked but I got less wrecked. So, in that case I guess it quote on quote “worked” but-

Jay Kang: Yeah that is true.

Doug Kim: Yeah.

Jay Kang: I mean like, you’re not stuck holding sumo coin or any of the shit coins that I had for a while.

Aaron Lamer: Let’s not give Doug too much credit, Doug was holding some absolute dookie at various times.

Aaron Lamer: Doug, how much storm did you have?

Doug Kim: Oh my god, so at my- well, okay so I actually did get out of Storm at a BTC profits. So I’m really happy about that but yeah at its peek I had- oh my god it’s almost embarrassing, but I think I had close to a half a million dollars worth of storm tokens

Jay Kang: Nobody kid nap Doug, Aaron and I will come after you if you kidnap Doug.

Aaron Lamer: Okay, blind blind quiz, as a person who once had nearly half a million dollars in this, what is Storm?

Jay Kang: That is a dick question.

Aaron Lamer: Don’t google it right now.

Doug Kim: Alright-

Aaron Lamer: I will hear your fingers tapping on those keys if you start doing it.

Doug Kim: The way I understand it is storm is trying to gameify micro tasks. It’s like Postmates but for everything, you know? It’s trying to make everything into a micro task. So I guess you can use the whole system to decentralize many tasks. I don’t fucking know, I don’t-

Aaron Lamer: Okay

Doug Kim: I don’t care anymore.

Aaron Lamer: So in your portfolio, how much of the reason you held that much storm was belief in that product or idea and how much of it was a beauty contest in which you thought other people would come in and buy that idea from you.

Doug Kim: Oh, it was totally a beauty contest type thing, the reason I think I didn’t sell at that point was because it wasn’t on a quote on quote “legit exchange” like I think it was on, I don’t know-

Aaron Lamer: Hit BTC.

Doug Kim: Yeah. And so I was waiting for it to come on to Binance or whatever, and then-

Aaron Lamer: Yes.

Doug Kim: Because of that wait it dropped down, but then- I mean it did have a bounce but then I sold too early and then I- it’s just a whole thing. Anyway-

Aaron Lamer: Well I think getting listed on exchange is a total beauty contest phenomena. If there’s a single thing people are waiting for when they’re buying coins that are not listed on the big exchanges, it’s just- I mean a very solid investment hypothesis would be, buy things that are not listed on big exchanges, wait for them to be listed on big exchanges.

Doug Kim: Right, but you have to have a pretty good belief that it’s going to be listed on exchange.

Aaron Lamer: Well also, if you came in with that very reasonable hypothesis in, say November 2017, you still got 95 percent wrecked. It’s not like your hypothesis helped you at all knowing that it was just a beauty contest.

Doug Kim: Right.

Aaron Lamer: So, will you do that? If we start rebounding, do you think you’ll play the next alts runs the same way?

Doug Kim: I think if- so part of the other reason I didn’t get rid of my alts in time, I think I was waiting for the- I was like an idiot, I was trying to time it so long term gains would hit rather than short term gains, or whatever. But at the end of the day, yeah I saved tax money but I don’t have any money to save taxes on anymore, so. It was just like-

Aaron Lamer: Everyone’s just feeling bad for Doug, he’s like coming on the last series of a world series of poker event and is still net up in crypto?

Doug Kim: Yeah, so I’m still net up in crypto in terms of dollars, but I did lose BTC value along the way. That’s what irks me more I- actually it’s just kind of like losing BTC value, because, like you know I’m still like- when I first got into crypto like, you know early 2017 I think, my hypothesis was that, you know- I didn’t know about any of the alts or whatever but I was like bitcoin is going to be a thing, it’s going to be, you know-

Aaron Lamer: So I’m going to hold like three to five percent in bitcoin in my portfolio and go all in on storm.

Doug Kim: Yeah, pretty much. Yeah that’s what happens in a year, you go crazy when someone hands you the alt hopeium and you’re just kind of like “oh, I’ve got to get into this alt shit” you know? In April of- and May of last year it was just crazy, it was just kind of like every alt- it didn’t even really matter. You could choose- beauty contest or not, any alt was just five Xing overnight and you’re just kind of like ,”oh my god, I’ve got to get on this train” and then the train kind of exploded.

Aaron Lamer: Okay. Let me throw away beauty contest dummy hypothesis at both of you, I’m interested in how you’ll react to this Jay. And you tell me why I’m wrong. We know that a bunch of coins are going to get added to Coinbase in the next year. We have a pretty good idea, BAT, Zcash, three or four other ones all going to get added. And ZeroX already had a nice little bump as it finally got picked up, which everyone in the world knew about other than the block. So, why should I not just sort of take the Doug Kim prestige alt philosophy here and just evenly spread my money among those tokens, we know they’re the next listings and what is the most mainstream exchange in America. Jay, what do you think?

Jay Kang: Well, for some of them yeah, like you know, ZeroX, BAT, some of these coins that have been discussed for a long time about being on Coinbase, people like you or Ledger or, you know, smart investors. Not- but like, you know, Ledger-

Aaron Lamer: I wasn’t included in that smart investor list, was I?

Jay Kang: No.

Aaron Lamer: Because you’re going to dishonor on the other people on the list.

Jay Kang: Yeah, I know I know. I was thinking about Ledger’s feelings there.

Aaron Lamer: Smart investors like, Ledger, Doug Kim, everyone in here except Aaron.

Jay Kang: Alright, so let’s just say people who pay some attention to crypto still and who want to get an edge and who still are trapped in the mindset of last year’s thinking, right? That they are- the second they hear a credible rumor and it is backed up by somebody they trust that this is going to happen, the first thing that they are going to do is buy that coin, right? And I think that a lot of the action on this stuff is probably around rumors which is why, you know- and I do think that it actually is one of those buy the rumor sell the news type of stuff.

Doug Kim: Yeah.

Jay Kang: Because I just don’t know if the announcement itself and the increase in volume and trading because it’s on Coinbase really is doing that much. One thing that we don’t know, we do know how many people are on Coinbase, right? Generally, it’s a lot of fucking people.

Aaron Lamer: We know how many people are downloading it off of IOS and Android store we can at least triangulate its trajectory.

Jay Kang: The thing that we don’t know that Coinbase does know is how many people use Coinbase pro, which used to be Gdax, you know? And how many people are actively trading. We don’t know when the last log in for the vast number of crypto holders on Coinbase was, I imagine it is much less frequent than it was last year.

Aaron Lamer: We don’t know if noobs are buying Litecoin now or buying Ethereum now or bitcoin.

Jay Kang: Yeah we don’t know any of that stuff.

Aaron Lamer: Coinbase’s data alone could be worth so much to a trader.

Jay Kang: Oh yeah.

Doug Kim: Sure. But we don’t- you know, that would be illegal I think, but-

Aaron Lamer: I’m not proposing that I’m just saying, when I think of Coinbase’s value as a business. There’s a lot of different angles that have a lot of value.

Doug Kim: Sure, so I guess my point- endpoint is like, I do think it is baked in but I also think that I actually don’t know and I imagine that it is not actually by percentage that much of people who sign on to gdax/coinbasepro and sort of actively trade alts in that sort of way. I just- I don’t know anyone who does that still and I think while anecdotal evidence is not the best way to go about it I think for when we’re talking about, like “noobs and retail investors”, quote one quote, the fact that I don’t know one person who still does that is a little bit damning, don’t you ? I mean, Aaron you don’t know anyone who does that either right?

Aaron Lamer: I think it comes and goes. I do know a few people that do that, but I think It comes and goes in waves sort of like something like online poker playing to shout out you and Doug’s past. You know it seems like everyone’s playing for a while and then certain things change and people aren’t playing and I think that things like that can come back, although they’re probably not guaranteed to come back. I was going to put a twist on buy the rumor sell the news, which is, at this point could we say buy the boredom sell the excitement?

Doug Kim: Sure.

Aaron Lamer: We talked about that early on, like how do we read a very bored market? Where people are not interested of this anymore, because that’s what I hear when you say people aren’t playing alt markets anymore. Is that people are bored with this as entertainment.

Doug Kim: Yeah, sure I think I’m just more reacting to the idea that the affiliation with a place like Coinbase or any of these large things, you know even like the crypto, the bitcoin ETF where people are like “oh you can get it on your Etrade account” or “you can get it on Schwab”

Aaron Lamer: Yeah.

Doug Kim: That sort of stuff I just don’t know what the actual value is anymore, I know what it used to be but

Aaron Lamer: Fidelity announced it and we didn’t even talk about it on the show.

Doug Kim: Well I don’t even know what they announced, what did they announce?

Aaron Lamer: They announced that they’re going to do crypto exposure on fidelity in some form, I don’t- I didn’t even read it close enough.

Doug Kim: I guess that’s what I mean is like- I just- I don’t think that that’s a good or reliable way to think about it anymore. Because I don’t know if people are following that type of behavior and if people aren’t following that type of behavior. There’s teo implications, the first is that you shouldn’t predict them to follow that behavior, the second is that they’re either completely out of crypto and trading or it means that some new way has opened up and I just don’t know what that new way is, like I can’t even imagine what it’d be right now.

Aaron Lamer: Doug, what gets people back in, you’ve- Doug you’ve been through more winters than us. What going to get people excited?

Doug Kim: The biggest thing is just following the leader. I think if bitcoin does appreciate and hits a certain amount, you know, even if it’s just to eight K or something and stays in that range, people are going to be like “oh, shoot it’s going back up” and people start buying into bitcoin again and then once that happens and it kind of stays in that range for a little bit people kind of get, you know, the boredom effect where they’re like “ oh what else should I buy with this bitcoin that I bought” it kind of has to follow that cycle where people file back into bitcoin and use their bitcoin to buy alts because that’s the flow of the money, but I don’t know exactly what’s going to ignite that resurgence back into bitcoin. I know in an earlier episode I predicted that bitcoin would end around ten K at the end of the year, but I’m not even so sure abour that anymore.

Jay Kang: You’re not so sure?

Doug Kim: Yeah.

Aaron Lamer: I’d say it’s only like 90 percent likely at this point.

Jay Kang: I’ll give you some odds on that, Doug. I mean, I don’t see any chance that it’s going to be anywhere close to- I mean we’re almost in November, you know?

Doug Kim: Yeah, that’s true.

Aaron Lamer: That’s like a couple rallys, come on. Jay, this is an episode about healing and believing that crypto can come back, okay?

Doug Kim: On the other hand, these are historically the two months that crypto usually does fucking go insane just because the holiday effect, if you believe in that.

Jay Kang: Wait, what’s a holiday effect?

Doug Kim: Well last year I think the holiday effect was in full swing, where people were, you know, after thanksgiving they’re like “oh, what is this new thing you’re investing in, oh it’s crypto, it’s like this blah blah blah” and people start talking to each other about this crypto shit and then they get into it and then things just rocket out of control in the holiday months because people are like “ oh I’ll- “ not only are they investing because they heard about this cool thing from their uncle Bob, but you know maybe they’re like “oh yeah, maybe I’ll get my niece or nephew a .001 bitcoin for their birthday or something, you know? It’s just kind of like cascades into all this buying.

Aaron Lamer: Can you imagine if you bought your kid ripple for his birthday. A hundred Ripple for your college fund.

Doug Kim: Yeah.

Aaron Lamer: Okay, so I’m going to make a case that’s positive here.

Doug Kim: Alright.

Aaron Lamer: Which is, if it can get going a little bit, like I’m reading right now about this. Fidelity is launching a crypto trading platform. If bitcoin can show any signs of life that made people go start telling their investment manager that they think that they should get some bitcoin exposure, even if it’s just one percent of people’s portfolios. There’s a bunch of infrastructure for that to happen now that didn’t exist during the last bull run or it was at least being hinted at then so, it seems like if there’s like any infusion of new people the possibility of a snowballing is out there. My question is, are there new people? Is there a new generation of people who didn’t already show bitcoin to their relatives coming to Christmas this year? Or is there the possibility that we’ve tapped out new people’s interest?

Jay Kang: That’s what [inaudible 00:34:34] says, right? Like that-

Aaron Lamer: He says the biggest gains have already been made, I mean that doesn’t mean that there’s no gains still to be made, but.

Doug Kim: I kind of disagree with that, I don’t think the biggest gains have been made. I think even though we’re in this shit and we hear about 24/7 there’s like shit tons of people who don’t- still don’t even know what bitcoin is.

Aaron Lamer: Yeah.

Doug Kim: Yeah, like maybe they’ve heard about it on the news or whatever but there’s a lot of people who’ve still haven’t even looked into buying a bitcoin or anything like that, and so I think there’s still, I mean maybe there’s hopium talking but I think there’s still one last alt run for sure where people get crazy about it, it’s just kind of like a matter of time and something kind of sparking that. So yeah, I think it’s still possible I mean it could even be from like- I don’t know, I’ve been seeing that the stock market has kind of been in dire straights recently and crypto kind of creeping back up a little bit so I’m think that maybe there is some sort of correlation when people see that the stock market or something isn’t this safe, quote on quote-

Jay Kang: Guys come on

Aaron Lamer: Yeah.

Jay Kang: that’s like literally just like somebody in an insight straight against you, and so the next hand you and so the next hand you have a double-

Doug Kim: I’m just sayin and this might be the hopium talking but, you know, people look for alternative investments when so called, quote on quote “safe investments” aren’t doing so good.

Aaron Lamer: Yeah, I’m with Doug, I mean Jay, didn’t you kind of on your way out of the crypto door say like “ I don’t see the point of this, so much easier and better to invest in stocks” do you feel like that’s still true at this historical juncture?

Jay Kang: Okay well, me- I, like everyone else, is getting murdered in the stock market over the past couple of weeks and I will say that I do think if bitcoin had jumped during that period of time I might’ve thought about it, but it didn’t-

Aaron Lamer: Yeah.

Jay Kang: And so I-

Aaron Lamer: Notably.

Jay Kang: I’m more reactive to Doug saying that it crept up a little bit, and so that means that some people are- it didn’t really even creep up-

Doug Kim: Maybe it’s been going down every month so much, that just staying just flat seems like it’s going creeping off, you know, I feel like-

Aaron Lamer: I mean, it’s insane how different our scale is for this stuff than it was during the good times [crosstalk 00:37:02] where like, yeah it crept up, bitcoin’s up like, what? A hundred dollars today? Even when Dcred got listed on Buynance, is a coin Doug has held for many years. It went up like 23 percent that day. During the good days Dcred would go up 23 percent in a day just for no reason.

Doug Kim: Right.

Aaron Lamer: Just because that was what was happening with the alt market, more Dcred was moving against bitcoin and bitcoin would go down and it would go up 25 percent for a day.

Jay Kang: Yeah it-

Doug Kim: Our scales have definitely changed. And we’re all now very sober.

Jay Kang: So Doug, as our resident alt bag holder.

Doug Kim: Yeah.

Jay Kang: Are you still looking for new projects? I mean the thing- the other thing that people should know about you that Aaron and I find fascinating is that you hold on to these bags, you’re not a trader. You are an investor-

Doug Kim: Yeah.

Aaron Lamer: Yeah.

Jay Kang: Are you afraid that some of these alts are now obsolete?

Doug Kim: Oh yeah, some them are- I’m like pretty worried, but some of them have gone-

Aaron Lamer: Aren’t some of them confirmed obsolete? Like no longer in operation?

Doug Kim: Yeah, actually one of them they actually shuddered their doors and you returned your tokens to them and they would return you some Eth in exchange-

Jay Kang: Well that’s nice of them.

Doug Kim: CFI confounded and, I believe they’re probably going to do the same thing with their main thing. This is Iconomi which I think-

Jay Kang: Oh wow.

Doug Kim: Trying to be kind of like the, I guess they were tying to be the fidelity of crypto if that makes sense. They were trying to like-

Jay Kang: So they- that Iconomi or however it’s pronounced, they went under too?

Aaron Lamer: I think it’s Iconemy

Doug Kim: Yeah, yeah.

Aaron Lamer: And since pronounced Something wrong today, I’m on a vengeance streak, it’s Iconomy you guys, Jesus.

Jay Kang: Alright, so I agree that it’s Iconomy but Doug might know better because he owned the coin.

Doug Kim: Clearly not. But I think that-

Jay Kang: This is the coin ICN, right?

Doug Kim: Yeah.

Jay Kang: So it’s a very popular coin, wow so they’re out of business.

Doug Kim: They’re not out of business but they are converting to- I think what happened is that they can’t continue under current regulatory law because, basically they’re token is a security and so they’re performing this new thing where you can exchange your ICN for EICN, this new coin that would represent an actual share in the company, but I’m guessing in the process they’re probably going to be using KYC and other things to shut out American customers and any other country that doesn’t, you know, allow crypto to be traded as securities or whatever.

Jay Kang: I think I owned ICN at some point. Almost certainly because you told me to buy it-

Doug Kim: Yeah.

Jay Kang: but why would you even announce that? I mean, is there any repercussion to just letting it go and pretending it still exists?

Doug Kim: I don’t know I guess they’re-

Jay Kang: Why even bother to refund people’s Ethereum, I mean- you know, if you’re- it seems so bizarre. When I think about the crypto landscape and these 2,000 coins, I imagine that eighteen hundred of them are like a desk at [inaudible 00:40:13] with a little placard on them that nobody has been to in months, you know? And that the coin just still exists and it’s interesting that they decided to sort of capitulate and say “hey, you know what? This didn’t work out”

Doug Kim: Yeah, I don’t know, I guess they’re different in that they actually do- I guess they’re not a total scam if they’re tying to make good with their investors. But it is kind of like, it still does suck for the investors because now we have to “sell out” quote on quote, at a huge discount to what we bought into. The only upside is that Ethereum is super down too, so I guess we get a good amount of Ethereum.

Aaron Lamer: Okay, so before you guys get out of here I have a question, this is for both of you. You guys were both early gamblers, you both were in the wild west of playing poker online.

Jay Kang: I appreciate that you are using the past tense here, Aaron.

Aaron Lamer: Yeah, well I’d rather take it to the present.

Jay Kang: Okay.

Aaron Lamer: So you guys are both past, present, and future degenerates and-

Jay Kang: There’s still hope for us.

Aaron Lamer: There’s still hope, look just like there’s hope for bitcoin, there’s hope for you and I feel like- a little bit like we’re like guys who are on a bad run at the table and we’re like “ poker is over” and it’s like, no we just lost a bunch. If we started winning again poker would be back on, that’s how crypto is, right? Crypto is totally back on if it starts going up again.

Doug Kim: Yeah.

Aaron Lamer: So, what I wanted to ask you though is you guys are both lifelong degenerates, America is basically has basically normalized you as of late. We’ve got- I was looking at pictures of a sports book- sports bar in New Jersey, people taking bets [crosstalk 00:42:05] it couldn’t be easier to lose your money publicly in america now, whether it’s gambling in casinos or sports books, or online fantasy stuff. How does it feel to have- to be normal in America.

Doug Kim: Wait, what do you mean it’s normal now to lose money?

Jay Kang: It’s more like gambling-

Aaron Lamer: Well it used to be- I feel like gambling was like almost frowned upon, like you couldn’t talk about gambling on T.V. particularly, like in relation to sports. Even card rooms and stuff like that I feel like we’re more frowned upon than they are now, now it’s pretty- it’s all pretty much good to go.

Jay Kang: Is it?[crosstalk 00:42:53] it is legal in New Jersey, I mean, Doug I don’t know when the last time you came home to the east coast was but, you know, if you go to the middle lands in New Jersey or if you go down to Monmouth Park in New Jersey.

Doug Kim: Yeah.

Jay Kang: You can just walk into a place and put down bets on sports

Doug Kim: Oh, wow.

Jay Kang: And if you are in the state of New Jersey you can use an app that you can only use in- and actually I have a friend who doesn’t listen to this show so he won’t care and also he’s just a friend of mine but he has to fly to DC a lot and instead of flying to DC recently he’s been taking the acela and the reason he’s taking the acela is because he gambles on sports while the train is in New Jersey on the app.

Doug Kim: Oh my god, that is very degenerate.

Aaron Lamer: I feel like this is a bit like weed legalization, where I’m bringing it up and then someone in a different state’s like “what? What are you talking about? It’s the same as it’s always been” and you go to New Jersey right now and it’s like a totally different [crosstalk 00:44:01]

Jay Kang: It’s like a bunch of wall street dudes on the Acela suddenly just punching in shit in their phone and it’s all just sixteen parlays on the NFL.

Aaron Lamer: Yeah.

Jay Kang: I don’t think that it’s become normalized yet and I think for people like Doug and I who are degenerates, but I would say, at least for me, and I think for Doug as well that it’s within reason, you know? That the bigger problem with gambling is the shame of it and if you are gambling within reason and you are a degenerate you don’t feel any shame about it, you know?

Jay Kang: You’re like “this is society that’s not really being cool”, you know? It’s not me-

Doug Kim: I feel like degenerate and within reason are not words that are usually juxtaposed.

Jay Kang: The thing that I am interested about, and this is totally off topic Aaron, but you know maybe I’ll just bring it up to close the show which is that I do think that at some point there will be a crypto like effect on sports gambling if it does become popularized, like, I know that generally that the sort of standards thought is that legalizing something that is already done in large percentage will not spike the number of users, right? That generally it will stay the same and legalization only makes access a little bit easier, makes it taxable and safer but it doesn’t mean that everybody starts gambling.

Jay Kang: I don’t know if that’s necessarily true, especially in places like New Jersey or New York. If you really could just walk to Seven Eleven and place down some bets- there would be some spike in- you know, there would be some new users and I do kind of wonder if that’s going to be a gambling opportunity, not one that somebody as stupid as me could take advantage of but, I wonder if lions are going to sort of have an inflation effect because of this, because you know there’s public teams right now.

Aaron Lamer: Yeah.

Jay Kang: So for example like the Steelers are a public team, or The Warriors are a public team where everybody generally bets them because they know the players and they’re familiar with it and they have bought a narrative that these people always win. There might be more public betting and sports betting for a while and it might kind of be like what happened with crypto or daily fantasy sports where there is like a landscape change that will be able to be profited on by people who are much smarter than me.

Aaron Lamer: Alright, I agree with you to a certain extent. I’m not sure I agree that there’s not more gambling when gambling gets legal, like I remember where my grandmother lives-

Jay Kang: No no no I’m saying I think there will be.

Aaron Lamer: Yeah, on the Mississippi river they legalized riverboat gambling, just so you get on the boat and it goes five feet off the dock and it was like- the town went from one percent gamblers to like fifty percent gamblers. People love that shit.

Jay Kang: That’s because gambling is awesome.

Aaron Lamer: became far and away the biggest thing in that area. So, I would assume more people will be gambling and I would assume that people will start gambling their interests, not necessarily like what old men like us want to gamble on like the NFL but potentially like gaming feels like the real frontier of people gambling. And it kind of makes sense with changing narratives of pro sports, you don’t really want to gamble on the franchise, you want to gamble on the player. Like these people playing Egames who become basically like businesses.

Jay Kang: Can I admit something dark?

Aaron Lamer: Yeah. Let me make a prediction, have you been gambling on Overwatch or something?

Jay Kang: Yeah. Yeah, I did it until last night and sometimes my friend and I will put together joke parlays that we will bet a not insignificant amount of money on but not too much.

Aaron Lamer: Yeah.

Jay Kang: Where we’ll take a game from every single sport that’s happening and yesterday I finally broke the seal and bet a Counterstrike match.

Aaron Lamer: Okay, I just want to pause the program here for one second. I need to get this out there, like five minutes ago you said it’s not degenerate if you’re reasonable and in this program Doug has admitted to half a million dollars of storm and you’ve admitted to gambling on Counterstrike matches.

Jay Kang: Yeah, it was the renegades versus cloud nine and I still don’t really know who won, but- or what those teams were- but I will say I, for the first time, watch a Counterstrike match because I had bet on it, and it was thrilling. It was actually pretty entertaining, so this is just a way to tell you yes, I do believe people will bet way more on Esports because it’s kind of exciting to watch.

Aaron Lamer: Yeah I think it’ll be Esports and stuff that is even more far out than what we consider Esports where you’ll like- I think we’ll have franchising where you’ll be able to own tokens to own parts of teams which will be like futures of them in tournaments and that kind of stuff. [crosstalk 00:49:04] like really sophisticated financial products basically along the lines of how some of how some of soccer’s are [inaudible 00:49:12] Europe where fans become owners and can profit from the success of their own team so-

Jay Kang: Or like real life fantasy Esports type of stuff I think will be a thing so, yeah.

Aaron Lamer: All kinds of shit.

Doug Kim: Have you guys looked at the luck box project?

Aaron Lamer: No.

Doug Kim: Oh.

Jay Kang: No.

Aaron Lamer: Show you’re back Doug, show you’re back.

Doug Kim: Well yeah, so I got into ICO it’s not- it wasn’t a good one but- because they’re not actually listed on a public exchange yet still, but it is just kind of like a platform to bet on Esports. So I thought you guys might be interested into looking into that.

Aaron Lamer: Yeah, I mean there’s certainly a few of those going and there’s also things happening where Jay is kind of coming to it from the sports betting side. It feels like all of these things, like gaming, gambling, and digital money are converging on one interlocked product and if I could I would just invest in that future rather than buying a bunch of dumb alt coins.

Jay Kang: Yeah.

Aaron Lamer: Because we all- could we all agree? Luckbox is not going to probably be the one who wins that war.

Doug Kim: Oh, I don’t know, I have no idea.

Jay Kang: I’m with Doug, how do you know Aaron?

Aaron Lamer: I don’t know, maybe it will be. But, it’s just- it’s hard to square and ICO with such a huge infrastructure needed to support gaming and all this stuff, it feels like more likely to me that that stuff will emerge natively from within the games’ ecosystem and the gambling ecosystem than that someone is just going to do a decentralized token that powers it, am I being naïve?

Doug Kim: No, we’re just kidding.

Aaron Lamer: Alright, this has been great. Doug, what will get you buying alts again? Final question.

Doug Kim: I mean, I’m still already kind of like balls deep in alts so-

Aaron Lamer: Okay so, nothing needs to happen, you’re just going for it.

Doug Kim: Exactly, I’m just going to be- yeah, what it’s going to take for me to sell alts is the better question. I think like- hopefully just getting that next alt rise- I’m going to probably be, you know, getting- unwinding a lot of positions back into bitcoin. I think I just- yeah for me I’m just kind of content now just holding bitcoin and watching the seasons change and making money slow, if that makes sense.

Aaron Lamer: Okay, I’ll save the question of what it’s going to take to get back from Kang for another episode but thanks for coming on, Doug.

Doug Kim: Yeah, thanks.

Aaron Lamer: Alright, later guys.