There’s a reason the History Channel has produced hundreds of documentaries about Hitler but only a few about Dwight D. Eisenhower. Bad guys (and gals) are eternally fascinating. Behind the Bastards dives in past the Cliffs Notes of the worst humans in history and exposes the bizarre realities of their lives. Listeners will learn about the young adult novels that helped Hitler form his monstrous ideology, the founder of Blackwater’s insane quest to build his own Air Force, the bizarre lives of the sons and daughters of dictators and Saddam Hussein’s side career as a trashy romance novelist.
Tue, 07 Dec 2021 11:00
Robert is joined by Sofiya Alexandra to discuss cryptocurrency.
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Hello, I'm Erica Kelly from the podcast Southern Fried True crime, and if you want to go from podcast fan to podcast host, do what I did and check out spreaker from iheart. I was working in accounting and hating it. Then after just 18 months of podcasting with Spreaker, I was able to quit my day job. Follow your podcasting dreams, let's break or handle the hosting, creation, distribution, and monetization of your podcast. Go to spreaker.com. That's spreaker.com. Wanna say I don't know less? Listen to stuff you should know more. Join host Josh and Chuck on the podcast packed with fascinating discussions about science, history, pop culture and more episodes. Dive into topics like was the lost, city of Atlantis Real? And how does pizza work? Say goodbye to I don't know. Because after listening to stuff you should know you will listen to stuff you should know on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Hey there, it's Ebony Monet, your co-host for the San Diego Zoo's Amazing Wildlife podcast. In this special episode, we're speaking with Doctor Jane Goodall about the fascinating journey that led to her impactful behavioral discoveries on chimpanzees. It wasn't until one of the chimpanzees began to lose his fear of me, but I began to really make discoveries that actually shook the scientific world. Listen to amazing wildlife on the iHeartRadio app or wherever you get your podcasts. Delatte. I'm Robert Evans. This is behind the ******** a podcast that has always opened by me shouting out the name of my favorite painkiller, delaudid. Ah, it's good stuff. Why secret? Because I'm hopeful. Because Sophia just got mailed a bunch of knives by our fans, and now I'm kind of hoping that some fans will send me a bunch of Dilaudid anonymously in the mail. Can we also say that Mama loves Darvocet Darvocet? Yeah, it's the good ****. Yeah, that. Ohh II. And honestly, I can't. Give a better idea during a time in which a lot of people are dying from fentanyl overdoses in tainted pills, then asking strangers to send us random medication in the mail? That's just good thinking. Again, podcast Daddy and Podcast Mama Love to gamble. Everyone knows we like to roll them bones, baby. I got a a coffee cup and eat the rich coffee cup. It's actually sitting next to me right now from a fan recently, but it came in. Packaging that I've never seen. The packaging made sense in retrospect, but it was like. A rounded a box with rounded edges made entirely out of Styrofoam that was like taped up and had very official looking labels on it, and it looked like the packaging you'd put in through like a vial of of medication or like like bacterial samples or something. So I was looking at this package like, should I open this? What the **** is in this thing? And just weren't about to be getting all these knives? I was like, ohh this could really be a terrible package to open. Most of these did not have names on them. And I respect that because, you know, the government doesn't need to know what we're sending to each other. Yeah, anonymously send your favorite creators weapons in the mail. That's a beautiful. Knives were amazing. I just did a little tour of the knives for for Robert Nice. There's that amazing U.S. Marine Corps and IK bar. Yeah, that's a good knife. You can **** some **** up with a K bar. That's the kind of knife if you gotta, like, jab your way outside of a car. Nice ***. Other holster like, yes, I love it. Thank you so much. Someone sent a tiny miniature knife for, like, little baby pictures. Little baby knife for stabbing time babies for stabbing little, little fetuses. Yeah, they could take it from a fetus knife. He loves it. Mm-hmm. Yeah, that's the kind of knife that, like like babies young enough to be legally aborted in the state of Texas would use in a knife fight. Yes. To try to fight the people that will not give their mothers rights. Yeah. Yeah. I got too loose. Knives that came with a collection of other things, like a bag of matza and you know, yeah, that was weird. Cue, that was. I love that guy. Yeah, so just like some some maniac in a Midwestern state sent you a sack with loose knives, matza a cigarette. It was incredible. Hey, it was multiple notes. Yeah, there was a lot of sweet and told me to take care of myself and my friends and family with these loose knives. And now that is the name. Honestly, my new band, loose knives. When you walked me through that us through that package, that is the proudest I've ever been of my fans. That would that was an incredible way to send a gift to somebody. Just loose knives with a cigarette in a sack, 1 rolling paper, and a single rolling patches. Yes, miss matches police. Thank you. What an amazing, what a hero. Someone sent me lavender bath products along with the tiny knife. It goes on my keychain someone else sent me and they also send that like a key that can sneak into an airport and specifically said this doesn't. This isn't visible on X-rays. God, that's some queen ****. You know what I mean? God, thank you. That's, you know, having when people, when people send you stuff like that in the mail and just like, here's how you can smuggle and life on an airplane. Stranger that whose content I like, that lets me know that we're reaching the right demographic. I've got this scene, you know? Absolutely, absolutely beautiful. I was telling Robert before this I was like, yeah, I used to fly with a knife in my purse all the time on airplanes. And not because I was, like, trying to prove a point or anything. I just always. Harry and knife and I would forget to take it out before I flew and they never got it. It took me like 15 times of flying before finally someone was like, is that a knife? And I was like, oh **** yes it is. And then I lost it. But now I have a K bar, so **** EM and make sure you check the K bar. They will probably find that I won't fly with that one. That's just for local stabbings. OK? That's for locals. That's good. Yeah, you need to have, you need to have like, like not every knife is suitable for stabbing people in every situation. Like, if you're gonna Shank somebody in an airport bathroom that's past security, you want the knife. Exactly, exactly. But OK bar, you know, it's it's a it's for a different thing. It's a different kind of vibe. It's a different kind of, you know, stabbing the K bar is the knife that, like, if you have to. In in the style of a parable of the Sower hike on foot from Southern California up to Oregon in order to save yourself during the climate apocalypse and crash in my compound. That's the knife you take with you to stab people on the road. I was thinking more of like Cheryl. Stray strads like wild, you know, like I'm on the doing the Appalachian Trail. You know, maybe a staff training to eat. Maybe I stab a man who who wants to get in this ***** you know? You never know what happens. And you could eat him, too. You know, I always say you think I would stab a man without eating him? Robert. The heart first while it's still beating. Everyone knows that. That's how you get his power. And then we slice up his **** cheek meat. Hmm. That's the best meat into some steak tartar. Hmm. My man and human cheek because, like, beef cheek is delicious. I imagine people's cheeks would be pretty good, too. I don't think they have as much, like, fatty loveliness, but probably they're not bad. Yeah, they're probably, they're probably like, you know, when you eat like a fish head. Hmm. And you get, like all the parts out of the head and they're like, delicious. I mean, we should probably ask one of our fans to just send. Please don't. Please don't. Please send us what? Sophie, come on. Just just. You said you said we're not allowed to talk about doing a 911. You said we're not allowed to cut what Robert just said for safety reasons. So the. Robber, we're already getting sent knives, that you very said. Or could be used in a 911 and I feel like I could do a 911 with some of them saying sure, that's enough for us, we don't need to encourage. You're right, we can get our own. Exactly. That's what the knives are for. Hmm. And in the meantime, my K bar is for like, local stabbings. Like your farm to table kind of farm to table stabbings for sure. Yeah, and then the other kind of stabbings that are like more ohh you gotta travel to stab who you want. That's what my little airplane knife is for. That's good. So none of this has anything to do with what we're talking about today, which is cryptocurrency. Cool. So, Sophia, I never planned to do an episode on an FTP or cryptocurrency because I think it's all very silly. I am. I'm not a believer in any of this stuff, but over the last couple of weeks, in spite of myself, I've I've gone down a rabbit hole specifically in inspired by some NFT scams that have recently come to light that I just found absolutely fascinating. This is not going to be an episode about a specific *******. And to be honest, even like the victims here are not people I really feel that bad for. Because they're gambling with money that only exists because it destroys rainforests, basically. Like it's like crypto is, I think, mostly bad, but this show primarily functions by me getting interested in something and then reading about it. And this week I didn't want to read about Peter Thiel or or some sort of genocide to chesco or whatever. I wanted to read about cryptocurrency. So I did. And the person you can blame this episode on is David Garrard. Or David Girard who wrote a book called Attack of the 50 Foot blockchain. David is a senior Wikipedia editor, he's volunteer spokesperson for Wikipedia. He's also an author and a crypto expert who is a nocoiner, which is somebody who doesn't is involved in the cryptocurrency world, often reporting on it, but does not actually hold any himself. And he doesn't hold any because he he seems to pretty much think it's all ********. He is widely despised in the cryptocurrency community, but as far as I can tell he is very knowledgeable. And he's a good writer. I recommend the book heavily. He's also pro some of the fundamental ideas that are behind cryptocurrency, which I actually kind of am as well. At the beginning of his book he cites a quote from Bitcoin creator Satoshi Nakamoto's original manifesto, or white paper whatever you want to call it, laying out Nakamoto's basic goal of the Bitcoin project. Quote A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another, without. Going through a financial institution, so you can see like, right, just that. Basically, if you take out everything that's happened since, if someone were to like, tell you that idea, you know, back in 2005 or whatever, hey, this is what I want to make. That's not unreasonable, right? Like maybe that's just the libertarian in me, but like, I get why you wouldn't want that real quick. We did not do an intro, did we? Why would we do an intro? We didn't intro. We talked about knives. I just wanted to make sure Sophie's faces were all covered. Everyone knows who you are. You're Sophia Alexandra. Normally we talk about horrible dead baby things, but this week we started by talking about knives and cryptocurrency. Yeah, and then you said I, look, you lured me here under false pretenses. I thought there would be dead babies instead. You were like, we're talking about NAFTA and I'm like, oh, not on these ******* *******. How about this? You were like, that's not what NFT stands for. Cryptocurrency is incredibly. Environmentally wasteful. Every individual popular cryptocurrency uses more electricity and emits more carbon per year than many nations. Yes, that leads to horrific climate change, which kills a **** load of babies. 10s of millions of babies are going to die. Additionally, every year as the world warms and is fairly increases, you feel better, Sophia, I guarantee you. There are mountains of babies being killed by this. Mountains of them. I don't believe it, Sophia, I. I will. I will. For the for the next year. Every time there's a horrible natural disaster that affects babies. I'm gonna send you a picture. I'm gonna. I'm gonna go. Tiny baby hurricane. Yeah, little baby hurricane. Hurricanes that just affect in ICU warts. Ohh, we're. And, Nick, you all with tinies? We've gotten all the incubators. Yeah. Tropical Storm widow, bitty baby. Yeah. I don't think anyone sending me knives after this. No, Sophie, but, like, so. OK. Cryptocurrency, yeah. The basic idea like that Nakamoto was going for behind Bitcoin. That's doesn't sound entirely unreasonable to me. A way for people to send electronic money directly without using a bank or without like, you know, involving a government, right? Like, I don't have a fundamental issue with that idea. In fact, I think there's there's reasons for which it could be value valuable. Now, I'm was a libertarian most of my life. I'm kind of more on the anarchistic spectrum now, and I don't really like large powerful. Centralized institutions. So yeah, so you could see, like, if someone were to, again, if Bitcoin wasn't a thing, if all of the **** that's happened wasn't a thing, someone said, hey, I'm working on this idea. You might have thought, like, oh, that. That sounds like a A a neat experiment to try. It's worth giving a shot. One of the other things that Nakamoto was talking about and that a lot of early people who were into cryptocurrency talked about was the promise that it would provide an option for people who were unbanked, which is folks who, for a variety of reasons, maybe their location. The nation that they live in, you know, the level of poverty that they have, whatever. Maybe the fact that, like, there's a lot of people in places like India who don't legally exist because they were, you know, of where they were born. There's just nobody like keeping track of people there, like their identities often like tied up in the community that they live in rather than like a bunch of government documents. So a lot of these people aren't going to be able to have an account with the financial institution. So one of the ideas that, well, if you have some sort of electronic currency that doesn't rely on a government or a financial institution. It would provide an option for those people and specifically an option to do like micro transactions. So like sending small bits of money, you know, from one place to the other. None of this has wound up happening. Cryptocurrency does none of this, like absolutely nothing. I was going to say that's The thing is, if that's what it was, that would be tight. That's not what it is. And it's kind of like when I read about that ship that was like an independent nation. I mean you can buy your like thing on it with crypto and then it's like ohh we didn't realize how hard it is to it's actually very hard to do this. Have a ship and a government and infrastructure but your ownership? Ohh ****. So yeah the idea like sure that's cool, but you did not think through anything like eating or ********? No see or the laws of the sea. Or what it takes to actually operate a boat of that size. And I, I, I actually really like that you brought that up. And the story for people who aren't aware, there's actually a good article about it. A bunch of, like, libertarian crypto nerds bought a cruise ship at the start of the pandemic and sailed it off the coast of Panama in an attempt to create an independent nation there. And we're basically like selling bunks on the ship. And the idea was that it would be like a perfectly free country, but for one thing, you you can't be perfectly free living in. A tiny room on a cruise ship, like, people weren't even allowed to have, like, microwaves in their room. They didn't have their own kitchens, they were alliance felt like it's just there would have been a nightmare to live there to be able to do this in a way that is safe. So yeah, to be like, OK, we have to be safe. They're like, you can't have a microwave and whatever, which is like, hilarious when you're like, this is the freest you'll ever be except for you can never cook again. We'll see freedom. Like, I love the movie pirate radio. I think that's the one about those people who live on that boat, that and do a pirate. Yeah, I that's my dream. I would love to like live on a big boat with like 20 something of my friends and run a legal media stations. That sounds like the coolest thing you could possibly do. Everybody has British accents and everybody's very British. It sound it would be rad as hell, but obviously the idea anyway. But what what's the reason? I think that it's good that you brought this up is that it's a perfect example of what has happened with a lot of cryptocurrency. We'll talk about this a little more in a bit. Like, all of these people are good at one thing, and it makes them think they're good at a bunch of other things. Or at least they could figure it out. Like, these crypto nerds were, like, really good at making a bunch of money in crypto and other ways. Like, a lot of them were business owners. You know, they're the kind of libertarians who did have a skill. They made their money doing something, and they were convincing us that, like, well, how hard could it be to, like, operate a cruise ship or just I'll be able to hire somebody to operate? And how complicated could the laws be? And it's like, well, it's a nightmare. And it's the same thing with crypto. Arrogant, like, of someone that, like, decorates their house nicely and is like, let's just flip houses and then they're like, Oh no, yeah, I do not understand how to do that. I just know how to buy **** off of Wayfair. And my bad, and I should not have tried to be an HDTV person. It's you've seen, I've seen a lot of the same thing in, like, the pot industry because I was, I was living in and around. Pot farmers during like the height of the marijuana gold Rush in California. Time dirty to me, Robert. A lot of people who like would get in and try to start farms would like made a bunch of money doing something else, something in business or whatever like in the tech industry and would like, well now I'm just kinda like I'm going to be a pot farmer and didn't realize that. Like because they've grown like a couple of plants in their house or something and it's like, no, no, actual pot farming is one of the hardest things you can possibly do and it it necessitates very close contact with incredibly date. Plastic. Even if you're, like, organically using pesticides, you're basically spraying sulfur in amounts that you have to wear, like a ******* Tyvek suit. Like, it's it's hard. And all of these people, like, crashed and burned because they had no ******* clue what they were doing and they couldn't physically handle the demands of running a farm because farming is hard. It's like a lot of these people love to think **** is easy from the outside. Yeah. Yeah. It's a human problem. It's not just a crypto problem. No. Yeah. Everybody thinks something that you don't know **** about from the side. You're like, this **** is. Easy. I I see it a lot like with ohh no, the utopian kind of socialist and anarchist communities that I have a lot of, you know, love for. But like a lot of people who are like city kids talking about their dream of like buying land and operating a farm and like, I'm farming about an acre right now and I'm not. I the the people who are engaged in the project with me have been doing it a lot longer and are much better at it than I am. And even the little bit that I'm doing is like this **** load of work and that's like a little bit of land, not even trying to be fully self-sufficient. Like, it's all, it's this thing people do is, like, I I don't, I I think that this thing sounds fun. How hard could it possibly be? Oh no, it's a problem. The issue is that, like, same with a homemaker problem. It's like the idea these, you know, a lot of these men have been like, Oh well, like, all you do is ******* stay at home and take care of the kids in the house. How hard could this be? And then, like, you know, COVID happened and they had to do it for a little bit and they were like, Oh my God. What you do is hell. And it's like, yeah, ***** everybody's job is hard. I don't know what you think a easy job is just being rich. Oh, I I would say, like, being is, I think I could be a CEO of literally any company out there and do just. That's not a job that's like, no, that's like a like what? The royalty is in Britain, you know? Yeah, I could. I would just like Queen of England. Oh my God, Neal. You know? Yeah, I could be a pretty good Pope, too. I think, but yeah, I anyway, we're getting you be the Pope and I'll be the queen. Absolutely. We can finally destroy the Church of England. I can't wait. So the issue here like this is the thing we all do underestimate how difficult things that we don't have experience with are. It's it's Dunning Kruger stuff and it like for example, if you and your friends buy 5 acres of land and realize farming is much harder, you have two options. Either you give up or you actually get better. After a while it eventually figure it out. Either way, the worst case scenario is like, oh I I made a mistake and this is harder than I thought it was. If what you're trying to do is completely recreate a financial system, the mistakes you make will be things like, oh, I've been illegally selling unlicensed securities. Oh, I've been illegally operating as a money transmitting like organization without any of the proper paperwork. And now I found out that I've actually been committing numerous felonies. Ohh, what I've been doing for years is actually embezzlement and I was unaware because I don't understand. Many of these financial regulations, and I just thought it was easy to to to recreate all this. I thought that because it was cryptocurrency, there's no laws around it, and actually it's all still regulated the same way the rest of the economy is. And I've been committing numerous crimes, which is why a lot of these guys go to jail. Like a lot of the big crypto dudes either go to jail or flee the country because they either learn or yeah anyway this is what we're talking about here. So at the moment at best Bitcoin is an extremely volatile speculative commodity that uses an ungodly amount of electricity and is a huge pain in the *** for most people to use. It is not freed any individuals from reliance on centralized bank type businesses. In fact, part one of the things that everyone gets excited about is like bitcoins dollar value, you know, shoots up regularly. To a high level, but like you're still excited, like it's worth a lot of U.S. dollars, right? Like it's it's it's a money making scheme to get people rich in actual currency. And the people I know who are smart in crypto have done that. I have a friend who when Bitcoin was like 500 bucks a Bitcoin, he was moving to Europe and he put a lot of his money into Bitcoin with the idea that like, well, I'll move to Europe and I'll sell it for EUR and I'll avoid a lot of transfer fees for doing that. And he just kept some of it in there as the price shot up and he did very well. His goal was always like, well, I don't I. This isn't like, you know, a gamble, right? Like, and he's someone who enjoys gambling and that's fine, like if if you wanna gamble. I don't have an issue with gambling, obviously, like we do. We sell sports betting and stuff. I I have no moral problem with gambling, but it's not a functional currency in any meaningful way. It just isn't. It's again at best like a very volatile kind of investment type thing. Also, I gotta say, with like the environmental footprint that all of us are making every day, that's just so ****** **. And with corporations not giving a **** and not changing anything, and the government's not giving a **** and not changing anything, it's like, I mean, I understand trying to make money, but I just feel like making money from a thing that, you know, destroys the environment is like another level of, like making you feel bad. And it's like, yeah, all late stage capitalism makes you feel bad and participating in it, yeah. But if you know that there's no value to what you're putting money into and the thing they're putting your money into is just made-up so that people could make money. And then while it's made-up, it's just making the environment worse. Just feel like here's one of the things about it. I think if when you first got into it, especially if you got into it when it was not worth much, the environmental cost wasn't much. It hasn't always been as bad at. So the way that Bitcoin works, right? The thing that gives it scarcity, like when you're mining it, when you're doing it like is you're basically it. Computers mine it by having to do a bunch of calculations. It's called proof of work, right? And and the longer time goes on in order to keep the thing at a steady rate while processing power increases, the calculations get harder. So at the beginning, very little power comparatively was used to mine Bitcoin, but it just it it gets heart like the the math the computers have to do gets harder and harder and harder over time, and that increases the amount of electricity that Bitcoin like requires. And I don't think a lot of people thought about it at the time, especially since as as we'll cover, this was just kind of like one of A at at the start. It was one of a couple of different crypto things people had tried and like in 2010, I don't think anyone could have guessed that Bitcoin would eventually be drawing. More power than dozens of nations like it just because it didn't start that way. It was kind of like. And when Satoshi Nakamoto created it, it was like an experiment. Like, I don't even think in in his mind, it was going to be the final product, the actual cryptocurrency he wanted to create. It was like, let's see if this works and then maybe iterate, do you think? Do you think that like the idea that it could possibly become that was even something that people thought through all the way? I don't think so, because there's a number of things that are really, really. It's like the atom bomb. We're like, you didn't know that that's what gonna was gonna happen, but then it did and it was ******. Yeah, there's a bunch of things they would have done differently, like Nakamoto and the like. The people who were kind of like getting it off the ground, I think would have done differently if they'd known how successful it would be. For one thing, one of the reasons Bitcoin like can't work as a global currency is that there is a hard cap on the number of transactions worldwide that can ever occur. There can never be more at present. From 7 Bitcoin transactions per second planet Wide, which doesn't work, then why it's a it's math ****. Like I I, I I don't understand the math, but that's the way it works and people have proposed different ideas for like expanding the number of of Bitcoin transactions that can that can happen. There's kind of like ways to basically change the code at a fundamental level, but it hasn't been done and this handicap means that as Bitcoin has gotten more popular, it has gotten more expensive just to make a transaction. So you have to pay because it takes like. Power and stuff in order to like even start a transaction and you never entirely know when the transaction is going to happen, about 20% of them just get like canceled because there's this massive like blockage in terms of actually getting because you have to you have to actually like inter transactions onto the blockchain, right? That's the whole thing about Bitcoin is it's on this thing called the blockchain which is this persistent record of every Bitcoin transaction and only so many transactions can get written to the the the blockchain at any given point in time. So it's about 7 a second right now, which makes it a huge like, you can't one of the like people talk about Bitcoin being used for drugs and it is, it has been on like the Silk Road and stuff. But it's actually like it's it's a thing where individuals will like buy amounts of drugs with it. But drug dealers like big name people like hate would never enjoy like use Bitcoin for this because you don't know that the transaction is going to go through. You don't know when it's going to go through. So wait, let me ask you this, is it just like if there's. Uh. It's like trying to get tickets to, like, a hot show or something. Yeah. Trying to type into Ticketmaster or whatever the ****. And there's like, a lot of real. Yeah. Yeah. It's to be able to make a transfer. You've got it in that exact moment. You get your thing. And if you don't like, you don't. Yeah. Yeah. It's kind of like that. It's very. And and again, this is because, number one, when it was invented, I don't think Nakamoto had any idea that it would ever be this popular. And it was not. They hadn't thought all this out. Right, because it's a new thing. And the problem is that you have all these people who you invite invent a new thing that you think, what's the least that could happen with it and what's the most that can happen with it, do you think so? I don't think necessarily you do if you're the kind of person who just thinks this stuff is neat, like if you're the kind of math brain engineer type person who just enjoys the intellectual problem of a cryptocurrency, he thought through a lot. There's things about Bitcoin that are very smart. There is a reason it's been as successful as it is. Has used as widely as it is. There's a reason why, of all of the different cryptocurrency projects that have existed over the years, Bitcoin is the biggest one. There were things that he did right, but it's also like a guy trying to dream up basically a whole new economic system. It was always going to be incomplete and like, so, but I guess, like, I mean, it's like any kind of, and forgive me for making this a science fiction comparison, but it's like any science fiction thing, right? Where it's like, oh, it starts off real good. But like you gotta think about like, right, like all the best, best things that could happen and the worst things that could happen. So I feel like a lot of times, I don't know if I buy that these like hyper smart people didn't think about what could happen because I just think that they did and they were like. Ohh, whatever. We'll worry about it later. Yeah, I mean, maybe, I don't know. And I'm not trying to say that in like a negative way. I'm just trying to think like maybe the excitement of inventing this thing make makes it so that even if you consider what the possibility of the end game is, you're just like, oh, I don't care because this is so exciting. Yeah, I think that's a big part of it. I think it's it's nerds being excited about a thing. It's like all of social media, like it's kind of the same thing where like. Then no one thought through what might happen because they were so excited about, like, oh, can we make this work and can we get people interested in this thing? And that was a more important question than like, hey, do we do we think we might need to be able to do more than 7 transactions a second worldwide for this thing? Hey, what if it winds up using more power than multiple entire nations worth of people and and burning down rainforests in order to exist? Like. And again, it's also Bitcoin gets started in 2009. Right. Like the technology is in such a different place than that. I don't think they they I don't think they necessarily thought ohh dozens of different like Chinese corporations are going to buy massive mining rigs that are powered by coal plants in order to like mine more Bitcoin. It was like, it's it's a guy on a project in 2009. You can't anyway that's that's a lot. That's a lot to envision and. We'll talk about, like, why? Because the fundamental problem in a lot of ways with Bitcoin is that rather than it being what it should have been, was like, oh, here was an experiment. Here's the ways in which it was successful. Here's the ways in which it's failed. Let's try a new thing. It's still, like, the thing in cryptocurrency. The biggest thing, and people are I. And it's because people are ideologically invested in it. And that is a problem because it's obsolete. It's bad. It's it's heavily flawed in a number of ways and shouldn't still exist. Like something better should have come along. But people are ideologically committed to Bitcoin and that's a problem and we'll get to that problem more. One thing I know we'll have to go. We have to promote some goods and services. But really quick before we go, I just want to say that, you know, honestly, some of this is like reminding me of what it's like to be a stand up right when you're like trying jokes out. And in the beginning it's like sometimes you'll say some stuff that ends up being reckless and not something that like you fully thought the implications of. Or, you know, you fully understood was gonna be actually what you were trying to say because you're just trying to say it to figure out what you're saying. And that sometimes is what happens. And I think like the difference is, is like when you decide to let other people. When you decide to commit to that, or when you decide to whatever, but like no one's blameless. There's jokes that I know I've done that are like ****** before I got to the like the final version of the joke, but I guess it's just so scary that the not final version of a joke for these people. Is on the scale that ruins rainforests and countries. And yeah, I think is wild. And I think the only thing I can compare it to is being like someone like Dave Chappelle. You know? We're like, you put out a big *** special. That's just like you being like, I am a committed transphobe and then, you know, the Dave Chappelle of currencies. Yeah, and like Dave Chappelle, it was cooler in 2009. It's true, and my heart is breaking. But alright, Speaking of services, Dave Chappelle, you know who doesn't create transphobic comedy specials? It's gonna be an ad for Netflix. Yeah, it's ohh no wait. ****. Hmm. Well, here's Netflix. Mint Mobile offers premium wireless starting at just 15 bucks a month. And now for the plot twist. Nope, there isn't one. Mint Mobile just has premium wireless from 15 bucks a month. There's no trapping you into a two year contract. You're opening the bill to find all these nuts fees. There's no luring you in with free subscriptions or streaming services that you'll forget to cancel and then be charged full price for none of that. 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So by now we imagine that you've seen the theories on Tik T.O.K. You maybe even heard the rumors from your friends and loved ones. But are any of the stories about government conspiracies and cover ups actually true? The answer is surprisingly or unsurprisingly, yes. For more than a decade, we here at stuff they don't want you to know have been seeking answers to these questions. Sometimes there are answers that people would rather us not explore. Now we're sharing this research with you. For the first time ever in a book format, you can preorder stuff they don't want you to know. Now it's the new book from us, the creators of the podcast and video series. You can turn back now or read the stuff they don't want you to know. Available for pre-order now, it's stuff you should read books.com or wherever you find your favorite books. Ohh we're back so. From the beginning of a. So again, I I think there's there's some some neat promise and some of the ideas that inspired people behind cryptocurrency. But one of the issues with it is that from the beginning it's been primarily an ideological crusade rather than a quest to actually develop something that's inherently practical. In the book attack of the 50 foot blockchain, Gerard Gerard quotes Roger Ver, who was an early cryptocurrency advocate, as saying at first, almost everyone who involved did so for philosophical reasons. We saw Bitcoin as a great idea, as a way to separate. Money from the state. Now, Jerrad goes further, explaining that much of the ideological justification for crypto as it exists is tied to what what's called cyber libertarianism. And here's how he defines that quote. Computer programmers are highly susceptible to the just world fallacy, that their economic good fortune is the product of virtue rather than circumstance, and the fallacy of transferable expertise that being competent in one field means they're competent in others. Silicon Valley has always been across of the hippie counterculture and iron. Grant based libertarianism, this cross being termed the Californian ideology cyber libertarianism is an academic term for the early Internet strain of this ideology. Technological expertise is presumed to Trump all other forms of expertise, EG economics or finance, let alone softer sciences. I don't understand it, but it must be simple is the order of the day. And that's that's the issue here is what we're talking about a little bit earlier. And obviously at this point, because there is a lot of standard, but it's simple. It's kind of like a motto for me in my 20s, dating men. Yeah, and that's not a bad motto for dating, for dating men especially. Especially men in your 20s, because we we we tend to be pretty simple. But so. Well, it's worth noting here that a lot of people who use crypto now because there is so much money in it right, are just are gamblers or or scammers, not particularly believers in the ideology. When we're talking about the ideological part of crypto, it's it's it. It is the backbone still of cryptocurrency. It's a lot of the people making stuff. It's a lot of the people who are like the loudest evangelists. But most of the people who make a lot of money off of crypto aren't, you know, believers in anything there. In a lot of cases, just scammers. They're people committing serious financial crimes to get rich themselves by rotting, robbing people and defrauding them in mass. And that is a huge amount of cryptocurrency. One of the things about it is because there's no state, there's no bank, there's no protection. So, like, one thing that can happen is if you're doing a Bitcoin transaction and you, like, type in the address you're sending it to wrong. That money's just gone. It's like if every, like, if if every if every transaction you made was an even worse wire transfer, basically. I mean. I've done that on Venmo before, where you send money to someone who you thought you were sending you to, but it's not the right person. I mean, yeah, but this is Venmo has the decency to give you money back, but this ain't gonna happen with your cryptocurrency ship. No. Now, one of the things that is frustrating here is that, like, you have these, these true believers in the ideological promise of cryptocurrency, and they provide cover for a lot of the scammers, often not intentionally. Like the fact that there's these people saying, no, this is like a crusade, and we're we're separating money from the state, and this is good, and a lot of people are able to cloak themselves in that to steal 10s of millions of dollars. And and it's it's very profitable to do that for the true believers. The quest for a currency free of central control goes back decades. Cryptocurrency is actually a lot older as an idea than you might guess. In fact, PayPal was actually founded with the understanding that it would be a perfectly anonymous way to send and receive money without government oversight. In 1999. Peter Thiel. Told his employees that thanks to PayPal quote it will be nearly impossible for corrupt governments to steal wealth from their people through their old means. Now teal wound up making it better is underestimating governments well and his own greed because once teal gets rich, he stops saying **** like this and he moves on to found the most powerful surveillance company in the world spying for the federal government on it said it multiple federal governments on its citizens. So like again, a lot of these people, even the ones who are ideological, are absolutely willing to like turn on a dime. If there's money in it now, digital currency, though, has a long history. Philosophically, the idea seems to have originated from a fellow named David Chaum, who was a computer scientist and a cryptographer. In 1982, Cham wrote a paper titled Computer Systems established, maintained, and trusted by mutually suspicious groups. This was a thought experiment on how to create a trustless form of digital currency. Bitcoin is trustless, the blockchain, all blockchain cryptocurrencies are trustless, and trustless means that you cannot fake either. Currency or the transactions, right. It's very it's not entirely impossible, but it's very difficult to fake a Bitcoin transaction, right? Or to fake a Bitcoin because of the sheer amount of math necessary in order to, like, make one, essentially. And the blockchain is very close to a an unalterable record of transactions. So that's what makes it trustless, right? You don't have to trust somebody that like the transactions happening and going through, it's indelibly recorded on this thing. Hmm. So 1982 is when we kind of have the first person develop the idea for what becomes the blockchain. It's a persistent, unfalsifiable record of transactions. Now, Chaum did try to create his own cryptocurrency in 1995 with a company called Digicash in a thing called Ecash. Ecash was supposed to be perfectly anonymous. I'm sorry both of those names are so 90s. I know it's incredibly 90s. This I I imagine he was wearing Jankos the entire time. And and one of those like. Go leave from X-Files suits with the huge shoulders. Hell yeah. But also, do you remember that La La styles or LA gear gel? Do you know what I'm talking about? Yes. Yes. What was it called? I know what you're talking about. I don't gonna Google it during the break, but it was all like neon colors with little bubbles in it. And you would put it all over your ****. That's the equivalent of this. Hell yeah. Yeah, that's exactly it. It's the cryptocurrency equivalent of that. Weird S we all drew on our binders when we were in middle school. Yeah, sure. That was the logo for a weird reason. Like shout out millennials. Yeah, like kind of like a dollar sign, but not. But also why, you know, we loved it. We did. We absolutely did. So Ecash was supposed to be totally anonymous and the idea of a currency that's transactions couldn't be tracked by a government enticed a lot of powerful people. And there were significant money put behind Digicash and E cash. David Marcotte, who is the cofounder of the venture capital firm August. Capital and a former Microsoft Board member is like a kumquat or like a yeah, it's kind of MARQUARDT. Yeah. Yeah, that's a. That's like a red kumquat for sure. Yeah, it's like a red kumquat that gives $10 million to, to David Chaum's cryptocurrency. Also a kumquat is what I call your girlfriend now. Wow, very irresponsible guy. Can we get HR on the line, Sophie? Billy is the chart. And guess what? She proved this ******* message. So only one bank agreed to use cash. They implemented it for micro payments. They're like Missouri. The system was not bank is less popular than I was in middle school. **** and the yeah, the system was not popular. It was dissolved after three years. It just didn't like catch on in any way. David blamed this on the fact that the Internet had gotten more popular in the late 90s and the ideological. And privacy obsessed nerds that he'd written his white papers for were not the bulk of the Internet anymore. Quote as the web grew, the average level of sophistication of users dropped. It was hard to explain the importance of privacy to them. Most people are like, why do I need to learn how to use a whole new weird digital money thing in order to keep my transactions secret? And you know what? To be honest, I'm sure like the if you wanted to like, give him the actual, like the drug dealer answer like, no, I care about privacy. That's why I use ******* cash. There is a perfectly anonymous way to to transact thing it's ******* cash to you. That's why drug dealers do everything in cash. That is, like, the funniest thing about this is, like, because they're all such ******* nerds. It's like we have to have a way to, like, you know, make transactions that nobody can tracks. Yeah, you can just use cash. Stop reinventing the wheel. You know what it reminds me? That old chestnut about how America spent, like, so much money developing a pen that could write upside down in space and Russians just use a pencil. I don't know if that is that one. A I don't know if it's real, but I'm just saying that's like that old chestnut. Yeah, yeah. It you see that a lot now. There is, I will say, as somebody who used cryptocurrency to buy drugs over the Internet, there is one realistic use case for the anonymous currency, which is that if you're trying to buy illegal drugs through the Internet, you can't use cash. Right? You do need an option for that. And and some of these people attempted to provide that in 1996. Some weird libertarians tell your girl what kind of drugs. Bye. I'll get to that. I'll get to that. OK, cool. In 1996, some weird libertarians invented E gold, which was supposedly an anonymous digital currency backed by actual gold. So it was on the gold standard, but it was crypto. Which, to be honest at least makes more sense than like bitcoins based on like the scarcity of being able to perform hard math calculations. Thing. I don't know, whatever. Love getting someone to send you gold in exchange for your crypto, though. Well, yeah, I don't know that that ever happened, but like modern cryptocurrency. It was way less anonymous than its founders claimed. Egold handed over their records to law enforcement when requested. Nevertheless, it was popular for more than a decade among people who wanted to buy drugs over the Internet from shady Canadian pharmaceutical websites and needed some hint of deniability about it. I can confirm that Egold worked pretty well for this because allegedly people I may or may not have known, slash bin used it to purchase things like 2 CI and five MOMIPT and two CT7 and two CTE and all sorts of fun Shogun chemicals over the Internet. Wait, wait, wait. What can you tell the lady woman what that is? They're different hallucinogens that a guy named Alexander Shulgin invented and tested on he and his wife and wrote books about. And they're pretty rad for the most part. How how did they relate to mushrooms and or acid? Well, some of them are phenethylamines, which I believe mushrooms are a phenethylamine, too. Some of them actually are like some of them are kind of like synthetically similar to mushrooms. Some of them are very different, like 2 CI is like nothing else I've ever experienced. They're just chemicals. That it's very visual in a way that like it's visual in a way that like when you watch like how acid and stuff is depicted on TV. It's not actually like that. Acid isn't like the crazy, but I'm asking like is it more like, that's what I'm explaining. So you know how like when TV shows are trying to depict an acid trip they always show like all these psychedelic weird colors and strange visual that like you don't really get on asset. Like I don't have a lot of open eyed massive hallucinations. Of things that can happen on enough two CI, like it's really potent visual hallucination. It's rad. I love 2CI. And if you mix 2CI and five MO high last. Hmm, how long does the high? 7 to 8 hours. So like a good mushroom trip or acid trip? Longer than mushrooms? A little shorter than acid. Mushrooms also always take forever to get out of my system. I think everybody is different. But yeah, yeah, usually mushrooms for me about 3:00 or 4 hours, but wow. OK. Yeah, lucky. Yeah. But yeah, I love it all. Anyway. I have a lot of fondness for egold because it brought a lot of wonderful drugs into my life as a as a as a kid. Now that said, it didn't last very long. It was actually shut down by the government in 2009 because the people running it had stopped getting the kind of licenses you need to transmit to be like, to transmit money over the Internet. Basically, again, it's this, like, they didn't believe they needed those licenses from the government. And the government said, well, yeah, you do. So Liberty Reserve, which operated from 2006 to 2013, was another attempt to make it possible for people to buy things anonymously over the Internet. The goal of all this, and then anonymity was, for some people, just a matter of principle. They weren't actually doing anything sketchy. They just didn't want the government to know what they were doing. But for a lot of folks live, man, yeah, I get that. I do. That said, for a lot of folks, it was a matter of wanting to buy illegal firearms, child *********** or drugs. Sometimes all three. Liberty. Reserve was shut down when it's founded. One for me. Wow. Let's just draw child *********** into the drums. Cat. That's not fair. And but it is one of the things you would use untraceable money for. Like, those are kind of the big three. OK, I hear you, but I want you to go, like, I'm not drawing a moral equivalence between them. I'm just saying, like, but I just don't want them to be in the same sentence. I'm offended as someone that just wants to have a good trip. Yeah. I mean, that was one of the things. Affected children. That is not the same vibe. No. And even the the Silk Road guy was like, well, I'm not gonna let people sold child **** on the Silk Road. You can hire Hitman to murder people, but like, we're not. We have. We have standards, boundaries. Thank you. You can. That guy was a full on adults, full *** adults. But when it comes to babies, no, you save that for a robber and Sophia, you know I mean, but we won't molest them. Just kill them. Just kill them, obviously. Monsters. We're not monsters. Yeah, absolutely. So Liberty Reserve was shut down when its founder was imprisoned for 20 years for money laundering. Now, there's more to crypto history than that, but most of what you need to know after this point is that in 2007, Satoshi Nakamoto started working on Bitcoin. He was still following David Chaum's dream of a perfectly anonymous, yet trustless digital currency. Bitcoin was also supposed to be like, you know, anonymous or was supposed to be anonymous. That's the reputation. It has two people. Say like, oh, Bitcoin transactions are anonymous. They're not really. And in fact, because of the blockchain, they're often very close to the opposite of anonymous. Every transaction is registered indelibly, forever on an immutable chain. So, like, one of the things about this is that there you could there is a way to do totally anonymous Bitcoin transactions. If you #1 if you mind it, mind it on your own computer and get a Bitcoin and you, you know, are reasonably secure with your machine, then people would see the transaction. Where it was going, but they wouldn't necessarily know that it was your Bitcoin. Also, some people buy Bitcoin like in person, like just hand someone cash for a hard drive with Bitcoin on it. That's fairly anonymous. But the the transaction itself is not anonymous. It's literally the opposite. Everyone, including the feds, can see where Bitcoin is going, you know? So if they know somebody is a drug dealer or, you know, doing something else illegal and they see Bitcoin coming to him and they can. See that you owned that Bitcoin, then they know that you were paying that person you know. Now the other thing is that one of, and this is again part of the big selling point, that the blockchain is, is immutable, that everyone can see every transaction. That is what makes it trustless. But it's actually not true that the blockchain is immutable. The blockchain is decentralized. So it's basically what makes it supposedly immutable is that all of the different computers with the blockchain on it are constantly sharing the blockchains, and as long as they are like most of them agree, that's the blockchain, right? So theoretically. If you have enough computers operating to make up more than 51% of the computers with the blockchain on it, kind of doing this decentralized sharing of the blockchain, you could change the blockchain. And there are some, there are some groups with potentially the power to do this. I mean, maybe it's happened because there are these now big mining consortiums that, you know, operate hundreds of thousands of computers mining Bitcoin and theoretically they could actually modify the blockchain if they got like together. Enough people with enough of a goal to do that. Wait, modified to what? To like alter, I don't know. Yeah, like to to to either remove transactions or to like, you could you could **** around in a bunch of different ways if you if you had 51% of like the computers that were kind of involved in this big distributed conversation, like there's all sorts of **** you could get up to. But yeah, this is a little more detail than is necessary to understand the the grift nature of crypto. Because that's insane. Because my eyes glazed over, or because my eyes glaze over when I get too much into the technical stuff. Or because Sophie literally fell asleep and I could just read her hat and nothing else. Ohh cool. Oh yeah, she did fall asleep. Huh? Sophie? Yeah, get up. We're talking about the blockchain. I you must have said the word blockchain in the last paragraph 52 times. Like I look, I'm as frustrated by this as you are, but I I'm setting up all this background because I want everyone to understand what an enormous, ridiculous grift that cryptocurrency has become since it got very popular. Because this story is funny, and instead of hashing out more technical details, I want to talk about Mount Gox now. But first you got to take a break, buddy. No, I refuse to. You have to, because I'll use one of my new ******* knives on you. Yeah, no money for you. Stabbed. By you. Good luck, ************. I got at least five of them. Alright, well, here's. You know who won't? Stab you, stab you these goods and services? Boy spoilers they might. Mint Mobile offers premium wireless starting at just 15 bucks a month. And now for the plot twist. Nope, there isn't one. Mint Mobile just has premium wireless from 15 bucks a month. There's no trapping you into a two year contract. You're opening the bill to find all these nuts fees. There's no luring you in with free subscriptions or streaming services that you'll forget to cancel and then be charged full price for none of that. For anyone who hates their phone Bill, Mint Mobile offers premium wireless for just $15.00 a month. 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A therapist can help you become a better problem solver, which can make it easier to accomplish your goals, no matter how big or small they happen to be. So if you're thinking of giving therapy a try, better help is a great. Option it's convenient, accessible, affordable, and it is entirely online. You can get matched with a therapist after filling out a brief survey, and if the therapist that you get matched with doesn't wind up working out, you can switch therapists at any time. When you want to be a better problem solver, therapy can get you there. Visit betterhelp.com behind today to get 10% off your first month. That's better helpp.com/behind betterhelp.com/behind. So by now we imagine that you've seen the theories on Tiktok. You maybe even heard the rumors, your friends and loved ones. But are any of the stories about government conspiracies and cover ups actually true? The answer is surprisingly or unsurprisingly, yes. For more than a decade we here at stuff they don't want you to know have been seeking answers to these questions, sometimes their answers that people would rather us not explore. Now we're sharing this research with you. For the first time ever in a book format, you can preorder stuff they don't want you to know. Now it's the new book from us, the creators of the podcast and video series. You can turn back now or read the stuff they don't want you to know. Available for pre-order now, it's stuff you should read books.com or wherever you find your favorite books. Alright, we're back and we're telling the tale of Mount Gox. Have you heard of Mount Gox? Probably not, but what do you mean it's everything you say? Sounds like a big. I'm just letting you know, Mount Gox was the first big Bitcoin bank mountain dock. Sorry, Mount gox. It was the first big Bitcoin bank. So at one point, like a huge chunk. Of the Bitcoin being actively traded, I think a majority of it will like going through Mount Gox. It was the big bank in the Bitcoin world, which obviously the whole thing is that like you were not going to need a bank. But the problem is that without a bank, again, if you like mistype an address, your Bitcoin just disappears forever. Like you have no security whatsoever, you have no safety. There's no way to like. Actually, uh, protect your money in any meaningful way. It can be hacked or stolen from you. So people started using exchanges, which are basically banks, because they wanted the security that banks get. Which is very funny, because the whole idea was like, we have to get away from, you know, horrible banks. And then like, we wound up reinventing banks, but because it's crypto, they wound up reinventing banks, but much worse. So Mount Gox is the first big Bitcoin bank, and its origin is hilarious. In 2007, a nerd named Jed Mccaleb. Purchased the domain mount goxmtgox.com for his magic The Gathering card trading website Mount Gox stood for magic the Gathering, all the gathering online exchange. In fact, it was not called Mount Gox at all until magic the Gathering proved less profitable than Jet had hoped. And so he, like he he basically, like stopped running the website. But then in 2010, there's a bunch of articles on Bitcoin. This is kind of the first big like, boom. That Bitcoin coin. Yes, so he reads a bunch of these articles and he's like, oh, I I bet I could make a bunch of money off Bitcoin. And his his girlfriend likes the name of the wet, like the URL of the website he has. So he just decides to relaunch his magic The Gathering online exchange as Mount Gox, a Bitcoin exchange, in the hope that, like, oh, that sounds like authoritative enough. I remember like on something awful following this as a kid and people being like when they realized the giant Bitcoin bank was named after magic the Gathering online. Exchange like, what the **** are you people doing? Like, wait a minute, this takes a little bit of the legitimacy out of this. Yeah, money. Ohh yeah, and it's it's not legitimate at all, it turns out. So it was not long before Mount Gox was the place to trade Bitcoin. It is highly possible that no other part of the story would have occurred without Mount Gox, because, again, Bitcoin is a giant pain in the *** to do on your own. This whole, like, have no bank, just peer-to-peer with no middleman is a huge pain in the *** that's super dangerous and, like, frustrating and annoying. For people to do. And one of the things that's annoying about it is so all of the transactions that Bitcoin has ever been involved in are stored on this Ledger, right? The blockchain. Well, as time goes on, that means it gets bigger, right? Like by definition the blockchain is always getting longer, and so by like 2011 twelve, it's like 100 something gigabytes, which you have to keep on your computer if you want to do the transaction directly without a bank. I know, it's such a pain in the ***. Everything about it, like your phone starts running out of room and you're just trying to take photos. Yeah, like a meaningful occasion. And then you're like, no, and I yeah, it's like that, but for your money. I don't know what's more important, you know, my nanas birthday or these margaritas with the girls by Nana. Yeah. The genius of cryptocurrency is that it's provided us all with a way to to take that feeling you get when your phone doesn't have space to take more pictures and apply it to spending money. Ah, I don't like this. It makes me feel as irresponsible about money as I have always been. Yeah, so Mount Gox becomes huge and it it allows for Bitcoin to expand massively because now it's not a pain in the ***. People can basically trade it like a it. Also, it kind of allows commodity trading with Bitcoin, right? Mount Gox is where a lot of that starts, because before it had been so decentralized. Now there's this exchange. You can see the price of Bitcoin. Like how it changes people can short sell and whatnot. It it it allows Bitcoin to expand, masks, trade, lock my docks. Yeah, the Tina drops like it's hot. Well, that is what where the story is going actually, because the spoilers mountain Gox drops all of the Bitcoin that it still story drop it like. So gogs, drop it like Mountain Gox is a Bitcoin or the price of Bitcoin grows steadily over the next year or so. And Mccaleb was smart enough to realize after a couple of years of this that the platform had become something much more than just a hobby and that he was doing like, again, this starts as like, oh bitcoins neat. Like, let's see if I can set up an exchange to trade it. And very quickly he's dealing with like. Millions and then like 10s of millions of dollars and is basically like kind of unlicensed trading securities and operating a bank, which is illegal. So Michaela being this market is like, I should probably get the **** out of this, like this seems like it could be a problem for me and I I maybe didn't entirely anticipate what what what was going to happen here. Now he also had a problem in that 10s of thousands of Bitcoin had gone missing or been stolen from Mount Gox and he hadn't told anybody. So he was basically like using new funds that were brought in to pay people out that had had the stolen bitcoins in the hopes that nobody would notice it. ASIC pyramids, it is it is a pyramid scheme like that keeps happening. Help, please ask, plural. And Michaela is a really sketchy guy. I can't say that he was like actually had stolen those, but like I don't think we really know what happened to those Bitcoin, but he was definitely like bitcoins fell off from the back of a truck. But what we do know is, whoops. So the same year that happens, he sells Mount Gox to a guy named Mark Karpeles, and he doesn't tell him until the sales done. Like, Oh yeah, like 60,000 Bitcoin are missing. You got to keep playing this like shell game to hide that from everybody's heads up. Gotta drop it like it's hot if you're mark go. Looks now Mark Mark Karpeles is also a shady ************. He'd been convicted of fraud himself a couple of years earlier. So, like, again, none of these victims are particularly sympathetic. People either. But Carpenter is is he? It's a bad deal for him. And so by the time he becomes aware of the fact that a lot of the Bitcoin the bank had been holding had been stolen, he basically agreed to assume all liability for this as he continued to run Mount Gallia. It's it's very funny, like buying a cruise ship for your crypto nation and then realizing, oh **** a lot is involved with running a cruise ship and I should not. It's hard to be a bank. And as he's running Mount Gox, not only is he having to deal with like the fact that 60,000 Bitcoin are missing, that he's trying to like cover in in a variety of ways. He keeps getting hacked, the bank keeps getting hacked and more Bitcoin keeps getting stolen because of like errors in the coding and stuff. People are just siphoning thousands and thousands of big Bitcoin. So when he realized like 10s of thousands of more Bitcoin have been stolen, he panics and he takes the banks assets offline and he puts them into what are called cold wallets. So a hot wallet is a crypto wallet that's online, right? And that means you can use it anytime you want to trade the money. But it also means that, like, a hacker could potentially get it, and if they get your wallet, they just have it and there's no way for you to get it back. It's just gone forever. Cold wallets are just like basically just storing the the files that are the cryptocurrency offline and something not connected to the Internet, which is obviously the safest way to store it. But this again leads to this because he's unwilling to take any of these cold wallets. And put them back online leads to this Ponzi scheme situation where like he's trying to bring in new money as quickly as he can to pay out the old money. So nobody notices that huge amounts of Bitcoin have been hacked. The other problem is that I think when the hack first happened, it was like 10s of thousands of dollars worth of Bitcoin. But the price of Bitcoin increases so much so that eventually if it goes from like, oh we're short like 100,000 or a couple $100,000 to like, we're short hundreds of millions of dollars like, the problem expands exponentially. Overtime, because every time the price of Bitcoin increases, he's in the hole for more money. Don't you want walk? Walk? Yeah, it's got a temperature, 103. So he, uh, this? So, yeah, this is a bad situation. And for like, the last couple of years, he's running mountain Gox. The bank is basically bankrupt, and he's just, like, keeping it alive with nothing but lies. I'm gonna quote from a write up in the next web here. On February 4th, 2014, Coin Desk held a poll to find out how many Mount Gox users had experienced withdrawal issues. In some cases users still hadn't received their funds even weeks after they had requested withdrawal. Which is great. Way better than a bank to ask to withdraw your money and not be allowed to for weeks because it all got stolen. A Bitcoin talk forum thread amassed over three never. Chase could never. All those banks will do is destroy the entire. Global economy. By gambling on real estate, you get your money anytime you want. Please don't. Please don't take us making fun of how dumb Bitcoin banks are as any endorsement of chase no or or of any bank like actual banks are dumb. It's just a marker of how dumb the crypto banks are that they're even Dumber than regular banks. Yeah, yeah, although obviously less toxic because when Mount Gox collapses spoilers, it does not sink the entire global economy and leave 10s of thousands of people homeless. So there that's that's good. Good stuff. On February 7th, 2014, Mount Gox cancelled all Bitcoin trading, froze accounts and took a step back to take stock of what was actually going on. 10 days later, the exchange published a statement. It claimed it had rectified the situation and that it was now on course to correct customer losses and resume trade. But by the end of the month, Mark Cuban Mark Karpeles had stepped down from his role at the Bitcoin Foundation and the firm's fate was sealed. It disclosed over 740,000 of users. Bitcoin $2.9 billion in today's value have been stolen in a hack that it claimed had been ongoing for years. At the time, that amount was valued at around half a billion dollars. On February 28th, 2014, the exchange accepted its fate and filed for bankruptcy in Tokyo. It would also file for bankruptcy in the US later in March now. Bitcoin, again, had kind of sailed in this legal Gray area, hadn't gotten a huge amount of government attention. That changes because, like, as silly as, like crypto is to, you know, people in the Fed or whatever, when half a billion dollars goes missing, law enforcement's going to be like, well, OK, wait a second here. What? What, what happened here? How did you lose half a billion dollars? Being like, Oh yeah, so this creates a problem. And there's like, I will look into. Yeah, and there's after 18 months of, like, lawsuits and attempted like, courts try to restructure the bank to get people some of their money. Karpeles is eventually arrested on embezzlement charges. In August of 2015, authorities claimed that he manipulated Mount Gox's computer programs in order to alter its balance sheet to artificially increase funds in one of its accounts. So he was not his embezzlement was not him stealing money from Mount Gox. It was him, like, lying about the money that was there in order to deal with the fact that there's this massive hole in it. Meanwhile, the founder of Mount Gox. Has gone on to create a couple new different kinds of cryptocurrency and like continues to do that side of the grift. It's very funny in the end, find out what the names of the currency are, because with Mount Gox is a starting point. I'm just excited to see where it goes. They're forgettable, to be honest. Are they like the 90s names of like cash or did you know they're like, whatever the **** like coin, whatever? I don't know. They're not, they're not very exciting. I can find them for you in a little bit if you like. So. If they're not good, I trust you. In the end, mountain Gox lost about 6% of all Bitcoin in existence at the time. Again, imagine if a bank disappeared 6% of the world's money supply like. It's, it's very funny. Some of it was later recovered, but more scandals followed and and that's so they and there have been like other exchanges, like a bunch of like there was one exchange that had a Mac because they keep getting hacked, right. So there was one exchange that was based on an exchange that had initially been coded by a 16 year old Chinese kid and people liked it because it had a good user interface, but it was really bad code and it was never meant to deal with like hundreds of millions of dollars in transactions. But that's what happened. And there were a bunch of exploits and hackers stole like 10s of thousands of of Bitcoin and like made away with millions. And what that exchange did was tell everybody, hey, so that we can make whole the the rich people who were robbed, we're taking 37% of everybody's bank account. Like you just have to accept that, like, they're all like, like horrible grifts, like all of these ******* exchanges. Some of them have gotten a bit better now, mark. Like, mark. Mark. Mark. Yeah. I mean if you're being totally fair, like, you could be like, well, yeah, a lot. All of the early Bitcoin exchanges and crypto exchanges were giant horrible grifts. But like look at what banks were like and like the 1880s where they were just like run out of their clients money and everybody would be ****** and they would be runs on the bank. It's like, yeah, you know, that is fair. Like the problem is like to what benefit are you recreating the financial system and all of the problems? Inherent in creating an entirely new financial system. I haven't found anyone who's actually been able to give a thing. Bracket. Yeah, good that they're doing. If anybody did, yeah. So in 2015, a new cryptocurrency, etherium, is released. Ethereum is much more advanced than Bitcoin and it can handle like more transactions. It's it's a, you know, it was made like almost a decade later. So there's a lot of things that about Ethereum are smarter. It's main claim to fame, which are called smart contracts. And a smart contract is basically a program that is stored on the blockchain that executes when you like, do a transaction. Yeah, it's it's like a. A A program that you like store on the blockchain and so it can't be changed or altered. And the idea behind this is that you could use these to make perfectly equitable contracts. Like one of the marketing terms is like, hey, imagine if a musician could actually hold a record account company accountable to the contract they signed. Because it's immutable and it's on the blockchain. Everybody can see it. The problem is that number one. Contracts are only as good as their coding, so if they're coded wrong then the whole thing could be a disaster. The other thing is that like, well, the problem with inequitable contracts isn't that like, they're hidden. It's that the people who write contracts are able to, like, have lawyers that can write them in ways to **** people over and you maybe don't understand it. And there's no reason why Ethereum smart contracts would suddenly render someone immune to a record company having more resources to figure out how to **** people over on a contract. It just doesn't make a whole lot of sense. The other problem is that, like, as you know, in the entertainment industry, often you have a contract and then you have to renegotiate and like, change it later. And because it's immutably on the blockchain, that's kind of hard to do with smart contracts. They're not very smart, is the problem. You could argue that like an agreement you make with human beings, that a company you work for and have a contract for is much smarter because you could go to them and say, like, hey, actually I want to change this part of my contract, can we alter that and then sign a new contract, which I've done, like, I know a lot of people. You have not that, like, there aren't horrible like abusive contracts that's constant. But like it is, I I don't think the way ether is trying to do it is any smarter. And obviously most of what smart contracts have been used to do is create automatic Ponzi schemes. And like like like Ponzi schemes that execute automatically is like matters of code. There's a ton of different ponzis and in fact like people knowingly get involved in Ponzi schemes in the crypto world and the understanding that like, well, if I'm early enough then I'll make some money. Yeah, exactly. As long as I'm not the one getting ****** over and I'm ******* someone else over. That's the American way. Yep, Yep. And there's a bunch of, like, there have been cases with these smart contracts where, like, the coding of the contract is bad and it creates an opportunity because there's a hole in the coding for, like, hackers to steal millions and millions of ether or or or whatever. And this has happened a couple of times. And when it's happened and, like, influential people, like people who had helped make etherium, like, lost money. They actually were able to create correct those errors, like it's this the thing I said, where if you have like a high enough amount of the processing power, you can alter the blockchain. Basically **** like that has been done when like the whales lose money, it's just not going to be done if you lose all your money because you're nobody, which is cool. So you're you're recreating the part of the financial system wherein the rich make all the rules and get to change the rules if they lose money, which is also fun. Now you'll note that I have not talked a lot about the environmental consequences of cryptocurrency. We'll talk about that a bit, but even without that, like, if you separate the environmental consequences, it's just all such a giant, obvious ******* scam. And to make that point, I want to talk about the case of Bitcoin savings and trust, which was created by a guy who went online by a name inspired by a Jimmy Buffett song pirate at 40. So this this guy who's creating Bitcoin savings and trust, Oh no, identifies himself as a pirate, which is going to be. Meaningful? In a minute. So pirate at 40 promised even return on Johnny Depp. Get out of here. No, not anymore. For sure. He promised huge returns on people's investments, and he collected as much as half a million Bitcoin worth $5.6 million at the time and worth like all of the money in the world now. Any reasonable investor would have known that, like the rate of return pirate at 40 was promising, marked him out as a scammer. But this was Bitcoin, and people didn't think that way. There were folks who called him off online and like forms and stuff, and they were downvoted essentially, and lost online clout in the community for being negative about what was obviously such a great investment opportunity. Why are you why don't why are you being negative about crypto, bro? Like, we don't need that kind of thinking here. In the end, this very obvious Ponzi scheme wound up in control of 7% of all Bitcoin and circulation at the time. And it it was a giant scam pirate at 40, like, disappeared with everybody's ******* money now. He was caught. In this case, because again, these people are now committing financial crimes large enough for like to be paid attention to, and some of the money was returned. But this was just the start of what would prove to be a long chain of Bitcoin crimes and incompetence. Bitto mat. At one time, the third largest exchange for Bitcoin existed for months before it was revealed that they had kept the site's whole wallet file, which is all of everybody's money, on an Amazon Web Services cloud file that did not have a backup and was set to ephemeral. So if it was restarted, if the servers were restarted, the wallet was deleted and everybody's money disappeared forever. Which is exactly what happened in July of 2011. So mad my bank forgot to have a backup of our money? Sorry guys. My God. Bitcoinica was the project of a 16 year old who was pretty good at coding and tried to make an exchange. It collapsed in 2012 without any database backups. All its remaining funds disappeared after a series of hacks due to the fact that the admins used the same password for Bitcoinica that they had used for Mount Gox, which had been hacked months earlier, revealing the password and allowing hackers to steal. Everything this is, I could go on, stupid. Why would you have a teenager do this? Well? And this, this, this, this bit Bitcoinica which collapses the code that it was, was made by this teenager for. It was then used by that other exchange, the one I told you about that got robbed and took 37% of everybody's money. Like it's such stupid ******* ********. It's such stupid ******* ********. And you know what else is stupid? ******* ******** Sophia? These goods and services. No NFT's. And we're gonna talk about NFT's in Part 2 of this episode, but for right now, I wanna talk about something that's not ********. Sophia, you're puggles. Wow. Thank you so much. You're welcome so much. Find me on Twitter and Instagram. On Twitter, on the Sophia PSO Sophia IYAIYA. You can listen to my two podcasts, private parts unknown about love and sex around the world and 4:20 day fiance with miles grey. Where are we? Do stoned recaps of 90 day fiance? Hell yeah, hell yeah and you can find me on Bitcoin dot scam where I am. Just send me $350.00 and if everybody does that I will give you guys. Robert Coyne. Exist in your hearts, so no exchange necessary. You don't have to have an exchange. It's in your heart. You just know you send me 350 bucks, you've got a Robert coin, and then I'm gonna retire. I'm. I'm just gonna go. That's the code. That's the episode. Hello, I'm Erica Kelly from the podcast Southern Fried True crime, and if you want to go from podcast fan to podcast host, do what I did and check out spreaker from iheart. I was working in accounting and hating it. Then after just 18 months of podcasting with Spreaker, I was able to quit my day job. Follow your podcasting dreams, let's break or handle the hosting, creation, distribution, and monetization of your podcast. Go to spreaker.com. That's spreaker.com. If you could completely remove one phrase from your vocabulary, which phrase would you choose? I don't know. Correct answer. 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