Crypto Millions: Nat Eliason's Wild Crypto Journey and the Future of Digital Currency

[00:00:06] Tons of people have made millions, maybe even tens of millions of dollars in the various crypto crazes of 2013, 2018, 2021, now. So in the book Crypto Confidential, Winning and Losing Millions in the New Frontier of Finance, Nat Eliason tells his own personal adventure of making a ton of money, losing

[00:00:29] a ton of money, making a ton of money, and how it all ended up at the end by making his own tokens or currencies for a game and NFTs. And you'll hear him talk about it on the podcast.

[00:00:41] And then we talk all about not only his story, but the future of crypto. And here it is. Great conversation. This isn't your average business podcast, and he's not your average host. This is the James Altucher Show. So what a riveting book.

[00:01:11] You were, you kind of were living the dream. Like basically everyone talks about you and I don't mean you specifically, but kids who not, and not that you're a kid people who made it rich during the various crypto booms

[00:01:29] off of, I don't want to say bad activity because you were doing good things, but it was, there were, there's been various trends in crypto that I've kind of like written all the way to the top and then written all the way down.

[00:01:40] And while there's a real industry being built underneath that, a lot of the get rich quick stuff kind of happened from NFTs and gaming or meme coins, or we'll see what happens with these runes and ordinals and stuff like that now.

[00:01:53] But maybe just describe the time and your journey a little bit. And then I have questions. Yeah, totally. I think that you put it really well is that there is this dichotomy in crypto. There's this cool, real, very exciting industry that I remain pretty convinced is going to

[00:02:11] become a bigger part of how we interact with the internet and finance moving forward. By the way, wealth, real wealth can be built with that as well. Exactly. But that's slow and boring. And it's way more fun to speculate on whatever the manic thing is.

[00:02:23] I happened to be in a situation at the start of 2021 where I had some exposure to people who were in crypto. So I was seeing people who were in the thick of it making a ton of money.

[00:02:35] My first kid was coming, and I was naturally stressed and excited about that and unsure what money was going to look like on the other side of it. And just I felt the FOMO.

[00:02:47] I felt the FOMO really strongly and wanted to dive in and see how much I could make if I went all in on it. And I had seen a couple of cycles at that point. I had seen 2013 from a distance.

[00:03:00] In 2017, I had put money into a couple of ICOs and just kind of lost all of it. And so I... Did you see in 2013 anyone who bought Bitcoin at $100 and wrote it to $20,000? Or like how did you see people getting rich then?

[00:03:13] I saw the stories on, it probably wasn't Twitter, it was probably Reddit or maybe blog posts. And I had one friend, I think you might know him too, Justin Mayers, who was pretty into Bitcoin at that time.

[00:03:28] And so he was talking about it a little bit shortly after. But I had actually kind of first discovered Bitcoin 2011-ish because I was really big into gaming. And so I had one of those huge gaming PCs, and people in that community were starting

[00:03:43] to mine Bitcoin on their gaming computers because they had the GPUs for it. And me and my roommate tried it for a day or two and thought, oh, this is kind of cool, whatever, let's go back to playing games.

[00:03:54] And then just deleted the software and probably didn't mine anything in a day or two. But it's one of those kind of like, gosh, what if? And then two years later, I see that mysterious internet money run up to $1,300 and go, oh

[00:04:05] my gosh, there could be something real there. But it took eight more years before I seriously looked at it. The thing that I had going for me a little bit was that after the 2017-2018 Cryptomania,

[00:04:20] I kind of said, okay, there seems like there's something here, at least with Bitcoin. I'm just going to go into Coinbase and I'm going to set up an automated buy, just $100 every week, and I'm not going to look at it.

[00:04:33] And that ran from 2017 or early 2018 until the end of 2020. And combined with a bit that I had at the end of 2017-2018, it turned into $70,000. Because I was $100 a week all the way through the bear, because it went down to $4,000 or whatever.

[00:04:53] And then suddenly it's shooting to new all-time highs. And I opened my Coinbase and I thought, oh my gosh, where did this come from? I should see what else is going on here.

[00:05:04] And that kind of, I set a bit of that aside as like my gambling purse and dived into it. And then what I didn't expect was that I would get pulled even more beyond just the speculation, but into the actual programming and building side.

[00:05:21] And going back to what you were saying at the beginning about the generative casino side versus the building, quote unquote, legit side, I felt like that was a better long-term investment of my time trying to figure out how to actually make something in this space

[00:05:33] and not just gamble on it. Because at first you were playing around with this thing called farming and you were like, okay, essentially what sounds exactly like a Ponzi scheme, the more you would invest, essentially you would get paid new tokens.

[00:05:50] It wasn't quite a Ponzi scheme, but it had the appearance of it. And basically there was no value there. It was just like money. You were spending money to basically make more money and then you would spend that to make more money. Eventually that's got to...

[00:06:02] It's got to go down eventually. If there's no actual value being created by the new coins being created that you're farming, then eventually it goes to zero. Yeah. The analogy I like for farming is if you've ever played one of those mobile games where

[00:06:17] you tap something to get gold or cookie clicker, I think is the original one. You tap the cookie and you get cookies and then you can spend the cookies on grandmas that make more cookies for you and cookie factories and cookie farms.

[00:06:30] And the whole goal is to just get more and more cookies. It's like a weirdly fun game to play, actually. There's something satisfying about just seeing your number of cookies go up. And it's basically what farming was, except that instead of cookies you were getting hawk

[00:06:44] tokens or whatever token they've decided to brand it with. And then the more of those tokens you redeposited in the farm, the more tokens they were paying you per second. And so people would go and buy tokens so they could try to get more tokens faster.

[00:07:01] And yeah, it was just like this game of chicken of how high can we run this thing? How much money can we each get on paper before somebody big makes the first move to get out

[00:07:12] and then everybody rushes for the exits to try to end up being profitable on it? And there's no fundamental value. It's not like these things were DeFi exchanges or NFT trading places. There was nothing. It wasn't even claiming to be a currency, really. Yeah.

[00:07:31] And what the bare minimum a lot of them would do is they would just copy and paste the code for a decentralized exchange. They would copy a bare bones version of Uniswap or SushiSwap, and then they would say, this

[00:07:42] is HawkSwap, and you're investing in the new future decentralized exchange. But there was no effort there. There was no serious product. It was just this, yeah, Ponzi game. And the amount of money that was moving around in these games was absurd.

[00:07:55] And they would get launched on one day, have over $100 million in them the next day. And then two or three days later, there'd be basically nothing in them again and people would have moved on to the next one.

[00:08:05] The pace that this insane amount of money was moving around was mind boggling coming in as an outsider. And did that trend, if you call it that, did that eventually die out? Is that farming still happening? Not like it was. Now there's meme coins.

[00:08:19] Yeah, meme coins are the thing now. There's this kind of predictable trend in crypto where something new and really cool happens, like the first decentralized exchange. You know, Uniswap launches and everyone goes, wow, you know, that's super cool.

[00:08:33] And then a few close competitors launch that do pretty similar things, right? SushiSwap launches and a few of the other DEXs that have caught on on other chains. But then stuff starts to get copied at a faster and faster and lazier and lazier rate.

[00:08:48] And as that happens, the quality and the seriousness goes down dramatically and the speed of the peak and trough goes up pretty dramatically. So we saw that with people launching decentralized exchanges and the farming attached to them. And you don't really see that very much anymore.

[00:09:04] You might see another version of it happen on these new L2s in like six or eight months if people try to rerun stuff from last cycle. But that game has kind of petered out. And yeah, now it's these Solana meme coins are the thing.

[00:09:16] We saw the same pattern with NFTs, right? Because you had CryptoPunks back in 2017 and they were kind of the big ones. And then Bored Apes launched in May 2021. And that was a pretty serious high effort launch. And then a few other relatively high effort ones.

[00:09:37] And then by the end of 2021, you had every celebrity launching their ridiculous zero effort NFT project trying to get in on the cash. And one of the things with NFTs where I think there's real value is a kind of like what you were doing,

[00:09:51] which is characters or equipment or points in a game, like one of these kind of big multiplayer games. Making those NFTs because then they could become fungible or tradable. Let's say I go from World of Warcraft to some other game. I don't know the gaming world.

[00:10:14] Now I can kind of take the amount that I accumulated in World of Warcraft after years of playing it. You build points and strength and this and that. And that's an NFT and I can move that into the NFTs of another game.

[00:10:28] Yeah, I think this was part of what brought me into crypto was I'd been in gaming for so long. And people had been building gray markets around game economies since the 90s. Where these massive multiplayer online games, there would be items in them that were rare.

[00:10:44] And people would do whatever they could to exchange those for real world dollars, even though the games forbade it. And you would have these like secret marketplaces where you could go on eBay and pay $1,000 for an item.

[00:10:57] And then you had to like talk to a secret broker who knew how to get around the rules to make it not traceable and stuff. And like people were desperate to be able to get their money in and out of these games.

[00:11:07] So if big gaming companies start taking it seriously and make it possible for you to very easily move wealth through different video game economies, that's going to catch on so quickly. Because people are already spending billions of dollars a year in Fortnite and Roblox just to look different.

[00:11:23] Like purely for cosmetic items, not even for advantages in the game. These like digital status symbols are becoming a huge market really quickly. So yeah, like you said, the more that economy can be opened up, the more people will probably spend in it. And it's not getting smaller.

[00:11:41] And this is a crucial question for the whole crypto, is it a fad or is it not a fad question. Why crypto for this? Like why not just use eBay for it?

[00:11:54] I think the main reason is the same reason that it's more convenient to have digital transactions versus using cash for everything. In the sense that, let's just use like Fortnite and Roblox as two examples, right?

[00:12:11] Because those are sort of the big ones where people spend a lot of money now. They're massive multiplayer games, you can look different, you know, you can interact with people and whatnot.

[00:12:19] Right now, if you want to spend money in either of those ecosystems, you have to usually buy the currency within that game, typically using a credit card or your linked credit card through your EA Games account, whatever.

[00:12:33] And then you've got that game currency and then you can buy the asset in the game. But if I have 500, we'll call them Fortnite tokens, and I want to buy something in Roblox, like there's no way to do that.

[00:12:45] And on the one hand, you could say, okay, Fortnite doesn't want you to be able to do that because they want you to keep that money in Fortnite.

[00:12:52] But on the other hand, if all of the games could be connected to a single wallet, right, like your crypto wallet, and you could pretty much immediately move money from one game to the other,

[00:13:03] then like you said, whenever people have played a lot in one game and want to start playing another game, it's so much easier for them to move their work and their wealth from one game to the other.

[00:13:15] And then on top of that, Fortnite or whoever can have an in-game marketplace where you can trade Fortnite bucks for items and buy and sell items with other people. You're using the Fortnite currency.

[00:13:26] The game is taking a 10% transaction fee on each transaction, and then they can sell their own token in the market. And then if Roblox unlocks this like big new form of revenue for them, or they don't even have to use their own token,

[00:13:39] they could just use USDC, which is a stable coin pegged to the dollar. All those transactions can happen basically instantly. They wouldn't have to pay any transaction fees like they would with a credit card or whatnot.

[00:13:51] And then if you get tired of Roblox and you want to sell all of your items and then bring your USDC or whatever over to Fortnite, you can instantly do that. And I think it's a similar argument to why it makes sense for countries to have connected economies.

[00:14:06] The more trade there is overall, the more commerce tends to happen, the more tax revenue those countries get to collect. It tends to lift all ships. It's a really great point. Let's say Fortnite doesn't want to have their items tradable with items from other games.

[00:14:22] They're missing out on the fact that they might get more. Maybe they're afraid people are going to leave Fortnite for another game, but they're missing the fact that it makes it more likely for a much larger universe of game players to have access to Fortnite.

[00:14:36] Like, now I'm tired of this game, now I can play Fortnite. And yes, you potentially could have eBay be the marketplace to trade all these things. But think about it. Gaming is sort of a good industry to test out stuff.

[00:14:51] But essentially, let's say Uber issues Uber tokens to people who ride Uber a lot and to the drivers of Uber. And it's tradable for frequent flyer miles on airlines. It creates this whole economy that ultimately makes more users and actually lessens the load on the US dollar.

[00:15:13] It actually decreased inflation because there's other currencies people are using to navigate these different services. You also end up with interesting arbitrage opportunities where if Fortnite does get less popular because there's some other hot new game,

[00:15:28] you would actually have people who are watching the popularity of games and they're seeing, oh, you can actually make more money playing Fortnite right now.

[00:15:36] And so then they're hopping in and they're engaging in that marketplace because they're moving across all of these games where the economic opportunity is too. And we haven't seen how that might affect the gaming world as well. And there could be downsides to it.

[00:15:54] You don't want a game to become completely financialized. Which I think is what was a problem with gaming and the NFT stuff, is that there are games just made for the value of their NFTs. They got it completely backwards. I like to use this example.

[00:16:08] Dota 2 is an extremely popular game right now. It has been for a long time. They have a real money marketplace where you can trade Dota 2 items with other people for dollars. And most items cost $2 to $10.

[00:16:20] They don't cost the thousands of dollars that you had to pay for an Axie character or something in the peak of the mania.

[00:16:26] And so the crypto games that came out during that period, including the one that I worked with, had this real problem where most of them were speculative assets first that tried to bolt a game onto them.

[00:16:38] And that's not going to work because people just aren't going to be as invested in the actual game. And so the idea that it's going to work is a big game that people love playing that adds a financial element to it.

[00:16:51] Because then it's kind of like a bonus and then the items are going to be more fairly and reasonably priced and not at these just crazy speculative numbers. Yeah, I think this is an enormous use case of crypto that hasn't really begun with gaming for instance.

[00:17:05] But it hasn't really kicked off. Take a quick break. If you liked this episode, I'd really, really appreciate it. If you have any questions, please feel free to email me at alcatrazgmail.com. And tell me why you subscribed. Thanks.

[00:17:25] Another use of NFTs just as a random use case is like sports tickets. Right now sports teams can't make money if there are scalpers.

[00:17:43] But if you made, if I buy let's say a $10 ticket from the New York Knicks, but then I sell it to a scalper for 50 and then the scalper sells it to someone on the day of for 300, the Knicks only made money selling it for $10 for me.

[00:17:57] But if these things were NFTs, then they take a percentage of every sale. They would make a lot more money and it would make scalping legit. It would legitimize the whole industry.

[00:18:05] And by the way, this also makes new investing asset classes disconnected from the stock market so that people could still have opportunities other than McDonald's stock even in a bear market. And crypto makes sense for this because the technology is all built.

[00:18:20] The technology is actually better to do this in crypto. It's why reinvent the wheel. Yeah, yeah. And the big problem with the eBay example, especially for tickets or video games or some of these other things, is that you still need another middleman to broker the item swap, right?

[00:18:38] To like actually get the ticket to the other person or to get the item to the other person.

[00:18:44] But if the ticket's represented by an NFT and you can buy the ticket on a marketplace kind of like an open sea but for sporting and music event tickets, it can all just be transmitted instantly. You can still just show the QR code on your phone.

[00:18:58] The user experience wouldn't be any different. But now the artist or the sports team is getting a cut of every resale of the ticket and nobody's paying the absurd Ticketmaster fees.

[00:19:07] Nobody likes Ticketmaster and SeatGeek because you end up paying, what, like 20 or 30% in fee totals, which is ridiculous. And so you cut out that extremely bloated middleman and the people who actually benefit from this thing, this concert or this sporting event, they have a much more efficient marketplace.

[00:19:28] And it is better for basically everybody except the Ticketmasters and SeatGeeks. If you buy a ticket, this is a real ticket. It's a smart contract. You know sort of the providence of the ticket. It did initiate with the New York Knicks selling it. That was the first transaction.

[00:19:45] You see the whole history and it's a smart contract. You know it's verifiably true. And that also takes care of the middleman. Because I was having this discussion with a friend of mine who doesn't like crypto.

[00:19:56] And he was like, why don't we just build a whole centralized database? Why does it need to be this whole decentralized crypto thing? And there's so much functionality that crypto provides. My thinking is, just like with the internet, social media wasn't a thing in the 90s.

[00:20:14] Like GeoCities existed. It was sold to Yahoo for hundreds of millions. But it didn't really have users. Same thing with tribes.net or Friendster. But then suddenly the internet hit a billion users and Facebook and Twitter were successful. Around 2005, the internet had a billion users.

[00:20:28] With crypto I think we're still, let's say, 100 to 200 million users worldwide. So it's not quite at that tipping point. But when it gets there, I think this is going to be a trillion dollar use case of crypto. Oh totally.

[00:20:41] And I agree that the most obvious places where it will start are wherever there are gray markets that don't have a good solution. And so gaming is a perfect example of this. And where there are extremely bloated middlemen, so that there is a significant profit motive

[00:20:58] to cut them out, like concert tickets. And those are just, I think, some of the most obvious places where we'll see somebody really go after it. Because if a team built a really good seat geek competitor that musicians and sports teams started using,

[00:21:15] Blau would be probably one of the first people to use it because he's a big musical artist and he loves crypto. And where that platform is now only taking 2.5% instead of the 20-25% that Ticketmaster or Seatgeek are taking, everybody's incentivized to go use that thing.

[00:21:31] There's a really clear reason to try it out. But another marketplace that is not so inefficient, it's going to take a lot longer for crypto to have an impact there. And so it does feel like those near-term opportunities are wherever you see that massive take rate

[00:21:48] that could be replaced by code, by smart contracts. I totally want to get to your fascinating story, but this is a conversation that's interesting to me as well. This is all eventually going to the tokenization of real-world assets.

[00:22:03] So let's say someone graduates from college, they have $100,000 in student loan debt. But now they say, okay, I'm going to sell off 10% of my future income. I'm going to make Jamescoin out of 10% of my future income, sell it, keep some coins for myself.

[00:22:21] And all my future income has to go through the blockchain so people see it. And then every year, 10% is distributed to the holders of Jamescoin. I could use that to pay off my student loan debt.

[00:22:34] And then let's say I get into Harvard Law School versus Mexico City Law School. Nothing wrong with Mexico. And this also becomes an investable asset class. So again, uncorrelated to the stock market.

[00:22:49] And it's a way to create a more efficient market around, you borrow from future income to pay off debts without paying too much in interest. And you also could potentially make money off of that as your income potential goes up.

[00:23:01] But you can't just rely on that because you have to make income or else Jamescoin goes down. And I think we're going to see many versions of that in semi-controlled marketplaces.

[00:23:13] So a good example could be like a Shopify store, where when you launch this Shopify store and you say, here's the plan, here's the products, whatever. Instead of doing a safe, instead of doing a normal investment round,

[00:23:26] you could probably in the not too distant future issue a token through Shopify that when being held guarantees you some cut of the revenues or profits or whatnot that that Shopify store is generating.

[00:23:40] Or you could do it through Stripe, you could do it through one of these specific transaction hubs. That's a great idea. Yeah, because then you're making sure that all the income is getting captured. You can do it for a YouTube channel.

[00:23:51] When you launch the YouTube channel for this show and you say, hey, I'm a successful author, I've got all these followers, I'm starting on YouTube. You can buy 10% or some percent of the lifetime revenue of this YouTube channel with this token. That's something people will do, right?

[00:24:06] Because if you found MrBeast early and you could have bought some Beast coin and written that up, that would be a really interesting market. I'm sure that's going to exist. And here's the great thing. So what you just described is Kickstarter, right?

[00:24:19] But I can now sell my Kickstarter donation. Let's say I donated to you to write your next book on Kickstarter. Now that's it, that's all I get for my donation.

[00:24:30] But now let's say if those donations were tokens I get back that are the contract between what you promised me and what I gave, now I can trade with anything else. It becomes tradable. And that's the real benefit of crypto is decentralizing this and making peer-to-peer this trading.

[00:24:48] So I don't need the New York Stock Exchange. I don't need banks. I don't need the Securities and Exchange Commission telling me what I can sell and buy and hold. It makes thousands of new asset classes that, again, would stave off recessions.

[00:25:06] And I think it would just be a net positive to the world. Yeah, and I understand the concerns around financializing everything in our lives. I think those are fair criticisms.

[00:25:19] Historically, the more you have opened markets up to freer trade and faster transactions and more visibility into how transactions are happening, the better it's typically gotten for everyone. And so even if we run the risk of maybe financializing too many things,

[00:25:39] I do think it becomes a net benefit for everybody trying to build these new businesses, trying to get these new careers off the ground, if there is a way to open up financial access to every part of the stack.

[00:25:51] Startups are a great example of this because if you really wanted to make the most money possible investing in the American economy, you didn't get the best deal by putting it into the stock market. A lot of the best deals happened in the private markets.

[00:26:05] And if you're looking right now and you're seeing, oh my gosh, SpaceX, their last Starship launch was such a huge success, I really want to be able to get in on that. You can't because they're not public.

[00:26:16] And the only way you can is if you can have the connections and the huge amounts of money to get access to secondary, but most people don't have those opportunities. And that's kind of a shame.

[00:26:25] Opening some of those markets up earlier could be a net benefit for everyone. To your point, the supposed benefits of regulation and financialization of everything, let me start with the benefits. The benefits of regulation, which makes it harder to do the financialization of everything,

[00:26:41] and you yourself, as you describe in this book, have fallen for or seen many of these scams in the crypto world. And you used the phrase quite a bit in the book, the wild west.

[00:26:52] For a while, the wild west was this farming encrypted and the wild west was NFTs. Now the wild west might be meme coins. But I would say every new financial innovation, there's a wild west.

[00:27:04] Housing derivatives were the wild west for a while and there were a lot of scams. 2008-2009 financial crisis. Internet stocks were the wild west, so it caused a recession. Most things for a while, there's a lot of...

[00:27:22] Like hedge funds in the early 00s or in the 90s were the wild west. And there were a lot of scams where people took the money and then they disappeared. Madoff started in the 90s and it was a $60 billion scam.

[00:27:34] These things exist and then people learn from them and the industry matures and grows up. And now hedge funds are an institution. Mortgage derivatives are normal business now. Savings and loans companies, which were the wild west in the early 90s, it's business as usual now.

[00:27:52] Junk bonds, wild west in the 80s, business as usual now. So I think people have to relax. There's a wild west where a lot of people will lose money, but some people will make money. And that's just the nature of it.

[00:28:07] People choose to lose money also in these things. They didn't want to lose money, but they decided to play in a dangerous field. Most people knew what game they were playing.

[00:28:17] There's another thing on that, if you don't mind me hopping in on it, which is even outside of the finance world, what we've really discovered in the last 10 years is that we can create incredible regulatory systems without government intervention.

[00:28:31] Because for a long time we thought that a safe taxi system required medallions and certifications and all of these government endowed systems for safety. But then Uber showed that no, you can actually trust peer-to-peer evaluations. And you can use a rating system, you can do all these things,

[00:28:49] and you can create a safe system without government direct oversight. You can do the same with Airbnb. Airbnb showed that you can do it with hoteling and hospitality. And we're constantly finding new ways to have decentralized regulation systems.

[00:29:05] And there will totally be a way to do that for financial assets too that won't require every single thing to be overseen by the SEC. And yeah, we're totally in that wild west phase right now, but we're slowly figuring out better and better systems to regulate ourselves

[00:29:22] and create a more honest market without having to run every single thing through the government. Such a great point. I never thought about it with the Uber versus regulation on the taxi medallion side, but it's true. Now, with you, you said, okay, I need to make some money.

[00:29:38] I'm having a kid. This farming thing was the wild west. You were making a little bit of money, but you even recognized right away it seemed scary. But you also had some coding ability. So suddenly people asked you to code basically farming and NFTs in a game. Yeah.

[00:29:58] During that period, 2021, Ethereum and other Ethereum-like blockchains were taking off because of all the stuff that could be built on them. DeFi was the first big thing, right? Borrowing and lending protocols, decentralized exchanges.

[00:30:15] And it was this big rush of what else can we program to be like these decentralized apps running on Ethereum. And that was sort of like the big exciting thing during that period, because in 2017 it was just ICOs. There weren't really apps.

[00:30:29] And now there were all of these apps being built on Ethereum. But the only way you built them is if you knew how to code in this new programming language for Ethereum called Solidity. And Solidity is similar to JavaScript, but it's still its own thing.

[00:30:46] And because it was its own thing and because you had to get a lot of practice and use it a lot to know what you were doing with it, not many people knew how to do it back in 2021. There were supposedly fewer than 10,000 active Solidity engineers on GitHub.

[00:31:01] And so when I had this idea that, oh, I should learn how to write Solidity code, if you went in any Discord for any crypto app, all of them were trying to hire Solidity engineers. And they were offering like 250k a year salary plus tokens.

[00:31:18] You would only need three to six months experience because that was all that most people had. And then you could just get hired for it. It was an extreme version of the programmer job rush during that period.

[00:31:30] And so I was doing this farming and I was seeing people, they'd go up and up and up and then they'd make one bad mistake and just back to zero. You pick the wrong thing and you get all your money stolen.

[00:31:41] You get out too late and you lose everything that you made. It was really risky. Whereas if you learn how to build things, there's a floor on that because you're not putting the same amount of money at risk. You're getting paid.

[00:31:52] And if you're getting paid in tokens and you pick the right project and their token goes crazy, that could turn into a pretty incredible payday. I had a couple of, one big scare and one truly awful event happen.

[00:32:06] And I said, okay, I've just got to go all in on the programming because I can't keep picking up pennies in front of the steamroller. It was really hard to learn because there were basically no courses, there were no boot camps.

[00:32:17] CodeMentor was this site that I used to use a lot to get programming coaching. And there were no Solidity mentors on CodeMentor. So you were really... They had very few YouTube videos and they were really focused on the most basic stuff, launching a token, making an NFT.

[00:32:36] And there was no ChatGPT back then. And when I first started trying to figure this out, I spent a couple of months just trying to get a few basic contracts going. And it was really just a grind figuring it out.

[00:32:52] And while I was writing the book, I went to ChatGPT and I said, hey, could you write me a code for a new token launch? And just boom, it's done.

[00:33:02] So when you write the code for a new token launch, it's like you're making your own meme coin, for instance. And so there's tokenomics, like it describes how new tokens will be issued or taken away.

[00:33:14] It describes what the validating mechanism is, whether it's proof of stake or proof of work or something else. Not for this, because these were all tokens on Ethereum. And so you didn't have to worry about proof of stake versus proof of work or the validation or anything.

[00:33:32] It really was as simple as what's the name? How many are there going to be? Can you make more of them? Can you destroy them? Who gets them initially? Those basic rules.

[00:33:43] And I started off really scared and worried about doing it, which is why it took so long to get going. But then I started looking at more token contracts. I started looking at the code behind a lot of these apps that were launching.

[00:33:55] And they were all using the exact same code. It was basically copy and paste. They were just using the same code over and over again, which was a huge unlock of, oh my gosh, it's not as scary or complicated as I thought.

[00:34:05] If you're really pushing the boundaries, if you're really developing new things, it's really complicated. But if you're launching tokens in NFTs, it's actually pretty simple, which is probably why today

[00:34:15] we're seeing hundreds of new meme coins launch every day on Solana, because it's so easy to spin them up. And is that because also it's piggybacking on all the functionality? If you're building in an Ethereum, it's piggybacking on all the functionality of Ethereum.

[00:34:28] Let's say you made Natcoin in this way back in 2021. Would there still have to be validation of every transaction? But would you use the Ethereum? Ethereum handles all of it, exactly. You're doing transactions on Ethereum, but using your token instead of moving ETH around.

[00:34:50] Once I figured out that there was this simpler layer to it, it's actually extremely easy. There are whole libraries called OpenZeppelin, or by this group called OpenZeppelin, where you can basically launch a token in one line of code.

[00:35:05] And it spits out the 150 or whatever lines of code that you actually need for it. But even that is very, very simple. The cool thing about Solidity code is that it's extremely efficient and extremely precise, and extremely clear once it's written.

[00:35:25] The scary thing about it is that once you deploy a smart contract, like a token or decentralized exchange, you can't change the code. It is locked in stone, just because of how blockchains work.

[00:35:38] You don't want to be able to go back and change how many of a token are issued later after you've already sold a bunch. That would be a scary thing to be able to do.

[00:35:46] Which, by the way, it's funny you say that because that's exactly what the US dollar does, and that's what most companies do with their stock. But in the crypto world, that does not happen unless it's already in the code at launch.

[00:35:57] Yeah, and so the other big benefit, or the other big boon you have with trying to learn Solidity or learn how to build this stuff is that because it's on the blockchain, you can go read the code powering any app on Ethereum.

[00:36:12] You can just go to Etherscan, look up the code for Uniswap or Aave or any of these big apps, and boom, there it is. You can just read through it. You can see that it's safe for you to put your money into. You can copy the code.

[00:36:26] You can run your own tests on it. You can do whatever you want, which is really, really cool as a way to learn. Because if you were trying to learn how to rebuild Facebook's algorithm, you're never getting that. But then how do you launch the token?

[00:36:40] So you have the code for the token. Where do you launch it? How do people start buying your token? Yes, so the way a smart contract works is it's basically like a mini computer sitting on top of Ethereum.

[00:36:57] And if you make one of those mini computers for a token, it knows where all of the tokens are. And so if I have 100 NAT tokens, I can send a command to that little computer saying, send James 100 NAT tokens.

[00:37:13] It checks to make sure that I actually have them, that you actually exist. It makes all those checks, and then it just sends it. But that little computer is just running autonomously once I deploy it. So I would write up all of the code for the token,

[00:37:28] and then I basically just run another command on my computer and I pay a little bit of ETH as the transaction fee to create that mini computing unit. And then it just lives there forever. And because it's just living on the blockchain like basically everything else,

[00:37:45] anybody can use that to move the NAT token around, assuming they have it. Or we can send some of it to a decentralized exchange, and the exchange knows that if this is the address for this token,

[00:37:56] then the symbol for that token is NAT, and there are this many of them in existence, and this is who has all of them. You can't look all that stuff up publicly,

[00:38:05] but you have to know how to write the code to actually deploy it in the first place. And that can be the tricky part. But once it's deployed, you can go to some of these sites that interpret the blockchain for you,

[00:38:19] and you can just click a button to move your tokens around. Or I can take those commands from the token contract and I can put them in a website. So you could go to my website and say, $10 of NAT coin or whatever,

[00:38:32] but anybody could put that on their site too. It's totally accessible to anyone. Because it's based on Ethereum, could I then trade it on Uniswap, which is built on top of Ethereum? Yeah, you could trade it in Uniswap. You could actually add it to any exchange you wanted,

[00:38:45] and I wouldn't have to give you permission to do it. As long as you had some of those tokens in your wallet, you could go to Uniswap and say, okay, I have 100 NAT tokens and I have one ETH. I'm going to put both of them into Uniswap,

[00:38:57] I'm going to create a trading pool, and now 100 NAT is worth one ETH. And if somebody else went and said, oh, I want to buy 10 NAT, then 10 NAT would get deducted, the amount of ETH would go up by 0.1. But now 90 NAT is worth 1.1 ETH,

[00:39:12] so now the NAT token is more valuable. So the price would constantly be changing automatically based off the Uniswap balance of those two tokens. And nobody else has to facilitate that trade. You don't need a market maker,

[00:39:25] you don't need to find somebody immediately on the other side of it. The trading can just run autonomously on the Uniswap smart contract. Why with the recent mania for meme coins, like making these valueless coins, why has Solana become such a popular...

[00:39:54] Solana is like an Ethereum killer, supposedly. Is it because the transaction fees are smaller and you could do a few more transactions per second? Yeah, it's totally because of the transaction fees. Because on Solana, you're usually paying less than a dollar,

[00:40:10] sometimes less than 10 cents, to do one of these transactions. Whereas on ETH, if the network is busy, you might pay 50 bucks or 100 bucks to do a swap. And that's why Ethereum is really not trying to be the active layer anymore.

[00:40:26] It's just trying to be the security and final settlement layer. And there are these other layer twos being built on top of it, like Coinbase's base chain. Coinbase has pretty comparable speed and transaction fees and everything to Solana.

[00:40:43] But the benefit of it is that it's using Ethereum for all of its security. So instead of every transaction having to be done directly on Ethereum, base can bunch up 100 or 1,000 or 10,000 of them and check them into Ethereum in batches to bring down the transaction cost dramatically.

[00:41:00] And so you lose a little bit of security by being on base, but you get this incredible increase in speed and cost of transaction. So what we'll probably see is a lot of the day-to-day things,

[00:41:15] a lot of the little transactions happening on an Ethereum layer 2 or on a Solana. But then you'll see the big things happening on the Ethereum layers. BlackRock, for example, has launched a fund on Ethereum for doing some yield-bearing tokens. They've been tokenizing treasuries. They've put $500 million in there.

[00:41:37] So they want it on the safest, slowest, most proven, most secure chain. Because when you're moving around millions of dollars at a time, you don't care about a $50 transaction fee. But if you're trying to buy coffee, that stops working.

[00:41:50] Right, governments are their clients. It's not a big deal. So you basically then made your own currency slash tokens for this game, Kraft, that was being built. All these tokens that you were paid in to develop this had value.

[00:42:05] What was the peak value of the tokens you had? It was so crazy because they were one of the first teams I reached out to try to get a gig. I wanted to get my feet wet, I wanted to get some experience. And my friend had found them.

[00:42:21] They were doing something I was really excited about because they were trying to build a Diablo, Warcraft-style game, which I loved for all the reasons we talked about earlier. I was bugging them, trying to get them to hire me because they needed an engineer to build their token.

[00:42:37] And I was like, I'll do it, I'd love to do it. They said, okay, what are you going to charge? And I said, two ETH per week for the three weeks it'll take to do this, which was a pretty fair rate.

[00:42:49] And I figured they would negotiate against it a little bit. I was like, that seems reasonable, pay me four to six ETH, whatever, that'll be great. And they said, no, we pay you in tokens.

[00:43:01] And in my head I'm going, okay, I'm never going to make any money off of this, but it'll be a good experience, so sure. I'll take the tokens. And the deal was, we were going to launch it with 100 million tokens priced at one cent.

[00:43:13] So the game would be valued at a million dollars, not a crazy amount for a new crypto project launching. And so I said, okay, can you give me a million tokens? So that'll be worth about $10,000. And then we put those tokens in a smart contract

[00:43:29] so that it released them over a year. So I didn't get them all at once, so that I couldn't just dump it on the market. But it also made sure that they couldn't back out of the deal and take them away.

[00:43:38] It was a good trustless way to do it. And so we put them in, and then we were getting ready for launch. And a bunch of the wealthier people, the team knew, said the price was too low. They said, if you launch it at one cent

[00:43:54] with this many tokens, there's only going to be $40,000 or $50,000 of trading liquidity. So if I want to buy $100,000 of this token, and these guys had millions and millions of dollars to throw around, and they were willing to put $100,000 into this game launch, they said, I can't do it.

[00:44:09] There's not enough liquidity. So we had to up the launch price to 10 cents. And I'm going, okay, now I'm getting paid $100,000 for this. This is pretty sick. And so then we launch. And during the first couple hours of launch, it spikes up to over $1.50.

[00:44:30] And I'm like, oh my God. I just got paid a million and a half for two weeks of work. This is insane. And then, of course, it dropped back down to 20 cents, and it stayed there for a bit. But still, I'm like, okay, cool.

[00:44:45] There's like 200 grand that's going to come out over the next year. And there was that big NFT rush. So it was legit as far as they weren't scammers. They were trying to build a legit game and legit NFTs. And there were people actually playing the game,

[00:45:01] and they were launching new parts of the game every week. There were dungeons you could go through, and you could fight the monsters. And you owned your character as an NFT, and you could sell the NFT of your character if you didn't want to play anymore.

[00:45:13] And you could trade the items amongst yourselves and all that. There were so many scams and cash grabs at the time that it was cool to be actually working on something where they were building a real game. They were really, really going for it.

[00:45:29] And so the NFTs start taking off, and then gaming starts taking off. And Axie had their crazy moment, or Axie Infinity. It was worth like $20 or I think it was $40 billion at the peak. Just absurd. And they start going down. And there was another game called DeFi Kingdom.

[00:45:47] And DeFi Kingdom runs up to like $2 or $3 billion in the span of a week or two. And we're looking at that and we're going, are we next? What's going to happen here? And then we get to the end of December,

[00:45:59] and DeFi Kingdom starts going down, and then people find Cryptocraft, and they start putting money into that. And then in the course of two or three weeks, the token goes from like $1, $1.5 to $13. And now I'm looking at all of my tokens,

[00:46:15] and I'm going, oh my God, there's like $13 million here. This is just more than I ever could have possibly imagined coming from this. You know, here's where it's really hard for me to reflect on this story. Is in my head at that time,

[00:46:27] I'm not going, okay, this is insane. I need to get all this money out right now. I'm going, I'm going to do this. I'm going to do this. I'm going to do this. I need to get all of this money out right now.

[00:46:46] I'm going, this is going to $100. This isn't stopping here. This is just the beginning. It's going to keep going. And so when I'm claiming my tokens every day and I'm turning some of them into ETH, I'm redepositing a lot of them.

[00:47:04] Like I'm not taking the money off the table. I just kept doubling down. And a lot of my tokens were locked, so I couldn't access them. But even when they're locked though, you could still engage in private transactions and sell your locked coins? No, not really.

[00:47:22] You could in theory, but it wouldn't have been a crypto transaction. It would have been like a written agreement. Right, it would have been a dumb contract instead of a smart contract. Exactly, it would have been a dumb contract.

[00:47:37] But you could have made a contract that obligated you to. Exactly, yeah. And I didn't do that, sadly. And now those tokens are worth like two cents apiece. But you did do some transactions with private investors. Yeah, what I did was, as it started taking off,

[00:47:54] I realized that one, it was going to be impossible to time the market on this. And two, even, this is the big problem with a lot of crypto tokens, is that at the peak, all of the Cryptocraft tokens combined were worth over a billion dollars.

[00:48:12] Which is insane, right? But there was less than maybe $20 million of liquidity to actually back that up. Usually there was less than $10 million of liquidity to back that up. So if somebody had all the tokens and tried to sell them all at once,

[00:48:30] they wouldn't get a billion dollars, they would get like 10 million. And so the tokens were actually worth way less than it seemed. And this is a big problem in a lot of crypto tokens, is you might think that you have this many tokens worth this amount,

[00:48:42] but if you're one of the big holders and you try to exit your position, you will tank the price immediately. So I knew I couldn't really sell in large batches. And so I wrote a little bit of code that I could run on my computer,

[00:48:55] where it would claim my tokens for the day, and then sell a portion of them to ETH and redeposit the rest of them. And then I would get up and go over in bed every morning

[00:49:06] and hit a button on my computer, and boom, there'd be $1,000 of ETH in my account. And then it was like $4,000, and then it was $10,000. And it just kept going up and just completely destroyed my relationship with money during that period. None of it felt real.

[00:49:22] Didn't want to take any of it out, just wanted to keep doubling down with it. And like I said, I reinvested most of it or locked a lot of it up.

[00:49:32] And I think I got to that point by being crazy enough to leave a lot of money on the table. And that mindset eventually comes back to bite you. Yeah. First off, it's very interesting. This is one aspect of crypto which may or may not be a benefit,

[00:49:47] but if people know what your wallet is, you actually don't have the privacy that you would expect. You could get that privacy in 99.999% of cases, you have that privacy.

[00:50:01] And because you are a major developer on this project, people knew what your wallet was and how many coins were in it. It was laid out to investors and everything. So it's as if your bank account information could be viewed by everybody.

[00:50:13] Not that they could access the money, but they could see when you were accessing the money. And so you had people call you saying, hey, I thought you were really into this project, why are you selling? It turned into a huge problem.

[00:50:26] And I've talked to a lot of other people in crypto who had this same experience for better or worse, where when you're getting paid in the token of the project you're working on, and other people are investing in that token on the hopes that it goes up,

[00:50:39] if you're selling a chunk of it, it looks like you don't have faith in the project, or like you're trying to rug people, or you know something that they don't. And that's understandably can be scary for people who are watching all the transactions come through.

[00:50:57] And so in the beginning, when it was just smaller amounts, nobody bugged me. But then when every day my amount of tokens unlocking, it was like $50,000 of tokens, and I would sell 20,000 of them a day to ETH or whatever,

[00:51:11] I started just getting all these DMs and these Twitter messages from people being like, what the fuck are you doing? What's wrong? Are you scamming us? I'm like, I have a kid and a mortgage, I can't eat these tokens. I can't leave all of this on the table.

[00:51:26] Either way, I still have millions of dollars on the table here. I'm way more invested in this than you, but I have to take some off. And it just got nastier and nastier. People were going to the team and telling them that they had to fire me

[00:51:40] and kick me off the project because I was selling these tokens. And the team was like, what do you mean? He's working harder on it than almost anybody else. He's the most invested person who is selling tokens.

[00:51:53] Be mad at the speculators who are dumping, not the people on the team. But it's a huge problem. I talked to a lot of people who had millions of dollars of tokens liquid for projects they were working on, who never sold any of them

[00:52:07] because they were so afraid of the optics. And they just wrote it all the way back down to zero. Could those people, there are these exchange-traded funds where you pull your wallet in with a bunch of other people's wallets,

[00:52:21] and you just diversify it so everybody owns all the wallets together. Was there anything like that that was open to you? I could have done that. And if I had thought that the game was going to go the way it did,

[00:52:33] I would have set it up more intentionally or more carefully like that. But I didn't think it was going to turn into much of anything. And so the place where all the tokens went was nataliasin.eth.

[00:52:46] And so it was pretty blatant how many tokens I was getting every day and exactly what I was doing with them. And there were a couple hundred people who were subscribed to updates on my wallet through this app. That's crazy. Yeah, through this app called Zapper.

[00:53:04] And so they would literally get a notification on their phone if I did anything in crypto. Because they wanted to see what I was buying, they wanted to see what I was selling. And that was not fun. What if you had just ignored all that?

[00:53:16] And what if you had gotten fired? You still had all the coins. Yeah, and that's ultimately what I did. I said, you know, this sucks, but I've got to do what's best for me and my family. And I know that I'm working on this game.

[00:53:29] I know I'm not scamming people. And so if people are going to get upset about it, that's kind of on them. And for a while, I did talk to everybody and have pretty frank conversations.

[00:53:41] I sent a lot of people screenshots of how much I had invested to show them. I was like, no, no, no, I'm really in this and I have to take money off the table. But eventually I had to just be like, you know what?

[00:53:50] I can't argue with everybody about this. If they were in my situation, they would do the exact same thing. And even the game founders, like Leroy was after you to stop selling, even though you had to make money. Yeah, yeah. And that's what I told him too.

[00:54:06] We ended up getting in multiple fights over this, and he was telling me to sell less because it looked bad. And I was like, no. This is what I have to do. And if you want to fire me, but you're not going to

[00:54:17] because I am working on this a lot. I'm helping you guys. And it's like, this is just how it has to be. But there's a lot of downsides to having your whole financial life public like that. And I think that's why crypto has this pseudonymous element to it.

[00:54:37] If you were one of those people who got in on the initial offering for ETH and you bought 10,000 ETH at $1 and you still have them and you're worth tens of millions of dollars now, you probably don't want that tied to your real name.

[00:54:51] You don't want people to know that about you. So there's definitely some cons to the public element. And there are incredible benefits. Imagine if you could exert that much scrutiny over what your city is doing with your tax dollars. You'd learn a lot of stuff really quickly.

[00:55:07] It's a huge boon to society. So there's definitely pros and cons. And at this time, because it was kind of like this 2021-2022 mania, or basically 2021, it was even greater than the 2018 mania. There was NFTs, there was starting to be these meme coins and stuff.

[00:55:29] So you knew other people who were getting involved, like your friend Johnny, who you were together from the beginning doing this farming and then other stuff. He was getting into NFTs. What's the outcome with him? Yes. He really had a wonderful story through it,

[00:55:46] which is why I thought it was important to include it. Because when we started, he was running a cafe in Austin, and it was just bleeding him dry. And he was barely scraping by on it, was incredibly passionate about it,

[00:56:00] but the money wasn't working and it was getting worse and worse. And he was one of the people who had barely survived COVID. And so we started doing this farming stuff, and he had commissioned this incredible espresso maker to get built,

[00:56:14] and had hired this company in China to do the production on it. And we started out doing this farming together, and then I got really into programming, and I started having this outcome with Cryptocraft, and he got really into NFTs.

[00:56:29] And in March, we're sort of day trading doge, and starting with farming and trying to make a couple hundred bucks a day. And then there's this scene towards the middle of the book where we're at brunch.

[00:56:41] And at the start of the brunch, Johnny puts like $10,000 into an NFT launch, and by the end of brunch, he's up 20 grand. And he was in this crazy, really, really fast-paced NFT speculation, and he had built such a name for himself in that space

[00:56:59] that people had notifications for his wallet too. And so he started having to make other wallets and move money through Coinbase to hide from the people who were trying to copy trade him and cut out what he was making by being so in the flow of it.

[00:57:13] And he showed me this stat once that he had spent over $100,000 on Ethereum transactions during that period, but it was profitable spend because the NFT flipping was so insane. And then one kind of sad thing happened, which was the manufacturer in China screwed him over.

[00:57:34] Just took his money and ran, and he was out like $250,000. But he had made enough from the NFT selling that he was able to offer refunds to everybody who had pre-ordered. And I won't spoil how that story ends because it has an interesting ending,

[00:57:49] but he was able to resolve that issue. He was able to shut down the shop, which was a sad moment, but also kind of freeing for him. And he was able to pay out the employees for a couple months longer

[00:58:03] than he would have if he had to shut it down from actually running out of money. He and his partner were able to move into a more comfortable spot. He had this great outcome from going so crazy in it,

[00:58:17] but he also had the same psychological outcome that I did. It was really, really taxing and really, really rough. And he, like me, doesn't let himself touch the space at all anymore because the psychological costs were just so painful. What does he do now?

[00:58:39] He's working on just the espresso maker? Working on the espresso maker, and he has another job in a totally different industry, but the maker is hopefully going to launch in the next couple of months, which is pretty exciting.

[00:58:51] He was able to buy the time to really do it right. Building a cool new piece of hardware is an incredibly challenging job, and you can rush it, do a little cheaper, and just get it out there,

[00:59:03] or you can take your time with it and make it really awesome. And he was able to buy the time to do it right, which was great. For both of us, we had these things we were really passionate about.

[00:59:13] For me, it was writing. For him, it was coffee. We go after those things in a very serious way for a few years that we didn't have the freedom to before. That, to me, is one of the best outcomes I think we could have asked for.

[00:59:30] Sure. Right now, obviously, this moment, you're working on this book launch, and this is an important part of your career, but do you have plans for a next book? What kind of writing would you like to do?

[00:59:42] What inspired your interest in writing? Who were your initial favorite writers Yeah, that's a great question. I got into writing in a funny way. I really wanted to do startups and entrepreneurship, and I was a philosophy major in college with no relevant skills.

[00:59:59] So I looked at what would be useful to startups and what am I already good at? There was this cool intersection with content marketing because I could write well and startups needed content. I started out doing content marketing, and in the beginning,

[01:00:15] I was studying Ryan Holiday, and I was studying the people who were really crushing that game and trying to write like that. I ended up getting really into SEO. I had a search engine optimization agency for a little bit.

[01:00:27] Then after this story happened, I was like, you know, I've always wanted to really write a book. This is kind of my opportunity to do it and to try to do it in a big way. I never thought that I would want to write a memoir finance story,

[01:00:39] but the opportunity kind of came up. The opportunity kind of fell into my lap and it was just like this perfect storm. But when I started on it, what I quickly realized was that I had spent most of my writing career doing how-to highly optimized blog posts,

[01:00:59] which is very different from a psychological thriller memoir story. I basically spent the last two years just studying writing while working on this. I didn't do hardly any other writing. I was just like, I need to get as good as possible at storytelling

[01:01:15] and making this fun because the only way I'm going to make a crypto book really mass market interesting is if it's like a fun beat treat, if people are going to have a good time going through it.

[01:01:23] I studied that and I tried to make it as fun of a read as possible. Along the way, I learned that I actually really love the fiction-esque writing. It's really, really fun for me. That's why I was going to say I wouldn't call it a book.

[01:01:40] That's why I was going to say I wouldn't call it a memoir. There's this new brand, I'd say it's about one and a half to two decades old of narrative nonfiction. That's what this is, is narrative nonfiction.

[01:01:52] Because you'll write this over and over again with your next story and your next story. You'll have experiences kind of like Four Hour Workweek or Outliers by Malcolm Gladwell or all those books in the background of your Zoom picture that I'm seeing.

[01:02:08] It would be helpful to read some fiction writers. For myself, I read people like Raymond Carver or Dennis Johnson or even Charles Bukowski just because they really ultimately wrote narrative nonfiction and they called it fiction. All their stuff's nonfiction. That for me has really improved my writing.

[01:02:32] That's actually exactly what I did is I studied writers that could get people to just boom, boom, boom through a novel. John Grisham. I read A Time to Kill, which is wonderful, it's his first book.

[01:02:44] Then I reread The Beginning a bunch of times to try to get that energy into my writing. Another one that I really studied was Red Rising, which is this wonderful... Oh my gosh, this is such a treat. It's a wonderful fantasy sci-fi novel.

[01:03:00] There's six books in the series now so you can really go crazy with it. He's such an incredible fast-paced storyteller with a very strong, opinionated first-person narrator. This is great. I'm getting it right now. You're going to love it. You're really, really going to love it.

[01:03:20] I really wanted to bring that energy into it too. That was so helpful. What I would do a lot of days while working on the book is I would get up and I would reread some of my pages from the day before

[01:03:32] and then I would read the first chapter of Red Rising or some of the first few pages of A Time to Kill or one of those books before I started writing so that I was in that headspace of that storytelling mode

[01:03:44] so I could bring some of that energy into the book. That was by far one of the most useful things that I did. It's amazing how much reading one style will subtly influence how you write the next few days.

[01:03:56] Yeah, exactly. It takes about a day or two or three to wear off. Let's say, as a blunt example, Old Man and the Sea by Ernest Hemingway. Suddenly I'm writing in this super minimalist style.

[01:04:13] But I like that feeling of absorbing his style and bringing in my own humor and storytelling and so on. I always think that's the best way to write. It's sort of like when you're learning a coding language, you set up the basic environment,

[01:04:29] you set up the languages, and the best thing to do is to modify someone else's code to learn coding. Totally. It's funny because it works in the other direction too. You asked about the next book. I'm actually working on a sci-fi novel

[01:04:45] and that's been an incredibly fun experience. I was doing the same thing. I was studying sci-fi, figuring out who I wanted to emulate, whose style I wanted to learn from, and Dark Matter by Blake Crouch. I haven't watched it yet. I like Recursion by Blake Crouch as well.

[01:05:05] His pacing in that book is just incredible. It's just boom, boom, boom. It doesn't stop. I was using that to prime me for writing the sci-fi novel. Then I took a break and I reread East of Eden by Steinbeck,

[01:05:21] which is just a beautiful, incredible, maybe greatest novel of all time. Then I went back to work on the sci-fi novel and I started writing in that style. It was a completely different energy. It was slow and descriptive.

[01:05:37] Honestly, I was really proud of the chapter I wrote in that style. It was some of my most beautiful writing, but then I threw it away because I was like, I can't use this. This is the wrong energy.

[01:05:49] Obviously, I'm nowhere close to Steinbeck, but it was interesting how quickly that totally changed how I was writing. You're in control with your inputs when you're in a writing mode. They'll get in there quickly. When I do most of my writing, which is in the mornings,

[01:06:05] I make sure I don't read necessarily thriller kind of stuff. If you're trying to write short blog posts poignantly, if you're just getting to action, action, action, it's not as good. But yeah, you have to be very careful about the input.

[01:06:22] Like you say, the inputs that you put in is what comes out combined with your own style. Totally. Your subconscious is so incredible at processing things when you're not thinking about it. When you go on the walk after the writing session and the ideas pop into your head.

[01:06:38] If you're letting in social media and the news and all this other stuff, that's what ends up popping into your head when you give it a moment's rest. You have to curate that input layer so deliberately if you want to get that best writing work possible out.

[01:06:54] It's kind of fun to be in that monk mode where you're being so deliberate about it because it is just this incredible force multiplier for how good your art can be. Yeah, I can really appreciate that cycle. This is a really good book.

[01:07:10] Did you sell the movie rights to this book? I bet you people want the movie rights. We haven't sold it yet, but we've had a little bit of interest. I think that there will be more once it's out.

[01:07:26] I have a really hard time with this. I'm a very self-critical person. I'm very hard on myself and it's hard for me to say something is good. But I think it's a good book. I think it's going to do well and people seem to really enjoy reading it.

[01:07:38] I think it would be fun as some sort of film production. I'm excited to hopefully see that happen. It's in a hot area, it's a lot of money involved. It's young people doing their thing and it's good. It's going to be so fun.

[01:07:58] What's next in crypto, in your opinion? In terms of the Wild West side, there's these meme coins, which I think that's already run its pace a little bit. I'm sure there's people out there who made $10-20 million, disappeared and you'll never hear from them again.

[01:08:14] There's probably thousands of people like that who have just made $10 million or more from crypto and are just now gone forever, just living their life. Yeah, it's not a small number. I say this in the book too, that there's going to be more manias.

[01:08:32] There's going to be new waves of things in crypto that have these manias attached to them. It could be social fi, a Twitter where you can invest in people to buy and sell their tokens. I'm sure gaming is going to have another much bigger run.

[01:08:49] There will probably be a new NFT thing. There will be a new type of blockchain people will be excited about. The big one this cycle is going to be AI coins, AI plus crypto projects.

[01:09:01] Some of those seem like they're really legit and really interesting and there's going to be a lot of garbage too. It's hard to uncover. You have to actually have users, corporate partnerships, good developers with a track record. But it's hard to know.

[01:09:17] A great idea would be, here's a coin that's going to be a decentralized network of everybody's healthcare information. So you own your healthcare information. If AI wants to use your healthcare information to train their learning model, they have to buy it from you.

[01:09:29] Because it's all on blockchain, you could do that. But it's hard to know, okay, this is a great idea. How many people are actually using this? There's a lot of analytics that tell you how much is being bought and sold every day.

[01:09:45] Very few analytics to tell you how many people are actually using this for real use cases. Totally. And I think that's got to happen. You can sometimes find a Dune dashboard, dune.xyz. Dune is the best way to do it.

[01:10:05] If you're not going to go live in this world, if you're not going to quit your job and be 24-7 in the flow of information, or if you don't have access to somebody who has that level of information, don't even try. You're going to be the exit liquidity.

[01:10:21] Just buy Bitcoin and Ethereum and Solana and leave them in your Coinbase account and just don't think about it. Because if you're half in, half out, and you don't have that level of information,

[01:10:29] you might buy at the right time, but you're probably just going to hold it too long and write it all the way back down. And you don't want to get caught in that messy middle of being half in, half out.

[01:10:40] That said, if there's a wave of things that people are actually using and they're paying you for it, I could totally see a decentralized AI computing token where you can rent out GPU cycles on your local computer

[01:10:52] to some AI processing system and you're getting paid in their token. And if you have a gaming computer sitting around like I do, hook it up, get paid. The problem is there's tokens specifically for that,

[01:11:09] but then there are also tokens that initially for other decentralized computing use cases and they all seem to switch over to decentralized AI learning models because that's the hot thing. So now it's hard to really sift out what's their real business model and who's using it.

[01:11:25] It's sort of why I do generally think just hold the big ones. If you're not really, really going to be in it, I don't even play with the speculation very much anymore. I might throw a little bit at something on Solana just to feel alive occasionally,

[01:11:41] but for the most part I'm just holding the big stuff. You've got to be so in it because it's still really a wild west. For the same reason that you shouldn't be casually looking at startup pitches

[01:11:53] for angel investing in your free time unless you have access to pretty incredible alpha, you shouldn't be trying to bet on which of the new crypto apps is going to be the one in five years. You know what's interesting is the prediction markets. Yeah, super interesting.

[01:12:09] Even just on one bet, like who's going to win the election, $200 million is bet on that one question. They have a whole bunch of things you can bet on. That's built on top of Polygon, I guess. I guess the benefit of crypto is it's hard to regulate it

[01:12:29] because it's just decentralized out there. You can't regulate it. There's no trusted third party and that's a big winner. I think that what we're going to see in the next two years is Coinbase rolling out point-of-sale integrations

[01:12:45] so that merchants can accept USDC and then not have to pay a transaction fee. That'll probably catch on pretty quick because they'll save 3% on every transaction. Then they would have a more direct relationship with their customer

[01:12:57] because you could attach some personal info to when you pay with USDC using your Coinbase wallet on your phone. Stores could use NFTs for loyalty cards and things. There's a lot of interesting stuff that comes with that, but just being able to cut out that 3% they're paying

[01:13:13] is a huge unlock for a cafe. Their margins are so tight already. There are so many transaction fees around the world that are paid every year. That's all being soaked out of consumers' hands and put into big banks. That's a huge source of inflation.

[01:13:34] If you could just eliminate that, the world would save $3 trillion a year. That alone is a big benefit of at least everything moving to a stable coin on a blockchain. Yes, I think that's why we're seeing Stripe integrate both Solana and Base for payments.

[01:13:50] I think that's a huge thing on the wall. Visa and MasterCard are not going to be able to keep charging 3% for very long. Stripe wants to be that middleman, be that facilitator. Stripe can still take a tiny fee, but if you're paying 0.1% instead of 3%,

[01:14:06] that's a pretty sick deal. Most people are going to take that. What about Block? Are they doing something similar? They must be. I haven't seen anything about it, but I'm sure they are so Bitcoin-focused, though, that they might not want to do a stable coin thing.

[01:14:22] Jack Dorsey is a maximalist, I think. Maybe if there's a really good Bitcoin stable coin, which I think could happen, you could have a BRC20. Maybe Circle will launch one. They'll launch USDC on a Bitcoin L2, which is totally possible.

[01:14:38] Then I could see Square doing it, but I'd be surprised if Square adopted an Ethereum-based or a Solana-based stable coin solution unless they absolutely had to. How do you think Elon Musk is going to eventually... His roots are in payment systems, so eventually he's going to turn Twitter

[01:14:54] into some kind of payment system. I doubt he's going to use Dogecoin. He's got smart people around him who know the crypto space better than he does. It would not shock me in the slightest if all of the tipping

[01:15:06] and the subscriptions and everything else on Twitter or X gets switched over to using USDC on a native L2 for them or on Base or something where you're not really going to have a transaction fee.

[01:15:22] Because then, if you just have casino chips, if you're not doing a credit card transaction each time, people spend it more and they can take a cut of all those transactions. You might see people tipping a fraction of a cent on things that they like.

[01:15:34] You could pretty easily build a system where you have an X wallet or a Twitter wallet that you're loading with USDC, and then whenever you like a tweet, I would do that. I would be totally happy to do that. That would be cool.

[01:15:51] You would probably see a lot more microtransactions happen on an existing social network like that than a whole new one gets spun up just for that use case. Yeah, that's fascinating. I never thought of it that way, that it would encourage not only more liking

[01:16:07] but also more tweeting. I used to tweet a lot more than I do now. It's another thing to keep score of, as opposed to just likes and follows. It would simplify the thing they've started building with doing creator payouts

[01:16:27] because I get paid maybe like $20 or $50 every week for being active on Twitter, but that goes to my Stripe account and then I have to send it to my bank account and then I have to use my credit card if I want to subscribe to somebody on Twitter.

[01:16:39] If I'm using a Twitter USDC wallet or just sitting on my wallet, which is just connected and authorized for Twitter, you're just going to have a lot faster transactions. Removing barriers to transactions tends to make more of them happen.

[01:16:55] I can see there being an incentive for them to do it. Interesting. Well, look, that Crypto Confidential, Winning and Losing Millions in the New Frontier of Finance, I love having great guests come on more than one time. Congratulations on the book.

[01:17:15] I know it's going to do really well. Thanks so much, James. This was a real treat to get to do this podcast. Like I said, you're one of the people I started following in this space 10 years ago

[01:17:31] and it means so much that you liked the book and would love to come back on and it's going to get real crazy interesting over the next few years. It's going to be a lot of neat stuff that comes out.

[01:17:43] Yeah, I agree. Well, thanks again, Nat. Crypto Confidential.