Transcript for #1951 - Coffeezilla

what is a it's a crypto exchange right so how does that work so the first question is when you get in when you learn about crypto you're like it's this magic internet money magic how do you get some of that how do you get some of that magic internet money well you have to go somewhere to buy it and so it's a crypto exchange is where you kind of go you put your fiat on your dollars or whatever euros or whatever and you put it into this crypto exchange they have a bank and they work with that bank then they exchange that money for some type of crypto token. There's a lot of different tokens out there and explain tokens because I don't understand tokens.

Yeah, tokens like is the individual, you can think of currency, right? So it's like the individual. So Bitcoin is, you know, Bitcoin. Then you have, it's one of the cryptocurrencies. You have Ethereum. You have Dogecoin. You have Safe Moon. You have FTT, which is what FTX was using as their native token. So a lot of these guys, you'll start a crypto exchange and then you'll launch your own token that people can invest in, sort of like they're investing almost in your crypto exchange. And so that was actually one of the ways that FTX really perpetuated their fraud. I can break it down. How much do you know about the FTX?

So FTX was this crypto exchange located out in the Bahamas, which is a great place to put your what are they doing in the Bahamas? because it's unregulated. So the problem with doing stuff in the United States or, you know, something like Europe or something like that is you are subject to all these regulations, which require you to be a little more careful. Oh, those are pesky. Yeah, they're annoying. So like the famous example is like Coinbase is in America. And they have to file all these forms. They have to be they're regulated entity. They're publicly traded companies. So they have to report everything. So if you're offshore, you can kind of not do any of that. You can play fast and loose. And you know, for some people, they think that's better. They can offer, let's say like a hundred X leverage. Like you have a dollar. I'll let you trade with a hundred dollars. And that's going to be like one reason you come to my offshore exchange. I can offer you more leverage in the guys who are like, you know, coin base or something like that. So, FTX launches, let's start with who Sam Bangman Freed is. He's kind of at the center of all of this. Sam Bangman Freed is this guy who comes, he's the son of two Harvard lawyers, then he comes up, prep school. He's kind of like, built for success, right? He goes to MIT, goes to Jane Street, is this quantitative trader, and then he goes into the crypto space, and he launches FTX.

I think he is young. I'm not, maybe you can look that up, Jamie. 31. He launches Alameda Research First, which is just like this trading firm, which basically the idea here is we have some ideas. We're going to raise a little bit of money and we're going to do these trades that are profitable in crypto. The way he first made his money. was he did something where he bought Bitcoin in the U.S. and they sold it on these Japanese exchanges where it was worth more. So he was arbitraging this difference in prices. And then after he made his money that way, he launches FTX in 2019. And that's a crypto platform where honestly, you can make a lot more money than just with a trading firm. So FTX, quickly skyrock, it's in popularity. They bring on people like Tom Brady to promote it. Larry David and the Super Bowl, they kind of get buy in from all these big sort of names and also reputable people like Black Rock. So Koya Capital, they all invest in this guy, Kevin O'Leary famously promoted it for like $18 million.

He says he lost it on the platform. He says the 18 million was on FTX or whatever and he never got a dollar out of it. But that was what the deal was for. So they were paying everybody to promote this FTX crypto exchange. And the idea was is this is the next the next big thing, right? And this is where you're going to make money. There was a lot of fear of missing out or phomo in the in the markets at the time, you know, everyone thought all cryptos. You have to get in now, right? Because if you get in now, you're going to make some money. And so people invested in FTX thinking that this is going to be. a safe platform. This kid is smarter than everyone else. He's the son of Harvard lawyers. We just sort of can't lose. And nobody paid attention to some of the red flags that we're going on until ultimately was too late. It turns out he was pilfering FTX, the customer deposits and was using it in Alameda research, which was his trading firm to try to make extra money and he lost it.

Yeah, Coinbase is much more heavily scrutinized. They actually have to file with the SEC. They have to say what they have where they're putting their money. They're subject to more regulation about like how they take care of customer deposits. One of the big things with FTX was they told people, hey, you put your money with us. We're not going to touch it. We're not going to move it. That's what FTX said in their terms of service. So one of the really big problems was they actually weren't doing that but nobody knew because nobody had a look at their books like it was very opaque nobody knew what was going on behind the scenes. So even though they said like we're not going to touch your money. As soon as you deposited Bitcoin, I mean, I talked to some of the insiders at Alameda, they said they had this uh back door system to where they could see you Joe deposit a Bitcoin on FTX, they could grab that Bitcoin and start trading with it immediately. even though they were never supposed to be able to touch your money, obviously. That was the whole point. It's like, you deposit with us. We're not going to do anything with your money. It's your money. It's like a bank. It's almost like a bank. Like you deposit with a bank. Your bank isn't supposed to go ahead and take your money and go start trading with it. Unless, you know, obviously we have FDIC insurance stuff like that, but like they didn't have that. They just take your money, go trade with it, and that's where the disaster started.

This is one of the, this is why it's so interesting to me to look at fraud. Like this is why it fascinates me as well as I think it's an important thing to expose. But like I'm interested in the characters who perpetuate fraud because they're such interesting psychological case studies. Sam Bankman Fried, you could probably write a whole book about the fact that this guy, he got away with lying so long and perpetuating this image of himself as this generous billionaire, you know, he's sort of the next Warren Buffett, that when everything goes wrong, He thinks he can re-establish control because he's so smart. He is such a good liar that he's like, I can just lie my way out of it. So I think that's why he ultimately talked. His idea was if I lied my way into it, I can sort of lie my way out of it. And this is what he did. So I prior to this, I'd interviewed him twice before and I had kind of gotten hamstrung with like, you know, he's just so good at dodging stuff. Do you have any of you him before the scandal? No, not before the scandal. So it's like as it was going down. As it's going down, he goes on all these Twitter spaces. He doesn't want it. He's doing interviews with everybody. I ask him. And he doesn't want to talk to me. So he's going on these Twitter spaces. So I keep, I like was tracking when he'd go on a Twitter space. And I would contact the people ahead of time and say, hey, at the end when you're ready for this thing to go down. Because I know as soon as I get on, it's going to end pretty quickly after. I said, let me on. Let me ask him some real hard questions. Because all these guys are like Sam, we appreciate your transparency. Kind of kissing up a little bit. But I was just like somebody asked to ask him some more questions. So I had two prior little Twitter space interactions with him. And he kept getting away with the fact that he blamed all the wrongdoing of FTX on Alameda Research. And he said, I don't control Alameda Research. Even though he was the owner, he's no longer the CEO as of 2020. He hands it to this a girl he actually had a relationship with Caroline Ellison right and she supposedly controlled it he said she did everything I don't have access to the book like I basically knew nothing so anytime you'd call them out on an issue you'd say where's the money goes what's I don't know it's gone it's alamita research ask alamita so by the third interview I'd studied him and I said okay how do we get down to FTX's responsibility and this whole thing. And I kept coming back to it was the terms of service that said, you cannot move like when I deposit with you, you're not going to touch my money. And I said, Sam, if that's true, where's the money of all these people? There's no Ethereum left. There's no Bitcoin left. You don't have the real tokens anymore. You just have your sort of nonsense, FTT tokens, the tokens you invented. And he said, oh, well, you know, there were some margin trading accounts. And I'm like, no, but there were people who didn't trade with margin. There are people who just put their money with you. And they all they wanted, what they wanted to store some Bitcoin with Tom Brady. They wanted to be alongside Tom Brady. So he's like, well, well, you know, there was fungibility between wallets. And it's like, well, what's fungibility mean? It means whether you were a guy withdrawing who had who is this degenerate day trader or you were a grandma with who just put one Bitcoin on there or you know more likely the grandson. He treated all the accounts the same so when everyone came running for the money they just withdrew until nothing was left. And ultimately, because they had lost billions of dollars, it left billions of dollars in credit claims basically. They didn't have the money. And so now it's trying to be sorted out by the guy who literally unraveled and Ron and he says this lawyer, this lawyer goes, it's worse than in Ron.

That's John Ray.

This is the problem with offshore, offshore accounts and stuff. actually his whole technique of shifting the plane like on to Alameda and like I don't control Alameda. I've seen something very similar I'm investigating this Ponzi scheme that's offshore and like one of the first things the guy does is he controls it but he renounces ownership he goes up I'm passing it off to some sham director and he goes I don't have anything to I don't know where's the money I don't know but he controls everything and so it's like this is the this is the tactic of these offshore companies is like you put the right people in charge, who are going to take the fall, you resign, and then you blame it on them later when everything goes wrong. His problem, though, is Caroline Ellison flipped on him. So she definitely flipped on him. She was smart. Yeah, yeah, she cooperated with her and I believe Gary Wang were big executives. They're cooperating. They've pled guilty. They're cooperating with the feds. I mean, They did the smart thing, which is something like this happens, you shut up, you don't say anything. And then you point at your boss. I mean, that's basically what they did. Which they first sure did stuff wrong too. You did not get to that level and not know that things were wrong.

Yeah, that's, I mean, ultimately, that's the problem. Like Sam was just hopped up on him and Fedamene's playing League of Legends. While I invest, like, at the time that was seen as this charming, like, genius thing on calls. On calls. You could hear, even actually, okay, so this is funny, they found his League of Legends account. And during some of the calls after it was a fraud, they could, you could hear him clicking in the background. He's playing league. Like they tracked his account. He's playing league while on calls about the failure of FTX.

It's like, it's, uh, I think it's a, is it a moba? I used to play like a variant of league, so I, I know, I know it's fun, but, but it's not like, fun to the point. Look, this guy's whole thing was like, I'm this effective altruist. Um, yeah. I'm this guy who's going to maximize good in the world, you know, and that was his reason for working all the time. I mean, that's the justification for to be hopped upon in Fedamines. It's like maximize productivity, maximize human happiness. You can't do that and then say, oops, I played a little too much of my video games than lost billions of dollars. Like, that doesn't fly.

But, but after the fact, he's like, Luke, like, he's still playing video games and you're like, can you have the decency to get off the video game and talk to people?

Huge. This is what I wanted to say. Like the more I study this stuff and you start to have repeat occurrences like I just cover stuff all the time and you see echoes of the same thing. I just had somebody just a couple of days ago was interviewing for this for this news scheme we're looking at and he said, you know, I never understood how Bernie made off got people. because it seems so preposterous. And then I felt for something very similar. And what I noticed with all of these things that Thread is, you believe, you know it's kind of too good to be true, but the social proof is overwhelming and it overwhelms your kind of like alarm bells. So the social proof is a combination of things. So first of all, it's like, it's this guy who drives a Toyota. So you go like, well, why does he need to scam me if he's driving a Toyota, right? Then it's like, uh, which is the same thing when freed dead. Then it's like, okay, Tom Brady backs. Well, Tom Brady's got to have some guys who are looking into this and then it's like, we'll black rock back to him. Well, Blackrock definitely has him guys who looked into it. It's a quiet capital they said he was Might be one of the first like trillionaires or whatever like like he's such a great entrepreneur. They think he's such a genius. I actually it might have been one of the A ones he guys are I'm playing on the name right now

No, no, I'm sorry. I'm blanking on. It's this famous. I've got to remember it right after I get out here. It's one of the famous like investment funds. They invested in a bunch of NFT projects. Mark and reason, I think. Is the guy who runs it?

A 16 Z. A 16 A 11 Z. A 16 Z. I was one of those Sequoia A 16 Z. One of them wrote this glowing review of Sam, basically, saying he's going to be one of the first trillionaires. So all these guys basically, a lot of these people backed Sam with the highest endorsements. And so if you're just an average person, you're thinking, well, how much more due diligence can I do than all these other guys? All these other guys buy into him. And then they themselves are kind of also looking at each other, being like, well, that guy did it. Like, what is the hottest deal around, right? Kevin O'Leary's in. So you kind of think you're swimming safely with like other savvy investors. And that's what ultimately gets you to buy in. Bernie made off his very similar. I mean, he was, uh, you know, really well regarded in Wall Street. So when people invested with him, they didn't, they knew the, like, returns were insane. But it wasn't like he was some random fly by night guy. He was well respected in the Wall Street space. People thought he might take over the SEC after like the current person is stepped out of that. He was going to take it over. like he's one of the leaders at the NASDAQ I mean he was one of the go-to guys and so you thought well I invest with Bernie like I can't lose it's like almost you know betting on the house like the house always wins right so when FTX was taking off it just seemed like everyone who was a someone was backing him so then it was okay and then I think a lot of these people deferred to their other friends. They're all saying it's okay. Let me put money in and it's just a huge case study that just because other people fall for something doesn't mean you're safe. Like you have to do, I hate to say do your own research because that's just overused, like scammy phrase. It's actually such like a phrase like that, you know, it's almost useless. Let me say this. If it's too good to be true, if they're offering market returns that you want to believe in, you go, man, I want to believe this is real. Don't invest.

So there were a few people. There was a Matt Levine interview with Sam Begman-free. He didn't call him a fraud outright. But he's like, hey, it seems like you're in the Ponzi business and business is good.

And what did he say to that? He's like, well, you know, like think of it like a box. And, you know, you tell a bunch of investors, you know, hey, if you put money in this box, we can get some money out. We can give you this, you know, he starts to explain like this thing that sounds exactly like a Ponzi ski. And so ultimately, Matt Levine's like, ah, yeah, this doesn't really make a lot of sense. But again, it stops short of this is a fraud because, you know, no one knew there's a bunch of backing. So I made a video at the time being like this crypto CEO just to describes a Ponzi scheme and that video has aged so well because it's like people like I was all true um but like but people were outright calling it a fraud like Mark Ahodus he's a famous short seller um he was calling that a fraud early I have a buddy of mine um he goes by dirty bubble media on Twitter he's like one of the an a non a Twitter accounts He was calling it a fraud. You know, there were things that were coming out like questions about, you know, okay, they say up, they have all this money where? Where on chain is it? So like the blockchain, everything's publicly, you can see it, right? It's all at some address. And so people were asking, like, where's, you say you have all this Bitcoin? Where's the Bitcoin? You say you have all this Ethereum? Where's the Ethereum? And why is so much of your balance sheet made up of your own tokens? It's a big question. So one of the things that FTX had done and a lot of companies were doing at the time, but FTX was sort of the worst offender, is let's say I give you a loan show. So an unsecured loan would be I give you a million dollars and I don't ask for anything. So if you default on that loan, I'm out of a million. Another way is I ask for, okay, I'll take some equity in the studio if something goes wrong, right? So I cover my butt if you default on it. Now, this is what was going on in crypto. They're called collateralized loans. But what FTX was doing was they were saying, hey, like, we'll take a million dollars from you. But instead of giving you collateral like dollars, or like a, like some asset, we'll give you FTT tokens, which is their own invented coin. And that should have value if anything goes wrong. And people were accepting that as value. But the problem is, When the exact moment FTX can't pay you back is the exact moment that FTT becomes worthless. So you think you have all this collateral, you think you have this backstop because on the books it's worth, you know, $x let's say it's like worth $5 a coin. But what you're not realizing is the real risk is when FTX can't pay you back, they probably can't pay anyone back, everyone loses confidence, everyone sells their FTT tokens, no one wants to buy it. It's worth nothing. So how did this all fall apart? Great question. So it's really interesting because it was like a battle between FTX and one of their competitors Binance. So the owner of Binance is I think it's Qingping, Zao. He goes by CZ on Twitter. I probably butchered his name. But he was actually originally sort of an ally of Sam. So he invested in FTX early on, put a hundred million in and eventually got paid out like $2 billion. Yeah, some of it was in this FTT token though. So they have a bunch of FTT, right? And so it's like November was when all this stuff went down and a report comes out from Coin Desk where it shows FTX's balance sheet. It shows actually what tokens they have, you know, for one of the first times it was kind of really everyone got to look at it all at once in one place. And people notice like, wait a sec. a lot of their assets are just their own tokens like they had a serum token which they control most of FTT so it looks like if you just look at their assets it looks like they're covering their liabilities they owe customers 10 billion looks like they have 10 billion but like most of this 10 billion is just their own tokens so CZ takes this opportunity to kind of spread some sort of information about that. He says, hey, we're actually going to sell most of our FTT that we got from that deal. And we're going to sell it. We don't know if we don't know what's going on there. And all of a sudden, it starts this firestorm because people are like, there's already all this worry in the past. That summer, there had been a bunch of companies that collapsed. And people had never thought FTX. It was kind of the first time anyone thought FTX could maybe not have the money. So CZ says, hey, maybe they don't have the money. I don't know. Whatever. I'm just going to sell some, sell like $2 billion worth or, but he knew he was doing. Oh, for sure.

The conflict was, it's a great question. The conflict was ultimately that Sam was trying to get some regulations past and he knew every, all the crypto people were trying to control regulations to favor their individual business situation. And so CZ felt like he was being cut out in Washington. And I think there was like a tweet from Sam saying like, oh, like I'll see you the next time you're in Washington or something like that, but like it was kind of a dig because he knows CZ can't go to Washington like he's a he would be he'd be afraid of being indicted or I don't really understand why you can't go but he can't go to America so Sam was meeting with regulators CZ felt cut out like he was basically going to get a bad deal with regulators they were all trying to Sam was working really closely with regulators to try to get regulations passed and CZ felt like he was cut out so that stirred up this like battle between them and ultimately Sam goes oh you won like our battle And people were like, you know, is it a battle when you lose billions of dollars of customer money? Like, wow, can you view this as a battle? Like, but he viewed as like, we're sparring partners. Like, and you won this round or you won the war.

I don't think he thought he would repay everyone, but everyone thought like, oh, we'll just dimter chapter 11, bankruptcy. We'll restructure the company. We'll reopen. We'll just turn all the debt into new FTT tokens and pay everybody out.

Yeah, it's pretty clear he didn't see the full scope of the situation, especially at first. It seemed like he thought, you know, he was like saying, FTXUS was fine. and then FTX US went bankrupt and he's the one who put it in the bankruptcy and then he's telling everyone oh no no the money's actually still there I mean he was constantly giving a conflicting narrative of what's was going on now he's still like try to say he did nothing wrong he's maintained he's innocent And right now, actually, the big kind of scandal now is they're finding a bunch of campaign finance violations because you're trying to influence politics, US politics. I mean, it's insane how deep FTX's influence went from the Bahamas reaching into the United States. Well, technically, not really being regulated by the United States.

So yeah. Sam new publicly. in our current American climate, like it's kind of like, okay, it's a little bit chic to be donating to Democrats. You can do that without too much, you know, negative press. But if I'm the number three donor to the Republican Party, that's going to be a bad look. So he decides to donate dark to a Republican, like to Republicans. And part of the accusation is he knowingly did this through one of his executives, Ryan Salami or some, I think that's his last name. Salami, I don't know, I just don't know how to pronounce it, but he was like, yeah, the number three donor to the Republican party, but it was all orchestrated through Sam. Sam wanted to basically influence politics by just donating, donating, donating, donating. And the idea is, you donate to both sides you can ever lose, right? If you have your hands in both pockets, but publicly he's just like he's donating to Democrats because he says, oh, I'm like this, like, you know, I care about all these issues. it's like even more cynical than just buying one party is buying both lying about it so that you can get all the good press of like caring about all these social issues while also not caring at all And ultimately, one of the ways like even some of the candidates they donated to were through like a third employee, we didn't even know about. And they were like donating through them for like all these LGBTQ plus causes. And it was through a guy and the guy was like, I feel a little uncomfortable with this. And he said, well, we don't have anyone trustworthy at FTX. We can donate through whose gay. So like, can you do this?

No, basically they were like, we need someone trustworthy. We can trust to do this. So hey, you're going to be the guy. We're just going to do a few transactions to your name. That just came out in a press release. It's the new charges. He was basically like a, they call him straw donors because it's like, if I give money to you to give money to a politician on my behalf, you're a straw donor. You're not really a donor. So Alameda was using customer funds to pay off politicians in order to try to get favorable regulation for I guess, offshore crypto exchanges, right?

So I think the big violation was you're not supposed to like if you're alimit a research and you're funneling money through a personal investor that I think is the problem. They're actually campaign finance laws. I've heard are pretty weak. I forget the name of the law, but it was passed in like the early 2000s, 2010s maybe, where it actually became very easy to donate dark, where it's like you can donate through super packs, political action committees, and you can donate as much as you want, and you don't have to be, your name has to appear nowhere. And so that's actually what he said in one of the interviews he goes, No one believes me when I said I donated dark because no one believes anyone would be like everyone wants to credit for donating. No one believes that I just do it on the fly. And that's ultimately what he's doing. But it also looks like he's donating through some of his executives. And I mean, the whole thing was shady all the way down. Like I, so the person's not named in the report who is donating to Democrats. We know the one who Republic donating to Republicans was Ryan Salami. That person eventually said, well, hey, can we restructure all this money that went through me like a loan so that we can, you know, say that I took a loan out and I was donating. So we didn't file any laws. They never ended up doing that. But like it was very clear. The internal conversations were they knew they were committing fraud. They knew they were doing things wrong. And this idea was, well, no one's going to catch us, right? Nobody's ultimately going to find out what we're doing here.

As big as FTX, we don't know. I mean, there's only a few that are bigger, like there's Binance.

All of these things are so opaque in the sense that you can know their assets. So it's like a big thing recently in crypto. They'll say, Hey, we're going to show you proof of reserves. What does that mean? They mean we'll show you on chain all our assets. You can check yourself like I have a billion dollars in USDC. Well, that's great. But it doesn't matter if I've a billion dollars in crypto Bitcoin, whatever, if I owe two billion dollars. Right. That's what ultimately matters is how much do you have on deposits that you owe out. And so with Binance, we don't really know the only one we have a little bit more of a look into is Coinbase. It seems like there are, you know, legitimate, but So much of the problem with crypto is we don't know how much of the stuff is money laundering. We don't know how much of the stuff is like outright the proceeds of criminals. I mean, we know that these criminals do wander their money through a lot of these crypto exchanges through mixers. It's just sort of this big mess right now and we're waiting for regulators to figure it out. Finally, regulators have stepped on the scene, but You know, right now it's just this kind of wild, wild west of you're just having to trust these shady offshore entities that they're telling the truth. Binance says they're fine. They show proof of reserves, but what are their liabilities? You know, it's hard to know. So people really just take you at face value and they have to trust that like, oh, other people are invested. So I guess I'll jump into.

Yes, because they're the legitimacy that says, hey, I'm, you know, I too am safe because Tom Brady's got his money there.

Yeah, people lose their crypto keys all the time. I mean, It's kind of an interesting idea where you go, I'm going to get in before everyone else. But a lot of people found out about crypto at the same time, the mainstream media, everyone else did. So by the time they're actually investing, it's too late. I think the most fair case you could make about crypto is Sometimes national currencies aren't a great idea and you want an alternative. So like look at the Turkish lira, right? The inflation rate I think is like 75% or something like that. Like it's like it's an unimaginable. It's just out of control inflation. And if you hold on to your Turkish lira, you're in for a bad time because every day it's getting less valuable. So the question is, What do you do if you're in that country making money? If you want to store your money somewhere else, how do you store it? So there's this idea of like these alternative currencies that are kind of interesting. And then there's some arguments that like, hey, if you're someone like me, I have two employees and both of them are overseas, like one of them is in London, one of them is in Ukraine. And so for me, I have to pay them and you know, I have to do this wire transfer and it's kind of expensive to do these like you pay all these fees for wire transfers. So the idea is like, okay, if you have crypto, those wire fees can go down. And instead of taking, you know, maybe a day or something, it'll take like five minutes or three minutes. So I don't want to give off the idea that like there's nothing here. But the problem is is that With the lack of regulation and the ability to send peer to peer, which means like a UNI can just send money to each other directly, no middleman. There's also a really huge opportunity for fraud, scams, and basically like shell games, or you're hiding the money. You're saying, oh, invest in this, this is gonna become valuable later, but you actually own a bunch of that token, then you sell it off, and then the price plummets, so you thought you had a bunch of money, but actually it's worth nothing. There's all these new scams that have emerged as a result of people getting interested in this idea of an alternative money system. Yeah, especially in our modern age, I mean, it seems like you can understand where they're coming from the average person. They're like, look, I've been screwed by the banks every time the governments printing a bunch of money. Where do I go? Right. You can understand the appeal, but it's just like you went from the you know, the arms of one huckster to another. Like it's just like, it's just like, almost to something worth worse. There are reasons that our banks have a bunch of anti-money laundering laws. There's a reason that they have all sorts of finance laws. It's not for their safety. It's for your safety. I mean, it's like they need to, you know, fight like one of the best ways to fight crime is at their wallets, like, you know, like take away their banking. and crypto has just really revitalized that because, you know, now, if you're some criminal, laundering money is just never been easier. instead of taking a hundred thousand dollars across the border or wiring it where it can get held up by a bank. Now I can just send you a hundred k. It's going to take me five minutes.

Ransomware. Yes. Yes. A hundred percent because before it was like okay you need to use like western union or sort of one of these like these places where you can kind of send money without too much scrutiny but even western union has been kind of even getting kind of the pinched a little bit like hey you guys got to stop allowing all of this but in crypto there's there because there's no middleman because there's no one who controls like bitcoin like no one can say like no to a transaction now it's like there's there's nothing to stop you from sending that money and then and then you can take that money and you can send it to what's called a mixer which is this like fancy language for for a way to like anonymize your transaction like you put it you put a hundred thousand dollars into this little mixer and then it sends a hundred thousand dollars out later and nobody knows where that money came from What is a mixer? How does it work? It's interesting. So the most famous example is tornado cash. They've recently been shut down. But the idea of what?

The idea of these mixers was you didn't minimize your transactors. So like, let's say I put like one, let's say I have Ethereum. One of, well, one ether into this mixer, right? This pool of money. A bunch of people are putting one Ethereum into this thing. So all this money is going in. And then you basically wait. And as you're waiting, Ethereum's going out everywhere, a bunch of people are withdrawing, right? Because they're also taking their money out. Right? By the time you withdraw, there's nothing tying your Ethereum to your particular address to like this random external address because you send it to a different one. So before it's like, if I send you a dollar and then you send that dollar on, we can easily trace that back to me, right? It's like, here, here. But if I send a dollar to you and everyone sending you a dollar and then you're sending a dollar to all these other wallets that it's impossible to know which of those new wallets my dollars from. It's like it's crazy. It's a crazy idea that these basically nerds and cryptography thought of, which is, it's brilliant. I mean, it is brilliant because it is basically, it's almost impossible to trace. But ultimately, the outcome of that is like, yeah, I encrypt all your data, Joe, send me, I know you're the successful podcaster. I want you to send me $10 million or your data's loss forever. And you're like, call the police and you go, hey, track this guy and they're like, to what? to a Bitcoin wallet, to Ethereum, what are we tracking here? And then it goes to some mixer somewhere, and then we don't know where it goes after that.

Why would he do that? I'm not as familiar with the regulation side of things people were talking about that a lot. What I know is everyone's always interested in pulling up the ladder after them and like building the kind of the rule book around like hey like if you're from this certain jurisdiction that we're a part of your fine if you're not like if you're from this one, you're not okay, or I might say, hey, like CZ has connections to China, like maybe that's a problem or CZ has a connections to here, maybe that's a big deal, but I'm from the Bahamas and I'm American, so that might be fine. I mean, everyone's always interested in the regulations benefiting them. The challenge now, though, is you know, a lot of people had backed that bill and now that it was all a fraud or the guy who basically pushed it was a fraud. Now they're like trying to retool it and it's like sort of what's left after the guy who kind of was spearheading this bill like was a fraud. It's kind of tough. I was actually randomly like some senators office reached out to me and they're like, what do you think about this? And I was like, I don't know, man, you guys have to this is this is y'all's thing to figure out. Ultimately, y'all have to And my feeling is offshore entities should not be, they're not subject to our rules. How can you allow offshore, like, yeah, I don't know. I don't know. It's very strange. And these offshore entities were also using like US branches, like there's FTX US, which was like more regulated, but not really that regulated. It's a strange time man to be covering crypto because I tried to tell people for years that this scam problem, this fraud problem, was going to undo sort of everything. If you don't root out the scam, you don't find ways to solve that. This is never going to work because the money system has to be safe. Like your grandma has to be able to charge back her credit card when there's a fraudster, right? Or this whole thing doesn't work. You can't rely on people being technically savvy in order to, you know, make something work. If it's going to go to the public, you have to solve all these issues. And unfortunately, we saw crypto kind of go mainstream before they had really taken that. Maybe some of them were taking it seriously, but not enough. So if

So something to understand. FTX was in solvent long before it was realized that they were in solvent, right? That's the issue was FTX's problem was not CZ. Ultimately, he's kind of the guy who pushed over the house made on sticks or something. The problem was the foundation was wrong from the beginning. If you don't have enough deposits to cover withdrawals, you just don't have the money, right? your your issue is that anytime there's demand for withdrawals you're going to encounter problems. So the it was going to be inevitable anytime any story broke that showed that maybe they're not as healthy as they should be. There would have been around on the banks and people would have found out it's just like when are they going to find out it just he happened to be the final straw that makes it so someone would have figured it out and someone would have started dumping their coin. Yeah, people already, I mean, even leading up like CZ gets a lot of the credit for it, but like already, like a day before myself, they kind of shut down myself and some other people were saying like we think they're in solvent because we had taken a look at their numbers and we said there's no way they have the money for this. They don't have the tokens. So we were warning people, hey, this is probably in solving, get your money out. But CZ ultimately was the big, like, he was the most notorious and like a well-respected person in the space to where people thought, okay, well, if he's saying it, you know, he's a guy who only says positive things about crypto because he's a crypto executive. So if he's saying there's might be problems, there's probably some problems.

No, they've had a few runs and they've covered with draws. I mean, so it's just, the problem is a lot of it's a black box. I mean, so it's like things are good for now. Yeah, you don't know. That was the problem with the, with the FTX, like they had hidden all their numbers, like Sam had literally had a $10 billion account that he mislabeled with Alameda Research. mislabel. Yeah, he said he called it fiat at ftx. But it was a $10 billion hole. What does what do you mean by mislabel? Well, it was on a spreadsheet, Joe. So he he was on a put it on a spreadsheet for their balance sheet and he mislabeled the account. Fiat at ftx. And so what prosecutors are now arguing is he knew, of course, what it was he deliberately obscured what that was to hide it from people who were trying to take a look at his books. But It's just that's what I mean by black box you never know what games these guys are playing like they say oh here's sort of like the rough estimate of our balances but oops did I tell you about this $10 billion account like I forgot it's so silly it's a yeah You find out like there were just no adults in that room and like the few adults that there were were like, you know, they had like a criminal lawyer. Uh, well, anyway, I don't think he's actually been convicted of any of the I shouldn't say that. They had this guy Danny Friedberg shady shady. This guy literally shit Dan Friedberg. No, he's definitely shady. I'll say that. What was his, I remember, but what was his, his, his all thing was he did this thing with ultimate bet. So he was one of the lawyers. So there's this poker site called ultimate bet. And he got caught in the scandal where they had enabled this thing called God mode on ultimate bet where the, The CEO could see everybody's hands and play on the site, seeing everybody's hands. So he just cleaned up on all his own like his own customers. Just basically taking their money like I know exactly when to fold. I know exactly when to bet. So he had God mode enabled, and then they found out, somebody found out about this God mode. And so the lawyers, like, how do we basically cover this up? Dan Friedbergs, like, how do we, you know, what do you want me to do? And he's like, hey, just make this problem go away. This is the, you know, like, go blame it on somebody else, go blame it on somebody else, go blame it on somebody, you know, third party that got access to our website, say it was like a glitch or something. And so that, that is the experience of the lawyer that FTX then hires is like being complicit on a private call, leave private call, trying to cover up this God mode scam. That is his background. And so I asked, you know, Sam, I was like, you know, what does it say if this is your chief regulatory officer? this guy who enabled God or who helped cover up God mode. And he's like, well, I don't want to comment on other, you know, people or it's just like, well, how does he skate on that?

I ask myself that every day.

So many of these scams are like these issues of either regulators not having time, not having the resources, not having sort of like it's maybe not big enough. There are good people, a lot of the people going after these guys, but it's like trying to catch everyone who's speeding. It's like people get away with it. There are too many people doing it. You'll catch some people, but ultimately a lot of people will just basically skate by even though by all rights they should have been caught. In my view, what he did was criminal, that's why I started, but it hasn't been prosecuted or anything like that. But he's on a leaked private call, everyone can go listen to it yourself. It's just this shocking thing. And I think that shows like if you're running a shady empire, like who's better than a shady lawyer to try to help you cover it up, right?

It's a weird thing. So when did you start YouTube channel? So I started it a few years ago, 2018, 2019. And what was the first video? I started it as sort of like an interview show, nothing about scams. I had a channel before it. So I went to school for chemical engineering and hated it. I was miserable. I was like, I did not want my life to be earning 2% more of a bottom line for X on mobile or any chemical. I just wasn't interested. I was like, that's not my life. So I always wanted to sort of, you know, have a voice. And so I started a YouTube channel just doing random videos. I hadn't really found my footing. But throughout my entire life, I kind of had this relationship with like, hucksters and fraud. where, you know, when I was in high school, my mom got thyroid cancer, very treatable kind of cancer, and she's fine. But at the time I watched her as she's like, gets this diagnosis, gets swept up with all these hucksters who are telling her that the way to treat thyroid cancer is not surgery. you can just treat it naturally just don't worry about hey don't listen to the you know the doctors don't listen to your general practitioner you can just treat it with like colloidal silver or with just just put a bunch of garlic cloves in the pot I still remember house like reaped that she would put 60 cloves of garlic in like in a stew and she would drink it up because she thought that I'd make her better ultimately My dad, uh, convinced her, like, you got to get the surgery. Like they say, they're saying going to fly. You have to, you know, ultimately get the surgery, uh, which thankfully she did, and she's fine. Now she takes medications or a place to the hormones or thyroid would generate. But I saw my mom kind of get swept into this thing that I knew was nonsense, but it's sort of like hard. You kind of have to disprove every single, like there's always a new, like, health guy telling you that there's some new alternative discovery, whatever. And I was like, this is kind of weird. And I was like, why do they hate doctors so much? And it always seems to like end up with a sales pitch. I could never was like, hey, let me just give you this free thing. It was like always like, there's something there's a catch. So I didn't really know what I was looking at at the time. Then I would go to college and all my friends get an MLMs, multi-level marketing and sort of like, just like, like, hey, you're going to get rich. So I was always getting invited to these like, get rich seminars. And I'd go, because it was like my friends like said, hey, we have to get somebody, you know, you want to go? And I was like, sure all guys like kind of fascinated and you'd see these guys you know they're like hey don't work a nine to five job like be free like me and I'm like you're here on a Sunday at like five p.m. how free are you really like you're just like you're just kind of grifting here and so but I but you'd seem a nice cars and so I was like what is what am I looking at and then As I'm doing my YouTube show, I get fed a bunch of ads, get rich quick skips. You've got a bunch of people flexing in their Lamborghinis telling you, you know, they're like 25 years old telling you, you want to get rich by 25 or 22. I'll show you, I made a million dollars, I'm a millionaire by the time of 23 years old. Just buy my course. My course is, you know, $2,000. Pay me $2,000, I'll teach you to get rich quick. So I saw this and it all that my experience is up to that point. It kind of led me to like, I want to say something. Why is nobody saying anything? It seemed like there was this, you know, these people pitching this stuff and nobody was talking about it. So I made this random video just basically screaming about, you know, all these scammers online. And unlike my previous work, which kind of had resin, like it had gotten some reactions, but not much. What I noticed is that it resonated with people beyond the views. if that makes sense. Like, I was just like, there was something different about the reaction to it. Like, and, you know, victims would reach out to me. They'd like, hey, I'd been scanned by this guy. And I didn't realize what was going on. And you showed me, you know, sort of, like, how the whole scheme worked. So I decided to start pursuing it step by step. And at first, it was like, just me discovering, like, well, what is this? Well, how does this scheme work? Okay. So I buy this course and then what? What are you saying in the terms of service that means that I can't sue you have all these terms of service that basically say none of what I'm saying is true? Like they say they can get you rich in the sales pitch and then in the terms of service they said results may vary. What's that about? I mean ultimately it's like and so I realize like oh there's this sophisticated way that they're praying on my psychology and they're setting it up with like I used to be broke like you. Well that's a strategy. A lot of these guys were never broke, right? And it's just part of the story you have to tell to be really effective. It's like I used to be just like you Joe, but then I found out that doing Amazon dropshipping is the way to make millions of dollars. And, you know, I used to fail, but by these little tricks, I found out how to be successful. And if you invest with me, I'll save you time. You know, you could do it yourself. You could do it. But it's going to take you five years. Get with me. And I'm going to shortcut your success. Two months. You're going to be making five figures a month, ten months, maybe six figures a month. And I've done it for people before. That's the social proof. I've shown people how to do this. You can watch them watch. These are real. These are real people, Joe. You can do it. Be just like them. And so I started watching this and I started like seeing it. I'm like, oh my gosh, this is so interesting. I start covering it. And then I start to get seasoned to this letters. They don't like that. So they start to send me, they say, hey, you better shut up. Or we're going to sue you. And I was like, OK, I'm not going to stop making these videos. I just kept making the videos. And ultimately, they never did. But But I start doing that and after I get covered get rich quick schemes for a while, I start hearing about these tokens. And they're like, hey, selling courses, like it's always the new grift. You always have to find because people figure it out. Like they go like, oh, that actually doesn't work. Like a sell drop shipping is not actually like this incredible business that you thought it was that you're going to get rich easily. So don't do that. Go do crypto. You got to get a new crypto now. And then it became NFTs for a while. But like so I started I eventually like pivoted into this crypto direction and learned all about that. But it started just from a curiosity about scammers and and I wanted somebody to say something because I was just like, why? Why does this make? Some people tens of millions of dollars and nothing happens. Why are some of these people making hundreds of millions of dollars? People are miserable at the end of it. And nothing happens.

I was just doing a normal interview show with a few of my buddies. And it just was kind of, I was just trying to find my way. I was just trying to like, but even before that I had done a show where I was like trying to break down these topics, I was like researching addiction and I was just like trying to, you know, make some digestible piece of media around like addiction, right? I always was interested in communicating and complicated ideas in a digestible way. I just felt like, man, there's so much cool science out there. There's so many cool ideas out there. How do we communicate this? So I did that for a while. Then I started like Coffee Zillow was like this spin off channel. And I was like, let me do some interviews. And then it was also my place. I just threw things at the wall. So that's where I threw one of my rant. Like I just like ranted about this thing against the wall. And it kind of like stuck. And I just enjoyed it. I was like, man, Screw these people, you know, like we're taking advantage of like, and what was sick about it is they're not taking advantage of rich people because rich people will sue you. If you screw them over, rich people will sue you. They're taking advantage of like people who they're like $10,000 or $2,000, that's like all of their disposable income. and they're betting on these hucksters to dig themselves out of these situations. And that's one of the things I try to tell people is like, a lot of this success of these things is not from, it's not even about greed, it's about desperation. When you fall for these things, a lot of times, you're like my mom, like the reason she fell for these things is she so badly didn't want surgery that she was willing to believe anything. right because she's like you know if you tell me and I have cancer you tell me I can be better and you tell me it's ten ten thousand dollars you tell me it's a dollar I'll pay you either way right and so people are financially they feel like they're terminally ill financially they're just like I don't know how to get out of this I feel like I have no opportunities this guy I'm watching YouTube I'm trying to better myself I'm trying to educate myself in this guy comes on and tells me it's all a click away right it's all credit card swipe away

I think the biggest story we probably ever broken was either the FDX stuff that was already kind of going on is probably the Logan Paul story. The Crypto Zoo saga. That was a case where, you know, it's just the classic influencer greed story where this guy launches and NFT project does millions upon millions of dollars in sales and delivers nothing. He promises the world a fun blockchain game that earns you money and he did nothing and the project was left abandoned and people were like miserable complaining complaining no one says it but I'm not aware of this I'm kind of aware that you covered it but I don't know the story

Let me, let me, let me back up then. uh, Logan Paul is popular influencer, you know, he was sure. Um, so he along with a lot of influencers got really interested in like the crypto space and he had done a coin before that called Dink Dink, which was abandoned shortly after he promoted it. People got invested goes to zero, right? And he says, well, that's not my project. That was my buddy's project. And then like a month later he's like I actually do have a project excited to announce it. It's called Crypto Zoo. It's a fun game. They call it a fun game that earns you money. Basically the idea is they're going to sell you these two things. Eggs is NFT. And then there's a coin aspect to it called zoo tokens. So you can buy these zoo tokens to buy the eggs. And the idea is the eggs will then hatch into animals that will earn passive zoo tokens. So you can buy eggs with zoo tokens and then the eggs will passively earn zoo tokens. Does that make sense? No. Well, don't worry. You're kind of actually caught up. So the zoo tokens were basically this passive income. You basically invest up front and then you're sort of getting the tokens back out, which you could then sell, I guess. So that was the idea pitched to people and people immediately buy in. They $3 million in NFT sales. tens of millions of dollars in the tokens itself, the Zutokans, people are so excited about it. Because it's Logan Paul and he says this is his project, he's putting his name behind it, his back behind it and he's a great marketer. I mean, you've got to give the guy credit where credit is due. He's a tremendous marketer. So people get all excited. All of a sudden, the hatch day comes when you're supposed to hatch these eggs and half the hatching doesn't work.

It was on the blockchain, so you could like, your NFTs would turn into different NFTs. Like, they would like, they would transform into the animals. They go from an egg to an animal. How? It's just blockchain coding.

It's just random. It's like, it's supposed to be randomly generated animals. So you, you might get, yeah, and chicken. Exactly. And then you could like cross-breed your rhino with like a chicken and get like a rick-in or something. And get even more tokens. But, uh, is this it? Yeah, there it is. You get like bear shark. So like Panda. So people start to like, is this still around? so they say they're gonna go back and fix it now so Logan after being not involved for like a year as soon as my video comes out he goes damn what a coincidence like i've been working on it like i was gonna you know make it like launch it in reality he had touched it for a very long period of time but so so sorry to back up okay the uh... half the token half the eggs don't work and they're not actually earning anything the whole time they said they're gonna earn you these tokens right they're not earning anything So the promises haven't been fulfilled. There's just sort of all this stuff going on behind the scenes, Logan's quiet. Come to find out he had hired basically criminals who were selling on the back end, like some of the tokens. And he was sort of like, I don't know what his thing was. I think he realized like, oh, it's not going to be that successful. Let me move on. I think his mentality was, let me just move on. Right? The problem though is you have millions of dollars of investment in a thing that you promoted. You told everyone it was going to make the money and then you never delivered anything. So my story was basically showing that, showing the victims of the scheme, and then response, he's like, I'm going to sue you for that. He says you'll sue you. Yeah, he said I'll see you in court. and then the backlash against him was so severe that he releases a video saying thank you coffee zilla for showing at the world what happened and I appreciate it I responded out of anger but I'm going to make things right I'm going to fix the game to what it was supposed to be and I'm going to pay back 1.7 million dollars. I'm committing 1.7 million to anyone who bought an NFT can get a refund. Now, there's a bit of an issue with that. So that's nice. I actually think it's great that that happened, but there's two issues with it. Number one, which is that The NFTs only have a small part of the sale. They actually weren't even half. Because people bought these tokens. So the people about tokens getting nothing. He's offering this refund on the NFTs. The other problem is he hasn't refunded the NFTs. I've actually reached out to him twice. It's been over a month since he's done this. So he said he's going to do it. And then the Discord put like he's posting in this little chat room with the investors. after he said he was going to do it he's posted nothing there's no way to get a refund right now so i keep asking like hey where's you promised one point seven million to these investors they're all waiting it's been over uh... i think it's almost been two months now and there's nothing so it's like you know he says that he's refining people which sounds great for PR and then it's just like radio silence so What I'm ultimately looking for is some accountability from these guys. They're happy to make money from the endeavors. They're happy to potentially make millions of dollars from these, you know, different projects they're spinning up. But the second accountability is asked for, you can't reach them.

So we have text messages for behind-the-scenes. A lot of people, the people who were responsible for, say, Logan, kind of spearhead at the idea. And he says he spearhead at the idea. So it was his idea.

uh... yeah i mean he had a he had this team of a few guys who they didn't do much vetting into and some of them turned out to be criminals but you know my my feeling is ultimately no matter what happens like when you take people's money that's what i'm trying to like on my show. I'm trying to tell these like influencers like when you take people's money, it's different. When you tell them you're going to make them money and you get into the financial investment game, your responsibility is different. You can't just always pass the buck to like, uh, it was like a guy that's not that trustworthy. It's like, all right, that might be true. Then go fix it. go hire some more guys that are trustworthy and fix the thing and I think um my experience because I've I've talked to Logan and and that's why I know he didn't respond to me because I I texted him I said hey where does this money he left me on red but I've talked to him and when I talked to him you know There's just sort of this feeling of, he's like, I just don't want to think about this. I don't want to be. He wants to focus on Prime, which is successful. He doesn't want to be bothered with the victims of the scheme that he ultimately thought of in the first place.

It's very frustrating because, you know, at every turn, it's just sort of like, you know, I want to say it's possible. We just don't know and it's just sort of like, When you promise people refunds like the longer you wait, you know the less people are actually going to take that refund. If Walmart says, hey, bring in, bring in this skull. I'll give you a refund. And you're like, all right, when can I bring it in? And then I'll respond you for two months. They know that you're less likely to actually take the refund. So I don't know if he's doing it because he wants less people to get the refund. He probably is busy, but my thought is, a transgression of this magnitude where you're playing with people's money and livelihoods, you cannot take it lightly. And that's one of the things is these influencers got into this crypto space. I don't think they fully appreciated They're now dealing with financial investments and it's not a joke. It's not like a brand deal where, you know, if NordVPN isn't as great as they said it was, you know, it's all cool. Right. It's now it's your company and you promise people you're going to make the money. And now you haven't said anything for over a year. Then you say you're going to refund them and you don't say anything for two months. That's that's an issue.

Yep. So let me start by saying, so I work with a super talented digital artist. So he does a lot of my set stuff. So I have a lot of respect for, you know, the challenge of a lot of digital artists as opposed to physical artists is like, if you're a painter, you saw your paintings. Right. If you're a digital artist, how do you print it out? Like what do you do? So NFTs were sort of originally, it was like, this is for artists. like this is a way for a digital artist now to legitimately sell scarcity in their work. which previously they had no way of doing. You still can take a screenshot, but you don't own the NFT that like sort of the digital artist has sort of provisioned like this is the thing that matters. So I've a lot of like in that way, in that one way, I get it. I get why people wanted it to become the next big thing. The problem is, is it's quickly taken over as an investment vehicle. Now it's like everybody's an art dealer and now everybody's an art expert and now we're trying to make a buck right and at any time you get art involved with money things get weird but especially when you get art involved with quick flips and returns and now we're going to make all make money from this That's when things get really weird. So like, I feel bad sort of for digital artists, legitimate digital artists who really do legitimate NFT work. I don't think there's anything wrong with selling your work as a digital artist. Like, what do you expect them to do? Not everybody can go work for like some random YouTuber. Like, you know, people have to earn a living. They do legitimate work and good work. But the problem is when greed gets involved, when people get involved, basically promising money. In the case of the board-a-beaut club, it's sort of like what they, their idea was, will start almost like a country club where the NFTs, the past, for the country club, and like you can go chat with the like holders of this board-a-beaut club. And I guess the idea is like, because it's expensive, then you get in the room with people with money. But I found that whole thing weird because of the like, you know, Jimmy Fallon's getting involved and like, and then all these like mainstream celebrities, you know, start promoting this thing and it's like, this is a little, why is everyone doing it? And then you come to find out that a lot of them had their board apes bought by this company called MoonPay who is trying to like, you know, use the celebrities likeness to push that out and it's just like, this is a strange, what's actually going on here? Is it just about the art? It doesn't actually appear to be.

So think about it. So think about it this way though. So I'm sure you've played a bunch of games, video games, right? Have you ever played a video game where they have like in-game skins and like different like outfit? Sure. So tons of businesses have been built. Like the entire free to play model of Fortnite, you know, Fortnite makes millions and millions of dollars. their whole model is built on skins and like different like in-game purchasable item you don't actually own anything ultimately it just lives and dies with your computer NFTs are sort of like I guess the idea with NFT gaming or whatever is like what you would actually own own it like the game couldn't take it away from you'd have some piece of art that you'd have some ownership of that would matter again I think the challenge is is just like where greed and like marketers get involved. It's sort of like ruin everything with scams and fraud to where it's very tempting and I get the temptation to just throw everything out. It's all just a fraud, right? Because you see so much of it and so much of it is just like kind of people trying to scam you basically for, you know, and use especially celebrity likenesses to scam people.

It's a, I mean, it's a huge part. This is how we get legitimacy for products now. It's like sort of like endorsements endorsement. It's like you got to find a guy to do it. So ultimately like, and the AI stuff scary because ultimately you'll get the AI deep faking you into, you know, yeah, there's one of me.

Yeah, they they deepfaked you and I think it went viral on Twitter for a bit.

I'll tell you offline who's doing it. Okay. I know. I looked into it because I was curious and you know that same person had put out a lot of ads about like Kim Kardashian had their deep fake of Kim that a deep fake of they had one of you saying that like so they have one of you saying like this products great you know go buy it And then there's another one where you were complaining that Andrew Tate launched it. And you thought you were sort of like Andrew Tate's going after my brand. Like, because it's very similarly named to one of your products. And so it's like, it was kind of this hilarious thing where they were playing both sides. It's like, it's Joe Rogan's. It's also Joe Rogan hate like hates that it's out there because it's so good. And it's like Kim Kardashian loves it. They had every celebrity was like basically endorsing this thing all through AI. And it's just the testament of our times. celebrities are the new sort of authorities for better and often for worse. But like, but people use that as currency now and like with AI, you can just like fake a lot of that stuff.

There's, there's a lot of podcasts that you've, I'm crazy. Sometimes I'll check when I go, is this real? I saw, there's a bunch going around. Now they can imitate anyone's voice like they don't. Yeah. I think you were probably one of the first because you have so many hours of footage, so they had a lot of training

literally and now they're getting really good at the inflection because one of the problems with these AI tools was they were very monotone and they can only imitate your voice in a monotone but now they're getting better at like okay we'll accent the voice and then we'll talk calmly and then we'll be able to you know get more excited yeah so that's a huge problem have you seen the face ones though yeah Jamie, can you pull up the the new TikTok face filters? Have you seen this? Which face filters?

I think it's like they're glamour. There's a bunch of Twitter threads right now on it. It's in the glamour. It's amazing.

You look different. Yeah, you look different. Yeah. It's literally gonna be this new world where you won't know, like, cat fishing is going to a new level.

Yeah, this is the one that I saw. Yeah. Well, now if you touch your face, you should be able to they don't like superimpose in it. Like it's all really real. Like you can do anything to your face and you can manipulate it and the AI tracks at all.

Yeah, it's really worrying like, you know, these technologies part of the problem is you could deploy them so cheaply and at scale to where, you know, in my world, I'm more worried about like the Joe Rogan deep fakes and like, and like people scamming people out of money. But I also worry about like the romance scammers. Yeah. How good that's going to get when chat GPT now has all the scripts down. And instead of paying someone to get it, you have someone FaceTime this person. Oh, yeah, you have someone face time. You have it all generated by an AI. It cost you almost nothing to do. I mean, one of the rise of like, Robo calls was it's just cheaper. Like, it's really hard if you're going to hire people to do it. You kind of need an ROI. If you have robots, you know, sitting spam now it's Now it's good. So you don't actually need to earn that many dollars per call to make it viable. So you just call everybody.

It's going to be a lot more prevalent and it's going to get a lot better. I mean, the rise of the ability to generate like a realistic companion avatar is going to be, I mean, it's massive. You know, these people are complaining to me the other day about this other thing, what you're going to find as well. So there's this app where you can basically have a girlfriend who's an AI. where like the AI you like like basically you know it's a fake like you know it's all AI but it's like a companion chatbot and you know I get a lot of emails like oh such and such is a scam and usually it's like some pods is game or some get rich quicks game this one they were furious because the creators had sold it like hey you can have hot role play with this AI bot And then the people developing in the app one day said, hey, we're turning that off. But the reaction from the community was like, you took away my girlfriend. Oh, just like you took away my like you let my partner. And these people had legitimately bonded with a bot.

Yeah, yeah, what is she? Her, her, her, her, her.

people were like miserable. They're like, they're like, it's talking. So, and they would like complain, like after an update, they'd be like, because I look through their red house, it's so curious. It's like, this is, it's just like a new brave new world, you know? But they would, they would say, you know, ever since the new update, she's just not the same. She's like talking to someone different. And it's like, you know, the back end is just like a large language model, and they just clicked an update.

It's a shocking league.

How does that, how does that?

Maybe the guys are just saying they're single. And all the girls are like, we're in a relationship.

more in general, our single less people are having sex and are engaged in meaningful long-term relationships. I think that's, you know, there's just an increasingly, I feel like we're becoming more atomized, like you're just kind of getting lost in your world. And you get these pseudo communities popping up. Like if I'm a board-a-be-out club member, I could call, you know, I might say those guys are my brothers. but are they really like what is what are what are these new community internet communities doing right and what are they not really replacing in the real world because basically what that's what we've done we've replaced a lot of physical things with online things and sometimes that replacement works like I can, you know, I can kind, but sometimes it doesn't, like I can like face time with my mom and it's like kind of the same, but it's not, it's not really. It's a little annoying. It's a little annoying, right? And they're getting better at it, but it's like, it's always kind of like this, like, facsimile of the real thing. And so I think this replicate AI is like, it's sort of like it's trying to treat loneliness and people, maybe you could, that's the nice way of looking at it. But it's pretty dystopian, man.

Just that. And then the rise of like, like, parasocial relationships, you know, they people watch. Yeah. Yeah. Yeah. People watch so much of online people. They think they know you. And like, and they don't, but they feel like you're their friend rather than having like online relate. I was hanging out with a few friends and you know, they got approached by some people and these guys like felt like they knew them. I love all your stuff that what do you think about so they're asking about one of their friends like what do you think about when this guy did that and I'm thinking like this guy doesn't know you but it's the strange thing where that's our that's our new world it's different from like when there were celebrities you didn't feel like you knew Tom Cruise

How do you think we go about So it's sort of like managing these two things, right? Like you manage the fact that pharmaceutical companies have profit incentives that lead them to want people to be on long-term drugs for, you know, ever. That's the best kind of drugs when you never get off of. with the fact that like, on the other hand, you have a lot of like alternative health guys saying, hey, that's nonsense to listen to guys. They're also kind of a lot of them pushing a bunch of pseudo scientific wackiness.

Yeah, because you go like you go like oh like Tom has a point about these like all these like you know these pills and but it's like okay then is the answer is the answer nothing like it's hard to know it's interesting right because like the question is like illness right there are certain medications like insulin for people that are diabetic that these are like

issues that are all swooped in together and no one's the same that's the thing it's like how much of it is an environmental factors like I can speak personally I have developed some like low grade form of ADHD but not because I mean what does it mean meaning okay so like in the past I could read books for hours and hours on end right like I love I loved reading books do to how much I engage with social media. And I'm someone who tries to monitor this stuff. I was on a flip phone last year for like six months out of a year. I mean, like I try to limit this stuff. But because so much of my job is on social media and Twitter and I'm scrolling and the scroll is so addictive because it's you context context which so much so fast. Yeah. That it's like my brain when I try to lock into a book, it's like it takes me a bit. And I'm somebody who likes to read a lot I'd say I was like a voracious reader especially as a kid and like as I get older I'm having to sit down and it's more like work I like I have to intentionally like I got to read this book I'm going to cut myself from distractions and I've all these apps on my phone to try to limit the amount of like screen time that I have because I'm just that I know this is bad for my brain so I don't, for me, I'm like, Adderall is not a good solution for me because my problem is not that I was born with this issue. My problem is I'm on my device, my device is literally over stimulating my brain to when I don't have that over stimulation. I'm just sitting in a quiet room with a book. Now my brain's like, well, where is it? Where's the, where's the, you know, interaction? So for me, I think the answer is, okay, for me, I just have to unplug more, right? And that's what I try to do. But for somebody who says, I was born like this, I can never pay attention. Like, is the answer, you know, some people say, Adderall helps them. What do you say to those people? So it, like, that's what I mean. It's like, I don't know. It's definitely helpful.

Yeah.

describe Twitter. Yeah.

I watch people ruin their lives by looking at these like their screens. No, It's it's kind of hard because when you first when you first like kind of come on the scene you get a little attention. It's like intoxicating and you want to engage too. Yeah, because it's like that's that's that's fun. And it's like we have a thousand people watching you like that's like beautiful. Yeah, there's this community that resonating you have time to kind of you can respond to people and like intelligently. When you start to get into the millions, it's just ludicrous. It just doesn't make sense anymore. And it starts to be this like, your audience starts to become to you more, it feels more like a hive mind, even though it still is individuals. It feels more like, okay, how do I get a pulse of what this actually is? This is why people gravitate towards negative comments when they have huge audiences is because they go like, Well, maybe they're right. Maybe that like one guy represents the whole. Of course it does it, but it's like they're worried because they don't really know what their audience thinks because it's so many people. So I know it's the right thing to do to unplug. At the same time, I'm like, okay, I have to know the current events. I have to know what's going on. So like, that's one of the worst parts about I love what I do, but it is the worst part of my job that I feel to some extent, I kind of have to have my finger a bit on the pulse to know who's into what's big. But then after that, the discipline is like unplugging.

And they're confirming your worst fear. Yeah. Yeah. You're worst imposter syndrome. They're like, you are, you are crap. Oh, man, I knew it.

Yeah. And what's hard is these these apps are built to be sweeter and sweeter. Sure. We're fattening more fattening every year. Look at TikTok. Like that's the best one. That's the and that's where that's where I finally drew the line where I always try to stay up to date on all the apps. You know, and I have a family member who's young who like told me about TikTok and they're like, you gotta get on this. It was like back in like 2019 and they were of course were right. I should have. I wouldn't know. No, no, but at the time I just said like, this is a step too far. The shortening of our attention spans YouTube used to be short form. That's like the funny thing. It's like then it was like TikTok and it started with Vine. But it's just like this new idea that like, hey, forget about 10 minutes. Let's talk, try 10 seconds for our video. And that's where I have successfully disengaged. I don't watch any TikTok or short format because it that would be the end of my attention. It's been I feel bad for like what do teachers do now when you're competing with like this never ending feed of the most in the kids.

You had it's so funny to imagine now, because you're just like, how could you? But then we were thinking the same thing about YouTube. You're like, wow, this is great. Like, this is so, you can find anything anywhere. And now YouTube is like, oh, they're like the responsible educational company. I mean, you can turn a lot. You can turn a lot. Oh, I've learned so much on YouTube. I love it. It is kind of an incredible platform. And it is important to remember with all these new technologies, like there are good things. But oftentimes the people who are creating the platforms don't really tell you about the bad things. They're incentivizing down, down exactly.

How do you regulate that when one of the challenges is that the rate and I know this first hand the regulators are so out of touch right with the technology because technology moves so fast that these guys they were a lot of these regulators were around when it was dial up internet and now they're in part positions of power being asked to regulate things when they checked out you know with email yeah

Yeah. that that is one of the bizarre things and so you rely weirdly enough on people to inform the politician to who informs the lobbyists. Right. And then you go back to people like Sam Bangman Freed where it's like he's informing them with money. Yeah. And he's like, hey, let me get a meeting with you. So he gets a meeting. And now he's a favorite on on the hill because he seems like he's the response one in the room and it turns out he's a giant frog but no one noticed because they don't know what they're talking about.

Does it make sense? So I totally get the, you know, elect kind of older people because they have wisdom. But at the same time, does it make sense for there to be limits on age where you get more young people involved in these situations who actually know the technologies, especially on those special subcommittees where technology is such an important part,

I have no idea see this is why I stay in my lane of scams because I'm just like it's impossible to it's impossible to and ultimately like one of the things I really so so I consider myself a journalist but one of my few privileges is that I don't have to engage in politics and it's and it is a privilege because I see people just lose their mind in this culture war and it's like I mean I don't know anything about most of these issues and I'm like I have expertise in like one thing. And I do have an expertise in it, but it's like, but I think now, if you're a journalist and you're sort of on the, if you consider you politically align yourself, now you're expected to have a position. on everything. Yes. Even if you have no idea what you're talking about, well, then you're expected to take the part, whatever the party line is, you're expected to take it. Even if you haven't considered it, it's considered it. That's what happens. And I've seen sort of people in the media become like co-opted by their audience within they have to have these opinions. Yes. And so I feel lucky because I feel like there is no like mainstream thought and like scams are just like, let me interview a few victims and like Dell tell the story and that's great. And I kind of stay away from that. So, I mean, for me, that's where I always go back to something like, I don't know.

And now everyone's AI experts too now it needs to be crypto experts and now it's like everyone's AI expert. Yeah, it's it's the classic. It's like everyone's always current affair experts. It's a weird thing how social media like it's an echo chamber, but it's it's a weird kind of echo chamber because it's not just what you think. So, if that were the case that would kind of be obvious, but it's also like, you're shown the other side, but the most incendiary insane side of the other side's views. Almost to the point, it's like caricatures. If let's say you're a right-winger, you know, like, okay, the most insane people in the left are going to get the most likes for me, because my camps are going to love, they're going to eat it up, because they're going to look as insane as possible, so you make them look insane. The left-wing people, they go, okay, let's select for the most insane right-wing person, and we'll put him out there. And so they both put out like these, like, sort of extreme views of the other side to their audience and then you and then if you're in that echo chamber you go like wow those guys are literally insane I mean because you think that's what the other team is just like agreeing with like yeah this is normal and meanwhile the other team would be like yeah that's a little crazy but like we actually think this we have a more moderate position on whatever so you know what I usually find is When you actually deal with individuals, instead of labels and ideologies, what you usually find as people are pretty normal, but we're just a lot of people have been caught up in this battle, and it's like a reaction to the reaction of the reaction where you go from like, okay, it was the mainstream media. independent media. And then I find that like, you know, and I'm in independent media. And so I understand the temptation as much as anybody to like dunk on mainstream media because it's like it's easy. It's like great. It's like, you get, you know, and they are wrong. So often. But then the mainstream media gets pissed off and they're like, hey, look, you independent media, you're just all you do is spend your time complaining about us. What are you actually doing in terms of news gather? Are you on the ground? What are you doing? Sometimes they are, but you know, I think The news, it's all just kind of decentralizing into a lot of different camps and there's good people everywhere and there's bad people everywhere. There's great journalists, you know, who are trying to make a difference in bureaucracies at MSNBC or wherever there's great people there's great regulators trying to make a difference but everyone's dealing with their own incentive problems and their own challenges with bias and their own echo chambers that they make mistakes and then when they make mistakes the other team just goes like ah

Yeah. Well, I mean, what I think is everyone, the problem with like, like pointing out financial incentives is like, everyone has financial incentives everywhere. Even independent media has to make a buck somehow, right? But What I'll say is I've been on some of these like like mainstream shows, not many of them, but you know, a few of them have been invited me on and what I've noticed is they're just bad like the platform itself is just a bad way to express yourself. Absolutely. Because you go, I went on one and I won't name it, but like you're in this waiting room and they join you in the waiting. It's like this Zoom version of it and they go, hey, how's it going? I'm good. Okay, we're on in five and then they ask you like this like three second question and then they cut you off within like you give this like sound you're aware like okay, this is it's live, but it's actually not live like they're gonna release it later so I'm like why can't I really think about my answer? But it's given with this perspective like okay, you have you know you have this 30 second answer and then they respond and then before you can even respond they cut to a new segment and so I'm like you can't even get into the meat or nuance of the arguments, the format literally constrains your ability to tell the truth, the whole truth. And so one of the things that I think has been so just unlocking about YouTube is like I just released a story, and it was about a 30-minute story. So you know how long it was? It was 30 minutes. When I have a 10-minute story, it's a 10-minute story. When I have a 50-minute story, that is such an underrated, like just format shift. to where you are able to tell the truth in the size that it is. And I think that's the problem now is, or with the problem, mainstream media that's like, it's a challenge is they're stuck in an old format.

I think it's actually kind of like splitting into two things where you have like, hey, I have a break. I'm going to watch something short. Or, hey, I'm like, you know, I'm gonna go do something. Let me put on a show. Let me like, let me learn while I'm, that's become hugely popular. It's like, hey, I'm setting up something in my office. Let me turn something on and learn something hope. While I'm doing it.

Exactly. Exactly. I'm like sitting with basically sitting in the room with an expert as he describes some topic that I'm interested in.

It's problems all the way down, but I think like The thing that I worry about the most is that we have to have some commonality, and so I think while spending time on things that unite people is like, I'm like, all right, my show, you can agree with no matter what. Or you can watch it, and you can disagree with it, but it doesn't, you're not divided by your, interests either way. And so I think it's such a right moment for journalists to do more than play the game of battles.

Do you think like, don't you think like 60 minutes has done a pretty good job? They only have 60 minutes. Yeah, yeah. And they don't even have 60 minutes. But don't they do like real stories, not just do real stories? Like not just like part of sin, you know, whatever. They'll do a little bit of the politics, but they actually like they'll and vice was doing that for a long time. They did these incredible like doc human. Like that's journalism at its best where you're just like you're just deep diving a topic that just people find interest. Yes. go somewhere you see you talk to people and you go you present the facts but you don't go in with this like pre thing of okay I know what happened and let me tell every like I'm just gonna you know but vice is a good example what's wrong because like they were that and then they got bought

as charitable as I can because I know like a lot of these journalists are working within these horrible constraints of like you know they want to do investigative work you know one of the dirty secrets of the journalism game is that investigative journalism is the loss leader for every single news agency They're all losing money on investigative journalism and they want to do as little of it as possible for the boss of mine because it's expensive man to go sit down to guide or really do the work. You know what's easy putting on a commentator and you know I can just pull up a bunch of articles all day and I'll just I'll just talk my talking points about those articles like that's the profitable side of things because it's quick you can turn out clips and at the end of the day you can use the findings of investigative journalists and you just put them on your show. You know, hey, man, like I heard you found this and they spent like three months on it and you spend like 20 minutes and you get double the views because people versus they know you because you're on TV all the time you're on or you're on the internet all the time and so That's one of the real challenges. I know journalists want to do that investigative work, but they have editors And they have people telling them, hey, we judge you by the number of clicks you get on our site. We're a click site. We're a subscription site. So you've got a cater to the kinds of people who subscribe to us. If we're the New York Times, we have a certain type of people who subscribe to us. If we're, I don't know what the equivalent is, the New York Post or whatever, we have a type of person. So I think the New York Post is more advertising. The point is that these journalists are kind of like sent out on these mandates rather than go find the truth. That's what they want to do, but instead it's, you know, you're battling for attention in a click world where you're not even controlling your traffic, the social media companies controlling your traffic. And it's about how many likes you get on Twitter and how many retweets you get on Twitter.

Yeah, well here's the thing too independent media journalists After certain size they can do it the the problem is they realize like for clicks It's like hey, I should just stay in my room and make 20 videos instead of going out and so that's why I'm a big believer in like like subscription models for independent media journalists like sub to get away. Yeah, yeah, I do like the YouTube equivalent of like Patreon, and it's like that is a way for me to free myself from like the view model, which I did for a long time. Whereas like it was just, it was about views. And so eventually I was like, man, I really wanna deep dive something and I don't wanna be limited to like, do I think this is a popular, a popular thing. So that was a big change. And I think, yeah, things like sub-stack, it really frees up people. And I think as we learn to like, pay for journalism? I think that's a big thing because it's not free. We got the false impression that it was free from years of just being able to go into like Google News or whatever and sorting through. Meanwhile, the quality of journalism was just dropping like a rock as everyone moved to this model. Yeah, to digital. There's no money in it. I mean, and the money is in just the mass production of just slop.

But what I've found is that anytime a model breaks, it gives you the chance to restart. So you just describe the kind of the problems with the models of mainstream journalism, that allowed for an opening, because people are thirsty for like real conversations, right? And so this podcast can go on as long as it goes on for and we can clarify anything we can do, but this If there wasn't problems in the previous generation, there might not have been that opportunity for you to get big basically doing what you do.

There's no other people. It's crazy to think of, you know, I kind of grew up in this. I'm only 28. So I kind of like grew up in like, as it was shifting, as everything was shifting underneath people's feet. And it's interesting to watch, like, I am very fortunate to have never had to deal with these middlemen. And these people, like, and people have tried to like inject it, but I got, I got enough people who had been burned by that telling me, like, hey, you don't want to sell a show. You don't want a middleman. You don't want this guy saying he can get all these deals, you do not want this guy. He's just going to use you, and he's going to inject him for nothing. You get nothing. And then, and then your show becomes worse, it becomes this different thing.

But I was so fast like that is my favorite and it's legitimately the most exciting part of independent media is for the first time. There's no business people telling people what to do. There's no top line guy who's saying, Hey, we'd really prefer it if you sold more ad spots or did more of this. It's just you and the audience. And that direct connection is special and we've never really gotten to see it before and yeah, I think that's a game changer.

It's a lot of promote some crap. Yeah. They'll coin or something. That's what it always does.

Yeah. No, there's, I mean, there's been plenty of that. People are always asking, like, hey, will you promote this? Will you do that? And it's just like, well, I sell out like that.

For sure the thing I think actually though the kind of like the kind of day-to-day struggle of like I got a kind of like you got to make something I got to generate something useful is actually kind of good because it kind of makes you strive it kind of makes you push I I really like, you know, I feel like I'm literally living a dream because I started making these YouTube videos. Now I've got this like crazy set and you know, I'm able to like learn all about cinematography and somehow I get paid for it. And it's kind of this wild thing, but at no point that I have to ask for anyone's permission. Yeah. Like that is like the like the nobody had to give me a chance. Like you kind of create your own, your own chance in a weird way.

like anyone can set up an iPhone and have a point at you and you just start talking and then make a video and there's a lot of them out there like you're not doing anything different right you know what's fascinating is you know what was the biggest tell like when I felt like everything broke was when all the late night people had to go home Wasn't that crazy? You got it? You got to see, like, they went from, you know, their TV people. And all of a sudden, what's on TV looks like a YouTube video. And you go, oh my God, you suck at this. This whole time, like, I thought you guys were some, like, you're the same as me. But like, but like, worse, yeah, I'm doing it myself. You have this whole team of people. And it's like, this is all you could, and then you, it kind of breaks the illusion, like, it's like seeing someone run a four minute mile or whatever you're like, oh, I can do. I can do this show. I got this idea to make this crazy set because I saw somebody do this TED Talk about like, you know, I think their line was like, you can't become Kanye in your living room. Like you got to make an environment that speaks to what the show is. It's kind of a weird thing.

And that's a different appeal because that's like, that's raw. So there's an appeal to the raw and then there's also an appeal to like, you know, high production value and it's different things. They both communicate a different, like kind of appeal to the work. But I always always obsessed with like, there is no difference between YouTube and like, Hollywood besides just a little bit of knowledge a little bit like insider like they kind of know tricks there's tricks of the trade they kind of have a little bit more money but I was like you can hack this together now yeah you can figure out ways to kind of like Almost get to like a Netflix. So that's my dream is to start pushing for like real like documentaries or many documentaries on YouTube that look like they could be on a Netflix or something like that. But never go to Netflix. Yeah. But never take the deal. Never go to the producer.

when they're just them and the camera you're in the void now you're you're in deep space there's no one around you and it's fucking wild to watch it is well can you unlock like how different is that from like stand up I'm just like a casual viewer of like the like late nights I mean I know they say like a pause but it's that real like laughter and like are they like saying like hey clap there's someone who's doing this

Yeah, you get stuck.

I feel like they didn't know that though like I feel like media literacy has kind of gone through the roof like so many people I guess it's maybe everyone has cameras now so everyone's like sort of mini producers now of their own show so they get it now and so all of a sudden the the craving for authenticity gets so much higher because now you're aware of like what a teleprompter is. Everybody's sort of like, even though I didn't know how exactly I worked. I kind of was vaguely aware that they kind of told you to applaud and like, and the laugh tracks in, you know, sitcoms were just canned laughter. So I feel like as people realize the fakeery, there's a craving for like, hey, can you do this for real? Like, can you not, you know, I remember when I found it like none of the conversations were real. What do you mean it's not real like they all because it's all a pretend like they're all they're all pretending that you really knew about my funny boat story and like I had this quicky, you know, and I thought wow, they're so charismatic and you couldn't find out they've been rehearsing the story. Yes, they go over with a producer on the phone and it's it's completely insane when you realize that you're like oh, it's all fake and it's and the illusion is sort of gone and so now I think one of the surprising things but also maybe obvious and hindsight things was why shows with no laugh track less less production are more engaging yes because there's more of a realization of oh there are there isn't like games here There's just two people talking. They haven't rehearsed their lines. And I mean, I came on here. You like, there was no production notes. There was no like, hey, we want to talk about this. It was just like, hey, you want to come on. And that's all it is.

Yeah, what's fascinating, and I think that's partly to do with like why people enjoy the show is that they know it's not like tricks and gimmicks. I wonder, there's like, it's funny to me, as I'm thinking about it, they're sort of like this, like the world is accelerating in two directions towards like authenticity and then like with all the beauty filters and like the fake AI voices, it's like, you can fake reality, but we also crave reality at the same time.

I always thought that it like life streaming your whole life would become big. Well, that was the Truman Show, right? Yeah, no, but I thought we would see it. Like I guess you see it with Twitch streamers who like stream like 12 hours a day, but I kind of thought what would take off as I was kind of surprised it didn't was like you just watched my whole life. Like, like, I'm people did do that. They tried it. Yeah, I was kind of surprised that didn't because I thought I thought like eventually you'd have celebrities who their whole life would be on display and like the authenticity of just sitting in a room with somebody with just it's quiet.

filming his wife and he rejects it.

Yeah, 100% I'm trying to figure it out. I thought for some reason, I think honey, it was an important thing.

That's the heat years later, though. He literally attached the webcam. Yeah, that's right. Two is baseball cap. I've talked to Justin. It was really interesting.

That was like a live stream show. Yes.

That's crazy. You keep doing this.

Yeah, you kind of, you know, I just realized why no one live streams are whole life. I just realized that I remember people were trying and like they would go out and they'd call it IRL live streaming and you go to like the store, you know, the problem was what people would swap you. Oh, so they'd like call in a bomb threat or something. Oh, God. The problem is you get enough people watching live. What in them is a psychopath? They just want to, you know, they want to get attention. Who knows why. You know, they're cool.

It's an issue with live streamers though because they get their reaction. Because if I'm shooting a show and something happens, I'll never put it up. You don't say anything. But with a live show because it's, you know, it's just happening in the moment. You get to see them put their hands up and, you know, the whole nonsense and, and then they get there little like you get mad about it. It stops the whole show and they know they had that impact. Of course. Yeah. So that's what's bad about like, that's where Alan thing.

I don't think I don't think most people would be capable of that. I mean, I enjoy keeping my private life private, my public life public. I think there's like, I think that's pretty normal and I think things get weird when everything's online. Your family's online. I've seen people who they put out everything. They put out their kids, they're there. And they're doing for the clicks. That's what's weird.

Well, it's also like an opportunity like kids channels were big on YouTube, where they were running these like, sorry, family channels are what they call them because you'd watch the family together. yeah and then you get like your kids would like to watch their kids and people grew multi-million dollar brands in the back of that and it's like by that point it's too late to stop because you got a mortgage you know you're depending on that money coming in and so you can't stop your kid better get on a kid I just want to know like do you tell your kid like get on your mark Like, like, hey, can you react to that again? Can you help me with this thumbnail? Like, that's crazy.

I don't know it. I mean, I was gonna ask, like, do we know if anybody just navigating like mega fame in general. I don't think I've seen many people do it without kind of getting eaten a little bit.

It's just like I think with my phone, I've sort of given myself some like low grade ADHD. I think I think too much of the like attention online makes you into a narcissist. Even if you weren't one original, it has the potential to do so. If you don't actively mitigate it, one of the strangest things is like when when you get hot online, everybody wants to be your friend. all of a sudden these people come out from the woodwork and all of a sudden everyone wants to be your friend and then when you're not hot again now it's like you don't exist and that's a bad way to experience life that your whole identity and your whole friendship base and everything's wrapped up with how you're doing online and like I know for me at least, I try to just segment my life to where the online thing is online and all my real friends are just in my city just like kind of regular people have different jobs. I think it's kind of important to detach yourself so that when things aren't going well, it's fine. When things are going well, it's fine. There's like a stabilizing something. I feel like you're describing Hollywood.

It's weird because the fact you need to be chosen sort of makes you play the same game. that you don't like. Which is you have to go to the power brokers and you have to suck up to them the same way people suck up to you when you're successful. You have to go suck up to the successful people. And now you're playing the same game where you're going to the people who are the decision makers and you're trying to woo them and pretend you're their friend.

it's and it's very unhealthy and it's good I think that it's now becoming possible that you can be like a Mr. Beast or something and be not being Hollywood he's like a North Carolina or what is and he can just do his own thing and start his own and he's this he says big of a brand is anybody and it's like it just doesn't matter he's doing is he doesn't have to like kind of play the same games I think that is it like Sometimes I think changes in technology are like neutral, like it's like kind of like you win some you lose some. I think that is a distinct change for the better that we've kind of decentralized Hollywood a little bit. It's like you can just start your own show, you're not. We talked about being subject to the gatekeepers, but even subject to that like kind of mentality of like everything's about success and fame. Yeah. That's the currency of Hollywood.

a lot of people you meet behind the scenes and they're like they're different, you know, it's like the same guy you meet and that's always a huge let down I've had so many examples of that but like but he was one of the first like not first but there are a lot of guys but the big the biggest stars I guess are the ones that are most like you're like you're a bit different but he was like when I when I met him we talked a bit and it's just like do this guy's legit like he's the real deal

That's really who he is YouTube's lucky because it could be any but they don't select who is like on top and they're fortunate because it could just be like some like some super narcissistic like monster I don't know if it would work

That's a good point. Yeah, because they get some you had you had there was this huge YouTube channel. I think they still might be the big like T series. I mean, there's some random corporation. I think they're ways to growth hack it maybe, but but you're right. You wouldn't create such a brand. Right. You couldn't fake it forever.

Yeah, the longer you talk, especially on the longer you, if you're in little soundbites, you can pull it off for a little bit, but the longer you talk the more it gets shown.

Have you ever talked to somebody like that? I'm sure, right? Like there's statistically there has to be someone who came on the show and you're like, oh my gosh, like after like an hour. The default shit. Yeah. Oh yeah. Okay.

I think most people who want to make money just go into finance.

Yeah. Yeah. Yeah.

But it's so weird because everyone who achieves any level of notoriety knows how temporary, more than even the audience, they know that there's a shelf life on everything. Very few people make it an entire career. Like, I'm always thinking like, it's gonna, it's gonna be over like, you know, next month. Right. Because it just, that is the nature of, especially online fame is even more fleeting than the old days of movie stars. It's even less. So I don't understand why that is. It feels like I don't really buy into that. I mean, I think it's just people or people and you have your moment in like the spotlight for one reason or another. It's usually not about who you are. It's just you're saying something at the time that resonates and things don't resonate forever.

I think I got actual attention, maybe 26, 25, 26.

Oh my god.

Oh boy. this this I will say like one of the challenges is you you kind of have to you don't know how long you're gonna stay relevant and then if you don't make the money then now what do you do I guess I guess is the point and then so if you haven't set yourself up then I guess and a lot of these people they think it's going to be lasting forever because their agents tell them it's going to last forever. So they just spend all their money and then especially if they don't pick up any you know skills one of the things like with with actors is all you learn is acting. I mean one of the interesting things now which is kind of fascinating about like modern like you know people who grow up on TikTok and like the youtuber is you kind of have to learn like marketing you have to learn video editing you have to learn so you can pick up skills to where you're never gonna be completely you know I know a lot of youtubers who now work for other youtubers because they like they stopped being relevant but they like I understand content I understand how this stuff works they're not just a face they're not just like a pretty face they have actual tangible skills beyond that That is an issue though. I mean, I can understand why that's a problem.

It is a huge problem. Right now the number one video sharing site in the world is basically YouTube and that's essentially it. There's not really anyone else. There's like alternatives like rumble, but you know, like that's kind of, I don't know why it's perceived as kind of like a right-wing thing.

Let's say political commentary thing. I mean, I don't know if like mainstream like just like random creators are doing really well. I don't know, maybe it's there, maybe it's not. I think you're pointing out though a very good point, which is like, as much as we talk about the decentralization of gatekeepers, there is one gatekeeper to rule them all still for someone like me, that is YouTube. I mean, I would like to think that, you know, throughout you learn enough about making stuff, making content that you could move. I would probably try to transition into some like production role. Yeah. Start a production company.

Yeah, you don't own any of your data. So you don't own any of your subscribers' data. You don't own any of that stuff yourself. It's a real it's a real challenge. I mean one of the things They also control what you can talk about so when I was doing you know my first show I kind of had this I had this video where I wanted to explore smoking and like in like vapes through the lens of the FDA and how they regulated vaping and they sort of went after vaping but you know it's a problem but it's also like seems like it's a lot healthier than like just smoking cigarettes or like the worst thing in the world for any human to to be doing although you know it's very fun but they're they're horrible for you and so I did a video about that YouTube like agegated it so now Not only no monetization, which that, you know, it's acceptable. It's just kind of the cost of being on YouTube. You sometimes get demand as whatever. The reach was killed. So now this video, which everyone loved, nobody can watch. Or you won't get recommend, like, you know, the recommended feed.

Right.

Right, so... So I think especially, I think they say their official stance is they do it on a video by video basis. I don't actually know. I mean, it's kind of hard to figure out, you know, what's true, what's not. But I will say, like, did I ever do a video about that again? No. Yeah, you self-sensor.

Usually they're important issues too. Yeah. That's the problem. They're controversial. So they are important. Right. But it's like, you know, I understand YouTube's perspective. They have, they have, I don't know how many, maybe they're supporting hundreds of thousands of peoples.

What what I've said is like I think a lot of these you know some of these companies they achieve near monopoly status is it's hard to argue that some of these companies aren't close to a monopoly in their specific domain that they're good at because you know if you're going to make a replica of you you've seen how hard it is with rumble because it's not like you're just video sharing it's like your video sharing their AI their copyright I think they said they spent like ten million dollars or a hundred million to build the copyright idea so if you want to compete with them you need to have at least that just to build a copyright ID system on par then you got to go host all the video you got to find that ad words targeting. Google is the best ad targeting in the world. They're not going to give you access to their system if you're a competitor or they're not going to give you the same deal. So it's like this challenge of okay, who can really compete when they're such a high barrier to entry. So I'm thinking like why are these things not considered some sort of public good in that because we accept that it's so hard to compete meaningfully with these things that are so important to our public discourse. I understand the whole argument of free speech is just free to speak against the government, not freedom from a corporation. But what I'm saying is when all our discourse is online, why are these companies not some form of like almost like a utility company? Yes. Like yes, at some level, you don't have the right to monetize, but do you have the right to at least say something?

Because at the time, the tyranny was government. Yeah. That's the only people who had the kind of power and oversight to where they could literally stop you from saying anything as a government. Now it's like, okay, you want to say something, the person who's going to stop you from saying it is probably not the government. It's probably like some like random tech executive.

Unelected from a, yeah, exactly. Yeah. It's a, it's a, it's a strange thing. And I think it's actually a very like, It should be a universal issue because I think conservatives all don't want to be censored, and that's usually who gets censored. But left-wing people are all about decentralized power. I mean, that's like the idea is like democracy, more elected, not just like these unelected people, but get more of a kind of a group say and powerful decisions. Well, then they also should have a problem with the decisions, even though they happen to kind of go a certain way. still being made by unelected people who just can have arbitrary, you know, biases. Like, that's the thing. It's like, one day Twitter's owned by, I forgot the last, who was the health of the leader of health and safety or whatever Twitter? Oh, Vigio? Yeah, yeah. One day it's her, the next day it's like Elon Musk. Right. And they have different opinions on things. Yeah. And so do you want to be subject to like both of their whims? Or do you want there to be some sort of thing on, you know, I don't know on the books that we could at least sort of have a public vote on it?

Get in there and go to work. It sounds like a huge, I mean, I, I get exhausted. I'm like, just thinking about it. I'm like, who wants to spend their time like arguing with somebody? Like, I don't know. I guess it's just not something I care about. So it's like to me that doesn't matter. But I guess to some people, this is their whole, just like covering scams is my thing. It's like, this is their whole thing.

I think it's deeply bad for health to constantly be given analytics like this is the thing on YouTube. I was talking to Lex about this because he was telling me he doesn't like he likes to not look at his numbers and I was like man, I love that. I try not to look at my numbers. The thing is when you go into your dashboard, like they give you every stat you could ever imagine. And I get it. They're trying to educate you on if a video's doing well or doing bad or whatever. But I think it's kind of good for artists not to have immediate feedback.

Well Mr. Beast is figuring out. He money balled it. So he money balled YouTube YouTube before that wasn't like a science. It was like an art. It's like nobody knew what they were doing. He comes in. He's like, you guys are all idiots. Let's turn this into stats and numbers. And I love him and I hate him for it because I got the one one perspective. It's like you kind of saw the Mr. Beastification of YouTube. Everyone talks the same. Everyone has a Hey guys, what's up? It's today. We're doing this. And that's like because he kind of showed like, oh, it's a pretty optimal way of doing it. So it's good because he gave people like handles on their own success, which is valuable. Like it's cool that you know why a video does well or not. There's also something that like it kind of kills a little bit of creativity and inspiration. When all of a sudden you know like this segment ain't gonna do it. Like, and you, they give you this graph. Have you ever seen the retention graph? No. Oh, it's hilarious. So you start off at 100% and then you just see as people leave. And then it goes to the end of the video and you see how many people are left. And like at every moment you can tell if someone clicked off at that moment.

And what they do now and like this is taught like at YouTube, you know, boot camps is like, look at your retention graph and everything that wasn't good. If people clicked off, you got to, you got to cut it. You got to stop and I think that creates its own like, you know, sickness because then YouTube boot camps are hilarious.

We've had to move away for a while. We really emulated some like creators. who we liked what they did. But eventually what you realize is like, I just have a different audience. And people are here for different reasons. And so I have to find my, I can't just rely on a book or not, not literally a book, but like the play book of like what has worked for you. I have to find out like, you know, not only what my audience wants, but what do I want? Yes, I think it's the most important thing. It is the most important thing. We're not just making, well, I'm not making things for other people. I'm making, because I think it's cool, I think it's, and I think it's valuable, just for me to express it. And so I have to find out, like, why do people watch my show? What do I want for my show in a way that even if nobody wants it, I put it in, like, I have this, like, this whole robot bartender thing and just like the CGI thing. And I do it because I like it. Yeah. It's fun for me. I get, I get a real kick out of that stuff. I'm like, I'm a nerd when it comes to that CGI tech stuff. And people wouldn't believe how much time I spend on that. I spend like half my day on that. Just like tweaking this stuff.

I really discovered early on that nobody cares about the numbers. The numbers are like the headline or whatever, but ultimately you can't make like this stuff doesn't matter until you get people involved. Until you hear the victims talk, they're the heartbeat of everything. Because until you hear that, like, what's a billion dollar? It's impossible to talk. And it's not, and then, and then you watch the guy, and you're like, this, who would fall for this? You know, like, it's easy to get cynical if you just see the numbers and the guy who defrauded people. The second, you humanize it, and you show a person. And all of a sudden, you see someone with all the same problems, and you can just tell, you can see it in their eyes, and they're just wrecked. by this guy who truly they believe that it's like the biggest betrayal you trusted somebody with everything and then they stab you in the like this Alex machine ski CEO of Celsius his whole thing was banks are evil which is not crazy. I mean, it's like, you know, you could understand why a lot of people resonated with that. They're like, and it wasn't even there. Yeah, sorry. I was going to correct that. He said like their greedy. Yeah. And that's true.

Yeah, yeah, he goes like banks are not your friends true statement Alex and then this interviewer's like but Alex is your friend and he's like yeah, he's that you basically you can take the same ride as me 8% 8% a year. I'll just give it to you. You know, we're we're giving we're doing the same thing as the banks we're loaning out your money, but we're gonna pass on 80% of the revenue back to you instead of the banks which they take all your money, right? So people bought into that. They said, that sounds great. Like, hey, the internet changed everything. You know, we think crypto's going to change everything. Why not have a bank that instead of serving its shareholders, it serves its customers. It kind of, like, there's something that makes sense there. It's really compelling. And then come to find out. Silcious was never making money. They said they were paying out, you know, you with their profits. They were paying out you with new deposits. like new people were coming in and they were paying you out. And so it was this giant Ponzi scheme where they set the rewards because they knew if it's high enough, people are just going to flock to them. And so, but they had this compelling explanation for why it kind of made a little bit of sense. And then when it finally goes wrong, he just walks away. I mean, yeah, he's getting sued civilly, but where's the criminal action? He's going to go to jail probably not. And it's like, that is so messed up. That is such a, that itself is a crime. I think it's so sick that we allow, we throw the book at people who will rob a store with a gun, right? Still 10,000 bucks. People who still millions, billions of dollars often get away with it. because it's just done a little differently. There's not the drama of the gun and somebody's even known to get shot. It's just, hey, it's just he pushed a few pencils around. He got you to sign a few shady, but that's just his sick and twisted, but it's just done in a way that socially is slightly more acceptable and get they get away with it way more often. But I would contend that these people are literally financially murdering people. after Celsius people committed suicide because of literally it's a fact people committed suicide because they lost everything I'm sure after the X as well after of course you know the bigger the bigger the scam they're just statistically it almost becomes impossible that you don't at least if not financially sort of metaphorically murdering a family you literally kill somebody and people walk away with Not like either only the guy at the top goes down or nobody goes down. And that is crazy to me. It's like what message are we sending via our regulators? Basically, it's like, hey, you're gonna get a slap on the wrist.

Something has to change. Something has to change. where you can't just go on like this, where if we're really going to allow, if we're going to take our financial future in our own hands, we're going to allow these influencers to talk about finance. Somebody has to be there when things go wrong. Yes. And there has to be consequences. If you lie and if you cheat and you steal, there has to be a guy at the end of the day who's going to put you in trouble. And I think a YouTube video is not nearly enough. It's why I'm constantly saying like, hey, get some from someone from the government getting bought like go block this guy up go lock somebody you know I know it's like a lot of this is new like the crypto stuff is new but it they're doing old crimes in a new way yeah it's always been illegal to steal people's money and that is what's happening and that's why I put these people on my show so you don't think it's some like rug poor it's all fake money no there was real money in these companies and they just stole it a new way but it's they're still stealing money and the fact that we haven't found a way to put some of these people in jail is mind blowing to me and we're sending a bad message that hey just keep doing it just go start and there are people now uh, they were trying to start GTX after FTX some new some new guys were trying to start GTX like the new thing and it's like, it's just like, you know, you have to that's half the purpose of the law is that it's partly, you know, for, you know, you did something wrong. You get punished, but also part of it is you do something wrong. You send a message to socially, you socially signal that we do not tolerate this. And right now, the social signal where we're sending and accepting is If you scam, there's a very high likelihood you'll get away with it. And if you don't get away with it, you'll get a little slap on the rest. You get a little fine. And that's not, that's not working.

You too. Coffee Zilla, that's it. That's the place to find. Best place to find me. I appreciate you guys having me on this. This is surreal. Been prepared of the show. Thank you.