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

26:02And you also could potentially make money off of that as your income potential goes up. But you can't just rely on that because you have to make income or else James Coin goes down. Yeah. And I think we're going to see many versions of that in semi-controlled marketplaces. So a good example could be like a Shopify store where when you launch this Shopify store and you say, you know, here's the plan, here's the products, whatever. instead of doing, you know, like a safe, instead of doing a normal investment round, you could probably in the not too distant future issue a token through Shopify that when being held guarantees you some cut of, you know, the revenues or profits or whatnot that that Shopify store is generating, right?

26:46Or you could do it through Stripe. You could do it through one of these specific like transaction hubs to ensure. That's a great idea. Yeah. Cause then you're making sure that all the income is getting captured, right? You could do it for a YouTube channel. You know, when you launch the YouTube channel for this show and you say, hey, you know, I'm a successful author. I've got all these followers. I'm starting on YouTube. You can buy 10 % of or some percent of the lifetime revenue of this YouTube channel with this token. That's something people will do, right? Because if you found Mr. Beast early and you could have bought some Beast coin and written that up, that would be a really interesting market.

27:19I'm sure that's going to exist. And here's the great thing. So what you just described is Kickstarter, right? But I can now sell my Kickstarter donations. So let's say I donated to you to write your next book on Kickstarter. Now that's it. That's all I get for my donation. But now let's say if those donations were tokens I get back that are the contract between what you promised me and what I gave, now I can trade with anything else. It becomes tradable. And that's the real benefit of crypto is decentralizing this and making peer-to-peer this trading. So I don't need the New York Stock Exchange.

27:56I don't need banks. I don't need the securities and exchange, you know, whatever commission telling me what I can sell and buy and hold. And, you know, it makes like thousands of new asset classes that, again, would stave off recessions. And I think it would just be a net positive to the world. And I understand the concerns around financializing everything in our lives. I think those are fair criticisms. But I think that historically, the more you have opened markets up to freer trade and faster transactions and more visibility into how transactions are happening, the better it's typically gotten for everyone.

28:39And so even if we run the risk of maybe financializing too many things, I do think it becomes a net benefit for everybody trying to build these new businesses, trying to get these new careers off the ground if there is a way to open up financial access to every part of the stack. Like startups are a great example of this because if you really wanted to make the most money possible investing in the American economy, you didn't get the best deal by putting it into the stock market, right? A lot of the best deals happened in the private markets. And if you're looking right now and you're seeing, oh my gosh, SpaceX, you know, the last Starship launch was such a huge success.

29:17I really want to be able to get in on that. Like you can't because they're not public. And the only way you can is if you can have the connections and the huge amounts of money to get access to secondary, that most people don't have those opportunities. And that's kind of a shame. Opening some of those markets up earlier could be a net benefit for everyone. To your point, the supposed benefits of regulation and financialization of everything. Let me start with the benefits. The benefits of regulation, which makes it harder to do the financialization of everything, is that there are scams. And you yourself, as you describe in this book, have fallen for or seen many of these scams in the crypto world.

29:54And you use the phrase quite a bit in the book, the Wild West. So for a while, the Wild West was this farming and crypto. Then the Wild West was NFTs. Now the Wild West might be meme coins. But I would say every new financial innovation, there's a Wild West. So housing derivatives were the Wild West for a while. and there were a lot of scams and it caused the 2008-2009 financial crisis internet stocks were the wild west so caused a a recession you know even you know most things for a while there's a lot of like hedge funds in the early o's or in the 90s were the wild west and there were a lot of scams where people took the money and then they disappeared or you know madoff started in the 90s and was a$60 billion scam.

30:39So these things exist and then people learn from them and the industry matures and grows up. And now hedge funds are an institution. Mortgage derivatives are normal business now. Savings and loans companies, which were the Wild West in the early 90s, it's business as usual now. Junk bonds, Wild West in the 80s, business as usual now. So I think people have to relax. And yes, there's a Wild West where a lot of people will lose money, but some people will make money. And that's just the nature of it. People choose to lose money also in these things. I mean, they didn't want to lose money, but they decided to play in a dangerous field.

31:18Most people knew what game they were playing. Yeah. There's another thing on that, if you don't mind me hopping in on it, which is even outside of the finance world, what we've really discovered in the last 10 years is that we can create incredible regulatory systems without government intervention. Because for a long time, we thought that a safe taxi system required medallions and certifications and all of these like government-endowed systems for safety. But then Uber showed that, no, you can actually trust peer-to-peer evaluations and you can use a rating system and you can do all these things and you can create a safe system without government direct oversight.

31:59You can do the same with Airbnb. You know, like Airbnb showed that you can do it with hoteling. right in hospitality. And we're constantly finding new ways to have decentralized regulation systems. And there will totally be a way to do that for financial assets too, that won't require every single thing to be overseen by the SEC. And yeah, we're totally in that Wild West phase right now, but we're like slowly figuring out better and better systems to regulate ourselves and create a more honest market without having to run every single thing through the government. But such a great point. Like I never thought about it with the Uber versus regulation on the taxi medallion side, but it's true.

32:40Now with you, so you said, okay, I need to make some money. I'm having a kid. This farming thing was the Wild West. You were making a little bit of money, but you even recognized right away, it seems scary. But you also had some coding ability. So suddenly people asked you to code basically farming and NFTs in a game. Yeah. So, you know, during that period, 2021, Ethereum and other Ethereum-like blockchains were taking off because of all the stuff that could be built on them. You know, DeFi was the first big thing, right? Borrowing and lending protocols, decentralized exchanges. And it was this big rush of what else can we program to be like these decentralized apps running on Ethereum.

33:27and that was sort of like the big exciting thing during that period because in 2017, it was just ICOs. There weren't really apps and now there were all of these apps being built on Ethereum but the only way you built them is if you knew how to code in this new programming language for Ethereum called Solidity. And Solidity is similar to JavaScript but it's still its own thing and because it was its own thing and because you had to get a lot of practice and use it a lot to know what you were doing with it. Not many people knew how to do it back in 2021. There were supposedly fewer than 10 ,000 active Solidity engineers on GitHub.

34:06And so when I had this idea that, oh, I should learn how to write Solidity code because if you went in any Discord for any crypto app, all of them were trying to hire Solidity engineers. And they were offering like 250K a year salary plus tokens. You would only need three to six months experience because that was all that most people had. And then you could just get hired for it. It was an extreme version of the programmer job rush during that period. And so I was doing this farming and I was seeing people, you know, they'd go up and up and up and they'd make money and make money. And then they'd make one bad mistake and just back to zero, right?

34:44You pick the wrong thing and you get all your money stolen. You get out too late and you lose everything that you made. It was really risky. Whereas if you learn how to build things, there's a floor on that because you're not putting the same amount of money at risk. You know, you're getting paid. And if you're getting paid in tokens and you pick the right project and their token goes crazy, that could turn into a pretty incredible payday. And so I had a couple of one big scare and one truly awful event happen. And I said, okay, I've just got to like go all in on the programming because I can't keep picking up pennies in front of the steamroller.

35:18And it was really hard to learn because there were basically no courses. There were no boot camps. CodeMentor was this site that I used to use a lot to get programming coaching. And there were no Solidity mentors on CodeMentor. So you were really on YouTube videos? Very few. Very few YouTube videos. And they were really focused on the most basic stuff. You know, launching a token, making an NFT. And there was no chat GPT back then. And when I first started trying to figure this out, I spent a couple of months just trying to, you know, get like a few basic contracts going, right? And it was really just a grind figuring it out.

35:58And while I was writing the book, I went to ChatGPT and I said, hey, can you write me the code for a new token launch? It's just, boom, it's done. So when you write the code for a new token launch, it's like you're making your own meme coin, for instance. And so there's tokenomics, like it describes how new tokens will be issued or taken away. It describes what the validating mechanism is, whether it's proof of stake or proof of work or something else. So not for this, because these were all tokens on Ethereum. And so you didn't have to worry about proof of stake versus proof of work or the validation or anything.

36:38It really was as simple as what's the name, how many are there going to be? Can you make more of them? Can you destroy them? Who gets them initially? You know, those basic rules. And I started off really scared and worried about doing it, which is why it took so long to get going. But then I started looking at more token contracts. I started looking at the code behind a lot of these apps that were launching. And they were all using the exact same code. It was basically copy and paste. They were just using the same code over and over again, which was a huge unlock of, oh, my gosh, it's not as scary or complicated as I thought.

37:10But if you're really pushing the boundaries, if you're really developing new things, it's really complicated. But if you're launching tokens and NFTs, it's actually pretty simple, which is probably why today you're seeing hundreds of new meme coins launch every day on Solana because it's so easy to spin them up. And is that because also it's piggybacking on all the functionality of if you're building an Ethereum, it's piggybacking on all the functionality of Ethereum. Like let's say you made, you know, Natcoin, you know, in this way back in 2021, would there still have to be validation of every transaction, but you would use the Ethereum miners?

37:47Ethereum handles all of it, exactly. So you're still just, you're doing transactions on Ethereum, but using your token instead of moving ETH around. Once I figured out that there was this simpler layer to it, it's actually extremely easy. There are whole libraries called OpenZeppelin or by this group called OpenZeppelin where you can basically launch a token in one line of code. And it spits out the 150 or whatever lines of code that you actually need for it. But even that is very, very simple. This was kind of the cool thing about Solidity code is that it's extremely efficient and extremely precise and extremely clear once it's written.

38:31The scary thing about it is that once you deploy a smart contract, like a token or decentralized exchange, you can't change the code. It is locked in stone just because of how blockchains work. You don't want to be able to go back and change, you know, how many of a token are issued later after you've already sold a bunch, right? Like that would be a scary thing to be able to do. Which, by the way, it's funny you say that because that's exactly what the US dollar does. And that's what most companies do with their stock. But in the crypto world, that does not happen unless it's already in the code at launch.

39:03Yeah. And so the other big benefit or the other big boon you have with trying to learn solidity or learn how to build this stuff is that because it's on the blockchain and because the blockchain is transparent, you can go read the code powering any app on Ethereum. You can just go to Etherscan, look up the code for Uniswap or Aave or any of these big apps, and boom, there it is. You can just read through it. you can see that it's safe for you to put your money into. You can copy the code. You can run your own tests on it. You can do whatever you want, which is really, really cool as a way to learn.

39:37Because if you were trying to learn how to rebuild Facebook's algorithm, you're never getting that. I mean, but then how do you launch the token? So you have the code for the token. Where do you launch it? Like, how does it start? How do people start buying your token? Yes. So the way a smart contract works is it's sort of a, it's basically like a mini computer sitting on top of Ethereum. And if you make one of those mini computers for a token, it knows where all of the tokens are. And so if I have 100 NAT tokens, I can send a command to that little computer saying, send James 100 NAT tokens. It checks to make sure that I actually have them, that you actually exist.

40:24You know, it makes all those checks. And then it just sends it. But that little computer is just running autonomously once I deploy it. So I would write up all the code for the token. And then I basically just run another command on my computer and I pay a little bit of ETH as the transaction fee to create that mini computing unit. And then it just lives there forever. And because it's just living on the blockchain like basically everything else, anybody can use that to move the NAT token around, assuming they have it, or we can send some of it to a decentralized exchange. And the exchange knows that if this is the address for this token, then the symbol for that token is NAT and there are this many of them in existence and this is who has all of them.

41:08And you can look all that stuff up publicly. But you have to know kind of like how to write the code to actually deploy it in the first place. And that can be the tricky part. But once it's deployed, you can go to some of these sites that like interpret the blockchain for you. And you can just click a button to move your tokens around. Or I can take those commands from the token contract and I can put them in a website. So you could go to, you know, my website and say I want to buy, you know,$10 of Natcoin or whatever. But anybody could put that on their site too. It's totally accessible to anyone.

41:40Because it's based on Ethereum, could I then trade it on Uniswap, which is built on top of Ethereum? Yeah, yeah. You could trade it in Uniswap. You could actually add it to any exchange you wanted, and I wouldn't have to give you permission to do it. As long as you had some of those tokens in your wallet, you could go to Uniswap and say, OK, I have 100 NAT tokens, and I have one ETH. I'm going to put both of them into Uniswap. I'm going to create a trading pool. and now 100 NAT is worth one ETH. And if somebody else went and they said, oh, I want to buy 10 NAT, then 10 NAT would get deducted. The amount of ETH would go up by, what, 0.1.

42:16But now 90 NAT is worth 1.1 ETH. So now the NAT token's more valuable. And so the price would constantly be changing automatically based off the Uniswap balance of those two tokens. And nobody else has to facilitate that trade. You don't need a market maker. You don't need to find somebody immediately on the other side of it. the trading can just run autonomously on the Uniswap smart contract.

42:53Why would the recent mania for meme coins, like making these valueless coins, why has Solana become such a popular, you know, Solana is like an Ethereum killer, supposedly. Is it because of the transaction fees are smaller and it's a little, it's a little, you could do a little few more transactions per second? Yeah. Yeah. It's totally because the transaction fees, because on Solana, you're usually paying less than a dollar, sometimes less than 10 cents to do one of these transactions. Whereas on ETH, if the network is busy, you might pay 50 bucks or a hundred bucks to do a swap. And that's why Ethereum is really not trying to be the active layer anymore.

43:31It's just trying to be the security and final settlement layer. And there are these other like layer twos being built on top of it, like Coinbase's base chain. And base has pretty comparable speed and transaction fees and everything to Solana. But the benefit of it is that it's using Ethereum for all of its security. So instead of every transaction having to be done directly on Ethereum, Base can bunch up 100 or 1 ,000 or 10 ,000 of them and check them into Ethereum in batches to bring down the transaction cost dramatically. And so you lose a little bit of security by being on Base, but you get this incredible increase in speed and cost of transaction.

44:16So what we'll probably see is a lot of the day-to-day things, a lot of the little transactions happening on an Ethereum layer 2 or on a Solana. But then you'll see the big things happening on the Ethereum layers. BlackRock, for example, has launched a fund on Ethereum for doing some like yield-bearing tokens. They've been tokenizing treasuries. They've been doing some really cool stuff. But they have$500 million in there. So they want it on the safest, slowest, most proven, most secure chain. Because when you're moving around millions of dollars at a time, you don't care about a$50 transaction fee.

44:51But if you're trying to buy coffee, that stops working. Right. Governments are their clients. It's not a big deal. So you basically then made your own currency slash tokens for this game, Craft, that was being built. and it had a launch and suddenly all these tokens that you were paid in to develop this had value. Like what was the peak value of the tokens you had? I mean, it was so crazy because they were the first, one of the first teams I reached out to to try to get a gig. I wanted to get my feet wet. I wanted to get some experience. And my friend had found them. They were doing something I was really excited about because they were trying to build like a Diablo Warcraft style game, which I loved for all the reasons we talked about earlier.

45:34I was just so excited about that potential. And, you know, so I was bugging them, trying to get them to hire me because they needed an engineer to build their token. And I was like, I'll do it. I'd love to do it. And they said, okay, you know, what are you going to charge? And I said, you know, two ETH per week for the three weeks it'll take to do this, which was a pretty fair rate. And I figured they would negotiate against it a little bit. I was like, that seems reasonable. You know, pay me four to six ETH, whatever. That'll be great. And they just didn't have the money. So they were like, we can only pay you in tokens.

46:05And in my head, I'm going, okay, I'm never going to make any money off of this, but it'll be a good experience. So sure, I'll take the tokens. And the deal was we were going to launch it with 100 million tokens priced at one cent. So the game would be valued at a million dollars, like not a crazy amount for a new crypto project launching. And so I said, okay, can you give me a million tokens? So that'll be worth about$10 ,000. That's a fair amount to get paid. And they're like, yeah, cool deal. And then we put those tokens in a smart contract so that it released them over a year. So I didn't get them all at once so that I couldn't just dump it on the market.

46:41But it also made sure that they couldn't like back out of the deal and take them away. It was a good like trustless way to do it. And so we put them in and then we were getting ready for launch. And a bunch of the like wealthier people the team knew said the price was too low. they said if you launch it at one cent with you know this many tokens there's only going to be 40 or 50 000 of trading liquidity so if i want to buy a hundred thousand dollars of this token and these guys had you know millions and millions and millions of dollars to throw around and they were willing to put 100k into this game launch they said i can't do it there's not enough liquidity so we had to up the launch price to 10 cents and i'm going oh okay like now i'm getting paid 100 grand for this this is pretty sick and you know and they were totally you know fine with it still I was like, all right, cool.

47:26This is a great deal. And so then we launch. And during the first couple hours of launch, it spikes up to over$1.50. And I'm like, oh, my God. I just got paid a million and a half for like two weeks of work. This is insane. And then, you know, of course, it dropped back down to 20 cents and it stayed there for a bit. But still, I'm like, okay, cool. This is like 200 grand that's going to come out over the next year. This is great. They kept building the game and it kept, you know, getting more excitement. and there was that big NFT rush. And then after the NFT rush - So it was legit as far as like, they weren't scammers.

48:02They were trying to build a legit game and legit NFTs. And there were people actually playing the game and they were launching new parts of the game every week. There were, you know, dungeons you could go through and you could fight the monsters and you owned your character as an NFT and you could sell the NFT of your character if you didn't want to play anymore. And you could, you know, trade the items amongst yourselves and all of that. And like, you know, they were really doing it, which was great because there were so many scams and cash grabs at the time that it was cool to be actually working on something where they were building a real game.

48:29Like they were really, really going for it. And so the NFTs start taking off and then gaming starts taking off and like Axie had their crazy moment where Axie Infinity, it was worth like 20 or I think it was$40 billion at the peak, right? Just absurd. And then they start going down. So people look for the next game to put money into. And there was another game called DeFi Kingdom and DeFi Kingdom runs up to like two or three billion in the span of a week or two. And we're looking at that and we're going, are we next? What's going to happen here? And then we get to the end of December and DeFi Kingdom starts going down and then people find CryptoCraft and they start putting money into that.

49:09And then in the course of two or three weeks, the token goes from like a dollar, dollar and a half to$13. And now I'm looking at all of my tokens and I'm going, oh my God, there's like$13 million here. This is just like more than I ever could have possibly imagined coming from this. You know, here's, here's where I, you know, where, where it's really hard for me to reflect on this story is in my head at that time, I'm not going, okay, this is insane. I need to get all this money out right now. I'm going, this is going to a hundred. This isn't stopping here. This is just the beginning. It's going to keep going.

49:52And so the, you know, when I'm claiming my tokens every day and I'm turning some of them into ETH, I'm redepositing a lot of them. Like I'm not taking the money off the table. I'm just doubling down. It was like, it was more money than like I ever imagined. It was more than I could have possibly hoped for. And I just wasn't taking the vast majority out. I just kept doubling down. And a lot of my tokens were locked, so I couldn't access them. But even when they're locked, though, you could still engage in private transactions and sell your locked coins. No, not really. You could. You could in theory, but there wasn't, it wouldn't have been a crypto transaction.

50:35It would have been like a written agreement. Right. It would have been a dumb contract instead of a smart contract. Exactly. It would have been a dumb contract. You couldn't made a contract that obligated you to. Exactly. Yeah. And I didn't do that, sadly. And now those tokens are worth like two cents a piece. But you did do some transactions with private investors. Yeah. Yeah. What I did was, as it started taking off, I realized that one, it was going to be impossible to time the market on this. And two, even, this is the big problem with a lot of crypto tokens is that at the peak, all of the CryptoCraft tokens combined were worth over a billion dollars, which is insane, right?

51:20But there was less than maybe$20 million of liquidity to actually back that up. Usually there was less than$10 million of liquidity to back that up. So if somebody went, if somebody had all the tokens and tried to sell them all at once, they wouldn't get a billion dollars, they would get like 10 million. So the tokens were actually worth way less than it seemed. And this is a big problem in a lot of crypto tokens, is you might think that you have this many tokens worth this amount. But if you're one of the big holders and you try to exit your position, you will tank the price immediately. So I knew I couldn't really sell in large batches.

51:56And so I wrote a little bit of code that I could run on my computer where it would claim my tokens for the day and then sell a portion of them to ETH and redeposit the rest of them. And so I would just roll over in bed every morning and hit a button on my computer and boom, there'd be a thousand dollars of ETH in my account. And then it was like$4 ,000 and then it was$10 ,000. And, you know, it just kept going up and, you know, just completely destroyed my relationship with money during that period. None of it felt real. Didn't want to take any of it out. Just wanted to keep doubling down with it.

52:31And like I said, you know, I reinvested most of it or locked a lot of it up. You only get to that point by being crazy enough to leave a lot of money on the table. And that mindset eventually comes back to bite you. Yeah. But, but you, at some point, first off, it's very interesting. Like this is one aspect of crypto, which may or may not be a benefit, it. But if people know your, what your wallet is, they, they, you actually don't have the privacy that you would expect. You could get that privacy. And in most cases, in 99.999 % of cases, you have that privacy, but because you were a major developer on this project, people knew what your wallet was and how many coins were in it.

53:12It was kind of laid out to investors and, and everything. So it's as if your bank account information could be viewed by everybody. And so not that they could access the money, but they could see when you were accessing the money. And so you had people call you saying, hey, I thought you were really into this project. Why are you selling? It turned into a huge problem. And I've talked to a lot of other people in crypto who had this same experience for better or worse, where when you're getting paid in the token of the project you're working on, and other people are investing in that token on the hopes that it goes up, if you're selling a chunk of it, it looks like you don't have faith in the project or like you're trying to rug people or you know something that they don't.

53:55And, you know, that that's understandably can be scary for people who are watching all the transactions come through. And so in the beginning, when it was just smaller amounts, like nobody bugged me. But then when, when, when every day, my amount of tokens unlocking were like, it was like$50 ,000 of tokens and I would sell 20 ,000 of them a day to ether, whatever. I started just getting all of these DMS and these Twitter messages, uh, from people being like, you know, what the fuck are you doing? What's wrong? What are you, what are you scamming us? And I'm like, like, I have a kid in a mortgage.

54:28Like I can't eat these tokens. Like I got to sell some, I can't leave all of this on the table. Either way, I still have millions of dollars on the table here. Like I'm way more invested in this than you, but I have to take some off. And it, it just got nastier and nastier. I mean, people were going to the team and telling them that they had to fire me and kick me off the project because I was selling these tokens. And the team was like, they're like, what do you mean? Like, he's working harder on it than like almost anybody else. Like, he's the most invested person who is selling tokens. Like, be mad at the speculators who are dumping, like not the people on the team.

55:02But it's a huge problem. And I talked to a lot of people who had millions of dollars of tokens liquid for projects they were working on, who never sold any of them because they were so afraid of the optics. And they just wrote it all the way back down to zero. Now, could you have, could those people, there are these exchange traded funds where you kind of pull your wallet in with a bunch of other people's wallets. So you're like diversified. So everybody kind of owns all the wallets together. Was there anything like that that was open to you? I could have done that. And if I had thought that the game was going to go the way it did, I would have set it up more intentionally or more carefully like that.

55:44But I didn't think it was going to turn into much of anything. And so the place where all the tokens went was nataliason.eth. and so that you know it was pretty blatant like how many tokens i was getting every day and exactly what i was doing with them and there were there were a couple hundred people who were subscribed to updates on my wallet through through this app crazy yeah through this app called zapper and so they would literally get a notification on their phone if i did anything in crypto and because they like wanted to see what i was buying they wanted to see what i was selling and that was not fun What if you had just ignored all that?

56:22And what if you had gotten fired? You still had all the coins, right? And that's ultimately what I did is I said, you know, this sucks, but I've got to do what's best for like me and my family. And I know that I'm working on this game. I know I'm not scamming people. And so if people are going to get upset about it, like that's kind of on them. And for a while, I did talk to everybody and have pretty frank conversations. I sent a lot of people screenshots of how much I had invested to show them. I was like, no, no, no. Like, I'm really in this and I have to take money off the table. But eventually I had to just be like, you know what?

56:55I can't like argue with everybody about this. If they were in my situation, they would do the exact same thing. And even the game founders, like Leroy was like after you to stop selling, even though you had to make money. Yeah, yeah. And that's what I told him too. And we ended up getting in multiple fights over this where he was telling me to sell less because it looked bad. And I was like, no, like this is what I have to do. And if you want to fire me, but you're not going to, because I am working on this a lot. Like I'm helping you guys. And you know, it's like this, this is just how it has to be, but it's, there's a lot of downsides to having your whole financial life public like that.

57:37And I think that's why crypto has this pseudonymous element to it, where if you were one of those people who got in on the initial offering for ETH and you bought 10 ,000 ETH at$1 and you still have them and you're worth tens of millions of dollars now, you probably don't want that tied to your real name. You don't want people to know that about you. So there's definitely some cons to the public element, and there are incredible benefits. Imagine if you could exert that much scrutiny over what your city is doing with your tax dollars. You'd learn a lot of stuff really quickly. That would be a huge boon to society.

58:14So there's definitely pros and cons. And at this time, because it was kind of like, you know, this 2021, 2022 mania, or basically 2021, you know, it was even greater than the 2018 mania. There was NFTs, there was, you know, starting to be like these meme coins and stuff. So like you knew other people who were getting involved, Like your friend Johnny, who kind of you were together from the beginning doing this farming and then other stuff. He was getting into NFTs. What's the outcome with him? Yes. You know, he really had kind of a wonderful story through it, which is why I thought it was important to include it.

58:54Because when we started, he was running a cafe in Austin and it was just bleeding him dry. And he, you know, was sort of like barely scraping by on it, was incredibly passionate about it. but the money wasn't working and it was getting worse and worse. And he was one of the people who had, you know, barely survived COVID. And so we started doing, started doing this farming stuff. And he had commissioned this like incredible espresso maker to get built and had hired this like company in China to do the production on it. And we, we, we started out doing this farming together. And then I got really into programming and I started having this outcome with CryptoCraft and he got really into NFTs.

59:34and you know in in march we're sort of like day trading doge and starting with farming and trying to make a couple hundred bucks a day and then there's this scene towards the middle of the book where we're at brunch and at the start of the brunch johnny puts like ten thousand dollars into an nft launch and by the end of brunch he's up 20 grand and he was just he was in this crazy like the really, really fast paced NFT speculation. And he had built such a name for himself in that space that people had notifications for his wallet too. And so he started having to like make other wallets and move money through Coinbase to hide from the people who were trying to like, you know, copy trade him and cut out what he was making by being so in the flow of it.

1:00:19And he showed me this stat once that he had spent over$100 ,000 on Ethereum transactions during that period, but it was profitable spend because the NFT flipping was so insane. And then one kind of sad thing happened, which was the manufacturer in China screwed him over, just took his money and ran. And he was out like 250 grand. But he had made enough from the NFT selling that he was able to offer refunds to everybody who had pre-ordered. And I won't spoil how that story ends because it has an interesting ending. but he was able to like, you know, resolve that issue. He was able to shut down the shop, which was a sad moment, but also kind of, you know, freeing for him.

1:01:05And he was able to like, you know, pay out the employees for a couple of months longer than he would have if, if he had to shut it down from actually running out of money, you know, he and his partner were able to like move into a more comfortable spot. Like he had this kind of great outcome from going so crazy in it. But he also had kind of the same like psychological outcome that I did. It was really, really taxing and really, really rough. And he, he like me, doesn't let himself touch the space at all anymore, because the psychological costs were just so painful. And what does he do now? He's working on just the espresso maker or working on the espresso maker.

1:01:46And he has he has another job in a totally different industry. But the the maker is hopefully going to launch in the next couple of months, which is pretty exciting. So it's like that. And he was able to like, take the time to really do it right. You know, it was like building a cool new piece of hardware is an incredibly challenging job and you can, you know, rush it, do a little cheaper and just get it out there. Or you can, you know, take your time with it and make it really awesome. And he was able to buy the time to, to do it right, which was great for, for both of us. We had these things we were really passionate about.

1:02:18For me, it was writing. For him, it was coffee. And we kind of bought the freedom to actually go after those things in a very serious way for a few years that we didn't have the freedom to before. And like that to me is, that's one of the best outcomes I think we could have asked for. Sure. Like right now, obviously this woman, you're working on this book launch and this is an important part of your career, but do you have plans for a next book? What kind of writing would you like to do? What inspired your interest in writing? Who were your initial favorite writers that you were saying to yourself, I want to be like that?

1:02:53Yeah, that's a great question. I got into writing in a funny way. I really wanted to do startups and entrepreneurship, and I was a philosophy major in college with no relevant skills. And so I kind of looked at what would be useful to startups and what am I already kind of good at. And there was this cool intersection with content marketing because I could write well and startups needed content. and I started out doing content marketing. And in the beginning, I was studying you and I was studying Tim Ferriss and I was studying Ryan Holiday and I was studying the people who were, you know, really crushing that game and trying to write like that.

1:03:27And I ended up getting really into SEO. I had a search engine optimization agency for a little bit. And then after the story happened, I was like, you know, I've always wanted to really write a book and this is kind of like my opportunity to do it and to try to do it in a big way. and I never thought that I would want to write a like memoir finance story but the opportunity kind of fell into my lap and it was just like this perfect storm but yes oh go ahead oh go ahead no you're good okay I was gonna say but when I started on it what I quickly realized was that I had spent most of my writing career doing like how to highly optimized blog posts which is very different from a like psychological thriller memoir story.

1:04:13I basically spent the last two years just studying writing while working on this. Like I didn't do hardly any other work. I was just like, I need to get as good as possible at storytelling and making this fun because the only way I'm going to make a crypto book really mass market interesting is if it's like a fun beat read, if people are going to have a good time going through it. And so I studied that and I tried to make it as fun of a read as possible. And along the way, I learned that I actually really love the like fiction-esque writing. It's really, really fun for me. That's why I was going to say, I wouldn't call it a memoir.

1:04:48There's this new brand, I'd say it's about one and a half to two decades old of narrative nonfiction. That's what this is, narrative nonfiction. Because you'll write this over and over again and with your next story and your next story. Like you'll have experiences kind of like, you know, four hour work week is, you know, or outliers by Malcolm Gladwell, or, you know, all those books in your, in the background of your zoom picture that I'm seeing, but like what, it seems like it would be helpful to read like some fiction writers to write, you know, so like for myself, I read people like Raymond Carver or Dennis Johnson, or even Charles Bukowski, just cause they're, they're, they really ultimately wrote narrative nonfiction and they called it fiction.

1:05:28I think all their stuff's nonfiction. And that, for me, was really improved my writing. Yeah, that's actually exactly what I did, is I studied writers who could get people to just boom, boom, boom through a novel. John Grisham. I read A Time to Kill, which is wonderful, and it's his first book. And then I reread The Beginning a bunch of times to try to get that energy into my writing. And another one that I really studied was Red Rising, which is this wonderful— Oh, I don't know. Oh, my gosh. this is such a treat. You're, it's a wonderful fantasy sci-fi novel and there's six books in the series now, so you can really go crazy with it.

1:06:09And he, he's such an incredible, like fast paced storyteller with a very strong opinionated first person narrator. And I wanted to bring some. Oh, this is great. I'm, I'm getting it right now. Oh, you're, you're going to love it. You're really, really going to love it. I really wanted to bring that energy into it too. And that was so helpful. So what I would do a lot of days while working on the book is I would get up and I would reread some of my pages from the day before, but then I would read like the first chapter of Red Rising or some of the first few pages of A Time to Kill or one of those books before I started writing so that I was in that headspace of that storytelling mode so I could bring some of that energy into the book.

1:06:51And that was by far one of the most useful things that I did. It's amazing how much reading one style will subtly influence how you write the next few days. Yeah, exactly. Like it takes about a day or two or three to wear off. But like if I read, like let's say just as a blunt example, like Old Man and the Sea by Ernest Hemingway, suddenly I'm writing in this super minimalist style. But I like that. I like that feeling of absorbing his style and bringing in my own kind of humor and storytelling and so on. So it's good. I always think that's the best way to write. It's sort of like when you're learning a coding language, you kind of set up the basic environment.

1:07:33You know how to code from other languages. And the best thing to do is to modify someone else's code to learn coding. Totally. It's funny because it works in the other direction too. So you asked about the next book. I'm actually working on a sci-fi novel. And that's been an incredibly fun experience. and I was doing the same thing. You know, I was studying sci-fi, figuring out kind of who I wanted to emulate, whose style I wanted to learn from and like Dark Matter by Blake Crouch. Oh my God, by the way, best TV series of the year so far. I haven't watched it yet. I really - You gotta watch it.

1:08:06Okay, okay. And I like Recursion by Blake Crouch as well. Yeah, and his pacing in that book is just incredible. It's just boom, boom, boom, doesn't stop. And so I was using that to prime me for writing the sci-fi novel. and then I took a break and I reread East of Eden by Steinbeck which is just a beautiful not just incredible like maybe greatest novel of all time and but then I went back to work on the sci-fi novel and I started writing in kind of that style and it was like a completely different energy and it was like slow and descriptive and it honestly I was really really proud of the chapter I wrote in that style it was I think some of my like most beautiful writing but then I threw it away because I was like, I can't use this.

1:08:50This is the wrong energy. I'm like, obviously, I'm nowhere close to Steinbeck, but it was interesting how quickly that totally changed how I was writing. You've got to be like really careful with your inputs when you're in a writing mode because they'll get in there quickly. Like when I do most of my writing, which is in the mornings, I make sure I don't read necessarily thriller kind of stuff because I'm trying to, If you're trying to write short blog posts poignantly, if you're just getting to action, action, action, it's not as good. But yeah, you have to be very careful about the input. And people don't realize, this is an important aspect of writing, is that, like you say, the inputs that you put in is what comes out combined with your own style.

1:09:33Totally. And your subconscious is so incredible at processing things when you're not thinking about it. When you go on the walk after the writing session and the ideas pop into your head. And so if you're letting in social media and the news and all this other stuff, that's what ends up popping into your head when you give it a moment's rest. And so you have to curate that input layer so deliberately if you want to get that best writing work possible out. It's kind of fun to be in that monk mode where you're being so deliberate about it because it is just this incredible force multiplier for how good your art can be.

1:10:08Yeah, no, I can really appreciate that cycle. And this is a really good book. Did you sell the movie rights to this book? I bet you people want the movie rights. We've had one person reach out and we're still shopping it in Hollywood. So we haven't sold it yet, but we've had a little bit of interest. And I think that there will be more once it's out. Like, you know, I have a really hard time with this. I'm a very self-critical person. I'm very hard on myself. And it's hard for me to like say something is good, but I think it's a good book. And I think it's going to do well, and people seem to really enjoy reading it.

1:10:42And I think it would be fun as some sort of film production. And so I'm excited to hopefully see that happen. Absolutely. I could totally see this as a Ben Mesrick-style movie. Yeah, yeah. So it's in a hot area. It's a lot of money involved, and it's young people doing their thing, and it's good. It's going to be so fun. What's next in crypto, in your opinion? Like, obviously, there are these in terms of like the Wild West side, there's these meme coins, which I think that's already kind of run its pace a little bit. Yeah. Yeah. But I'm sure people I'm sure there's people out there who made 10, 20 million dollars disappeared and you'll never hear from them again.

1:11:20And whatever. There's probably hundreds of there's probably thousands of people like that who have just made 10, 10 million or more from crypto and are just now gone forever. Just living their life. Yeah. Yeah. It's not a small number. And I say this in the book, too, that there's going to be more manias, right? And there's going to be new waves of things in crypto that have these manias attached to them. Like it could be social fi, you know, a Twitter where you can invest in people to like buy and sell their tokens. I'm sure gaming is going to have another much bigger run. There will probably be a new NFT thing.

1:11:56There will be a new, you know, type of blockchain people will be excited about. I mean, the big one this cycle is going to be AI coins, AI plus crypto projects. And some of those seem like they're really legit and really interesting. And there's going to be a lot of garbage too. And it's hard to uncover, like particularly like, so I always look for coins that actually have users, corporate partnerships, you know, good developers with a track record. But it's hard to know, okay, like a great idea would be here's a coin that's going to be a decentralized network of everybody's healthcare information.

1:12:29So you own your healthcare information. So if AI wants to use your health care information to train their learning model, they have to buy it from you. Yeah. Because it's all on blockchain, you could do that. But it's hard to know, okay, this is a great idea. Are people actually using this? Right. Which coins? There's very few analytics that tell you. There's a lot of analytics that tell you how much is being bought and sold every day. Very few analytics that tell you how many people are actually using this for real use cases. Totally. And I think that's got to happen. Yeah. And you can sometimes find a Dune dashboard, you know, Dune.xyz that shows you.

1:13:05Dune is the best way to do it. Yeah, yeah. But honestly, like what I tell most people is that if you're not going to go live in this world, if you're not going to quit your job and be 24-7 in the flow of information, or if you don't have access to somebody who has that level of information, don't even try. Like you're going to be the exit liquidity. Just like buy Bitcoin and Ethereum and Solana and leave them in your Coinbase account and just don't think about it. because if you're like half in, half out and you don't have that level of information, you might buy at the right time, but you're probably just going to hold it too long and ride it all the way back down.

1:13:39And you don't want to get caught in that like messy middle of being kind of like half in, half out. That said, if there's a wave of things that people are actually using and they're paying you for, I mean, I could totally see a decentralized AI computing token where you can rent out GPU cycles on your local computer to some like AI processing system and you're getting paid in their token. And if you have a gaming computer sitting around like I do, like, yeah, hook it up, get paid. The problem is there's tokens specifically for that, but then there are also tokens that initially for other decentralized computing use cases, and they all seem to switch over to decentralized AI learning models because that's like the hot thing.

1:14:25So now it's hard to really sift out, like what's their real business model? and who's using it. Yeah, and it's sort of why I do generally think just hold the big ones. If you're not really, really going to be in it, like I don't even play with the speculation very much anymore. I might throw a little bit at something on Solana just to feel alive occasionally, but for the most part, I'm just holding the big stuff. You've got to be so in it on, because it's still really a wild west. For the same reason that you shouldn't be casually looking at startup pitches for angel investing, like in your free time, unless you have access to pretty incredible alpha, like you probably shouldn't be trying to bet on which of the new crypto apps is going to be the one in five years.

1:15:09You know, you know, what's interesting is, um, the prediction markets like market, because like even just on one bet, like the election, who's going to win the election,$200 million is bet on that one question. And they have a whole bunch of things you can bet on. And that's built on top of Polygon, I guess. So there's a real fundamental use case there. And I guess the benefit of crypto is it's hard to regulate it because it's just decentralized out there. You can't regulate it. Yeah. And there's no trusted third party. And that's a big winner. I think that what we're going to see in the next two years is Coinbase rolling out point of sale integrations so that merchants can accept USDC and then not have to pay a transaction fee.

1:15:55And that'll probably catch on pretty quick because they'll save 3 % on every transaction. And then they would have a more direct relationship with their customer because they could, you know, you could attach some personal info to when you pay with USDC using your Coinbase wallet on your phone. You know, stores could use NFTs for like loyalty cards and things. There's a lot of interesting stuff that comes with that. But just being able to cut out that 3 % they're paying is, it's a huge unlock for a cafe. Their margins are so tight already. I could see that getting pretty big pretty quickly. There's something like$3 trillion in transaction fees around the world that are paid every year.

1:16:30So that's all being like soaked out of consumers' hands and put into big banks. And if you could, that's a huge source of inflation. If you could just eliminate that, the world saved$3 trillion a year. That alone is like a big benefit of at least everything moving to a stable coin, you know, on a blockchain. Yes, I think that's why we're seeing Stripe integrate both Solana and Base for payments. Because I think they see the writing on the wall that Visa and MasterCard are not going to be able to keep charging 3 % for very long. And so Stripe wants to, you know, be that middleman, be that facilitator.

1:17:04So Stripe can still take a tiny fee, but if you're paying 0.1 % instead of 3%, like that's a pretty sick deal. Most people are going to take that. What about Block? Are they doing something similar? They must be. I haven't seen anything about it, but I'm sure they are because they could just integrate it directly with all the Square readers. I know that they are so Bitcoin-focused, though, that they might not want to do a stablecoin thing. Yeah, Jack Dorsey's a maximalist, I think. Yeah, yeah. So maybe if there's a really good Bitcoin stablecoin, which I think could happen, you could have a BRC20.

1:17:37Maybe Circle will launch one. they'll launch USDC on a Bitcoin L2, which is totally possible. And then I could see Square doing it. But I'd be surprised if Square adopted an Ethereum-based or a Solana-based stablecoin solution unless they absolutely had to. And how do you think Elon Musk is going to eventually, you know, his roots are in payment systems. So eventually he's going to turn Twitter into some kind of payment system. And I doubt he's going to use Dogecoin. You know, he's got smart people around him who know the crypto space better than he does. and it would not shock me in the slightest if all of the tipping and the subscriptions and everything else on Twitter or X gets switched over to using like USDC on a native L2 for them or on base or something where you're not really going to have a transaction fee.

1:18:26Because then if you just have casino chips, you know, if you're not like doing a credit card transaction each time, people spend it more and they can take a cut of all those transactions. You might see people tipping, you know, a fraction of a cent on things that they like and whatever, you could pretty easily build a system where you have an X wallet or a Twitter wallet that you're loading with USDC. And then whenever you like a tweet, you're sending them like 10 cents. And I would do that, right? I would be totally happy to do that. That would be cool. And you would probably see a lot more like microtransactions happen on an existing social network like that than a whole new one gets spun up just for that use case.

1:19:05Yeah, that's fascinating. I never thought of it that way, that it would encourage actually more, not only more liking, but also more tweeting. Like everybody who previously used to tweet a lot and maybe died, like I used to tweet a lot more than I do now. Maybe I'd get back into it just to kind of, it's another thing to just sort of keep score of, you know, as opposed to just likes and follows. And it would simplify the thing they've started building with doing creator payouts because, you know, I get paid maybe like 20 or 50 bucks every week for being active on Twitter. but that goes to my Stripe account and then I have to like send it to my bank account and then I have to use my credit card if I want to subscribe to somebody on Twitter.

1:19:41It's just a really inefficient system. Whereas if it's just all sitting in a Twitter USDC wallet or just sitting on my wallet, which is just connected and authorized for Twitter, like you're just going to have a lot faster transactions. Removing barriers to transactions tends to make more of them happen. So I can see there being an incentive for them to do it. Interesting. Well, look, that crypto confidential Potential Winning and Losing Millions in the New Frontier of Finance. Such a great book. So interesting to talk to you about all these topics. Please come on the podcast again. I love having great guests come on more than one time.

1:20:18And congratulations on the book. I know it's going to do really well. Thanks so much, James. This was a real, real treat to get to do this podcast. Like I said, you're one of the people I started following in this space 10 years ago. And it means so much that you liked the book and would love to come back on and maybe talk about the sci-fi novel or something when that's ready, too. Yeah, would love it. Or a lot of times, just come on and we'll talk crypto stuff. Yeah, just chat crypto stuff. I think it's going to get real crazy interesting over the next few years. It's going to be a lot of neat stuff that comes out.

1:20:45Yeah, I agree. Well, thanks again, Nat. Crypto Confidential. Thanks, James.

1:21:02Thank you.