BTC Maxi's In Tears, Meme Coin Post Mortem, and Kevin Kelly Retrospective - Transcripts

May 21, 2023

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launch launch welcome welcome welcome to new official home of the alfalfa podcast so we spent how many hours yesterday but at least 17 foam walls there are some

blemishes some perfect don't tell them that no I am at least 17 no I can see

some armon squares that that are problematic but this whole side right here is a complete blunder this is after by the way I completely took down entire columns of armon to realign them realign

them you can't take down columns of armon I'm I'm impenetrable the man does not have any

did lose he does not have any angles did lose a race he's not a protractor we talk about the

race how much money did you guys lose on me today I won I won my Venmo is I bet against you pal

yeah yeah sure did stay on the full Venmo I bet against you pal yeah Stephen that was really

heartwarming how you bet on me look I honestly thought you would be you need even the sprint

and I was wrong okay hold on let's pay the picture sandbagging son of a bitch didn't

tell us he has like five pictures let's paint a picture we just came from a baseball game uh Nick Nick his business just uh hosted their company retreat which he uh cordially invited the alfalfa podcast too as well thank you Nick thank you for your media so we went to the padres

game and naturally it devolved into um gambling as it well I first thank you Nick thank you for

first of all I wanted to entertain is what it evolved thank you so much for providing

you wanted to plus the experience so what we did what happened was he wanted to plus the experience plus the exposed first I challenged Adrienne to a um pitching uh speed contest which he backed out

of immediately yeah I mean he did not he was eager to throw against you no so yeah there was so yeah there was there was no um what did the like the velocity meter there was no like

my radar there was no radar gun by the way my radar there was no radar gun by the way did did you look in the discord I asked the discord to guesstimate what you would throw did they all say 98 their numbers were hilariously bad what do you think what were they what do they guess Marty McFly I think said 73 okay which made me really discount his tinfoil

credentials because there's there's just no way I'm sorry that's all it took that's all what did you think what were they what do they guess Marty McFly okay that's all it took that's all it took

to discount Marty look if this man if this man can throw 73 what else does he believe

of like image I wish I could like I wish I could like zoom into this right arm that you have here uh yeah it's a slider of the century yeah you yeah you don't even know

what that that's such a weird analogy by the way such a weird analogy by the way

I don't even know that's like weird analogy by the way I don't even know that's like saying like

I'm the Michael Jordan of amateur basketball worry about it so okay yes okay so let me continue so that that velocity meter the radar gun didn't exist at the stadium they took it out two years

ago due to liability reasons naturally uh so what do you think what do you think people just

a bunch of lawsuits there's drunk morons like ourselves in there that are going to hurt ourselves so instead of in lieu of that we just had like a physical foot race where Armand and uh one of Nick's uh partners you need raced it was probably

a it's like a 40 yard dash ish type thing yeah yeah dangerous a bunch of lawsuits no it was more maybe like a 60 yard dash 60 yarder maybe like a 60 yard dash 60 yard dash and uh and uh mother

fuckers like a gazelle yeah what he did what you need didn't tell anybody is that he set state records in high school and he slow played that he told me I don't even know anything about right he told me that on the side and um you know I took action on you need of course of course but I did give Stephen the choice I said Stephen it's your call whoever you want to take

I'll take the opposite side I don't even know anything about right like so he told me that

on the side yeah anyway though the money alpha here is to gamble with your head not with your heart oh my head knew that Armand was going to go down in flames but I felt bad I felt bad after absolute shitting on his arm which I now feel validated for because there's no way after that

legs the man plays soccer for a living there's no way the arm is better so here's to know soccer

players aren't fast no seriously we're sure we're faster than like a freaking you know like a lot of other types of athletes but a track athlete the guy is a first of all shout out to

you need the guy's goddamn gazelle this guy's like five seven baseball player 10.8 in the

hundred meter in high school he said yeah I don't even know what that means I clocked myself

within three seconds he was like six feet beyond me it was just like unbelievable it looked like I looked over at him and I just completely gave up he was just like flying well I don't

well that's normal with the short guys but I thought you would kind of kind of you know accelerate and it was apparent to me after two seconds that you were not gaining any ground and then I just took the bill out of my wallet while I videoed you and it was over and that's

that thank you Stephen thank you for the $20 I'll put it to Eef and I'll be like uh you know

doing my part yeah I'll walk out for the green candle not the first $20 I lost today I'm here

to entertain that's why I do this podcast can we talk about can we talk about the other wager that was on the table I think there was you need bedding $20,000 that he'll be able to throw 70 miles an

hour 30 miles an hour that's right no Stephen that you knew that there was no way he would hit 70 miles per hour within 17 months we can't watch a baseball game he just pulled it out of his

ass you really pulled that out of your ass 17 months like what was that we can't just watch a

baseball game he just pulled no 17 is a funny number I just like to say it because it sounds

funny I like I like 17 months are you way funnier than 12 because it sounds funny I like I like 17

months are you way funnier than 12 are you ready to go 20k on this wager because absolutely because if I bet $20,000 on your knee there is no fucking way he's going to sit there and go okay wait a minute am I gonna wake up every day for the next year and a half for like $1,500 a month and train to throw a baseball no he's just gonna give up like if if I bet him a million dollars then I would be concerned I still think he would lose I don't think he's gonna throw a baseball 70 miles an hour

whatever this is I like it I'm with this whole yeah maybe we start like recording these we make

it part of the pod like we do a little bit like well that you guys you guys are entrepreneur

gambling yeah I love that you guys you guys are all coming full circle now my prior life you're

like you know it'd be fun just gambling for money all the time I mean if we can well is your life

fun today you still gamble for a living I feel like yeah I gave it like $20 and lost and I was

like haha I'm stupid I'm stupid I kind of feel like you gamble just using lines as the justification it's fine it's fine I had a bad day trading and I lost $20 it's not a good day it's not a good

day to make that joke my bad what are we talking about let's talk about yeah we're

gonna talk about what are we talking about let's let's talk about we're talking about

we're gonna segue into the actual podcast now segue into the actual podcast now yeah well no there's no segue it just happens it just happens yeah it just happens all right do it you don't even know what's happened segue me so a little little bit off alpha podcast update obviously like we have a new home we're settled in we're gonna be doing this once a week now and we're going back to the old format there was a time uh sort of our uh our goats and our og members will recall when we uh transitioned from one long episode to three and there was some controversy around like is this the right move should we do this is this good is this bad and we did it and we stuck to it for a while then we went to two episodes per week and as many people know we sat down and we record just once a week but we were dividing it up into multiple episodes to give people like money politics and life anyway we're back to an everything episode and we're going to be covering money crypto politics culture and life and technology and all the things within this episode we're going to be live streaming it so long story short show up at 5 pm pacific standard time on youtube every wednesday to join us live and we're gonna be making this better and better every week or you can listen uh on the podcast player of your choice on friday mornings we hope you join us live because we're going to be doing a lot of fun stuff and as you can see we've really invested our heart and energy into creating a really fun space for

this to do this live and look at this studio it just happens spontaneously yeah it just happens

all right do it you don't even know what's happening segway me so look at this studio

guys it's really awesome can we take a moment look at us look Who thought it was really awesome

can we take a moment to look at us look at us I thought we'd been there can we just give a shout out to steven for for that nice little piece right

there like you've been there out of all of us I didn't think you'd provide a decoration

a coutrement you point to it you guys just real quick it's like a sheaf of wheat like as if it were uh an alfalfa emo then are we thinking about like a neon sign here in the center shot

a third camera to actually capture that.

So we're talking about eith today we're talking about some price uh predictions from all the way from bear scenarios all the way to very bullish scenarios that we'd like to see and then we're going to transition into doing our best to uncover. What's going on with the ledger recover uh recovery recover uh program and product that they've released um which will be an interesting discussion. I'm actually really excited about that because I want to dig into the nuances of of that because we've talked about this a lot and I think that they're trying to do something good for adoption. Then we're going to um dive into Karen AI um which I'll just tease by saying there's a chatbot of a Snapchat influencer that made 71 000 in one week and um yeah we'll see

where else we go from there. Sounds good yeah sounds good so if you're not excited about eith

price my friend you're critically under exposed. All right why don't you kick us off Eric um what's

sure well any any alfalfa sure well any round let's go in the alfalfa okay okay so the money alfalfa that I want to share today well I didn't want to go first but I will okay so today was a sports day for all of us we went uh to the padres game right we watched the champions league final I uh have talked arm on for a long time about how I don't have a a soccer team that I root for but I do now my friend I thought you do well I kind of I kind of really do now yeah Manchester United yeah this is like leading into my alfalfa you guys so Manchester United has a has a publicly traded equity it's ticker symbol man you man you um Manchester United is getting taken over uh

very yes very nearly okay so it's in by is it the sad yeah yeah it's owned by is it the Saudis

now uh Qatar i like enough same same but diff maybe yeah there's there's two bidders okay so it's it's owned by this um sad as you're bidding okay so it's owned by an american family they're they're called the glazers they've been blowing it the glazers own the Tampa Bay Buccaneers I think the Florida Panthers they're this uh wealthy american family they own Manchester United and I think um the people of Manchester have have grown tired of of this ownership group they're like rioting on the streets they're like boycotting outside the stadiums they're saying glazers

out that's enough yeah it's owned by and if they're like because just for context it's like man you might be the most renowned club in the world other than like Real Madrid so like for them to

just not be at the top for so many years is like people are losing their minds beautifully said thank you for that because this is like my thesis to towards my money i'll hover here is that like this asset is very valuable okay so when they're selling this thing right um let me just say that the the stock price today is about 18 dollars and change um and that equates to about a four billion enterprise value on on the asset um i think this thing sells for an immense premium above that so let's just use comparables for now um chelsea football club just sold for 5.25 uh the Washington Washington football team called the Washington commander sold for six something uh the Denver Broncos sold for six billion something so Manchester United being this like you know like top tier asset i think will command a premium price you know well above its current enterprise value of four billion so what i'm doing on this is like selling the shit out of put options and i'm buying common but like what i would like to do like i think is as we get closer to like an actual deal i would like to buy call options um if if the buyout if the takeover occurs at five billion dollars the stock price would equate to about 30 it's at 18 now oh um so i think we even go north of that i think i think we go well nearly under priced yeah and and you know what dude we've talked for a long time about soccer like i haven't i've kind of been agnostic to the whole i've just been a fan of of the game weren't you weren't you a leads guy i'm the leads guy because like you know like well leads has the three american players so like i'm rooting i love that i'm rooting for america on that one but then when i get into it more it's like well well nearly underpriced yeah i'm the leads guy because like selling so many

goddamn puts on this thing i better be a fan of man united wait so the show the market cap

right now is 3.1 billion ticker symbol manu so yeah so 3.1 billion doesn't include the debt level i think they probably have like 700 million in debt so it's probably 3.8 on the on the enterprise value if if they sell for five billion that would still be under chelsea which i don't think they would sell for under like below what chelsea sold for i think they actually suffer above so there's a bidding war between a british billionaire and uh katari chic chic chic chic chic uh katari chic and the the chic is like coming in with higher dollars and the the british billionaire is saying like well i'll i'll let you still control 20 of the business um but coming in a lower dollar amount so i think that bidding war is like just pushing these prices higher like i am comfortable selling the puts below even current market price so price today 18 and change this thing went ipo in 2012 and then at like 15 15 dollars so like i'm selling puts at 15 like if i'm buying this asset at its 2012 price and it's 2023 that's fun alfalfa yeah it's pretty nice and i get to be a little fan of uh manchester united like if if this thing goes gives below 16 and a half like i'm going to be put to a lot of shares i'll probably be a 10% minority owner so you know then i'll

really be a fan but as of now this is this is my money alfalfa i like that yeah i like that yeah it's fun and it's like you're you kind of feel like a a supporter of the team a financial supporter

of the team why you're rude i love that it's not just a g-gen gambling the team while you're rude yeah so bottom line is like i think this is a win-win scenario like i'm like the premiums the premiums because the volatility is high right there's a takeover bid what i what i find in like situations like this like takeovers you have like really high upside volatility yes but then these the options get priced on both sides you know it's like these are priced on black shoals which is prices in vol right so like i'd happily sell the puts and if i lose them fine like i just own the out the common fine it's like a steep discount to what i think

valuation is the valuation is yeah can you imagine trying to shills bitcoin to the kataire sheik i'm sure this kataire sheik printed is like plenty of biclin he's

just like yeah we we it's called oil we have yeah yeah we have we sell it yeah we don't need

um your coins but oil still 70s like yeah well we just we just print like 100 x of it and still

sell it for 70 and oh and then we buy we buy soccer teams this is so good what are we drinking

we're drinking the nika by the way wait is that wait is that the nika i'm having the nika the nika from the barrel i really like the nika days i've never had uh obviously yamazaki 12 is

pretty outstanding shout out the nika shout out to japan you guys are really good at making

whiskey i can't thank you man i can't really get to making whiskey i can't thanks you guys

i mean it's a scottish word so yeah i mean yeah it feels like it's a german word yeah that looks

german fashion erica it's really good erica it's really good max in the chat wants to know what kind

of money are you making on the puts like how do you how do you characterize that oh do you so um it depends like how close to you know today's price you want to go uh but like i have i have my own metric i'm switching to my own camera i have my own metric that i've devised which nick has seen before which is i call the juiciness factor which takes into account not only like the implied vol today and the premiums that you're getting but it's like the covered return that you're getting on the share so here's what here's what's hard about selling options is calculating returns right and the idea what makes it hard is that like you basically don't have any collateral that you're putting down so like you you earn premium on nothing your return's infinity essentially so um what i use is called the covered return which says like if i were to lose all of these contracts how much money would i have to put out and then i calculate my return against that and uh to to max's question long story short is like um i can go like two standard deviations out of the money to a place that i feel very comfortable buying this thing

and earn like 50 per contract and i'm selling a ton of them do you know off the top of your head

with like if you had to equate it to an annual return what that looks like um like on a weekly it's uh i mean it's infinity it's infinity right but if you do the cover call on a covered return it's well over the one percent a week that i am targeting it's like probably double or three

times no it's actually five times that the juiciness factor is above five all right but if you do the cover call your goal and your goal so we're talking about like 250 percent

annual return if if you were able to capture the race on like an ongoing basis which you

can't because like it's all about you know the takeover of all but and uh the other the other

assumption is you're okay holding the common if you get put the shares and that yeah that that's my that's my like real alphas that like to me it's a win-win because if i if i can buy it at its 2012 valuation and it's 2023 what's happened since then you know like asset prices how much is how much is bar so going for unfortunately they don't have a common stock i would probably win wait how many teams have stock yeah super common is this super common no not many

not many and and in this particular case to to mandos bar does and bar doesn't

bark so this bar does not and this was just not that's just armon's favorite team that's armon's favorite team uh it does not have a common stock i think there there are few that do there are few that do and like here's the problem honestly with like here's the downside with what i'm doing is that like i'm playing a game that is speculative in nature so like man you as a business doesn't make money and this is like common throughout all sports franchises these businesses exist at operating loss pretty much every morning a winery

yeah it's like owning a winery yeah that's what they tell you but didn't jerry jones by the cowboys

for like eight dollars and zero cash pulling asset appreciates amazing to know zero cash

pulling asset appreciates amazingly that's it so like you those numbers weren't those

numbers weren't real by the way but they were approximate yeah yeah so you bought you buy a sports franchise knowing that you're gonna have to like make cash outflows to operate this team but over time like the valuation will increase and then you sell it to somebody else at higher price so that's the game i'm playing like you know it's unfamiliar i'm buying it at like four billion and then i'm hoping to sell it to this katarii sheik at uh six billion plus and uh you know they're in a bidding war so like they're literally bidding over each other here's the problem the the british guy is not buying 100 of the business so he might not buy the common

shares off of me it's unfamiliar i like it but but but the market will correct to whatever the

value the valuation valuation you would hope that the market sort of like that that gap narrows

interesting but that's the game i'm playing okay all right um i got a little different type of alfalfa so um i was sitting in the airport and there's a lot of debt ceiling talk these days so i had some time to waste and i figured i would walk through the 2011 debt ceiling

wait timeline timeline so you're at the airport yeah hold on pay the picture hold on pay the

picture i'm at the airport i'm waiting for my flight and i'm like you know hold on

i'm waiting for my flight and i'm like you know hold on you know you know what i do

i was curious you an lounge at this point or where are you you know i'm uh sitting uh

ready to board A1 through 15 on on southwest the the bus And Vanovolo

and i was like man i wonder what happened because it gets referenced often like what happened in 2001 what happened in 2011 and the short of it is that the the stock market tanked 20 percent in a very short period of time so i was trying to figure out well what was going on and what was the timeline so i'll give you my notes on it kind of what i what i learned is that in january of 2011 timothy geithner said uh he was the then treasury secretary sent a letter to congress saying hey guys uh between march and the middle of may we're gonna run out of money so you need to raise this debt ceiling now fast forward a couple months later he says may 16th is the drop dead date if you do not raise the debt ceiling um and around that time there was a little higher unemployment and it was slightly increasing i think there was like uh like unemployment was around 14 million so uh it was a little quite a bit higher than it was now we're at secular lows so keep that in mind you know volo in the winery the deal i mean this was like in the press every day like obama versus john bainer uh who's a republican head of the of the house and they were just going back and forth like bloody mess going on 60 minutes battling each other and whatnot but the short of it is that they didn't reach an agreement until like july 31st well after the treasury techeries treasury secretaries said deadline they actually did reach the debt limit on may 16th and the treasury started moving around money literally not paying some bills the market didn't really make a move until about three or four days before the day the deal was reached on july 31st so in that first bit it went down 10 percent and i think because the market was like oh shit we're well- was reached once the deal was reached it went down a further 10 percent this is like well after

obama signed it into law wait what year is this this is 2011 we went on 20 yes yeah strong strong

stonks um we we quickly started to rally back but it was a 20 in a couple weeks do you remember what was going on in 2011 like was this the time when they were like furloughing uh government

employees and there was a government shutdown yeah also during that time yeah yeah i remember yeah there was no during that time yeah i remember i remember this personally yeah exactly and so the one thing to keep in mind is that at that time there was a little higher unemployment and the biggest part of that deal was spending cuts and so spending cuts cuts equal less liquidity in the market and so i think that's something to keep in mind like if we start to see a deal forming and there is heavy spending cuts price in this you could see even after a deal is is inked maybe maybe the market doesn't like that there's less fiscal stimulus being put into the market and then the other part that we're predicting and this is going back to our net liquidity calculation which again is the treasury or sorry excuse me the fed balance sheet minus the reverse repo facility and then minus the treasury general account but basically the government's got about like 80 billion left and that's not a lot of money to have in their checking account and once a deal is reached they're going to refill that checking account by issuing bonds and t-bills and so that's going to suck a fuck ton of liquidity out of the market and so we could see that pull net liquidity down right after so let's see if spending cuts are on the table and and how quickly this thing

starts as Janet Yellen updated her guidance at all saying that we like we would be out of

money by uh what was it June June 1 and also first week of June but i think going back to 2011 we know there's quite a bit of wiggle room when it comes to like shifting around payments as anyone would if we were all about to reach bankruptcy you just kind of like stop paying some people put it off move some money around that kind of thing so anyway i thought um share my notes on what i was uh looking at in the uh in the airport 20% down 20% down 10% before and 10% after the

deal was reached which i thought was 20% down you know who doesn't care right now the nasdaq pulled up it has those five stocks that are just performing it's just like fuck you i'm going up it just it doesn't care no care about anything it's like banks failing up because

that ceiling oh nigga exactly right it just doesn't care pulled up it has those five

stocks that are just performing it just doesn't care don't care about anything it's like banks it's driven by five components and like in S&P sameats driven by its five largest components is market-weighted so like right it's being held up but the breath is fucking disgusting

everything down i think it's also hard because like if we're talking about it on this podcast it's probably priced into the market you know it's like there's there's very little that we i think there's stuff we talk about in crypto that's not priced in because crypto is this very like wild west borderline autist slash opposite of that market where nobody knows what's going on still smart money can't participate in weird stuff happens but i think like stocks stocks if you will like but not everybody yeah sorry everybody knows what's like everybody knows about the debt ceiling you get these weird periods where everybody know like the banks are failing the debt ceiling's happening in the wrong direction and it just keeps going up and then you start asking yourselves like wait am i am i supposed to be buying here

yeah sorry the market rallied today off of some like just positive comments like face both sides saying we're not we're not defaulting on our debt as in they felt confident that they'll reach a compromise but that also happened if you read back to the timeline 2011 that happened multiple times multiple so we'll see if if yeah i mean i feel comfortable betting

on like just the political strife and like just pure disagreement between both sides do you feel like you want to be short this market eventually meaning like within the next

i i revisit i i revisited my uh asset allocations also in the airport and uh out of my liquid net

worth half is in play and half is in cash i remember a lot more than i i remember a lot on one of your alfalfa rounds maybe a couple months ago you said if i see the s&p go to like

41 50 then maybe i take a few more dollars off the table like i did it yeah i did it 42 and change i think and so if we go to like 42 and change and 43 can change yeah i'll i'll certainly uh peel more off and then go short also no not short not short just in cash and also if bitcoin you know hits that 30k mark even goes above i'll i think i'll shave that off too i think it's weird this like time i felt very comfortable with cash i don't know if it's just like feels good emotionally just to like know it's there and it feels must be nice it feels comfy yeah

so if we go to like 42 and change and then go short all like almost borderline college mode like literally like getting close no i'm fucking around but like it's it's this is when you want it like this is when it all counts yeah this is the this is how you want to be prepared to take your time to deploy and you've been very observant and cautious and waiting for the signals for a while and like the fact that you're saying like you're you're exactly there where it feels good you know half in half half like ready to deploy i think that's exactly

i mean the play has been just like literally like i mean the play's been you know chop chop first half of the year and then yeah assuming some kind of down dig second half of the year

and we'll see if it comes it certainly may not yeah i think that's that's the key is that you're comfortable how would you feel though yeah well you're comfortable because you haven't been tested like if if you did your strategy you sold at 4300 or whatever

and then you know bitcoin goes to 50k then you're like tilting what did i do how would you feel

though yeah well you're well you're like tilting what did i do i'm tilting yeah i'm tilting what

i do do you have no spot i do okay i do okay yeah uh crypto i think is

nine or ten percent total you're such a nit but i'm glad

you have something um yeah not having any liquid net worth it's it's a lot more but i'm glad yeah not having any liquid net worth it's it's a lot more because keep in mind a lot of my net

worth is in illiquid real estate so yeah it's not like i can like sell it and poor guy because

keep it's more guy i just wanted to just yell at you yelling me yell what do you gotta say no just

chirps y'all happily forward you my annual retirement is uh enjoying the chicks in the mail get them get them get that mailbox money i just wake up and there's chicks in the mail

mailbox money i keep hearing okay get them get them get that he's got the mailbox money

mailbox money i keep hearing so much about funny so much about problem with that problem

if You like brit i still get all the chicks all right i got some mouth off all right all right

guys hit me baby it's mostly a hit me baby a very quick comment i'm i'm proud of myself for not buying pepe like i told i extraordinarily disappointed i said that people will get hurt i said that i'm gonna pass i maintained my composure to not get involved and i say this knowing that like we have a friend that turned a thousand dollars into five million and eventually got out for high six figures and that's remarkable that's incredible he paperhanded at 700k

to five million oh excuse me thank you okay poor guy yeah poor guy um sorry thousand dollars

thousand for you yeah poor guy um sorry thousand dollars thousand for you so like smooth 700 fx i was not in that position to have acquired that shit coin for you know uh at the price that he did in at the time that he did and therefore i knew that i would be chasing a hopeless dream and i decided to pass and in the past in that cycle i've made the mistake of chasing stuff like and you know you you and i were talking stephen it's so weird to sit next to you i don't know

if i like it i feel closer to you actually do you actually i feel closer to you better

don't you feel better with this arrangement i feel good yeah i don't know i feel good yeah yeah but you guys aren't gonna yell at each other combative and i'm not certain about this give

it a second like how this how this will be he's not gonna yell at each other for our relationship i feel like i want to yell at you more than that guy over there do you yeah i'd like he's so far away from me i can't i barely know his name maybe you're so comfortable throw barbs because you're just sitting here maybe maybe i'll just

i will actually just stab you i'm gonna get a little yeah he's so far away maybe i'll just

wait i'll we are we are stabbed start calling you an r-word very even

marty caught up to your comment but i remember but i remember like you were like i was like dude if we were in the the hype and the euphoria of the bull market and we were in meme coin land and that was the thing then yeah i would have chased it because uh depending on when i got in on that little mini meta game i i i would have seen higher upside and i would have played it and i would have exited and and you called it easy you're like that's too easy but you like to gamble and you like hard mode i like easy mode and to me that was like not easy mode it was hard mode i wasn't willing to play it i wasn't willing to gamble and i passed and i feel good about it so i guess my alfalfa is just like after you've had some reps and you've taken your notes and you know what your plan is just fucking execute it like like know what you're comfortable with and execute it and be okay with it and be proud of it and be willing to come to your friends and be like yeah i stand by it like i'm i'm glad i could have made you know 100 if i traded that perfectly and doubled my money but like i'm okay because i didn't have to think about it for those two weeks at all and i'm happier that i didn't have to think about it and i didn't stress

for those two weeks so that's that's where i'm at with it okay i'm not trying to be a hater here but i think still after all this pepe is up almost 2x after when you declared you didn't

want to buy it there's so many things up 2x though there's nothing no i mean pepe the talk of the town it was where the all the attention is but it's like i don't need 2x trades in

a two week window right now no i mean pepe is only that like that just doesn't do it i agree and like there's some people who just need to get the turns right but the big macro turns like are we

risk on risk off risk on again like on again what am i gonna do with a two-week win on like a small percentage with a tiny little back like right i'm never gonna

full throttle on a two-week trade like it's just not going to happen okay for the audience out there if you know that you can double your money in a week you should definitely do it nobody can do it no financial advice no no okay i'm i'm partially trolling but there is some alpha in there right there there's sort of two philosophies trading at the extreme one is the lotto ticket philosophy we're like i'm gonna just drop 100 bucks into every frog coin i see and maybe one of them will 10 000 x right and then there's sort of like a trader mindset where you're like wow this trend is so fucking stupid but i know it's got a 2x in it i know it's got a 2x in it so i'm i'm gonna get in i'm gonna get out i'm gonna humbly double my money and then i'm just gonna go away if you can do that and i'm not saying like most of you can't do that i probably can't do that either i'm just lucky but if you can do that that's that's perfectly acceptable strategy right you just have to know what you're doing like what is the trade and why am i doing the trade um yeah i think it's perfectly fine to wait for the i i think the guys who make out the best in the meme frothiness are the ones who wait and they go hmm okay yeah it is fully redacted

right now i am i am i'm gonna jump in the pool can you just please acknowledge the survivorship

bias to like meme coin frenzies like at least acknowledge it that it exists absolutely which is what i'm saying okay if you can trade it's better to be a trade it's better to be the humble trader who goes in collects 20 30 in like two days and gets out like nobody's making a twitter tweet about that as we call them on twitter i'm told nobody's tweeting about that like oh i made 30 everybody wants to see the guy who made 700x on texas but but for everyone yeah there's like a survivorship bias thing for every one of those guys who tweets there's a hundred thousand people who threw a thousand dollars in and it went to zero right so

that's like a false fantasy so chasing that is silly and chasing that is silly can i ask a question because i'm i'm an arm on when it comes to this stuff like i i know myself at this point i'm like a i'm a slow compounder that's like my that's in my dna but when i look at something like this i see pragmatism okay and what i see is this it's like for for people who have a lot of money it makes sense to just earn 5.25 in t bills that's great you're gonna make a fuck load of money just by having no risk but for people with not a lot of money you should get some exposure to these things like like our buddy put a thousand dollars into this and turned it into seven hundred thousand dollars that's after he took a fucking 80 haircut like that's

fucking awesome well to his credit his commitment to being at the cutting edge of the industry paid off the guy's in every discord the guy pays attention to everything going on he's always looking for the next little piece of alfalfa cracking for three or four years by the way swinging and missing many times like him and i have talked about multiple misses and all it takes is one of these to steven's point about the lottery game he got one right and it's life changing so i think that's incredible if that's your game and especially if you have the and and and and the the wherewithal and also the balls to play that kind of game like it takes big

to play that kind of game like it takes to my point if you don't have a lot of money like if you got a lot of money you don't

have to worry about this shit you don't you don't have to worry about this shit if you have a few million bucks and you can kick back and you're like i love this much to live off over the rest of my life and you can earn your five percent like

why would you gamble anymore and you've got to like troll these Oscar likeier

it's a it's a hard life what do you guys think


so fantastic do you have any alfred anyone talk baneck so i had i don't know if it's alfalfa but i had a long like for sometimes i'd comment on a tweet and then i end up in this like seven day back and forth where they keep responding and i i just have to keep wait this is real yeah

steve where they keep responding yeah steve you need you need bigger problems

do you argue on the internet or is this more intellectual yeah you need bigger, problems no it was it was intellectual it's it's actually a thing i'm interested in yeah so you get a lot

of engagement seriously i'm seriously just curious i have no exposure you know you get a

lot of engagements in yeah you get a lot of engagement in the eath twitter land if you go oh look at the eath earnings and then you make some tweet about the price to earnings ratio and this is like a grinds my gears thing because like i feel like we can't put p e ratios on e right i feel like it kind of makes sense but it doesn't like it's something that's directionally correct but it's wrong it reminds me actually of the bitcoin stock to flow model like a few years ago where everybody was like stock to flow and everybody jumped on that oh he's trying to bring it back yeah rip plan b yeah rip plan b yeah if you still follow plan b at this point just just delete your twitter account and invest in index funds like you're

just you're you're gonna die so just just stop like he that that whole thing is great uh archetype

for how to create a sort of like viral but by the way he got me hooked in a little bit like

he got my attention i mean he got my attention he's one of the first people i ever learned about

i think the guys i got a million twitter followers at this point right but like it it really exemplifies what sells on twitter you throw a concept out there that looks elaborate and intellectual and complicated and make it but you simplify and then somebody grasps it and they go like oh i'm understanding this inside information that's complicated and not understood by the world but in actuality the model doesn't make any sense and stock to flow is just retrofit of bitcoin price and there were a lot of people not not like a lot of notable maxis by the way but like there were there were people like like nick harder i remember and and eric wall i remember two people in my brain who were like this is total bullshit like this is not a real thing but so many people went along with it because it fit there by so it was like bitcoin up and i think eth is doing a similar thing now it's like oh we're looking at these fees and we're putting a pe ratio on it and it it doesn't exactly make sense to me right because the demand for block space is sort of priced in gway right and it doesn't really care what the usd price of of eth is right so you're you're basically saying like oh eth price is 80 000 and we're charging this much like for for every transaction and then we're gonna oh that's that's a that's a 9x pe that's wow that's so undervalued but if the price of ethereum fell

by 50 then it would be an 18x and if it fell by 50 it would be a 36 because you're earning in the asset itself it's the the the price up and down is reflexive and that if eth goes down

so do so do the fees so so what what this fell i think his name was figo.eth what he said to me was like he was like oh it's like an exchange rate problem it's like if you were investing in an indian company that had their earnings in rupee and you were like well my my i'm denominating in dollars those earnings in rupee don't make sense what if the rupee goes down 90 and my retort was like no it's not exactly like that it's if the indian company was paying out earnings in their own stock right which was then denominated in dollars but it wasn't necessarily tied to the earnings like there's like a disconnect there yeah so i kind of throw that out to you guys like do you feel the same way about the eth pe chatter like does

it feel weird to you absolutely i think like this is the big problem with anyone who's tried to value this asset using traditional methods is that you get you run into this like circular reference that you're describing it's recursive right that's what it is yes and it and it becomes

sort of impossible and the other part that i've had trouble with it's recursive right that's what

it is yeah brought this up since the very beginning but the other part that i've had trouble with is when you're valuing the token um versus the network so like man it like when you're when you're participating in the network you're paying the fees and that's going to what like it's going and it's being burned by the network but then like you know that benefits the token but it's like also the network but it's also like you know what part benefits the token in this way like i've literally done back flips sitting here trying to think of like

how like how to actually think about this like like is this a cost or is this a revenue and you're someone who's who's probably like looked at like 1010 k so like sec annual annual filings and done

this like traditional valuations oh my god yes like i i've literally looked i've looked at eth from every valuation method that i've ever learned with of which there are probably 70 and um it's so fucking hard to dial it in i haven't been able to because of these simple problems that you're describing but but you know to like move towards our topic like this van eck um valuation model i think has done the best job of representing sort of like a realistic approach and and the outcome we can all you know we can we can discuss but i think the approach is reasonable and um you

know granted there are these these issues right so right so so they're basically including transaction revenue like gas fees they're including there there's in the sorry van heck van eck analysts which i i went back and actually looked at some previous videos they've done i hadn't seen

a video or an interview of this current analysis yeah so there's in the the fan sorry van eck yeah so so for people watching we're talking about the van Eck did they do did they do etfs or something

what do they what is their base they do they have like a they're like a tart fire company they

applied for a spot etf they're very heavy in commodities like gold like uh they're like a

tart fire company yes no they're a trad fire company yeah they were like they managed money

part 5 tract so they basically just have uh etfs for like every industry vertical okay yeah they're

traffic notifiededited basically just have okay so so yeah so what Nick's referring to it's like to their credit they put out a very what from what i've seen is the most i think thorough valuation model of ethereum that exists and they attempted to put like a future and a present day value on the token and a whole bunch of like discounted cash flows on it and like really break down where that comes from so we're talking about that right now because we want to try to get from the point we're talking about ethan like this pe ratio which is not good to this like more complicated model which which i think has some merits to it but which i think

still shares some of those right so so uh let me let me put one place where i kind of agree with them so they have this um the the baseline price model takes a free cash flow uh multiple and they apply a 33x so uh i was actually playing with google bard and i said hey can you give me like examples can you give me a teaser are you a bard guy i'm ben ma bard guy lately dude yeah real-time data baby real-time data i'm a big bard guy anyways uh i asked it i said can you give me examples of companies that have you know an under 10x free cash flow 10 to 15 and then i said what's over 20x and it gave me um apple amazon alphabet like all those like uh kind of fang type stocks they're in the like low to mid 20s so to put eth at like a 33 is not too far of a stretch so i agree with that but then you look at like their their revenue numbers and i think this is steven where your point comes in it's it's like okay base case is 51 billion dollars in revenue in 2030 but at what eth price right like if eth is at a thousand or 20 000 like the model changes

recursive real-time data baby real-time data i'm a big bard guy anyway i asked it i said can you

give me exams in or 20 000 like the model changes so they used a really good analogy in this report which i was like i read it and i was like yes that's the problem they started likening eth to dave and buster's tokens right we're like people really love dave and buster's and they want to play games and everything and they're buying the dave and buster's tokens to play the game right and then they're like well eth is kind of like the dave and buster's tokens and yeah that's the problem so then you get into this question of like what the hell is the dave and buster's token worth like the dave and buster's token isn't tied to some revenue multiple of dave and buster's it's just like complicated supply demand model it's like akin to the dollar it's akin to any foreign currency like why does a currency have value like currencies don't necessarily have value because there's like an earnings multiple or cash flows apply to them like there's this complicated like what are the what's the trade deficit what are all these other there's like all these complicated metrics underneath the hood that equates sort of supply and demand at the other day what is the demand for the euro relative to the dollar and like we want to simplify it to this oh there's these earnings but it doesn't exactly make sense like yes the more people who want to go to dave and busters and play the video games all else equal

the dave and busters token goes up but is it really tied to usd dave and buster's earnings

their price targets are anywhere from $300 to $50,000 and so in the in the dave 2030 right this was the part that grinded my gears with the whole thing yeah i mean i kind of get like i can't take

any of it seriously probably accurate though 30 right right yeah i mean i kind of get like probably accurate though i get the bear case where it's like fucking nobody uses it like it

just stops getting used so that's why it's like 300 bucks but of course that's like in the realm of possibility like i just i don't know well i think if you're gonna do this at all you you

you you sort of like double down on a specific direction the model the model breaks when the dave and busters tokens you get literally the price of them is so volatile it goes from 300 to 50,000 like i that's where the model breaks and i hope when they get some interviews maybe they'll come on and we'll chat about it with the two analysts who did it like this is the main question we need to ask them it's like how did you derive those fees and at what eth price and how do you factor

in the volatility of the asset that is like being translated into dollar itself so to give people an idea of what they're projecting they took 2030 and so by their metrics today eth has like two and a half billion in revenue which i still think is sketchy because it's not dollar revenue it's eth revenue and then you value it in terms of the eth exchange rate to dollar so it's a little bit weird right but 2030 their base case is 50 billion i think in revenue yeah their bear case is two and a half billion which is today and then their bull case is like 130 billion or so 136 billion so like a 60x from here it's a really really wide range um there's some interesting tid bits under the hood there like for example they think 20 billion of that is mev 20 billion of that's a lot it's a huge chunk and in doing that they said that mevs currently like they put it out like they did some weird this is super wonky but they put some like equation over like oh it's basically equivalents of two and two percent of tvl it's gonna go to 0.15 percent right so it's gonna like margins and that are going to be compressed because they think applications and layer twos and everything they're gonna say hey this is a really bad experience to have our users sandwiched by jared from subway and like getting absolutely wrecked so we're gonna look to kind of compress that so that 20 billion amount is like taking that into account and it's still like a pretty high number um and they had like an approximately equivalent number for like metaverse and social versus financial they actually put metaverse and social as like a i think like 30 or 40 percent higher in terms of revenue than financial and then they had this other category um like infrastructure so they're like there's gonna be 50 billion of revenue in 2030 it's gonna mostly be metaverse social then financial then mev then like kind

of baseline did you um did you happen to see the bit about l2s and their kind of thesis on where

value accrue yeah i thought that was super interesting yeah what did they say they said

90 something percent of all transactions i have in front of me so 98 of all transactions will occur

98 but 50 of the dollar value will still happen on l1 98 because so the take rate is very high

for eth yes yes like the the value happened because some transactions need extreme security composability like maybe punks will never trade on an l2 like they'll always be on l1 and maybe the provenance of being on l1 is what gives them value and and back and forth but so they said that like margins for l2s range from 15 to 40 percent and that as l2 competition increases that will like reach perfect competition around 10 percent and that they believe the majority of the value will be still accrue to eth the asset which is something we've talked about before so it's nice

to see someone take a position on it there are some other interesting numbers in there like for example they looked at um they looked at like avze they're like what percentage of fees paid to avai go to the app avai versus eth right and i would have actually thought it was like 50 50 like avai fees aren't they don't feel like they're super high and i feel like eth is really extractive compared to the fees on ave but they were saying that actually avai gets like 90 to 94 of the fees and the other 10 to 6 or 7 percent go to eth and then they said that was like actually kind of almost equilibrium they think in the future that applications that run on eth are going to extract 90 97 of the fees and then the rest of it goes to eth on the base layer for facilitating that infrastructure so that was interesting to me that was we're already closer to where i thought we would be going we're almost at like the endpoint already in that regard so i thought that was interesting another thing that they said in this report that was super interesting is like um they they basically said that um here's the direct quote from the report say curiously unlike most enterprises where businesses pay the overhead of rent electricity and the rest users directly pay the overhead of interacting with the on-chain businesses that on-chain businesses hosts and chief vendor ethereum so they're basically saying that like when you go to the mall to buy something you pay for the product and if you go to Sephora to buy some makeup you buy the makeup but then they're paying for their their rent and all this stuff right but

on ETH the customer doesn't pay for the electricity to turn on the lights and Sephora and should

separately then they pay for the makeup they pay for the right right like ETH is this weird ecosystem where you go to the bank of Ave and you pay like all of their infrastructure and warehouse in your transaction and I was like hmm that's weird I've never heard anybody phrase it like that and I was wondering if that's going to be actually a sustainable playing no I don't think eventually not right right like it seems like in the future the aves of the world would absorb that cost and sort of obfuscate it in a way and that would be competing to have like a lower you know cost to the consumer to get the end product that they want

so no so EJ I have a question for you um hey man hey how are you yeah not bad you're so splendid yeah wee bit tipsy as I just said in the chat um so you've been doing this analysis for as long as possible you've tried 70 different ways to do it and you feel this is the best that you've come across what do you think of the price targets and where do you land like with

your critical analysis of the whole thing yeah not bad yourself yeah if you don't mind can I

give you a uh a two-minute uh masterclassing valuation I would be please yeah so be honored

yeah so be honored Jordan clip it so so as I as I look at this model what I see is that like when you approach valuation there's there's two ways that you value anything and one is called relative valuation one's absolute valuation so relative valuation is is you measure the value of something relative to something else okay so in uh tech companies you would say uh you know this thing's trading at five times sales well I'm growing up faster rates so that's six times sales or in uh in a home you'd say like oh this three two home is is selling at 700k well I'm a 3.3 I should be trading at higher higher than that so it's a relative valuation and then in the other side of that is an absolute valuation okay so what Van Eck is doing here is an absolute valuation absolute says like this is what this thing is worth independent of what anything else in life has worth okay it's based on its own merits its own cash flows intrinsic value says that this thing should be worth x and they said that like okay

and it's more difficult intrinsically to do by nature right it is

exponential more exponentially and more difficult to do it's way harder to compute thank you for saying that because an absolute valuation like if you get it right hypothetically speaking an absolute valuation if you if you can calculate it correctly

this is going to be the exact value of the the asset its way harder to compute thank-you

this is the ultimate power of the asset it's like having the crystal ball versus like what we talked about before that the relative value is like it's a quick and dirty method but there are so many uh plausible ways to get that wrong along the way right the quick and dirty is pretty shitty absolute is very good but it it is very hard to get correct so what van eck is attempting is inherently very hard and they're they are trying to pinpoint how like what the cash flow value of the eth network is assuming that the eth network is a mall and assuming that eth network is going to rent out their block space like a mall rents out their their square space to Sephora and sharper image and Macy's or whatever and ultimately it's the consumers who walk into that mall that buy the products from Macy's and Sephora whatever but the the dollars flow to the mall owner as like they rent block space or you know square space so when I look at at that approach I'm like this is this is directionally correct I love it you know Steven's questions are valid like how do you value it when you have this like you know reciprocal sort of circular problem I don't know the answer to that yet but I think VANEC is on the right track um what you found is is in the output of what they said is like hey this thing uh based on our discounted cash flows could be anywhere from zero to 50 000 that's like okay well that is the problem with the absolute valuation is that sure they're square space here's what happens in an absolute valuation you have a numerator and a denominator the numerator is the cash flow the denominator is the discount rate let's key the discount rate out of it for now where the where the valuation model goes right or wrong is all about the numerator it's it's all about the cash flows so if you project the cash flows to be x y or z your valuation is going to basically follow that so what what VANEC is basically saying it's like if the cash flows are not coming in strong that's our bear case the valuation of e the asset is going to be weak if our cash flows are going to come in very good then that's our bowl case and it's going to be 50k so like what i would challenge anybody to do is to like use their model i think this is actually this is the alvair's like use like their framework because it's it's like directionally correct use their framework if you believe in either their their bear case or their base case or their bull case or somewhere between any of that use that and say like okay based on my assumptions of the numerator which is the the basically the demand of the network make your own projection of the demand and then you can easily sort of like assign your own valuation to eth based on that because that is basically the intrinsic value of eth like they did a good job the only thing we can argue on is like

like what the future looks like in terms of demand yeah so um i have two follow-up questions and maybe we can answer those as we wrap up this this portion um but before we do uh i have a ask for the audience if you don't mind as you're watching in front of your phone your laptop hit the like button it certainly helps uh get the live out to you know friends and family and helps us grow yeah yeah and i'll cheers you to that and if you don't i'll see your uh abstention in the analytics so but uh but my question is first off one do we think eth right now or in the very near future will be valued off these traditional valuation methods at all and then i want to know what your guys's 2030 prediction is for eth because the reason the alfalfa podcast talks about crypto in the first place is because it's the highest risk return asset we think uh presently and if there was something else we probably would talk about that most of the time so i'm curious what you guys think i got my own kind of like number in mind but uh i don't know anywhere you guys sit first off are we even evaluating this asset off off traditional methods

will it be valued off revenue in 2030 even no okay no it's a new kind of asset no to that specific

question yeah like we're trying to yeah like we're trying to apply these old ways of thinking to a thing that's never existed before like if you take something like gold why does gold have gold doesn't have cash flows but it has value because there's some you call it like a monetary premium and then there's some sort of demand for it in industry and then there's some sort of demand for it in terms of oh this is just a scarce thing that hedges me against the debasement of the dollar and then the more people who believe in that specific meme the greater the demand for that narrative and then the greater the price like what is that formula nobody knows that formula it's complicated and and gold i think is a really difficult thing to price because it is very widely held by like central banks and in large world banks and who knows what they're doing with the supply and you're you're just sort of along with the ride with that right whereas like ethereum we can be very confident that the US government does not hold like eight percent of the supply of ethereum or something it's just it's just not a thing so you're you're in before any of those shenanigans happen the other thing about ethereum is it does like i i know people have talked about this sort of a triple point asset meme a lot it has properties of a commodity it has properties of a bond it has properties of the currency and i think it's sort of difficult to weigh all of those things together but i think what you can understand right is like look this thing is going to zero or it's going to thirty thousand fifty thousand whatever you want to call it right almost doesn't matter it's a thing in your portfolio that is like an asymmetric bet like if i told you you could have a bet that you could lose which is going to zero or you can make 20 30 times your money you just take the bet you're not like well is it 20 times the money is it 10 times the money is it 50 times the money is it 100 times the money it almost doesn't matter like you have to allocate something to the bet like if you believe in the general direction of the meme as we all do like we think we all think i think here that this is like a super interesting asset that the world doesn't yet understand then you need to be allocated to it you don't have to be like all in but anytime the world offers you a bet where the downside is you lose everything so negative one doesn't get worse than negative one but you get like plus 20 plus 30 plus 50 plus 100

you just take the bet right can i go yeah uh i think you're right i think that's like direction correct my my presumption with eth specifically is like uh that maybe maybe it doesn't trade on like a traditional asset multiple or something like that right maybe it doesn't that's okay like gold exists and i've i've always like used bitcoin as the proxy to gold okay so like i one day believe that bitcoin will surpass the the value of gold that's that's this is my supposition and and gold is worth 11 trillion dollars today and bitcoin uh if it were to surpass that would would be 250 thousand dollars per coin okay i haven't done this math for eth but like maybe eth you know plays along that same path too just like just to play devil's advocate to stephen it's like you should be tethered to something right like you you should be tethered to some value to say like well if eth goes to 50,000 or 100,000 or a million or something like at some point you'd want to know where where that is um an unreasonable valuation yeah like we would all agree on that yep and like you know i haven't i haven't like done the moon math necessarily yet to see like

where the unreasonable valuation is what i know is that right now is so yeah so so in other words the the comps to historical ways of evaluating these types of assets are necessary to a certain

degree well yeah i they're part of the me well yeah they're part of the mean or helpful i think yeah i i also don't know if that's well i'm gonna i'm gonna illustrate a totally absurd case right imagine i told you eth is going to go to zero or is going to go to literally 900 quadrillion dollars okay yeah like at that point you wouldn't be like well i can't really invest like is it going to go to 900 quadrillion or one quadrillion like i don't like at that point there's just a part of your portfolio that is so insignificant and the asymmetry to the upside is so great that you just you stop thinking about it right and you're not necessarily even trying to exit i can just tell you like look it's a lotto ticket it's a lotto ticket you lose 90 of the time but when you make you make at least a thousand times your money back you're just gonna play the game you're gonna be like okay like i have to just play this game i don't have to worry about what the exact upside is i just know that it's it's so beyond the e V of my lotto ticket that i have to put it in my portfolio and i don't know if it's zero uh point one percent or one percent or three percent it's probably not 10 i think that's like an interesting question is like where do you go assuming that's

like a omega lottery ticket yeah and i want to start hearing some price prediction boys

2030 well i you want to wrap it up with the price predictions or do you want do you

do rebuttal serve but then give me give me your thoughts on my thought

why eric finishes thought but then i want to hear uh i mean your point is fair like if it's a lot of tickets a lot of tickets you allocate to a lotto ticket but like it's a it's a good lotto ticket it's a rig it's a rigged lotto ticket in your favorite it's a good lotto ticket and i i i would hearken back to something that you've put me on which is like um you when you enter a trade and and this is different right like because we're talking about an investment on a trade but you put me on this idea when when you're going into a trade you know what your downside is and your upside is and like for me uh to have the upside just be x question mark and have downside be you know like not 100 about 90 percent like i would i would like to know a with a little more clarity like what i'm expecting on the upside and for me how i would how i would discern that is to tether it to you know either an absolute or a relative valuation that makes sense to me an absolute one would be like how van eck does it or a relative one would be like comparing it to another asset class like gold or whatever and like i think that to me makes more

sense than just being like a lot of ticket whatever yeah well let me ask you let me ask you let me ask you more directly if assuming eth works let's assume that whatever your concept of eth works it's 10 years in the future and we're like oh that worked what do you think is the minimum price like in like a bad scenario but we're all like yeah eth is the thing

it's got 70 of the smart contract demand i would think i would think i just don't even understand

what that means personally i think like van i think like van x bullish expectation

discounted using a 12 discount value is probably correct yeah so i mean what i digest your kind of like uh like perspective as i still need to sign probabilities to it because you're right it is a lottery ticket but like when you put the price at will eth be at 4500 by 2030 i'd say that's more like a 90 probability but like when i when you say will it be at 50,000 i'd be like

well i gotta lower that okay right i agree with you but what i'm trying to say is the probability equation you're using in your investment thesis is more like it works or it doesn't not like what is the actual well when it works is it worth a thousand x or a hundred x i almost think that doesn't matter it's sort of like what is the min case if it works and

what is the probability assuming you don't have an opportunity cost that's of similar like returns right so yeah i'll give you i'll give you guys mine so my 2030 is in the range of like 18k to 25k

is where i put like my baseline projections you arrived at this price by calculating the

amount of feet of mars yeah exactly no so no so i actually i i still like the logarithmic regression curve the the logarithmic regression curve is used for things that have a network like effect i like it it takes into account diminishing returns as the network grows and it's it is it is priced to fit off previous data um bitcoin i think is is the better one so i actually and by the way log string aggression you can look at the rainbow rainbow chart for bitcoin if you don't want to like look at the math version it's it's a quite elegant chart i'd say it hasn't it's broken only a little bit throat broke a little bit but that's essentially what we're looking at is like an asset that has a network effect that grows in in such a function where

the the returns diminish over time in another broke broke and the rainbow has recovered right

like yeah yeah yeah we're back still yeah yeah we're back still in very very strong by territory bitcoin rainbow so i like looking at the bitcoin price and then i kind of like take my relative price on eth it's a very crude method like van eck is like you said absolute method i'm looking more at a relative method i think and so anyway that's what i'm looking at because i've had these tough decisions where like i think i've told you guys like i'm looking at a multi-family property a storage unit or buying a car wash that could make anywhere from six to nine percent cash on cash annual returns at 20 to 25 percent which has high probability i have high conviction in it and so you know i i think eth will perform well over 100 annual return closer to 200 annual return and so i'm making these tough decisions now where i'm used to just shoving cash in those but anyway that's that's where i put my my price prediction and um but over how

many years of seven years okay bitcoin rainbow so but over how many years of seven years okay seven years um all right i really want to get to the part where i've been having sex with this

like uh ai bot okay so i'm sorry i really want to okay so let's get there very quick

okay we still got to talk about okay let's get a number we're gonna talk about the ledger thing

and i want to get to this chat all right darmon is yet to darmon is yet to master the art of the ay general segue literally once the jam the next i'm a jammer i'm a i was trying to hand it off to

you driver hand it off to you literally jam the next i'm a jammer i'm a i was trying to


georgia can we edit that out we're live georgia can we edit that out that out

live the man is he's a pile driver what is he gonna do okay so you want you want surprises

can you guys give me a fucking range like i haven't had a chance to speak about the range

it takes it takes a 27 characters of speed takes we we gotta go give a range what year are we

talking 20 30 20 30 seven years call it two cycles i think 30 is i think 30 is two cycles i think 30 is optimistic i think it's reasonable i'm just trying to 10x that's my yeah okay that's my thing ten x over seven is well over 100 because i think it's an asset that if you have a bunch of cash you can shovel a lot of it into not financial advice um it's not going to go to zero ten x over seven years is well over 100 because probably and you just just get a smooth ten x and you just chill you stake it also ten years from now if the rate remains at like three or four percent you'll have 40 more of it maybe 50 more of it so that's pretty cool too you can leverage it up if you're a huge g-gen maybe if you're staking in the meantime you're saying yeah yeah okay yeah like the by the way the staking yield has been more robust i think than people have predicted do any of you guys stake yes i stick and i i use um not for all my money but i use i've talked about this a little bit gear box has been like it's it's a leveraged staking protocol this is my age badly so don't clip this but i think the most secure of them but still like i have a small chunk in it it's okay if it's it's been i've had money in there for like seven months it's it's been over 20 for like six months

straight that's not why if you're staying in the meantime you're saying

yeah but do any of you guys stake yes i stick in and i have a small chunk in it's okay if

it's wow i'm glad you're just sharing with us now i've literally the first time go back to the old tapes go on to steno steno ai by the way look up the transcripts look up me saying the word gearbox i've never you'll hear something you'll see something like oh he said that in november we should have listened to him you should have listened to him mix on it if we

if we can interact with you never you'll hear some you'll see nice on it if we if we can sign up from here from here which i think we easily can if we do though um we will be performing these podcasts um from outer space because i have now purchased mars

and you guys are on my civilization right you know all right all right i like that all right give us yours though like what what i mean because obviously you're based on something

so just give me a range uh what i what i i don't really have like a fair value range because like the future is unknown and like how how the cash flows come in will determine how i view the asset but if if i'm able to capture uh a 10x on the price today i will gladly realize eighteen thousand dollars i'll realize i will

realize i'm 40k okay eighteen thousand dollars i will realize that i'm 40k

okay i like it 40k thank you sir for you know thank you sir

yeah one of us has you guys can take that you guys can take that to the bank leverage

leverage your entire portfolio leverage leverage your entire portfolio advice okay i've thought about this as pretty see everyone as well so 40 40k yeah based on based on reading this shit and thinking through it all and you know applying my little

all right i change my magic sauce... 40k then all righton. Come on board all right

magic sauce 40k then so to take it from the macro to the micro a lot of people are very upset right now the situation is pretty alarming there's a lot of misinformation oh i love this i don't even know what you're transitioning to oh ledger you can't oh i forgot about that stephen we're

recording a podcast um we are hanging out live we have an agenda oh i love this i don't even know

we are we are hanging out live we have an agenda is no agenda we're just having a good time we're just having a good time so we have Chianti for the three people that don't know because well there's plenty of people that might may not um ledger has released a new product uh a new firmware update that is essentially a subscription for ten dollars a month that allows you to uh essentially like remove this rely like like remove this single point of failure of your seed phrase on one piece of paper and have this backed up and the controversy is that uh and it's backed up to like three different sources and we can talk about the technicalities of how that works but to really like get to the crux of it this uh exposes something that a lot of people didn't know existed or was a possibility before on the device that you already own which is the nano s one of their best selling products one of their best selling hardware wallets and this will be possible to add in simply by updating your firmware and opting into a subscription they also recently raised a hundred million and they've raised hundreds of millions of dollars uh they're a huge company and they're a startup that needs to succeed and there's a lot of different angles on analyzing how we got here everything from this is a vc back company that needs to find a new revenue source to um we can't trust these guys they've already exposed like our data uh a year or so 2020 ish ago two years ago well fuck that's three years ago um and so many different ways of looking at this but there's a lot of misinformation and what i would like to accomplish in this like little segment of conversation is just getting to the root of the best understanding that you guys have amongst like 2020 ish you know this conversation of we have often talked about the importance of needing to uh uh like fully uh self-custody versus like how that's actually a problem in the first place and how most people that want to adopt and hold crypto in the first place don't have the aptitude to be able to do that and how ledger is actually attempting to create a solution that could be a great solution for a lot of people but for og crypto holders this is unacceptable over the line and causes and will cause if not has already caused most of them to be like I'm I'm done I'm done with you and i'm going to treasure or i'm going to some other hardware wall brand that you've never heard of so i just want to get to a place where we're like clear on what our actions are because i think

that's where the alfalfa is so yeah yeah i mean i i think like um as you mentioned they raise money and i think as the board of directors of ledger they're like how are we going to onboard the next billion people and they realize that like you know giving everyone a 24 which is the exact thing we've said they talked about and they're like well how do we do that and make it simpler for them or at least safer and a better ui for them and i think that like they've also realized that along the way they can create a nice little subscription business model for for the business so i think it plays hand-in-hand with like where they want to grow the market and the financial needs of the company i think we're kind of learning for the first time that there is a social contract between us and the hardware wallet manufacturers that maybe we just didn't know existed before which is the exact thing we've said we talked about had no idea yeah that there is possibly a firmware update that you could provide that extracts you know whether it's encrypted or not like your your private keys and that's something that we weren't aware of before

and if it's if it exists with ledger it probably exists with others no so that's the thing right it exists with all of them i think so and by nature of the device itself requires software

and we don't we don't mind that they they have that service but i think what what i worry about is in seven years when eth is eighteen thousand dollars and they own a significant portion of maybe my net worth yeah forty thousand sorry sorry sorry i misspoke um you know if a government a nation state decides to say hey we require this type of regulation or a bad actor you know implants an employee in the company and can patch in something that gives them a back door what you know whether they're known or not like all these like you know kind of doomsday scenarios which happen when you look at like how intelligence agencies like backdoor av companies and all all sorts of like quote unquote impenetrable devices and companies it's certainly possible so i think that's what we worry about and i don't think we are aware that that that's possible and now we're aware of it so i think there's a few things you can do is like do you you know one thing that a new comparison that comes up is like well is coinbase safer now than a ledger like it actually comes up in my mind now i don't i don't know if it is but the other thing you can do is just implement a multi-sig right like if one company has some probability of risk if you can you know decrease your probability risk by implementing a multi-sig

for those crypto hardliners right like maybe my net worth implant can you do a multi-sig with like doesn't that implicitly mean you are going outside ledger with already you are your leader

is just one of the sigs yes but but but you might need two in order to execute a transaction which

makes it but you might need two in order to excuse like assuming you're just one person

who wants custody of their in your crypto hardliner like you've in your crypto hardliners like you've existed to this point for years you may want that i'm kind of on the take that like for the

next billion people this might be like a pretty suitable uh like service it absolutely is a great service for getting more people to utilize this technology but it is terrible for the ethos of what bitcoin and crypto is supposed to be it's terrible for that and and my question for you guys is because i i have not dug into the technicalities of how this actually works is and maybe you don't have an answer it's okay if you don't but it's like if this flaw exists with ledger why doesn't exist with every hardware wallet ever like what's stopping our you know uh stored keys from eventually from whatever hardware wallet we use being one firmware update away from a government forcing the hand of a manufacturer or a corporation to say yeah i need this information and i need you to give it to me now it's like and we can't like what's the road something out there

yeah now it's like and we just like what is this road something out there yeah okay so so the main thing is to acknowledge that all four of us sitting around at this table none of us are actually equipped to like break down the intricacies of what's happening here and they give you a definitive answer no definitely not and that's kind of i don't know of the scariest word but it's like theマacies of what's happening no definitely not definitely not like i would i would consider i would consider myself to be like a very crypto native person like i have like a

good amount of my net worth on chain i'm on chain all the time like no it is it is i would consider

i would consider myself but even with me like there's we talk about crypto about like just eliminating the trusted third party right we talk about this fantasy world where we just have complete self-custody of all our funds and but if you think about it like there are actually like all of these sort of trusted third-party intermediaries in the way of like everything that we do and like and and the ledger thing is scary because it breaks it down to the hardware level right like right so the fact that they they push this update through and they said they said you could opt into it but why is it even possible with the existing hardware to push a software patch through where that hardware can port your seed phrase over it like i think a lot of people

were like whoa whoa whoa wait first of all why was that even possible in the press eventually like okay one one way that like an individual could play it would be like i'm not going to update my firmware i think that's a bad idea how many it's a terrible idea yeah how many years are you not going to update your firmware for it you eventually need to update your firmware because your object becomes obsolete by nature also does the firmware updates provide security absolutely like there are other vulnerabilities that are issued so you eventually have to update your firmware and if you've updated your firmware and you're one literally software button away from opting into something that allows that to have some sort of backdoor access again this is where the misinformation starts to kick in it's not necessarily misinformation it's just people that are doing their best right now that is a mix of people that are highly technical to people that are uh highly technical traders to people that are just like i have a lot of money in crypto and i need to make sure that i actually have true self-custody because that's the promise of what i signed up for and everyone is trying to figure out is that actually the case and i think that the rude awakening that is occurring right now is that for the first time people are realizing the hardware wallet which was supposed to be the safest way to store your keys is not actually as

safe as they thought it feels like its alarming in fast playing all to me i think that's a bad

idea how many it's a terrible idea just firmware it feels like is alarming for me that is extremely alarming to me finance right like i feel like the way we got to the modern financial system was we were super decentralized at a particular point in time we all just kept our own resources and then people were like robbing us and we were like fighting them off with sticks and then guns and then just battling and then we've got together and we're like wait what if we give these to sort of third parties sanctioned by this collective entity called the government and then we don't have to worry about this so we're like okay that's good and now i wonder if we're like going back it's do you guys know the comedian Jim Gaffigan? he has this sketch about like people eating candy bars and like we need people that have like a healthier option they're like well we'll make the kids eat this like we'll put granola in a thing and we'll sell it to them and then comes back they're like the kids aren't eating the granola he's like well we'll put little chocolate chips in it and then he comes back he's like boss the kids still aren't eating the granola They're like hey of course you always whispers and he has this sketch oh it's okay well just we'll just dip the granola chocolate chips in chocolate and eventually he like invents like the kudos bar which is just a fucking candy bar it's the same thing they've kind of come full circle and given the people exactly what they wanted in the first place and sort of repackage it as a different thing but it's still like a candy bar and I wonder if we're going to get to the same place here where we try to go super decentralized and we're like wait a minute this is really fucking hard and then

ultimately we end up back where we go okay actually you take all our crypto yeah yeah and I don't want to get too tinfoily but I will say like let's get in there you know I've had a chance to meet with like a former director of the NSA former commander of cyber command and like it is a practice of them they like their former employees to cycle into industry and they certainly like the pull industry people in under their command meaning like they like when their their employees rotate into the private sector and then back into the public sector and if you think you know the United States is very okay with that well then you got to think that like other governments are very capable of that especially to like a French company like like Ledger so I'm just saying like uh yeah there there is a social contract it exists there are foreign governments who will certainly

attempt this this is and like uh this is they'll say like let's get in there you know yeah this is terrible this is terrible for crypto but there the fact that there is a social contract

means to me i'm sorry game over game over for most wait the wait the whole thing is over it's over

it's over the whole purpose was that there was no social contract they were just supposed to be a manufacturer of a physical hardware good that's stored wait who is they ledger which everything all the crypto is over because they're all the same now yes it's not because no it's not because of ledger you know what it's it's it's it's a fundamental understanding of like how do i actually create a situation where a third party is not necessary to any degree whatsoever look

look at just to put the put the hat on of a hardcore bitcoiner right now how wait who is they ledger are saying all the crypto is over because they're all the same now yes

triggered is that person to know that there is not truly this idea of self-custody that exists

without a third party they use custody wallets and custody exchanges in order to use their

DECC first place to like of course they do first place like of course they do but what is the real version of this look like what is the version of it look like looks like that doesn't

rely on anyone like well i think what we should come to terms with is that like this is like shared risk like let's say you use a different method and ledger has some kind of issue you don't think that's going to impact your precious asset price like if if ledger has an issue and you're on a treasure like this is a shared risk i think if ledger has what kind of issue like some kind of vulnerability where all of a sudden people realize their seed phrases are are not as secure as they think they are and if that becomes public like well this is a shared community risk like whether or not you're you're losing the ledger like people fear most that another person gets their private keys right and so if that if that happens in the future if there is evidence of like it happening multiple times this is a shared risk of owners of the asset class

whether you like it or not so anyway i think i think we should like right i think it's a

way bigger deal than we're giving it right maybe and i think honestly believe that maybe and i think people should defer to like the banclist episode where they talk to the cto ledger like if you want

the technical version of this i think yeah if you want the right way why do you think yes if you want the one that version wait why do you think you want the propaganda version of it go listen to that but if you want the like what's really going on version we just we actually need like a like like a hardcore developer who understands like a cryptographer slash hardcore developer who understands exactly what's happening who can explain like how keys should be stored in the most authentically self-custodial type of way and how perhaps this entire time we've been lying to ourselves that we can trust an entity of any kind to provide a physical device because ultimately it's based in software like yes there is an offline components of the whole thing but if you can send a software firmware update to that physical device then is it truly pure and secure it's kind of like what came up in the money channel of our discord today it was like multiple people were talking about uh the different ledger models and how the if i'm i think it's the the x that is the one that has the bluetooth technology and the s is the one that doesn't and it's like being able to plug it in versus the ability to use bluetooth you're providing more points of accessibility and more points of vulnerability and more points of failure ultimately and and and that's scary in a world where things seem to be becoming a little bit more dystopian as time goes on there's more uh independence happening if you're into the peter zyhan thing which steven you are it's like it's not good for that narrative right like like you want it's not good for the for the um for the belagy narrative i still believe belogies right

by the way about what i think the Choose right

we're printing we're out of a million net no i think it's I played a role in that episode where i just wanted to help us have a conversation i think his basic thesis of like what is happening

in the world is correct you were kind of going to move quick i think he said we're down at a

million yes no i think it's so weird that we're down in a million yet no i think

but you were anti-biology in that episode what yeah we were like Bitcoin is not going to a million dollars

yeah you were like big well he was playing the uh the moderator and like tossing up no you

moderator and like tossing up no you you did not say Bitcoin is going to a million dollars i don't think bitcoin is I know you didn't otherwise

i would have dunked on you appropriately okay hold on i don't think Bitcoin is i know you didn't

otherwise okay hold on we're getting off track but the point is like i forgot

eric i want to hear what you think about this whole thing like are you worried or not worried

is my my main thing yeah yeah what's your thought here i don't know enough to be worried or not worried what i do know is that if this is a worry then it's fucked and my's my suspicion my suspicion is that it's a nothing burger like everything else is so okay i've like seen people that i trust like a seed like go through their thought models on what's happening and they say that this is a nothing burger so to me it's a nothing burger but like if if it is as bad as we sort of make it to be like if this is like our seed phrases are

it's not a nothing burger okay i'll put everything on it it is fucked it's not a nothing burger okay i'll put everything on i said on a nothing burger the fact that there is any vulnerability whatsoever on a level that exists with any company means that that is

intrinsic to the technology of how the seed phrase of how your keys are stored in the first place in the first place i would counter it with like you don't know what you're talking about and

neither do i but neither do you so and neither do i but neither do you so then it's a worthless conversation here it was a worthless conversation can i come it's abo 144

then it's a worthless conversation can i come it's comfy about how your counter please so i don't know how a ledger works i will throw that out there i have no idea how a ledger works but i do know that if they are pushing a firmware update that you can download and change the way your thing functions it does mean that the existing hardware had the capability to do something before and that's all i'm saying i don't have to know how it works but i can keep going i can use deductive reasoning to say like oh this thing had the capability to do that if you

such a secure capability to do something for another that's all i'm saying i mean i can

let's keep living you want to let you just push the software you want to you want to push the software you want to you want to live in a world with with fucking auto gpt that can go and do

whatever the fuck it wants you're not you're not you're not worried about where you going

absolutely go there i can go there shall i think so i'd go there you do you want to live in a world with auto gpt that can do whatever the fuck it wants it already has access to the internet we shouldn't never giving it access to the internet in the first place we should have never given it the ability to code in the first place these are all things that max tech mark talked about and then now here we are it has the ability to download upload access all the fucking information that ever existed and then how difficult would it be to push a firmware update if you're ai and you just simply want to up that's bankrupt the entire fucking human race that has already moved from the big banks to you know self custody crypto i mean there's so many terrifying scenarios of things that could go wrong and i think we should be taking it extremely seriously oh and it's not just

the fucking nica whisky speaking i i'm honestly actually i think it's terrible i'm i honestly actually i think it's terrible i actually have a take that i want you i want your nica whiskey ton i want your tick on my take my take my take from this as like like assume you're a ledger and you're a founder my take is to pick a fucking lane like legends like we are the og hardware wallet and like people keep a hundred million dollars of bitcoin on our wallet also here's a here's an update that lets you just recover your seed and i was that already was there a backdoor

along i don't know but here we are have you just pick a lane be like super accessible or take

that i want your i want your nica whiskey ton i don't know but here we are have you I should have

let Robinhood do that they should have let metamask do that that was not their game it's weird like you can't just be in both customers you like burned your existing oh there was a space where there was literally a guy in a twitter spaces he was like well ledger isn't for people who have

more than like 50k in their wallet anyway and people were like you like there was a space in their wallet anyway what

and there was all this stuff about how they don't know their customer they clearly don't know their customer if they made this move that's the biggest thing that i took away from this is like wow

they are not talking to the real crypto hodler at all what's so so yeah also so the three shards get shared with ledger a company called coin cover and then a company that shall not be named i looked up coin cover i was like sitting in bed last night i was like well is all my money gone

is that is that there is that there shall not be named ell Dusk?

No it's just like some independent third party and i was like looking at the coin cover website i was like this i'm like doom scrolling in bed like this does not inspire confidence it's a i don't know and then like some third party like company that doesn't i don't know

so you need two out of three in order to get your hold on it and like inspire ... That seems legit nothing to see here folks just keep your net worth on ledger and you'll you sleep fine

like we said always use a hardware wallet

thank god thank god thank god our ENS names are covered by ah multisig boys thank god alpha alpha pod

if these guys were here in person we'd be having a grand old time yeah basil says I've been watching arman wave his hand at eric to switch the cams LMFAO

yeah that's it for eric that's it my bad that's my bad that's my bad we've been drinking

since uh 10 30 a.m jack keeps it's 10 30 a.m jack keeps it sharing that I have to pee

very badly which is absolutely correct do you want to take a break before we get into a lot of, can I?

no break I can I, I'M GA THEPrances t please! arman can I go to the bathroom

s s soblazed i actually wish I was so blazed s

it sounds great sorry

let'spass FDX wallet LLC

can we

wait it can we

light coverage yeah of course

oh my oh my

god are you serious? god are you serious? I'm going to the bathroom

I didn't hear anything if anyone did not pick up on this already

Nick is the landlord and, and, and it's legal in California so

my insurance policy allows I I haven't smoked a joint since before I had a baby

oh hey Basil uh switch the cams for me

you, you

we're here to get we need, we need a little Steve and I have peed twice at least already but I can't help you man

oh my god by the way can the chat here the airplanes by the way because like we live I don't think so we live pretty close to like a a fly lab under Max and right in nurse and left

I left the moon roof open

and the room and I'm wondering

if anyone can hear I don't think so under Max and I left I love, I love Max

he's been on fire

ledger you had one job ledger master job just be do that


you literally had one job just do that like would you have preferred that we just had like pure ignorance like this

I'm so safe in this head in this head it's like you know what's funny is that we sat here talking about it for 14 minutes

and it's like no none of us have any fucking idea what we're doing oh oh oh oh oh oh oh Stephen's already in the bathroom no no

that's truth I gotta to the bathroom

have a little break

I don't know

I don't want to stop no no that's fine I

I thought we're not doing the stop thing

that's absurd no no

we're not doing the stop thing I'm not stopping I'm not stopping I can't stop you can't stop

I'm not stopping I'm not stopping I can stop

I can't stop I'm gonna fix one airline and I want to refill my drink

how do you fix the plane

I'm gonna fix the plane Eric's gonna go to the bathroom

and I want to refill my drink do you have any 3 mil Zins?

I got 6 mil I got 6 mil milligrams in and this is a perfect opportunity since Eric isn't flipping the camera my way

so are we going

and this is my way so are we going into some of the

life topics then? yes so next we're gonna talk about Karen AI Karen AI she made about 71 grand in her first week of having a chat AI so we're gonna talk about that next let's take a quick 5 minute break we'll be back refill the glasses get a drink

come back an existential feeling I had this sick feeling that we got the whole thing wrong no you're, you're being dramatic no I like you being someone has to be dramatic so dramatic

existential feeling

no you're you're being dramatic no I like you being so dramatic everything's gonna be fine

everything's gonna be fine why though? we're iterating the vulnerability exists to any degree what's so ever

then the whole goddamn thing is it's a trait we're iterating it's a folder of not because the beauty of crypto is that there is there's just like 0 like the you can transfer all your money by memory like you just have like twenty words and you just transfer all your money gone and it's gone and the person who offered the inferior product now has no funds in their product and nobody wants to buy their product it's beautiful it's a free market where people provide products and there's no ability to have some sort of regulatory capture to stick people into your shitty product where they're like hey you could move your funds but there's this like ninety eight day waiting period and you've gotta like download this other thing and then you gotta file you gotta fax in this paper to move your funds it doesn't exist

you just let me understand something these keys these keys that are stored these keys fucking hardware what's stopping it from being you know you're not technology enough to answer this like how is this what are the alternatives like where else how else that is still offline

stored on this

that's the question I'll tell you if I can

is there any way to store keys offline without interaction to any degree like with software look there's a very I'm sorry I'm just I think that's what I would ask like a like an expert right now that would be the exact question would be like just start the conversation there like how how does that work is there any way

there are ways to do social recovery like we've talked about

like but that's a different realm that's it's not the same thing is it

the problem with Ledger isn't that They're using a way of private key recovery that people didn't opt into the problem is they're just putting it on top of an existing sort of infrastructure that people thought was hard and couldn't be modified from the new hardware device and they said your old hardware device can't opt into this because of the hardware we're like we could there obviously there's no way we could just push some firmware update that lets your hardware do this but we're here's a new device people be like oh that's cool I can buy the I have no and instead they were like oh hey you know that device you've been using for like seven years here's the software update you don't have to opt into it but if you just click this green check mark box then we just get your seed for it people were like whoa whoa wait wait that was possible that's kind of weird

that's where they went wrong like they had to like pick a lane all right you got to give Eric a

mic well Steven's not

going to be fine take a biological break wait you've had this the whole time no, I've been here I've been with the people okay

oh I'm not here by choice wait you've had to

do this the whole time okay oh I'm not here by choice come on told me to sit here if you need a break yeah right

and what I would like angle changing and what I would like is I'd like you to start the conversation about Karen and when I reenter the room I want it to be at like peak sexuality that cause you're that's like where I thrive and I would like it to be there when I

reenter the record

let the record show that Armand thrives at peak sexuality Wow so on that note we're trying to do this thing now where we don't uh we don't have a break between the uh segments well I guess eventually we're gonna go into just we're just doing

one thing

I guess that's fine but like to not do a break is absurd broadly like it's

four hours I agree as well like there were there were individuals in the chat who were commenting about how badly I had to be and that made me realize that I did indeed have to pee

yeah we we all know like we you have taken breaks when we're

doing one hour podcast yeah so I feel like my bladder is usually pretty good but then it just it's a capacity point man it's

they gave me a yeah so they gave me a you gave me a six milligrams zen pouch i want the chat to follow

I'm already I'm already hiccuping I want to see it if uh

hiccup the hiccups that's from the alcohol no that's from

this zen pouch

hmm that's from the alcohol I'm gonna I'm- I forgot what- what are we talking about for the life segment we're going to talk

about karen ai we get a lot

we got oh, wow. there's a bunch of stuff in here I'm glad we have these notes actually because I have zero short term or mid term

I think the thing to add might be surprised to hear that

we have notes yeah the whole town

we have notes notes

I- I don't think they'd be surprised at all the whole town knows you have no memory let's- let's


I don't know when because when I

put it in I start hiccuping oh man I think um thanks Bandit for the comment we were we were uh gonna be pretty insecure if we put up these little pads and no one

commented oh I know I need I need some positive reinforcement from Bandit right now

what'd he say

he just said nice setting nice panels no no not no just no but he's talking about the panels

I know he is I know Bandit

nice setting well let's transition into the next segment we're gonna do a hard left turn from talking about the intricacies of ETH tokenomics we were just at a baseball game and you yes Eric yes informed me that the MLB was considering getting rid of umpires and just having a computer call balls and strikes to absolute digital perfection and I wasn't sure how I felt about this actually and you seem to have some opinions so I want to kick that over to you how do you feel about having baseball governed by a computer and what are the broader implications

for society so I know we have some baseball fans in our audience D. Koch it's peak sexuality no no we went the opposite direction so D. Koch I know is a Detroit Tigers fan I know we have some other baseball fans I know for a fact as baseball is changing their rules to suit fans so they have already done a couple of rule changes implementing a pitch clock which you guys

where the beneficiary is up today

like the game went faster today the game was long and it would have been longer

by the way by the way I enjoyed the pitch clock it was noticeably

faster right and the game we all was like holy shit we're in the third or fourth inning as we said it we're like this game is going by fast that's a positive change I would assume you guys all agree okay so the next change they're looking at implementing is the robo umpire which I believe to be like an immense positive this is going to be revolutionary in that like we all sort of like the human element of gamesmanship and that exists between the players the pitcher and the hitter we don't want the human element to come in with like a third party like let's just play the game as it's intended a strike is a strike

and a ball is a ball let's let the players play can I ask you a more difficult example how would you feel if the NBA playoffs and all of the fouls were governed by

a computer I mean like many of them are because there are the ability to challenge calls now some of them yes but and like within two minutes they can like they can go to the to the instant replay to see if a ball was out of bounds off of one team or another so like they're already implementing that and I think that improves the game that improves like the the product itself whether that improves like your watchability is open you don't like that they took an extra 45 seconds to

look at the call baseball's great it is America's pastime it is a sport that I hope never loses its sort of like a connection to the American culture I think it's a beautiful thing and yet at the same time compared to other sports like pickleball sport air quotes has way more attention I couldn't believe it this weekend I'm not even gonna troll I couldn't believe it this weekend pickleball was on ESPN I was blown away I couldn't believe it was ESPN 1 or 2 and it was like a whole match it was probably people that you know very well

I mean I I can't believe that if you were


if you were like that's ridiculous

yeah no yeah no no

no that's ridiculous it's crazy in 1971 damn there was a boxing match yeah yeah

I'm on can you believe that I've on I'm on I'm on Steven's tip on this when did you I don't care about pickleball like this is a sports network and mostly what they show

is talking like let's show some sports like oh from that regard like there was a


there was something why

but but not happening at like 1 p.m. on a Thursday oh there's always stuff

happening happening no they chose to show pickleball on premier pico level


I'll give pickleball

no no I'll give pickleball some credit because pickleball you know particularly the singles is an athletic feat singles is

how do I long pickleball how do I make money off pickleball

is extremely hard max wants max wants to

know I want to know how do I make money off pickleball how do I make money up pickleball buy any sort of like ecom company domain names

I feel like the best pass-a-play is like domain names so our so our our mutual

friend Justin

I mean

what I mean what about what about dot-eeth if Justin got pickleball dot-com for 1.2 million I would've said that's like the biggest joke of a steal of all time that's yeah I would too like you're you get like what is what I basically getting a better multi-billion dollar

industry domain name for a million

yeah that's I would too I think a better how about like passive play is like turning worthless commercial real estate for like claimed to be worthless into What it hurt you

if I said tennis courts maybe like what it hurt you

tennis courts

tennis courts tennis courts would it hurt you No I'm only are you saying to take like an eleventh floor

empty unit and yeah I think that this this I think that I think that unit yes I think that this we for some things so what it was you turn that either into housing which is is difficult because I've talked to like commercial real estate guys who say like okay so we'll convert this but it's like it's fucking hard and it's expensive and like maybe the economics don't exist but if all you need to do is just like lay down a flat floor and like put some nets up that are fucking free essentially like that makes sense to me and I think you turn unproductive

real estate into productive and that's

great idea so you

turn that back into

Teachers Max So what it was I think it's great idea yeah and you could never do this with tennis right you couldn't just be like we're going to put a

tennis court

in the middle of

this bedbather

beyond you couldn't just be like oh we're going to put a tennis bathroom beyond

because with tennis you can you can well with pickle you can hit lob shots too you needed two but there's the number

of the pickle ball with tennis the demand is not there necessarily pickle ball has

all the demands yeah like the tennis people aren't like itching to go into an abandoned bedbather beyond and play a game

I mean I I told I told you guys I told you guys right like when I went to the place that Steven and I play and I got smoked by two 65 year old women

like they smoked me okay so this is like I don't want to go down this other path of talking about competition

that was the part where they laughed at me remember the conversation that was the part they hurt them the conversation

about the guy who said like I want my sports to include a physical element and he got so much backlash he said in an harsher way he said

I didn't

I mean the guy was

right those were big words for a man who can't even

win a sprint

whoa whoa

hey now can't win a sprint who didn't participate probably for us 40

miles an hour who provided

the anticipate

40 miles an hour who the entertainment you don't want a sprint against me I have a bad foot I'm basically I could get a

hand on

my shoes to the chat can we call it on your shoes

to the chat

the chat can we call it on my shoes the chat does not sound like

my choose that sounds like an easy when to me orthopedic hoco 1-1s but you can

go fuck yourself I mean so Does he win to me? I mean

so I've seen I've seen elderly caddies wear hokas I've seen big walkers well hokas I've never seen an inverse

arm on and to h sober

this is how can I used to his day


a this to hear


yeah the topic for today ever great that wanna bring up it came to me again like where at the baseball stadium a hotdog Mexican need , would you like yourRu discussion pick and I was like of course I would. What kind of person like would you like your and onion and salsa it , yes all the above

of the above — Watt the genetic mutation — of good against

No I don't have that okay I don't have that

okay I know some people that would like vomit I do I do as well

poor Bowersford for Bowersford the I do as well to who they are for listening to this podcast anyway this guy he he rings me up $19 for this hotdog after tax

I'm like okay who's that

he's a $19 hotdog $19 hotdog No Really? He turns around grabs the premade hotdog off the rack hands it to me and it's like there you go if you'd like to there's a little option to add a little extra there and just like oh my god you had 20% tips Stephen how much you tip him I tipped him I tipped him 20% because I succumbed he was like looking at me like it's peer pressure Wait wait is this a segue?


Oh my god I tip him

it's peer pressure Wait

Yes Yes the fact that you don't know it's a segue it means it was an unbelievable test by the way I was just like this guy turned around grabbed a pre-made had a hot dog off the rack handed it to me looked at me like was like would you like to you know just if you're comfortable with it whatever

don't worry about it and it's just like

so he eyeball pressure yeah yeah and just like the amount is like 20 or like add custom like what am I gonna do click the button and then just like type in the cut you're just like I was thinking about like there was a time where I would go to a like a three hour dinner and the waiter comes up he talks to you he gets to knows you he makes recommendations things happen he brings food he's like I'll preemptively like that food's not right he goes back makes it right and you give him 20% that was a good tip this man turned around and handed me like a Mexican hot dog that was pre-made he made none of it himself and like I'm expecting it to be 20 and this has happened throughout my life I get a coffee they turn around they fill up a pre-made drip coffee hand it to me they turn a little swivel thing around yeah this is the problem by the way

the swivel

would you like to tip third? you're just like god damn it

20% that was a good tip this man none of it himself he didn't I have somebody grinds my gears things here but the worst thing for me is like when they're like no you get zero fuck you you think I'm gonna take the time so are you

custom amount I have sirens

but they are you are you the zero guy? because I I don't have the balls sometimes

if you set your baseline amount at like 25 and custom thinking like I'm gonna be like oh I don't want to take the time to enter the custom I just go zero but when they go like 15


like I think those uh casual encounters uh like I think there's a there's a pretty good rule to use which is like if you use them often if it's a coffee shop you go to like a few times a week if it's a place that you frequent like yeah tip your barista

tip your like person that's part of your you know I don't like cash but in this situation I'm a huge never care Narr MakEEP cash but i try to remind myself so first of all I buy I get I get $2 bills from Chase what yes why because they're fun to give they're very fun is this Persian this is the Persian thing this i don't know if it's Persian this is so old man


like he's getting it's Tyler bills from

chase very

fun this is Persian Persian this is the Persian thing this is so old man Armand okay he's got his

$2 bill

and $2 need


it's Persian in two dollar bills I love getting $2 bills That's Persian It's cash in their hand and they love it and they get to pay it forward so it's like they get to make someone else's day there's something about a $2 bill that is like make someone's day so what I like to do is make a person that's doing the especially like car wash like car wash is like oh thanks for you know stroking my wheels you know real quick for five seconds it's like here's here's a couple twos I think it's much better than just like pushing a 18% button on a pad so whenever possible I try to carry cash I'm actually in the

market for a

money clip it's Persian yeah I'm in the market I'm researching I'm reviewing I'm actually FOR

they're all the same dude they're all the

same dude do you guys remember that like that Louie CK skit where he like is like a cowboy walking in the bar then he goes in the bar tender he's like I need food for my horse a room a beer a woman he just takes a coin and goes ting and he just flips some like ambiguous amount of coin in his way and it's like he just like has his way like that should cover it and you get all those


it'd be so nice

it was better he was like Louie CK and he just takes coin his way

as if like that would cover it all and it's like those days where he just flips I need food for my horse a beer for myself a drink for my woman a room for three nights

ting ting

but it really was that alright can we talk about who's making some real coin now yeah

who's making some real Guinness that's my dome strong

way he's making

sanguines that this I didn't get into you on the record with tipping but it's fine that's fine we'll have a well I don't approve this it would I let the I let the record share what it did if I I thought Eric didn't even get to

Siddek this

I didn't though I were you want

to come on little rip well

I didn't either is there is there a principle is there

a principle or more

segue rescinded block

block veto that's what happens when you make a bad segue I'll be doing that immediately okay so here's the thing 20% tip is industry standard but for what okay for what that's like for like you said like a night's worth of like you treating me to service what if the service is you give me an overpriced hot dog from the back like that's not 20% worthy that's like that's a nothing you go no tip you go no tip and then say that's a no tip I think like somebody somebody cracks a bud light bottle to me they reached into the refrigerator cracked take the bud light and give it across the table that to me is worth a dollar max regardless of the

price you tip the same on a Bartender Cough


that's going to be too

OP Over Especially


That's B

you tip the same on a Bartender Alf profile

or what it I And here's the thing over tipping but tipping the same amount just it doesn't make it

logically inconsistent bingo here's here's the thing

here's with Nick bingo Here's where I I'm with Nick with tipping in general if you're generally in a place where you have the opportunity to and I'm not just saying this to say it I honestly mean this most of their income obviously comes from tips there's a difference right? There's certain establishments that you might enter where the the little pad is being turned to you and you know that it's just it's like you could be at like a florist shop these days and they'll turn the pad to you and you just bought some flowers and it'll ask you like do you want a tip I think that's entirely different but if you're in a place with tips and that they're earning close to minimum wage if not minimum wage I like to tip a lot and I think you're all saying the same thing I'm not saying you're not totally I completely am in a place where I'm like this is my opportunity to give back I think this is exciting it's a good opportunity and then they remember you they give you great service and all those things are true however at the same time I could not agree more that it doesn't make sense to give the guy a cowboy star 20% who deserves it 25% versus the person who just did nothing more than open the Bud Light the average order value

I'm not saying you're not saying that

the average order value

the average order value

the average order value I get it the A.o.v is higher I get it so doesn't that work out?

doesn't that work out? doesn't it actually kind of like

I don't think so I don't think so because you can be overcharged for the hot dog and then that A.o.v is stupidly high so you shouldn't be tipping high on that A.o.v

You could be stupidly high so true Pat brings up a good point the people who are really benefiting or the employers because at the end of the day you sit down with an employee and you think yes I paid you this much but you also earn this much so here's your effective salary

How does it work? how does it work? how does it work? Do all the digital tips go into a pool and gets shared by all the people that were working that day? No, I would like to know

how that works What happens at the bar typically is the bar team gets tipped out on bar tips and then the restaurant team gets tipped out on restaurant tips and the bar guys get paid way more at the end of the night than the restaurant team despite having done

way less work typically and not having to smile and kiss ass as much

Right, like not having to do much service

like you pop a bottle here But is that correct? It all gets pulled together the digital and the physical

and then it just gets spread out You know Loves It The Best and I have a payment processing company is the payment processing company So there's the

Oh yeah Payment processing company That like just takes

a little rip off those tips Can we hear of those tips? Payment processing company from time to time No

Can I give it like a You did just tell us No You did just tell us Maybe at some point Can I give it like a take that I agree with Okay so Danny Meyer He's like a restaurateur He wrote an awesome book I can't remember It's called Setting The Table his book I loved Okay There's Alpha in this book We don't even have to get into it right now He as a restaurateur of like several Michelin star restaurants He says he's like I don't want my patrons to be in control of my employees wages He's like I want to be in control of those So he So what is it? So on the menu On the menu he says Don't tip Don't tip I pay my employees Where is that? Living wage They're mostly in New York But it's like Gramercy Tavern It's so rare It's very rare So rare But he's like breaking the On that one But he's breaking the mold In a lot of ways In which like restaurants exist And that's why he's like

So good at what he does Maybe at some point

Can I give like a So on the menu On the menu he says Don't tip

Where is that?

Living wage

But he's like breaking That's why The thing about being in New York In general Being in the US Is like when the Europeans show up The American wage staff Can't stand it So like Because it's like These people don't tip

So in Austin They're not used to it

Austin, Texas holds a Formula One race Perfect example And Formula One is very much A European sport So you're flooded with like 100,000 plus Europeans And they just You would think They would love it The city's busy Packed bars Restaurants packed They hate it Nope they hate it Because the The paisans don't They're working longer They don't tip They're working longer

They don't tip

They don't tip The best they're getting Is 10% I will say As a consumer

Traveling to Japan It would be As a consumer Traveling to Japan It was nice To know that just like

You don't tip And it's just You don't tip And it's just It's like a more like Clear sound experience To just know like This is the price But if I was at that New York

But if I was at that New York restaurant There would just be this like Anxiousness feeling That like He says don't tip But like

Eh you probably should Just don't So I asked for sex like 30 minutes ago And I still haven't gotten there So there's this chick Okay

Can we just please Segue

Accepted Sustained Can we talk

About Karen Sustained Can we talk about Karen Karen's my girl So Karen You got along Her voice She's a snapchat influencer She's not an OnlyFans girl She's a snapchat influencer And what she did was ingenious

I was getting into that

You got the help she needed It's ingenious That's a real word

Have you changed your channel At all?

Since you

Did you just ask me if ingenious is a real word? It's a real word Well I know Because it just so happens to be

Eric is judging your Eric is judging your Let the record stay

Let the record stay Let the record stay Stephen questioned in GIS

Let us know Is that a word like irregardless?

No it's a real word

What's the difference between genius and ingenious?

Clever Ingenious is more like clever Genius is its own Even more so? No, not the same Different Ingenuity and genius Exactly, thank you Nick Let's move on I say that

Genius is its own

Ingenuous but even more so? Let's move on

I say that

Either she has a great team Or she on her own I would love to have her on Karen Wonderful, beautiful human being Love to have you on She decided to create a chatbot Of herself And all of her content Loaded up to It appears to just be A sort of like GPT-4 rendition of her So like similar to like if you were to Go and interact with like If you guys have seen like the Huberman bots Or any of these or Steno Is coming out with our own chatbot Where you can interact with like these various Specific episodes Or specific episodes And come talk to the alfalfa podcast Like you're going to be able to do that soon And in the same way You can do that with Karen And Karen is someone who has uploaded her content And herself to the point where Her fans can go and interact with her And not only was it successful But it was successful to the point where She took her entire following And let them know that this was available And actually is at the point where right now On this episode Right now Why? I just went to her website And I opted in And she's got some good marketers behind her Because you know what Nick You know what it says I think I talked to you about this Maybe I didn't It says 96 hour wait time to get approval To the Telegram group 6 hours So she's got some funnel workers behind her And if you don't know what a funnel is A funnel is essentially this idea of like Taking people Cold That have never heard of you And funneling them into the point Where they become raving fans And there's a step by step By step process Where you engage them And you warm them up And you build trust with them And the fact that it says like There's a waiting period For her Telegram group Is obviously a complete farce Right It is made up There's no waiting period It's just to create a sense of scarcity for her And what she has to offer Because what is she offering? Nothing She's offering an AI version of herself And she clocked in $71,000 in one week And in the I believe it was It might have been the Wall Street Journal It might have been the New Yorker Said that she thinks that she can pull in $5 million per month Right Within a few months It's fascinating, man

Like various podcasts Specific episodes Or podcasts Scarcity

It's fascinating, man

Like what is happening? What is happening? So if let's say you're an incel type Of her following You follow her You're enamored by her And you de-emer She says she gets anywhere from like Hundreds of direct messages To tens of thousands of direct messages Depending on what she posts You know, like 99% of those people Are not getting a response So for a dollar a minute You're getting a response Not only are you getting a response You're getting a one-on-one message Is Karen AI that different from real Karen? Well, it was trained with 2,000 hours of her YouTube videos So it is trained on a pretty good set It uses GPT-4 So it's a Interface that we're used to My question is like Most of these guys probably just want to like Text dirty things to her And have her text dirty things back For sure So is GPT-4's like Limits reached when Talking about certain topics

Have you done any deep research on this, Arma?

No, I don't think Deep research No, I have not done deep research on this But I don't think that GPT-4's limits Are sort of like a part of the equation When it comes to Karen

When just using the API Correct Yeah like I'm going to introduce my own training data I'm giving you the content

Yeah like I'm going to introduce my own training data I am giving you the content Ultimately So I'm completely just pulling this out of my ass But if your question is like If I were to ask Karen, like Do you like butt sex? And she heard us say She's her worst So what would chatch you

She's her worst I'm a large language model And she's not common on butt sex Thank you

But what would Karen say But what would Karen say What would Karen say

Karen would say I'm glad you liked that

Karen would say Karen would say

Well it depends on the size of your penis

Control the cell No seriously what would Karen say Karen would say it depends on the size of your penis

So did she say that then And then the guy would say Well like you know I mean here's my dick You know here's my dick pic And have a conversation But like they can have that

And pay for it And it would be exhilarating But the price

So she's charging a dollar a month Which to me sounds exorbitant Like it sounds like old school How much does a cam How much does a cam

How much does a cam

How much does the cam stuff cost I don't know like I think the way the cam stuff works Oh you know about that

I don't know like I think the way the cam stuff works is like You buy tokens And then you use those tokens Great business model by the way But like

Isn't that Andrew Tate's business model

Ah let's not What's wrong with him


Well what's wrong with him Ok fine I'm just saying

Alright Anyway but like I think that It's kind of like those old like pay per call Like pay by the minute type things One in hundred numbers 900s One in hundreds That business model is so far away from perfect competition It will They're really good The margins will go down For sure right like No but

One in hundred numbers 900s One in hundreds

One in hundreds

And so I don't know I just find it fascinating That she's the first

And maybe she Just think about it Like that's a perfect little comp there Like the fact that the nine hundred numbers Were ever a thing to begin with And the fact that they made so much money For so many years Why wouldn't this Ok Obviously it would And it's going to be a huge industry I have a thought To me Please go But Karen AI to me is nothing more Than the beach head From a business perspective To what the new world of sex looks like We are just beginning to see What is possible And we are going to be blown away By the Karen AIs that do things like Just talk to you Show you images Like Ok here's another example Like Karen AI soon Will have the ability To auto generate an image for you To your liking I mean if we can get graphic I think we can Except for the fingers



I have a thought Except for the fingers and the feet It won't come out good So if you say to Karen If you say to Karen

If you say to Karen Show me what it would look like For this or that to happen And she can generate it Why wouldn't you pay for that It's her and it's you You can upload a photo And generate an image of what it looks Generate a video Generate a video of us having sex Generate a video of us OK Now let's go a little bit more forward Even to the point where Go on I integrate my VR headset into the whole equation And now I'm having sex with this fantasy girl That I've known since high school I always wanted to have sex with And I get to tell her to say what I want her to say I've wanted her to say this my whole life Do what I wanted her to do my whole life Give whatever I've ever wanted her to give to me my whole life I would pay incredible amount of money Incredible amounts of money to do these things And do you know how many people out there Are willing to do these things And do you know how big of an industry this is going to be It's going to blow people away Go on

So it's going to blow people away What I found fascinating about it Because we certainly maybe take a spike into What it looks like to use AI to maybe create Non-human-only-fans accounts It's actually more difficult than you think But I thought that was the immediate path As to the path that you're pointing about Is like maybe people want that They want the perfect type of girl That they've been imagining in their life They follow them They pay for images and videos of this specific woman Whether she or a man Whether they exist or not But like what surprised me is that she's not providing that She's just providing like a pain ship And she has a proof of concept that fucking works And she didn't have to go that far She didn't have to go to that extent And I think it's important to note that like In this same week The Surgeon General of the United States Put up loneliness as like a serious disease And said that it is as dangerous as smoking That being as lonely harms your longevity As much as smoking does And so Karen and I put up a post This is on May 11th And she says Karen herself references Karen AI is the first step in the right direction To cure loneliness Men are told to suppress their emotions Hide their masculinity And to not talk about issues they are having I've got to fix this with Karen AI I've worked with the world's leading psychologists To seamlessly And she goes on to talk about like how she's Necessarily like doing this And she talks about CPT and DPT with chats I don't understand that But she says this will help undo trauma Rebuild physical and emotional confidence And rebuild what has been taken away by the pandemic So she's not necessarily providing like a XXX like need She's actually going after just straight up loneliness Which might even be just as big as a market As what we assume to be like You know the immediate market of this thing Eric I was curious what you were going to say earlier

Like a pain ship I think like my thoughts are along the same lines So like we can get porn whenever we want to Like porn exists So I think like the need for curated porn I mean that also exists But it's like less of a need But I think you need the companionship Right so you know this could be this new model But I don't think that people are going To find themselves fulfilled by that type of companionship Like all I'm looking at is her dollar figure Right her revenue right now She's extrapolating that into some future revenue She said five million What in this Fortune magazine thing She extrapolated her current revenue Into some future and I'm saying like It was hyperbole and it was a great headline Yeah and my take is that like I think the majority of her revenue now Are people that are actually like more like us Who are like just experimenting For the dabbling sake The novelty Yeah for the novelty factor Than it is like people that are actually like Seeking companionship Like maybe that is a smaller percentage of her revenue

The novelty I think there's a huge number of people That actually are looking for what she has to offer But they aren't actually looking for her They're just looking for it Or someone? Correct It or someone That's what I mean And so what's coming is I don't know First of all you'll have many variations of her You'll have every OnlyFans and Snapchat girl Doing the same thing On top of that you already have companies That are attempting to do this I don't know if you guys know But there are like multiple companies Whose entire like hundred million dollar raise so far Is just to do this And I think there's like two or three of them I don't know them by name Sorry to solve the loneliness issue? Is that okay? Yes And to provide companionship And sex And sexting I should say And like whatever that evolves into Which is like video and image and whatever Ultimately what we are obviously creating Is like the her world The movie her is phenomenal And I've said this for as long as this podcast has existed I think it's the best Most accurate version of the future world that exists But it's only like a very small subset of the world that exists Because he falls in love with an operating system As if that's the only thing that he can do But there's so much more That this person we will be able to do in the future beyond Just falling in love with your operating system The reason they pick the operating system in the movie Is because it was the most meta example Of what you could fall in love with It wasn't in AI It wasn't like an individual program It wasn't like an individual website It was the thing that you operate with It's in your ears It's on your computer It's physical It's it's oral It's all the things At all times it goes with you Wherever you go So it made sense But like I think what we're going to delve into Is going to be far larger Far crazier Far more multifaceted Than we can possibly imagine Wait hold up

It or someone That's what I mean

Coming is

I don't know

Sorry to solve the loneliness issue Is that okay

Ding Wait hold up

Would you have fallen in love with the operating system?

Yes Sure I think like anyone could fall privy to that

It's literally a walk Literally a why

Gummy today Gummy today But like could I?

Because it's the exact proxy

It's the exact proxy for what Command ship looks like in real life It's like the exact same thing Why would you not? She's perfect

He's perfect And it's like this perfect thing That you've always wanted That intellectually stimulate Especially if you have intellectual stimulation As a love language It intellectually stimulates you exactly the fucking way you want How could you not fall in love with that thing? You know It's made for you So many people That just become obsessed And to be fair to your point Nick It's like well to go further on it I should say Is it a good thing? Yeah, that's the next question

It's made for you It's purine

I think that's the next question Is this a good thing? Society-wide, right?

If loneliness is an epidemic, isn't it a good thing? No, I think this probably promotes it more than it solves it

Okay, that's worth why And also, is there a bias of us? I don't know if you noticed, but as we get older We become typically more conservative of the old ways And we often joke about how our parents and our grandparents Like refer to the old ways of how things should be done And how they used to be done Like so is this a little bit of bias of that? Or is this just a new technology that like solves the problem a little better? I actually don't know

Yo, this is a good point actually Like we're familiar in crypto with the concept of Lindy Yeah Right? Shit that lasts Yeah, so a good... Taleb talks about this in anti-fragile

He says like Yeah, you're banned by Taleb by the way Yeah, you got blocked

Yeah, you got blocked He blocked me

He blocked... Was that your greatest accomplishment? No, I'm sad

No, I'm sad

No, I'm sad Please unblock me, Taleb I've read all your books I like them You shouldn't have trolled him I didn't troll him I was just like I disagree with his take

And he was like, blocked Apparently he's like very sensitive

He's very sensitive Yeah But anyway, like one of the points in the book is like a chair has Lindy He's like, take a chair It's one of the most ubiquitous, widely used things It's got four legs It's got a thing to sit on It's got a back Like, there has been no innovation on this thing for hundreds, if not thousands of years It has Lindy, like it's not getting any better It's a chair If somebody presents you an alternative to a chair They're like, yo, I have a better chair Your antenna would go up and be like, hmm, do you? Because the chair is pretty good You wouldn't be like, fuck yeah, this chair sucks Chairs are a thing of the past I don't like chairs My butt needs something new You'd be like, you'd be skeptical You'd be like, chairs are pretty good Like, you better have something good there And if you're going to change something that's very, very old And ingrained in the world It's like a high bar for it, I guess is what I'm trying to say I guess that's the essence of Lindy

I guess that's the essence Right Do we have a pretty high bar to pass?

Because we're used to the old thing We're used to the old thing

Companionship's pretty good Real-life companionship I don't know, going out by yourself if you need to To make friends

And if I were to play it out further I think the way it goes Which could easily exist Is where you have men and women Both isolated In these experience pods Where they get exactly what they want But then when you sort of curate your ideal experience Then you basically get milked You get milked And then that just goes into this depository And that depository goes into this women's version of Deposit me That's fine

I do agree that your take of Is this AI version solving loneliness Is this pro-humanity or not? And to me it's certainly not pro-humanity I think pro-humanity things is actual pro-creation Actual social interaction And if you have this technological solution That aids people down a path of actual isolation Meaning they're not around real humans

But they're interacting with something human-like

What if you're thinking too limited about what it means to be human? No, but it ends in the pro-creation portion In order to be pro-humanity

Pro-creation exists in the realm that we know it to exist today But what if it existed in different ways in the future?

You get milked and it goes into this depository And then humanity continues to exist Because guys are getting fucked by a machine But their experience looks different And then a girl gets inseminated by a machine But then her experience looks and feels different

So you're giving me a vending machine situation

You get it out pops a baby You get it out pops a baby It sounds like one of the pods in the matrix But in a different way

And that's the way I see it functioning proper It's like the way I see it actually working Where humanity continues to exist That's the way it works And it doesn't work if you continue to actually fuck each other There's no way It doesn't work There's no way Because why would you ever go back into this world Where you don't curate your partner You like just deal with one

Oh many reasons Because you're an analog person And you like the sort of novelty of not being able to choose And push a button to get what you want And you want to be able to go out and go to the bar And be able to like fall for someone And engage them and see if you can get them And all the analog things I think there's going to be this great divide Of people who are like I prefer things the way they used to be The conservative take Versus the ones who are so pro-technology And be able to get things the way they want them

But don't you think that it will exist along the path Towards the end result Which is what I'm describing Where it's like People who like classic cars for instance But that's like a subset of all car owners Car owners are just like Just give me like the latest and greatest fine And like then you have like this very select subset It's like I prefer the way things used to be You know and it's like a minority

This will exist forever

Yes Arman I don't remember like the conclusion of her Like does it paint the future of like what her The society of like where her exists looks like And like where does the protagonist like end up I don't remember So like but Is this a situation where the protagonist is in a positive situation Like this ends well for him in like No No I don't remember the movie

I don't remember either The movie I don't remember either Do you remember this I don't remember

I don't remember either

So I just remember Do you remember this I don't remember it being a heartbreak story

I mean

So what do you remember of this Steve? Look Keast together I don't remember everything to do but But I remember it being like The essence of it was Oh this poor human Was manipulated by this machine With this feeble Human Like emotional proclivities And now he is like putty in her hands And his life is now forever Whoa and This will happen to everybody else as well Because these poor humans Are but emotional humans And the robots will just manipulate us to their own ends That's like It's beautiful Kind of my Take away from it


Keast together Kind of my Take away from it Okay It's so good I think the key thing here is And so you know Sam Altman just recently Spoke in front of Congress right? Yeah he did Um I And then of course we had the Um We had the letter that was signed By some incredibly important And prolific AI scientists And Evangelists The fact that like so many AI evangelists got behind this letter To pause Development of AI And are in favor Of the government getting Like Here's the thing about AI evangelists They're way smarter than anyone in government Okay People that are in government This is This is Continue But like all I have to say is Continue People that are behind the technology Are way smarter than the people in government About Of course about their realm But also I would I would argue like objectively speaking Like they're just smarter people But this technology is so critically In need of regulation And Universal Um Sort of Just like principles that we all adhere to That they are at the level Of understanding that this is that important That detrimental to society If it gets out of the bag That they're going to an inferior group of people And saying we need your help Because if you don't do something To control our industry It will be bad for everybody And by that I mean You have open AI Google Um Assembly AI Uh I mean everyone Meta Like they're all sort of competing in the same And not to mention the companies that exist outside Of the United States That will probably usurp a lot of the U.S. companies very quickly Moving incredibly fast And they need the help of the government Which notoriously has not known even how to use Email Probably a bad example Unfair But there are people in the government that literally Don't know how to use their email

What do you think about that Nick? I mean I think it's fascinating that we have A guy like Sam Altman Um Who actually owns zero equity In open AI Which I learned for the first time during the Senate A congressional hearing? A congressional hearing Yeah He said he owns zero equity What a sucker Yeah and he says like Um I just do it because I love it I mean he's obviously Obviously What I hope to refer to us as at some point is Post economics Um He's He like doesn't care about having more money But like we have an actor Uh In this play that is Doesn't care about money But he's clearly saying like Yeah this could go good Or this could go bad And um Elon Musk did a Did an interview with David Faber recently I think it was even yesterday Um I think it's It's cool to watch I watched a few clips of it And he talks about like Who's that? David Faber's a Um Uh Like a post on CNBC And um You know Elon says like Or David Faber questions like Why do you tweet what you tweet? Like Why? Like why not just shut up And like make more money And he makes a reference to a movie and goes on But he just says like Give me power Like give me power Give me more money I don't care And if And if actually he says like I will say what I want to say I don't care if I lose money So you You have these two actors who are kind of imposing sides Who are like Post economics saying We can make this good And this guy's saying No this is going to end Very badly

And I'm kind of interested Um

He interested Like one of them said this Is gonna end very badly

Well I think Who's fair I think

Elon is obviously saying Like You mean he like signed this paper The march

The probability Yeah the probability The probability Yeah the probability The probability Is a high that it could end badly And Sam Allman saying There we go I'm weighing in more balance Like I'm I feel like I have control over this But like

Also He's in a

Interesting position But it's interesting that we don't have the typical Lovers of capitalism At play with these two actors, right? They both Have enough money One that literally doesn't make money off of his new company

Just like the Other Possibly the greatest initially Great The greatest product that has ever existed The fastest Created Well clearly objectively The fastest adopted product of all time We can say that Chat Gpt

So will this So will this This will be an interesting Play out to see Will this produce us a different result? I don't think it will That we have two people That are not motivated by profit kind of like Playing it out Potentially posing opposite sides But I do There is a place for the worst capital allocators on earth The federal government and, I don't know, maybe they will help That's essentially what I was trying to say No yeah, you said it

I think you said it well

Technically maybe they will help That's essentially what I was trying to say No yeah, you said it I think you said it well No, I don't think I said it well But they are the worst Capital allocators They are the wrong people to make the decisions But perhaps they are the best policy makers Because that is actually the root of their job in so many ways And that is what they are being called in to do Is to please create policy That prevents us fromestoney ourselves Even Elon admitted that his letter

That's what I hear That's what That's what I hear That his letter is literally worthless Like he admitted that like Signing that letter meant nothing It was futile And I do think similarly U.S. regulators Disagree

Disagree Disagree Disagree Because Sam Ullman would not have been In front of Congress

If it were not for that letter Okay


No 100% But the point still remains That we made this point As a group that like It's futile Because AI is a global marketplace Like China Russia EU Like