[Applause] welcome to the smart nonsense podcast where we talk about entrepreneurship self-development challenging norms and today cryptocurrencies this conversation is so awesome because very rarely do you get the opportunity to see this world from someone that knows what they're talking about because 99 of the world has no [ __ ] clue and i don't normally swore in the intro but i just did that's how important this is we talk about currency why that's fundamentally changing with the structure of blockchain with the cryptocurrencies like bitcoin like ethereum like all these different coins that are being released some good some terrible we'll talk about that and really the the future outlook what's it gonna look like in the next year five years ten years we get into it all so listen closely realize henry and i are just talking nonsense uh don't trust anything that we say but our guest does know what he's talking about his name is ian lapham and you can find him on twitter at ian lapham l-a-p-h-a-m he's also working right now for a startup company that specializes in trading cryptocurrencies it's called uniswap you can find them uniswap.org so much going on in this world i think you would be silly not to listen to the end and really understand how this is going to change everything i'll let the podcast speak for herself so without further ado this is episode 42 with ian really quick how do you two know one another oh true yeah bulky sorry yeah bad introductions i forgot you guys i don't know i wanted to wait till we were we were live but i don't know who either of you are i don't know what the heck cryptocurrencies are loki's just in a warehouse somewhere in chicago [Laughter] all right so we're on the same club hockey team ian was our goalie star goalie because bruce was butt versus trash at brown yeah yeah yeah oh that's how little i let belky know holy moly henry's were you in so you're just in the dark no i'm older than you guys i was uh 2018.
All right so you're older you're at brown where were you studying i studied econ and then i studied cs i did both um but yes we played hockey together i've i haven't seen you in like i don't even know two years or something i thought you both went to high school and you always played hockey nope nope college hockey yeah the uh the elite of the elite we were good dylan dylan is a sneaky uh a sneaky good hockey player you wouldn't you wouldn't expect it but i got the quick legs that's about it yeah yeah i mean the goaltending wasn't that hard in practice so just geno after geno but yeah and you you switched to cs later on right were you planning on doing that from the start no never um when i got to brown i was like uh in my head i was like i want to start a business i'm not even going to graduate which was stupid because brown is amazing and i'm and i was like i'm never going to leave um but i was getting an econ degree because i kind of wanted at one point i wanted to do like finance or something like that um but then i got into coding and i was like all right let me just get a computer science degree so i did that in the in the second two years um i never i didn't plan on schooling what do you mean you got a cs degree in the second two years yeah so this was crazy i did an economics degree uh okay and basically finished it just a you know like a bat like a ba um but then i was when i was becoming when i was going to junior year that's when i wanted to get the cs degree and a lot of the econ classes can count towards a computer science degree so like things like stats and math and like uh econometrics if you know what that is um so i kind of stacked yeah i stacked all these weird things and somehow got a scientific cs degree in like two years um it was nuts what on earth okay so you have you have a bs in bcs whatever the heck it is in cs yeah nba and econ i i didn't formally get the ba and econ i had to have it i was the same way i was like i didn't formally get a couple things but like i had the course load for them exactly we were all pissed because ian started taking his life seriously and then stopped coming to practice and we had no goalie for like two years yeah like every thursday was like you comment i'm like no chance problem set and then your goalie uh a friend in the physics department got pulled up to varsity oh true yeah ian you know we should have noah on here to talk about that because he was just getting like he was injured every other week from the varsity yeah i remember when that guy got called up but i don't really remember why or what the context was there yeah they're out of options this kid yeah we were out of options because you weren't you couldn't participate and then uh like literally just i don't know what happened to prues too who knows bruce was kind of vacant but we contacted this kid from my freshman unit super smart physics kid played street hockey in like middle school yeah dude can you come up and uh you know do a couple practices and the varsity team they lose their goalies and the varsity team's like yo dude uh what do you got for a goalie down there i think they asked ma who was our captain they're like ma you gotta you get a goalie for us and we shot noah right up to varsity from what he broke that was my job i could have uh could have gone to varsity then well good for that kid good for him all right um so you two have spit out a lot of last names um that tells me we're talking about inside jokes and stuff um ian so you graduate and then what you were did you go down the finance route like you had planned no um so when i was a junior i started getting exposed to this cryptocurrency world which we'll get into with what would have been what 2017 2017.
Yeah so in the timeline of crypto in general that was similar to like a 1999.com bubble kind of crazy time in history and that's when i got involved with stuff so i was in college as a when i was graduating college i knew that that was what i wanted to do so a childhood friend of mine who's like my best friend his name is nick he was working at john hancock the big life insurance company and he was running their blockchain team and he's like do you wanna do i can work with me so i said hell yeah you know it's my was my best friend i get to work with him in the interview he was interviewing me but we were pretending to be serious even though like if you don't give me the job you know i'm gonna smack you so um was it was it a like a a multi-person interview yeah fake interviewing you in front of a room of people yeah this other guy was in there asking me questions and then you feed you the questions beforehand like presentations the day before we met up in the starbucks and went through the list of questions i was you know i had perfect answers for all of them like this kid knows his [ __ ] yeah exactly not only does he know his blockchain he appears to be a time traveler yeah exactly that's nuts yeah so long story short yeah i ended up there um and we were doing crypto work within this massive company you know it's a publicly traded you know billion dollar company um the corporate lifestyle was not for me or him so we all quit um and moved on they lost a whole branch of childhood friends no it was crazy because they were we wanted to do i'll get into all of this but we wanted to do things on a pub with blockchain alex you know we'll get into that but basically they wanted to do a more kind of like controlled experimental version of what we wanted we wanted to do it the real way like the real deal um they said no and we were like if you don't let us do this we're gonna quit and they were and they were like no you won't and then we all quit so they don't do blockchain anymore um well it's crazy yeah they're done um i'm reading uh sorry to cut you off michael lewis book right now called the new new thing about jim clark in silicon valley and that was like so much of what he did he was just like oh you're not going to let me do this well i'm going to go somewhere else and do it exactly and now john hancock doesn't have blockchain exactly it's a powerful thing you can wake up one day and you're like wait i'm not going to do this anymore and then you don't do it anymore and it just works um so that's what we did um we moved on to other things um and i've been in the crypto world ever since right now i'm doing a couple things i work at a startup called uni swap like one swap uni swap um i'll get into what we do and everything and i'm also running a dev shop so what that is it's a group of people who we get contracted to build software for other companies um so i'm running that as well yeah we've been battling with like all right where do we take this because one we're we're such just simpletons in terms of understanding blockchain and yeah and just cryptocurrency in general and then plus you have kind of the entrepreneurship weird career route that we want to explore too at some point yeah i feel like now we should focus on blockchain what that feels like what like we're so on the outside like on the inside you said it was 1999 a couple years ago yeah is it did it pop or what i don't even know like on the inside was it like right in the hop yeah i was right before we hopped on um because ethereum was all my friends were talking about in again 2018 i went on and just typed in ethereum price and it looks like the dot-com bubble right oh yeah get 1300 for a coin or whatever you're gonna have to explain that to me in 2018 and now yes it's trending up but it's a fifth of that so exactly yeah it is um it's a story we'll start from the beginning and we're gonna let's start with the basics and then we'll go okay what for context here we're gonna start with what this all is and then by the end of it we're going to be talking about yam coin spaghetti coin and cream.finance um and you're going to want to learn about all that but first i guess like the first thing we have to talk about is there there's cryptocurrencies and then there's blockchain so do you guys blockchain is like a you know has a weird uh association with it but do you guys know what blockchains are or do you want me to explain like what that actually means please let me let me give my understanding and then you can oh yeah correct me as i go wrong because i've tried to last 24 hours i've just been cramming for an exam on this basically it's like yeah studying for a test exactly so blockchain blockchain's solving this problem of we normally need people these third parties to verify any sort of transaction any sort of i guess transaction that goes on between two people or two entities and then this dude uh nakamoto what's his name yeah some some dude or group or no one knows what this thing is uh they make blockchain which is basically replacing the humans in the third party with a computer and algorithms can figure out like uh if this transaction happens you don't need people to verify um and it does it through a bunch of computers all verifying that it happened that's the secret sauce i think but there's a lot of gaps there so start filling yeah i mean in general that's it right um a blockchain is really just a new type of database so right now you know every company everything we do uses databases right um the zoom call is being stored in one right now um you know everything you use is connected to some database that is controlled by some company and what that looks like in real life you know that sounds kind of abstract but what that literally is is you know facebook has databases for example what that literally is is a big warehouse of computers somewhere in like nevada or ohio or florida or london you know it's it's massive rooms of computers all around the world that these companies operate amazon obviously amazon right and web services exactly so then you get to like the next level up where a company will rent those computers to other companies but the whole point is they're big rooms of computers and you know they hold data um are those in are those servers exactly it's just a bunch of servers in a database is that because i've always heard i think naval ravicon said like servers i mean sorry databases is just so fundamental to understanding computer science and i i still don't understand what that is yeah is it a warehouse of servers is that what it is it's kind of both servers are basically like the things that accept requests and then give spit you back data so you you the data is just on this big computer and in lots of rows of info you know just just piles of info a server will you can ping it with the request say like i want this and the server will go into the database get what it needs and get back to you but servers in between a computer and a database exactly that's the protocol is when they're like how you communicate the protocol is the set of instructions for how to communicate so it's like we all need to this is getting like very good looking at dylan and i like server exactly i feel like no one understands this except for maybe like whatever one percent of people out there yeah it's crazy because we use it you know all the time and no one knows and you don't really need to know the whole point is that right now companies have these things and that's what we do we send them requests and they they have our data a blockchain is a new type of database where instead of companies owning and controlling the data everyone owns it and and people share it across the world so all it is is it's like a big google doc that anyone can anonymously edit and there's like specific rules for what you're allowed to do if you try to break the rules people are going to yell at you and you're not going to be able to do it is it question is it physical people because i know if like you break the rules on reddit they're like some bots that flag like take care of that the the moderators yeah they're literally physical people saying like you can't write that no and that's the beauty like like you said dylan it's all just an algorithm it's it's a set of encoded rules in code saying this is the [Music] set of instructions that we will accept if you don't follow this code then it won't be accepted and it's just a big network of computers around the world so in my room right now i could be running a node or you could be running one but basically instead of all of us going to the amazon database we go directly to each other so the whole point like you said is we're we're taking out third parties and we're letting people communicate directly with each other that's that's the thing you actually need to care about if if i wanted info from you ian then instead of me having to go to say amazon ask amazon for your info or whatever we can just talk directly to each other exactly so what you would do is you send you broadcast a message on the internet to the blockchain some minor you know this we're getting into the technical weeds here but someone running one of these nodes who's like running the blockchain in their house will pick it up and they'll see did you follow the rules if you did your message gets added to the blockchain and then on my end i say oh dylan just got this message added let's see what he said okay you did this i'm going to respond in whatever way and we just repeat the process are people using it like that because all i ever hear about is icos right exactly the money aspect are people like really transacting like that yeah so that's what we that's the interesting part so we've just you know talked about what like how it works but that's kind of the same thing as talking about like what is http you know when you go to a website and you see that or like what does this http is um it's hypertext protocol yeah and it's that's just a the it's a rules set for how computers talk to each other and if because we need a standard right because if if you're trying to send something to another computer and it just doesn't look the way it's supposed to that other computer's not gonna know what what to do with it you're speaking gibberish and it's waiting for english exactly it's just you know a way so as humans it's just easy for us if we all agree on like a way to do things it's easier for us to build around that so what you know all that stuff with the transactions and the nodes and everything it's that's like the low level but the beauty of all this is on top of that we've built these things called cryptocurrencies and that's what bitcoin is and that's where things start getting fun um and they're they're basically an alternative to money and that's that's why these things are interesting it's it's a global way to represent money that isn't controlled by a government it's not controlled by a company it's controlled by just people and that's that's where you can start to get pretty wild with all this stuff yeah because normally you need i guess the you need like a paypal or something like for example right now we have a team in the philippines and sending money we'd go through paypal but in theory i could just have a little code i i guess through ethereum would be the best way or just send bitcoin whatever and it's just like every week send this amount to this person and then all these computers verify that it happened it's locked in the blockchain throughout all of history we'll be able yeah forever and it's kind of so one thing i like to think about is kind of what is money right like we talk about money all the time we talk about the us dollar um but not a lot of people ever think about what that actually is so money is three like if you look in a textbook it's three things it's a unit of account it's a means of exchange and it's a store of value you can immediately forget all that but we when we moved up the gold standard we moved into something called fiat currency which is just the dollar that we have today you know you have in your wallet or you know your bank account um and what fiat currency is it's it's literally just currency where the worth is based on perceived value of supply and demand so that's a complicated way of saying we all just kind of believe this has value so it does and that's why the us dollar is so strong globally because in today's world your money is as valuable as the perceived value of your economy right so that's why if you go to any country in the world you can spend a us dollar because everyone knows the us is you know producing a lot therefore we believe that the dollar is good but if you go to venezuela you use their currency as toilet paper because it's absolutely useless because the inflation is you know ten thousand percent and you're better off lighting fires with the dollar than actually spending it to buy anything because it's worth nothing um because their economy has issues um and we can get into venezuela specifically let's do it um but is bitcoin in that sense more like gold and silver exactly um that's exactly right so that's the analogy you want to think about um it is a it's a store of value just like money that is based on perceived applied demand so you know you go on any app go on cash app go on whatever square and you see a price of bitcoin that's literally just because there's a market of people around the world and we value it you know based on what we think it's good for um so in that case it's like digital gold and there's no piles of you know if you go to the fed in boston new york there's literally piles of gold sitting there um it's gonna seem ridiculous in like 100 years that we had we just sat on like piles of rocks and we were like this is worth a lot of money because like you know it doesn't really mean anything it's like pretty dumb when you think about it um it's so silly it's these are my rocks exactly look how many i have yeah we keep them in piles and they're even my friends work at the fed and they say like people arrange them in like chairs and stuff like it's it's stupid it's literally like it's like making a throne of nadi's but it's gold and we say it's worth you know so much money um but yeah in that sense it's you know it's like a digital gold and that's why it's starting to get interesting because now you have this thing that just lives on the internet and then kids in their bedrooms can do crazy things with all this money which you know i'll talk a little bit about but it's totally new and it's crazy yeah let's let's quickly go back to venezuela then is the solution there more cryptocurrency exactly so venezuela yeah you guys are good see people think this stuff is super complicated but it's it's not it's just money but it's digital uh well the math behind it probably super cryptography behind it database and server was hard yeah once you learn about it once forget about it it's just digital money but you know you're on the right track here um so venezuela is huge so now we can kind of talk about the different types of cryptocurrencies you've probably heard of bitcoin ethereum we were talking about um but there's a there's thousands of others and some of them are built to track the value of a dollar so there's they're called stable coins but all that is like when you think of bitcoin right it's going up and down in price you don't want to buy your groceries with something that could lose 40 value overnight right um that's or you don't want to get paid in that because your paycheck maybe it'll double but maybe it'll you know go to zero and that's scary right yeah so if we're gonna use cryptocurrencies to do things like humans uh we'd like some of them to be stable you know a dollar just kind of float around a dollar maybe one day it's 99 maybe one day it's 101 but it's about a dollar so people have invented those things um and in venezuela people on their phones are using them to get paid and to buy things now and there's huge initiatives in you know countries outside of america to use these things because it's way better for them but isn't that just a fiat currency then yeah it it basically is but it's digital but yeah currency is good isn't it like you you know the supply and demand like the problem there is they printed so much money that it inflated the value it's worth nothing but you usually have the rules of like there are 21 billion bitcoins ever that are going to be made or whatever the number is exactly i assume the same with other currencies yeah so that's that's the key thing here um with these stable coins it's a fixed supply and we know that there will only be this certain amount so that it you don't have to worry about the government or you know the algorithm printing a billion to them overnight like it never will like they are what they are and that's it um but even ian aren't there like i feel like some scam type coins or you have to be careful because some sometimes you know the code is written differently and if you can't read it and understand it maybe the supply is much more than you thought or whatever it is exactly so that's the huge issue in this space and that's kind of like if you ever got if you ever read about it in 2017 in this ico bubble that's it was the initial coin offering is what it was called and these projects would pop up every single day they'd make a website and they'd say you know we got fresh new coin here it's called this this and this you can buy it and everyone would buy it and then the team would literally delete the website steal all your money and you'd be broke and that happened thousands of times and we're seeing it's also been happening this last month but in a totally new way which i'll talk to you about in a bit but yeah you have to be careful with these things and that's why in my opinion they're we're not ready for in quotes normal people to use these things like you have to be pretty advanced to not lose all your money in like a week so don't go buying random spaghetti coin on whatever right i i was thinking like i had family members in 2018 like we'd be at a barbecue or something they're like i'm thinking about buying some ethereum that's like investors saying like i'm thinking about investing in like this like i don't know shoelaces.com in like 19.
Like exactly just things were flying around exactly it's like anyone who invested in like pets.com or whatever and they lost all their money or like uh yeah exactly and that's the crazy thing here because now it's like there's good and bad things about this um the good thing is that you know if you're a person in your room and you don't have like millions of dollars and you want to get into some you know cutting edge technology it's hard for you yet you can download robinhood you're going to pay some fees uh you're only going to get access to things when they're public um no one's going to take your investments because no one knows who you are in this anyone can buy a token anytime you just be on your phone in your bed before you go to sleep and you can buy this new thing what's this just cryptocurrencies yeah any any new cryptocurrency there's new ones every week that do different things um but a lot of them are trash so you have to be uh you know you have to be smart and a lot of them will just lose you all your money um what are they my understanding is basically the blockchain is the technology and they're i've heard the term fork but they're like building on top of it and that's why the new coin will come why it'll exist like why are there multiple coins what is the value there so the coins all do different things um a lot of them are built on top of this blockchain called ethereum which you know we mentioned a few times ethereum is just kind of like bitcoin but the only thing bitcoin can store in its database is your account balance so dylan has five ian has ten and that's the only thing bitcoin can do and if you send me a couple it'll switch the numbers right um that's all that bitcoin's programmed to do you know i had this much you have this much that's it it's just a calculator so i s uh dylan sent me i think some materials you sent him yeah about oh sorry you said that's all bitcoin can do that's just gonna yeah i was just gonna say i read that ethereum was set up to be a platform for people to actually like create contracts on top of okay so bitcoin is just numbers that's the basics exactly okay and this is where you can lead into the fun stuff so ethereum lets you write code so i can be in my room and say it's these things called smart contracts but really they're just little chunks of code and people can interact with them and you can do whatever you want with the code right so i can make a a file that lets us swap tokens um i can make code for a new token for ian coin you can literally go by unicorn right now if you want like where on what ethereum.com so that's what my company does uniswap um now you know this is starting to come full circle here but so ethereum has all these chunks of code sitting around right with all all these people in their rooms and companies have ma written this code and they do all these different things but you still need to go on a website and do this right so these companies are popping up that are letting you actually interact with this stuff so my company is kind of like nasdaq for all these different tokens so people around the world have coded up thousands of different tokens they're all different names and there's different rules for what they do and if you want to swap one you can go to uniswap you log in with your account whatever and you you have your account and then you can go from any token any other token um you can do this in a lot of other places too coinbase you can do it um but you can swap these things and it just works you pay some fees but now anyone in their room or on their phone or on their computer can instantly buy something that someone around the world you know created yesterday and it's it's just it's like a really crazy ecosystem right now um and people are doing ridiculous things with them um so specifically last week this thing called yam token came out and this is like we'll probably put things in context for like how much a lot of people in the space are absolute degenerates you know just kind of day trading trying to you know make a lot of money um and this is kind of like a thing that happened last week so basically last week um this team last week being august 13th week whatever that is yeah last week ian when you say like those people are day trading for degenerates that's what i thought this whole thing used to be are you saying like you're actually trying to use the technology like for what it's meant to be yeah yeah so maybe i should not just get rich quick yeah so back in the day yes that was like the only thing anyone used it for it was what token can i buy to make the most amount of money before it crashes you know that like four years ago that's the only thing people used it for now you can actually use it to do a lot of cool things so one you know you can get stable access to money if you don't live in america in america we don't need that our frankly we just don't need that we i can venmo you money whenever i want and that's that's great um if you're in a country where like your government has some serious problems the action get alternative for you like you can go on your phone and pay people in a money that's not gonna doesn't that take a collective like we are now accepting stablecoin as a country to like yeah it works so that's part of the issue here you can use these things to pay people but it's still difficult to um kind of live off of it in certain places um people are like building and that's where a lot of the investment is going on in the space right now like how do we use crypto in real life like how do i go to cvs and buy it there's apps where and and use it to buy things um there's apps where you can kind of do that now um so that's one thing if you're in if you're in a country where your your local currency is not very strong and it's hard to get us dollars um we use that like in most countries actually people just buy us dollars in the black market and that's what they use in their day to day like in a lot of countries that's how it works um but you're paying crazy fees to get us dollars so it's it's bad for people i remember i was in argentina because they've had a lot of currency problems and everyone just they love the us dollar if you had dollars waving around people were like trying to buy them off of you and like street corners and stuff so it's huge around the world but now this is moving towards the the supplement yeah like yeah you can there are people that you know there's a massive market for selling us dollars like in the black market that's a huge business uh it's it's global and that it just shows you that like money is just a weird thing we all kind of made up and like ours ended up being the good one um yeah i mean a lot of things changed after world war ii um like money used to be called massachusetts money uh way back but that's boring that's boring stuff um i want to know and then i think we have to get back to yam or you're listing some numbers of good things but um how do you because i'm on unit swap right now yeah what what happens when i put that i want to take five of my ethereum and turn them into a hundred bitcoin what are you doing so that's what you're doing there is i mean literally you can't go from ethereum to bitcoin because they're on different blockchains but you could go to like wrapped bitcoin or whatever um yeah sorry to stay on the ethereum blockchain yeah so but kind of confusing so are there yeah there's bitcoin blockchain and then ethereum blockchain do all these all these other coins are built off of ethereum blockchain so the majority of them are built on ethereum ethereum's kind of like the cool kid on the block these days that's what like every company is building on um in my opinion it'll be the one that we use like globally but there's other blockchains um there's a lot of them and what's the reason for me going on uniswap and wanting a different currency yeah so the reason you'd want to swap is one it's cut it's kind of like buying a stock so to some degree it's still kind of like you believe in this project and you want to make money off of them doing well it's like buying a stock so um there's one company that's doing synthetic derivatives but what that is is it's literally just you know wall street there are these things called derivatives where you can get exposure to like the performance of certain things all it's just a it's a financial instrument it's a way to you know it's a way to make money it's a way to diversify your portfolio it's a thing you'd want if you are looking to invest um this company on ethereum is doing like a blockchain version of that right if you think that that company is doing a good like a good thing and you kind of want to ride the wave with them you'd buy some of their token it's called snx and as their protocol their thing gets used more the value of the token goes up you make money so you basically invested in this company that's kind of what you would do on youtube you're okay it's kind of like buying stocks can you also so are you buying a stock but in theory people in their day-to-day are also using the stock certificate itself as the currency yeah it's it's kind of weird what these tokens are actually used for but at a high level you go on uniswap and you're making investments you you want to you know get upside to these companies but you could also go do something like get a loan and that's what some of these companies do you get a digital loan if you want to get a loan in real life what would you do right now you know call up your bank and you probably how do i do this and they'd probably be like yeah you're too young uh no um or like your credit's not great or like we'll give you a small loan it's like a weird process right i could go on my computer right now and get a 50 000 loan in like five minutes and i'd probably only pay like four percent interest or something and that's not henry's attention so that is that's that's what you can literally do with this stuff like that is like the actual stuff you can do can that 50 000 also blow up tomorrow as in become nothing so that's where the stable coins come in the loan will be in the form of a stable coin that that so where do you get a stable coin loan so okay go it's compound dot finance that's your that's another example of this if you want to like actually do some of these things compound dot finance um well yeah yeah yeah wow so that's one thing you can do you can take out a loan um but the other big thing which is kind of related to the yams is you can lend your money so you lock up your money and other people are using it to do things and you're earning interest because you're lending your money so now you're kind of acting like a goldman sachs or a santand there but from your bedroom like in the real world you can't just lend out your money that as an individual human but you do when it's in your bank account you know yeah but you're interested okay like you said it varies what would it be if you were lending out on blockchain this is the crazy part this yam yes now we're going to get into the beginning so so so this is a so this happened like a week i'm going to lose all my money yeah don't you gotta ask me before you buy into stuff for disclaimer any anybody doing this you wish it was a late disclaimer you could lose all your money be careful um so like a week ago this group of people who didn't know how to code that it's rumored that they're mostly investors um they made this thing called yam.finance and it's what you think it's supposed to be like the potato and the the brand the logo was like the potato emoji um you could look them up on twitter i think it's yam finance um and they basically created this tool where you could lend out your money at really high rates so in your bank account you're probably getting like maybe one percent per year last week it was about 25 per day so i think that's why i just went on their website and they had like three different warnings like not use the site exactly so this is what happened a bunch of people made and this is kind of what we were talking about how it's dangerous these people didn't know how to code um if if anyone's ever listens to this i'm sorry that i'm offending you for the people who created it um but they weren't very good coders um this thing was working so people from around the world in about two days there was over 200 million dollars locked in these contracts so like a lot of money from around the world poured into these into this people in their bedrooms yes so that's the beauty of this these people in a room somewhere in san francisco built this thing in like a couple weeks within a within overnight hundreds of millions of dollars is pouring into this thing the rates are going insane um so everyone wants to get involved because everyone's making a ton of money um but the whole thing was a fugazi it was like a it didn't mean anything like and this is the bad part of crypto so yes people were earning money but at some point you know things need to be reset because for every winner there's always a loser right it's not like we're just printing value out of nowhere um so the code had a bug in it and they tweeted out like oh like in about four hours when this thing is supposed to happen it's gonna break and we need to all vote to fix it because in blockchain you don't just change the code you you vote with your tokens and like things change so i woke up in the middle of the night this was like 3 a.m like a week ago and everyone was like should we vote on the thing or should we not vote on the thing because to vote you had to stop earning your 25 per day so knowing everyone's like i don't want to lose my money i'm going to let everyone else vote but you've reached the tragedy of the commons because then everyone's like i'm not gonna vote there's only one dude voting yeah exactly because everyone wants their money either if you listen to reply all the podcast no no okay uh there's this episode about this like uh prolific new york artist named zendulu and she trains these rats and basically she was sorry basically she was behind pizza rat and like some other viral things and maybe i'll send it to you dylan to put in the show notes but i think zendula might have made yam it's just a bunch of reds that's belky add another podcast ponzi expert okay so were you in on this ian yeah so i was farming it's called yield farming and everyone puts the little farmer emoji in their twitter crypto twitter's a big world um so i was farming the yam i wasn't in on it i didn't make it um but i was farming the ends and then i i get the call and i had to wake up in the middle of the night and we're like should we vote everyone around the world is kind of like tweeting like are we gonna vote are we not and eventually everyone was a good person around the world and enough people decided yes we're gonna vote so they clicked yes they voted but when they voted they found out there was another bug in the way the votes are counted because these people can't code so there was a set even though we voted to fix the first bug there's a second problem and now the money it's not going to work it's broken forever so the price starts dumping and people around the world are paying hundreds of dollars per transaction everyone's losing thousands of thousands of dollars bank run yeah it's a bank it was literally a run on the bank for this potato coin um i like woke up in the middle and i had to sell it all and the thing absolutely dumped people lost so much money and the guy was tweeting like i'm a failure like i'm a terrible developer like i've ruined lives like people lost their fortunes and it was crazy and they're great yeah go ahead yeah the whole point of this is that in this world a group of people can code up this thing millions of dollars from around the world can fill into it in a couple days and then it's a free-for-all around the world it's like a big multiplayer game like what are we gonna do with it right okay so this is different okay apple when they when they first introduced the ipod right it's about to roll out steve jobs is pissed that the headphone jack doesn't click and they have to recall them all yeah but like apple tells its shareholders like things will be okay we'll fix this yes it takes a dip and it goes why couldn't the founder of yam just be like let's let's keep this money locked in here and like just fix this thing and do it somewhere else yeah so that's like one of the core things of the blockchain once the code's on the blockchain you can't change it so that's why these things are incredibly important to get right and that's why it's dangerous because if something's broken you can't change it you know that sounds like a major downside well so here's the problem yeah i said enron before but enron all these investors no one actually looked at the books and like paid fine attention to all the details so is that what happened here no one looked at the actual code in the first place yes believed everyone else yeah and like i said it's a lot of degenerates and no one bothered to check on the code and the problems were like very trivial like problems in the way you do multiplication sad like oh wow that's so sad it was brutal so even you though do you just try i mean you were for white which means you were solving the little puzzles or whatever you want to call them that they put up yeah just like farm to create the blockchain it's all kind of confusing but uh like what were your thoughts like oh you just trusted that it was going to be worth something that it had merit yeah so just because if i might add it sounds like you got caught kind of day trading i did um i got out fast enough so i was fine um but one thing i'll say here is like this is a new thing that's been happening this month these types of schemes and it's kind of like 2017 all over again there's a lot of crypto that's like actually good and you know people are getting loans using dollars this is the degenerate side but it's more fun um so the reason i was doing it is because it's kind of like a ponzi scheme right like if i can see the rules of the game and i know i can play for a little bit before getting burned i'm going to play and try to outsmart everyone else and if i'm correct then i can make some money if i'm wrong degeneres versus degenerate i mean not yeah argue that it is i'm being a degenerate it's great so yesterday we got deep into yams got hacked you know and we're on to the next and spaghetti coin pops up spaghetti.money is the website for this one uh wait before we go to spaghetti i see on their site things are headed over to yam version 2.
Do you know anything about that yeah so yam v2 is like the new hot thing and now people are buying the yams again um so back in it we're back the games are back and the whole point of this is yes these things are kind of absurd but it is cool that like a kid in his bedroom can code something and get hundreds of millions of dollars interacting with it because yes these things suck but you can also build something that's great um like you know the code doesn't have to be how how did they go from finishing the build of yam last week and people start piling on a million millions of dollars it's literally memes on twitter and reddit and 4chan and that's what's so interesting about this space it's lit like that's why their logo was a potato um everything that was tweeted was about potatoes there were memes actual memes made 4chan took over reddit blew up and all these things operate they basically live on reddit and twitter and people from around the world like internet weirdos who know about this stuff get involved and it's just that's why this is so interesting it's a new precedent like people literally make memes on twitter they put this code on the blockchain and then money from around the world float like floods and it's it's like like you can't put an app on the app store and do that it's just not possible you can't you can't do that um and that's why this is kind of wild where where then are like i'm sure there are a handful that are just trusted like ethereum's probably they're in bitcoin those are trusted doing well good stuff i guess is ethereum is that i get kind of confused because there's the there's applications built on top which i assume are the other coins like yeah like what are what are the most promising like trustworthy like this stuff is is good right yeah so that's yeah probably something also good to think about um you can kind of think of the you can think of them as ethereum's just a big computer and people write their apps on top of the computer um so a few that are doing like real things not you know food ponzi schemes are compound i mentioned like you can compound out finance you know they have they they build these smart contracts they write code on top of ethereum and you can go and you can get loans or lend your money so it's just a new way to get loans or lend money um maker dow is the one that makes the stable coin so they make and there's a couple that makes stable coins um so that's just kind of like an internet version of the us dollar that's like a useful thing uma uma is another one and they do synthetic stocks so a kid in nigeria on his phone can buy a synthetic version of tesla stock um like if you're if you're a kid in a third world country how do you buy tesla stock like it's hard to get a bank account it's hard to get robin hood it's hard to do all that but if you just go on on uma's website you can get a synthetic version of tesla stock and get access to these things that in you know traditional finance like only the very wealthy or privileged people can get access to so that's that's one um synthetics does a similar thing but they do like synthetic versions of other currencies so like if i wanted exposure if i wanted to long or short the the japanese currency i can do that for my phone um now and anyone around the world can do that so so it's basically replacing new york in the whole sector yeah last week um a guy from brown actually called me he works at goldman sachs and he was like how can we invest in your company like we don't even know what else to do at this point we just want to invest and then my bosses just laughed yeah i mean they're so uneducated it sounds like yeah they have no idea a lot of things and that's a big thing theme here it's it's called defy if you want to google this it's decentralized finance um and that's what it is you're you're spot on it's replacing the financial infrastructure that we have in these big buildings in new york that cost billions of dollars to operate and to work and now anyone around the world on their phones can just do this and can do the same thing are they scared are the jp morgans and goldman's yeah every every single one of them is building a blockchain product every single one of them john hancock except john hancock they're screwed sell that sock um you know that's the thing traditional finance will always be used for certain things you know i'm not one of these like hippies it's like you know we're all going to move all the money to the internet like i just don't think that's going to happen but for certain things it will move to these to these you know internet native protocols whatever that's what you want to call it um the same way all these businesses move to dot coms in exactly 2 000.
Is the issue though like are people coming up because i don't know how to write ethereum code so what it d i think is the name like i don't know how to write that is that where these companies will come up and it's like you don't have to know how to write code you can just yep yeah i don't know how that works how do we use it day to day like you can go to a website and easily send money on paypal is that what these coins do that's what these companies do and that's kind of like what my company does if you wanted to go and do a like a swap swap i want to sell token and get token b you need code to do that for you and you have a normal person has no clue what you know how to do that but you just go to our website and we do it for you and there's other companies popping up that kind of make tokens for you so a good example is my friend brian flynn he runs a big crypto newsletter um and he made a token representing himself called jam because like that's his like internet ego it's like jam um and basically people buy his token and if you have his token you get access to his newsletter you get into private message threads with him um you get like special privileged access to like his content and stuff and a company basically wrote the code for him all he'd do was click a couple buttons um and then he had his own token so you could make dylan coin if you wanted to um and like people could use it it's it's super niche now and still complicated so like normal people don't want to use this but for the internet weirdos who are like down to experiment you can do some interesting stuff with it so long story short companies are popping up to do these things for normal people go ahead dylan well in terms of adoption i've heard before because you have this distributed ledger and everyone is kind of proving and accounting for all this stuff it's you can only do like 15 transactions a second or i forget what it is but yeah limited amount of transactions how do you do your homework yeah that's that's right yeah i've been obsessed with this for 24 hours so nice yeah no that yeah that's that's about the number right now on a theorem you do 15 transact actions per second if you look at visa they do about 10 000 per second you know way better um and that's one of the issues right now with this stuff like our little online cult of you know crypto people can use it because there's not that many of us um but when the real world starts doing these things that's gonna be a huge problem so then you get into this world of blockchain scalability and that's just like it's being researched so heavily um new there's a new version of ethereum coming out this year eth 2.0 um which will increase it to like a thousand there's this thing called side chains but basically people are and a lot of money has been invested into solving that specific problem billions of dollars and people are building out solutions there's other blockchains that already do ten thousand per second a bunch of google and qualcomm guys made one called solana and that does ten thousand percent so why aren't we transacting on there or are we and we don't know it we we might it's a it's a big battle right now so like that one specifically just got a big exchange to integrate with them but basically instead of swapping tokens on new swap um some people will go to this exchange and swap on a totally different blockchain um it's way faster so we might who knows yeah spaghetti i need to know the spaghetti so the the yam thing created this template of like of i don't want to call it a scheme because some of them are actually decent but ever since that these things have been popping up there's the yam v2 there's one called taco coin there's cream dot finance there's spaghetti coin there's like 20 of them and they're all food and they all have like food emojis on twitter um and the spaghetti coin was yesterday was this people finally figured out how this works and basically you lend your money out in a lot of these places and you go through a bunch of hoops and eventually you dump your money into this vault and you start earning interest on it so yesterday it was like i was getting like 100 per hour which means i was doubling my money every hour uh but yeah but that is you have a trillion dollars in like four hours yeah these things don't last long so that was the rate for about 15 minutes but it was alive yeah and then the world on the internet figures this out live this was happening last night at like 10 and everyone else started doing it so the rate starts going down and then the spaghetti uh everyone started realizing that and the market sentiment was kind of like you know what we're over spaghetti everyone started selling pasta tokens called pasta and it was the same thing as the yam so everyone around the world was racing to get their money out of this thing because the market value was plummeting um and like a friend of mine lost like four grand in like an hour and it's just like it's nuts is it all made up like yeah 100 return every hour why so that's you know it's real for a bit when no one knows about these things because basically they're printing stock for you and the market is making the price of the stock go up so just by having your money sitting there you're earning a bunch of stock the stock's going up so when you do the math you're earning those types of numbers but as soon as people don't like the stock it flips and it can get negative real fast so these things are like this is not what crypt is about you know there's way better speculation versus the actual investment yeah this is kind of like the dave portnoy like d-gen trading side of everything um but it's fun and i've been doing it last month mainly because it's kind of fun um and it's just a big stream of memes are people just making absurd amounts of money then yeah some people are making like you know they're literally doubling their money every week which is which is ridiculous you know it's unheard of by finding the next meme literally they're living on 4chan and in telegram group chats and they're on twitter and you know as soon as 4chan takes one over it blows up and people you know throw all their money into it and then the rest of the world figures it out and then it's a race to get out and it's just been happening i feel like that's what gets cryptocurrency the bad rap so in terms of actual like so people don't get all fed up and angry and stuff because i do think the blockchain is so fundamental and that's never going away in terms of distributed uh whatever that approval process is yeah what's what then we kind of talked about how many transactions you can do uh it's difficult because you have to remember your private key to like if you lose your key which is basically like the key to your bank account and ability to transact i assume yeah then you're you're [ __ ] you're like you lose everything i assume so people have all these what is it hard wallets or whatever basically like they're just carrying around yep yeah that's like um another big issue with the adoption here yeah so in general like these food coin schemes they're fun but like some of the things i said earlier like the actual goal here is to just get people access to financial opportunities that they never could before and around the world um and that'll be pretty big but there's issues like what you just mentioned so it's like if you forget your password at google you just tell google and you prove that you're you and they'll let you reset it right somewhere or another they call you or they text you or whatever you remember a secret like question um there's no company on the blockchain that'll just you know help you out like that's the whole point there's no google here there's no customer service yeah exactly there's no customers there's not if you you just go before 10.