Amazon, Google, and crypto are on trial

24:26The FTC is going to have to make a different and much harder case now. Right. Yeah. So in the case of Amazon, the FTC basically defines the market as the online marketplace industry, which is a really interesting way to define it. Which I think, honestly, I don't think Amazon would really even like that because it wants you to think that it competes with the big box stores, with Target and Walmart and all the antitrust hearings and all this stuff that we paid attention to over the last couple of years. You always have the Amazon reps pointing to, you know, the way that it arranges products in search to the way that a Walmart or Target arranges products on a shelf.

25:06So in order to define it as an online marketplace, I don't think Amazon would be really happy with that. And I imagine they're going to challenge that in court. Just looking at like the way that it's defined, it really has to do with like online storefronts. And I imagine that will get kind of shaken out a bit more as time goes on. It seems kind of even more complicated because stores like Walmart have gotten more like Amazon. If you go to walmart.com now, you can get a bunch of third party storefront items. But even that, well, so this is where it gets really heady for me, right? Because I think like if Amazon has its way, the competition is everyone who sells anything in any way anywhere in the world right i would argue that is a reach but also if the ftc has its way it's like companies that allow other companies to set up storefronts inside of your storefront on the internet which is a much much smaller thing that amazon and to like a lesser extent walmart because walmart will sell third-party stuff but you can't really have a store on walmart.com in the same way that you can kind of have your own store on amazon.com so it's like that teeny tiny thing is probably too small because i don't know that like if you're a real person on the internet you're not thinking like oh i'm gonna go to the storefront on amazon.com you're just like shopping for things on amazon the answer seems to be i mean it's somewhere in the middle there but it does feel like even where like if you go 60 40 on one side or the other that's gonna end up being really important in this case yeah what are the competitors because the thing that i'm thinking of is etsy for example very small company in comparison like shopify sort of, but it's, it's a slightly different thing.

26:35Alibaba. Alibaba is a good one. Yeah. Instagram is setting up a bunch of like ways to buy products in like storefronts, which I guess are essentially people's accounts now. And then also like TikTok shop maybe, but that's like really, really new. So, you know, other than like, to think about like competitors, it's mostly, you know, these kind of smaller companies compared to like, I guess like meta stuff and like TikTok stuff, which is really still very nascent and not people. I'm not going to Instagram to buy things. And also then you add the whole distribution logistics chain that you mentioned, too, that really none of these competitors have that, that it's fairly unique.

27:15None of the small like meta and TikTok don't have that at this point. Right. The only company doing Amazon things is Amazon, which is, I suppose, a strength of the argument here, but also going to make it a challenge to figure out like who are we who else are we arguing about here is gonna be weird in this case whereas like at least google has one real honest to god like apples to apples competitor which is why the google trial has become so much about bing because like why isn't being good is like a central question but in a way you can't quite ask the same question about walmart and and get answers about amazon it's going to be very it's going to be very strange to see how we about this because there just isn't any company out there remotely like amazon anymore and we are also not even touching amazon's media business the fact that it runs prime which is its own very powerful player in its market yeah um like prime movies it has lord of the rings now right yeah there's like although that show sucks so i suspect that will not come up on anybody's side in this argument well there's the mgm acquisition yeah all these things to bolster prime like in a lot of ways it does seem like this goes back to like is this raising prices things like is the is the ongoing push and existence of prime good or bad for consumers is a big part of the question here and amazon has spent a long time being like it's cheap we keep giving you reasons to make it better and the ftc is going to be like no actually what it's doing is like building ever higher walled gardens through which it can screw both sellers and customers a solution to a problem it created essentially yeah right right and has made more and more expensive to solve over time Do we have any sense of the timeline on the Amazon trial?

28:51The Google thing took, what, almost three years to actually go to trial from that first complaint? Is that a roughly good guide for the Amazon one, do we think? Yeah, I think that's probably fair. Justice moves very slowly in this country on all fronts. But I do imagine it's going to be quite a bit of time. And while people interested, I think we just have to continue following it before we have like a gauge of when arguments could take place when things start. Right now, it's just it could be anyone's guess. We also don't really know what's going to end up going to trial. Like even the Google case that went to trial is somewhat subtly different than the one that was filed.

29:32Yeah, that's very true. Well, listen, as long as Project Nessie doesn't go away in this process, I'll be OK. OK, which is a cooler name, Project Nessie or Jedi Blue? They're both very good. But Project Nessie for something that is heavily redacted is perfect. Yeah. Like, it's the Sasquatch. Like, they should just have secret names for everything and then just redact them all. Like, that's what I would do. They all have cryptid names. All right. Thank you both very much for being here. We got to take a break. And then we're going to come back and talk about a very different trial, about a very different industry with very different stakes.

30:06It's crypto time, y 'all. We'll be right back.

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32:38Welcome back. As you're hearing this on Wednesday, it's day two of the trial against Sam Bankman Fried, who's better known as SPF and is also known as the former founder and CTO of FTX, which was for a while one of the hottest companies in crypto. It was huge. Now, of course, Crypto has taken a dive, and so have SPF's fortunes. And the two things have a lot to do with each other, actually. There are a lot of folks out there who think this trial, which is ostensibly just about SPF, is going to have huge ramifications for the whole crypto universe as new information comes out about how the industry actually works.

33:16It's a complicated trial and an important one. The Verge's Liz Lopato is covering it for us, and I suspect right this second she's probably in a courtroom. so we caught up a couple of days ago before things really got going. Hi, Liz. Hey, David. How's it going? Okay, so I realized I was prepping for this, and you and I have both been following this pretty closely for a long time. You, mercifully, more closely than I. You've hired tolerance for this nonsense than I do, I think. But I realized after all of the chaos of the last however many months it's been, I've sort of lost track of what Sam Bankman-Fried is actually on trial for.

33:53So in a weird way, let's just start at like absolute ground level here. I think there are a lot of layers and a lot of things to talk about. But like, what is this man actually being accused of and on trial for? Well, conveniently, David, I brought something to the recording. And it is a copy of the superseding indictment. So this is what he's on trial for. I love it. And there are seven counts in it. Okay. And they are wire fraud and conspiracy to commit wire fraud mostly. OK, so count one is wire fraud on the customers of FTX. Count two is conspiracy to commit wire fraud on the customers of FTX.

34:31Sure. This is pretty straightforward. And I just want to pause here and talk about how you prove this, because this is part of what's exciting. Part of it for wire fraud, you have to show the bank transfer happened. That's boring. But then you have to prove that people were defrauded, that Sam Bankman Freed knew he was lying to the customers of FTX. And so this is something where we might hear testimony from actual customers, you know, who are talking about what he told them. It's where we might talk about what he was saying in front of Congress is where we might talk about what he's you know, what the Super Bowl ad said.

35:04Those kinds of things are where this all comes into play. Right. And the sort of base underlying thing is that he used customers money, basically funneled it to this in his investment arm called Alameda. Was it Alameda Capital? Alameda Research. Alameda Research. But also used it to buy himself real estate and to make some investments. It's a straightforward, the accusations are straightforward. It's embezzlement. It's very old fashioned. See, this is why this is useful, because I feel like this is all, it all spins in so many directions about like the crypto industry and tax fraud and all this stuff.

35:35But ultimately, it is just like he used money that wasn't his to do things you're not allowed to do with money that isn't yours. It's like, it's pretty simple. OK. All right. So that's the first two. What else we got? So we have count three wire fraud on lenders to Alameda Research. So this is his crypto trading arm and they had borrowed money. And now the allegation is that he defrauded the people he borrowed money from. And then count four is conspiracy to commit wire fraud. Again, you see where this is going. You want to do it and then you do it. Yeah. Yeah. And then count five is conspiracy to commit securities fraud on investors of FTX.

36:09So that's different. And that's the one where we might see VC testimony. So the people who were investing were given bad information. Sam Beckman-Fried had reason to know it was bad information. That's the allegation, right? So you might see somebody step up on the stand and say, hey, this is what the documents that I got said. Here is what Sam said. And here's the due diligence we did. Here are our due diligence documents. And again, you have to prove that he knew what he was saying is wrong because like being an idiot isn't illegal. Right. So that's count five. And then we have count six, which is conspiracy to commit commodity fraud on customers of FTX.

36:47I'm seeing a trend here, Liz. Yeah. Well, we're going to get to the conspirators in a minute. And then count seven is conspiracy to commit money laundering. OK, so that's what that's what we're going to be hearing from. And part of the reason I wanted to go through those things specifically is that there's a bunch of other stuff that's going on around this. There are so many things going on. There's like an SEC lawsuit. There's a CFTC lawsuit. There's another trial, actually, that's going to be happening. It's scheduled for next March for a number of counts we aren't going to be hearing here. So I wanted to make sure we knew which counts we're dealing with, because some of the allegations around like campaign finance stuff, for instance, while they might show up in this trial, they are not the charges that are being brought against him here.

37:30Yeah. And you've kind of alluded to this, but one of the things I think is important and sort of complicated to understand is what's different about what happened at FTX versus what has happened in some of these other crypto messes we've talked about on this show over the years. And I think about like everything from, you know, the Luna debacle where a bunch of people lost a lot of money to like what happened with Axie Infinity where a bunch of people lost a lot of money. It seems like there's one thing that is like crypto gone bad. And that seems to have all gone, it kind of gone one direction.

38:01And this has gone a slightly different direction. Like how do you explain the difference between what all those things are where a lot of people lose a lot of money and what this has become? Oh, boy. So Terra Luna was a project that I think was badly conceived from the jump. And there were a number of people who predicted that that death spiral would happen in exactly the way that it did. And now there are, you know, also some allegations that are being brought against Do Kwan about, you know, the last I saw was that he might have been falsifying some trading. But as far as I know, and I'm saying this now, we may we may see something else in the future.

38:38As far as I know, Do Kwon did not tip his hand into the till and actually take money. OK. Right. And when you talk about like the various crypto failures of things like Three Arrows Capital, again, like they had loans that went bad and they couldn't make good on them. Sure. There's a difference between making bad bets and actually taking people's money. So like that's kind of what we're looking at. And there are people within the crypto industry, by the way, who are very happy to see Sam Bankman-Fried go down because they want they want the fraudsters out of the industry. They really do think that this is something that's big and real and important.

39:13And so clearing out all of the villains, if you will, is a positive for crypto. I think that they are a little confused about what the general public understands about crypto, because I think once you're in it, like there's a lot of stuff that there are a lot of subtleties and nuances. It's kind of like an onion, right? Like there's just always more down there. Yeah. But Sam Bankman Freed was really, really successful at marketing and really, really successful at promoting himself and really, really successful at making himself synonymous with crypto in the United States. He was the good guy. Like not only was he not the villain, he was like the disheveled good guy of crypto who like wasn't trying to sell you a bunch of nonsense.

39:51He was the other one. Right. And so that makes it a lot harder for anybody who says, hey, we want to be regulated because you know who else said that was Sam Bankman-Fried. Right. So there's like sort of a lot of a taint here, I think, for people who are not directly involved in crypto. And one of the sort of long term goals of crypto is, I think, to get a lot of people involved. And I think potentially, you know, this kind of trial and the associations with Sam Bankman Freed as a very public face of crypto could be bad for the entire industry as far as like recruiting new customers goes. Yeah, I was thinking about this.

40:24I rewatched the big short movie relatively recently. I love it very much. But there's this character in it, Michael Burry, who is like one of the first people to see that the housing crisis is coming and that the way we've propped up mortgage bonds is a disaster. And he is like the voice of reason. He's also like a maniac. And I had this moment of reading about Sam Bankman-Fried in the run-up to this trial, thinking he's both trying to be, like, the CEO of Goldman Sachs setting up these systems that are a disaster, and the Michael Burry saying, this is all a mess and is all going to come crashing down.

41:00He tried to do both of those things simultaneously and sort of play all sides, depending on who he's in a room talking to, and did it really well for a surprisingly long period of time. He was like, this is the future. Also, we need to be regulated. Also, it might be nothing, but it's possibly everything. And it worked until it didn't. Well, I have a couple thoughts about this. And then there's something that I've noticed when I explain crypto to people, which is I'll explain it to them and they'll say, oh, is that it? Is that all? And it's like, yeah, that's all. That is it. You know, and they think it must be much more complicated than it actually is.

41:36And there, you know, there are like a bunch of there's a bunch of complicated math in there, you know, but conceptually, it's actually not that difficult to understand. And so as soon as you explain like an NFT to people, they're like, but I thought I thought this was supposed to be sophisticated. It's like, well, the math is sophisticated. The programming is sophisticated, but like the concept pretty simple. And I think one of the things that people like Sam Beckman-Fried really benefit from is this assumption of technical complexity and that if you think it sounds, you know, half-baked, maybe it's just that you don't understand it.

42:09Maybe you're just not smart enough to understand it. And Bankman-Fried's background as somebody who went to MIT, worked on Jane Street, you know, MathWiz, makes it easy to sell something like that. Part of what's really striking to me about all of this is actually running the casino is a pretty profitable business. And if he had just run FTX and like let Alameda fail, I think he would be fine. The problem here is that he wanted to prop up Alameda Research, which was the reason he founded FTX in the first place. Like if you go back to that profile from Sequoia Capital that they deleted because it was so embarrassing.

42:47But don't worry, it's on the Internet Archive. You can go read it. He talks about other exchanges being rickety and Alameda having losses because the exchanges weren't good enough. And so he wanted to build an exchange that was good enough for what he wanted to do. And again, you know, there are moments in that profile where the VCs are like, well, we assumed he wouldn't need money, but here he is. And it's like, that's an alarm bell for me right there. You know, there might be a good reason to go get VC money, even if you don't need it, just because it lets you expand faster, for instance, lets you do more things.

43:19But in retrospect, that does seem like a striking thing in the profile where they're like, oh, we assumed he was just minting money hand over fist. But here he is asking us for some. Hmm. And, you know, if you read the SEC complaint, they say FTX was a fraud from the jump that like from the very beginning, you know, customer funds were being misallocated. And so I'm partially curious to know sort of like the timeline of all of this, because the way that FTX was exposed was particularly chaotic. Yes. And we found out about the misappropriated customer funds after a different kind of chaos that is not on trial.

43:56Explain that really quickly. And then let's, again, there are many more tentacles of this story that are going to come out over time. But I do think that part is important because you're right. It's not on trial, but it is like central to what happened to FTX. So just explain that chaos real fast. Sure. So Coindesk gets a hold of Alameda Research's balance sheet. And the balance sheet is weird. It's the easiest way to put it. But there's an awful lot of this token, FTT, that's minted by FTX, that's propping up the balance sheet and backing up their loans. That's like if Sephora were to go out and get loans based on the beauty insider points, which they determine the value of.

44:35That's a good example. I like that. Yeah. And so there's something weird happening here. And Sam Bank-Midfried has a long-running rivalry with the head of Binance, CZ. And CZ happens to have a lot of FTT tokens because CZ was an early investor in FTX and Sam bought him out and gave him FTT tokens to do it. And so CZ essentially announced he's going to dump his tokens. And at that point, the market panics. And so people, there's a run. People are trying to get their money out. They're, you know, dumping tokens left, right and center. FTX is like, we're up for sale. Binance is like, oh, we'll buy you.

45:11And then Binance, like after a day is like, just kidding, we're not buying this. And then after that, there's bankruptcy. And it's in this period of time post bankruptcy that these details start to emerge that get weirder. You know, like the sort of like funky accounting of valuing yourself by a token that you get to assign the value of yourself. Like that's not great in and of itself. But the customer funds stuff that comes up afterwards where it's like there's this hideous balance sheet of terrors that the Financial Times gets a hold of. Like, it's still up there. Like, if you want to go look at that terrible spreadsheet, like it gives me panic attacks.

45:50But like, go look. There's, you know, just like a hole. There's an eight billion dollar hole. Billion with a B. That's when everybody was sort of like, OK, well, where's the money? Where's the money, Lebowski? Well, and so this is where the FTX trial and this sort of relatively specific set of allegations against Sam Bankman-Fried becomes the trial about crypto. Right. And you wrote a sort of run up to the trial, getting at a lot of this, that there is a there is a sense in the industry that actually what's about to happen is a lot of evidence is going to be introduced and a lot of testimony is going to be given not just about Sam, but about the crypto world.

46:31And this is both a it seems like both a prosecution tactic and a defense tactic is to basically make the whole crypto world look really, really, really, really bad. Yeah, that's right. I think there is a lot of danger here without knowing the specifics of what's going to be said. We're going to find out during opening arguments. What we've got is an offshore exchange that is doing something that would be illegal in the United States. You can't run both your own trading firm and your own exchange. Like that's an obvious conflict of interest. Right. We have laws about that. Yeah. It turns out. Yeah.

47:04So it's in the Bahamas. So and, you know, as we ran through the charges, I think it's worth thinking about what kind of evidence it takes to prove each one of these charges. Like there's the boring part where you show the wire transfer happened like that's going to happen. Sure. There's like some chain of custody stuff about like text messages, also boring, but that has to go in the record. But then it's like you have to demonstrate what was actually said by Sam Bankman Freed and what Sam Bankman Freed knew. And those might be two entirely different things. And so you think about like, OK, what kinds of text messages were there?

47:36What was going on in Slack? What conversations were happening? We know that there are a couple of his co-conspirators who pled guilty and are cooperating will most likely testify, including his ex-girlfriend, Carolyn Ellison, who was one of the CEOs of Alameda Research, you know. Who was in a position to know everything about what happened here. Exactly. And there is a recording of her contemporaneously explaining what happened. Like, you can say you can make an argument maybe to try to take her down. Oh, well, you know, she's trying to pin it all on Sam because she wants an easier sentence. But like, if you have that contemporaneous evidence of her explaining what happened, that's a much harder thing to make.

48:17You can't make it stick if she said it before she thought she was going to get caught, you know? So there's a lot of stuff that is going on that I think we could potentially hear about. But one of the things that I want everybody to sort of remember, because there are so many moving parts in this case that it's easy to get lost, is that right before Sam Bankman Freed was arrested in the Bahamas, he was going to testify before Congress. And we had his prepared testimony, which included a group chat of crypto exchanges where he was being, you know, sort of scolded by CZ. And I wonder, one, if we're going to see more of those exchanges, especially brought in by the defense.

48:57and two, what they will say. Because, you know, this is the sort of thing where, like, I don't think it's unusual for crypto exchanges to have conversations with each other. I'm sure that happens all the time. Sure. If only because, you know, everybody's trying to be like, OK, so what's the SEC going to do next? But, like, I am interested in, you know, what kinds of evidence might be brought forward potentially either to try to get the not guilty verdict or to try to get Sam a lighter sentence, because you have to keep in mind the defense is doing about three things at once. First and foremost, they want him not guilty.

49:33Sure. But should that fail, they second want to make sure that sentencing is relatively light and third want grounds for appeals. So that means there's a bunch of evidence that they're going to be stuffing the record with that may not necessarily be directly relevant to the verdict itself, but might, for instance, be helpful for those other two goals. okay and it seems like if you're his defense the only two moves i can think of are you either have to make the case that he didn't know what was going on like you said that being an idiot is not illegal and so they either have to make the he's just sort of a dumb figurehead case or make the everybody in crypto is a con man sam's not worse than everybody else case is there a is there a third version of the defense that you've heard about?

50:20Yeah. So one of the things that that sort of a joke and white collar crime is either you're too small to be responsible or you're too big to be responsible. And yeah, there you go. You're too far down the food chain to be responsible for the crime or you're so high up the food chain. You had no idea it happened. Right. He's like, I'm hobnobbing with Democratic hopefuls. How could I possibly have known what was going on? That's right. Yeah. So I expect that we're going to get the he was he was too far up the food chain to know the specifics of what happened. But I also think that based on the reporting I've seen, there's going to be an advice of counsel defense.

50:53He's basically going to say that he's going to throw his lawyers under the bus. He's going to say the lawyers told me that this was the best way to do things. So I did it their way. I don't know how much water that's going to hold. I'm very curious about what kind of evidence you might present in order to make that defense, particularly because there seems to be a lot, just like a mountain of evidence here in terms of like chats and recordings and press, you know, moments in the press, all of these things, just a mountain of stuff that he said. So I'm very curious about what could possibly be brought forward in order to show that he was acting at the advice of counsel, that he was doing what his lawyers told him to do and it wasn't his fault.

51:35Just from a trial perspective itself, How do you think this is going to compare to, say, the Elizabeth Holmes trial, which you also covered very closely? That one was just like a nonstop spectacle, right? There were people cosplaying as Elizabeth Holmes outside of the courthouse. Do you think this one's going to be sort of a show in the same way? I honestly have no idea. I think there are going to be a lot of people from the crypto industry who are going to pop by to watch. I've certainly spoken with people who've expressed an interest in doing so, just out of curiosity, in the same way that, like, you know, I think a lot of us are very curious about this.

52:10Certainly, I am curious. That's why I'm going. One of the things that I'm interested in is, you know, with a lot of the sort of like crypto bankruptcy proceedings, there are investors who show up. And so I'm curious if we're going to see people who are FTX customers who are going to show up to see what happens. And, you know, the other thing that's like worth keeping in mind here is we've been talking about the sort of boring financial side of all of this. But there is this salacious human element that I am now going to talk about, because I think that's one of the things that people are really interested in.

52:39You know, questions about recreational drug use. a lot of the people within FTX were dating each other. I mean, Carolyn Ellison is Sam Beckman-Fried's ex-girlfriend, you know, and like someone who is likely to testify and who has already pled guilty is his childhood friend from map camp. Like, there's some operatic stuff going on. So I think that there's like, I don't know if we're going to see necessarily people showing up dressed as Sam Beckman-Fried or in FTX gear, although we might, who knows. But I do think that there is a very, very high likelihood of like real fireworks, because if you think about like, David, you've worked at a startup, too.

53:16If you think about what people are like when you're working at startups, like especially because you're working these long hours and everybody's in their 20s and like you don't know what you're doing. It's just just the case. There are shenanigans and these are shenanigans that are now going to be in the courtroom. And so, like, you can imagine in an attempt to discredit a witness, you might bring up some dumb stuff they did in the office. Yeah. Or in an effort to discredit the defendant, you might bring up a lot of their own personal shenanigans. And I do. I think you're right that there were a lot.

53:45There are a lot of shenanigans we know about, because especially like since the man went on house arrest, he has he had the most public house arrest of all time and just happily told anyone who asked about all the shenanigans going on and going on at FTX. And yeah, I have a feeling there is a lot more to come. How long is this trial supposed to be? It's scheduled for about five weeks. It may run a little longer, a little shorter, but I will be in New York City for all of October in the first couple of weeks in November. I'm actually turning 40 while I'm there. Ah, happy almost birthday. Thank you.

54:15Tell Sam that he hosts you. This is how I'm celebrating. Yeah, it feels very fitting for you as actually is how to celebrate your birthday. This feels right. But yeah, you know, I think that there's a lot to come and I really can't wait to find out what kind of evidence I'm going to see, because, you know, there's a lot of stuff that as a reporter, I just love being in other people's business. I'm a huge gossip. Like, that's just the truth of the matter. Like, I was that before I was a reporter. I grew up in a small town. Gossip was a contact sport. Like, this is like a game I love. And the government can get a hold of so much more juicy info than I can.

54:51Like, I would love to see the due diligence that Sequoia did. Like, I would love it. I never get to see that stuff. So this is the kind of thing that I'm really hyped for. It is a really underrated thing. I had this experience being in the courtroom for USV Google for a couple of the sort of bigger named people. The people who, A, never meet with reporters most of the time. Sam Bankman-Fried is sort of unusual in that he loved talking to reporters. But most of the time, these people either never tell the truth or never meet with reporters in general. But just watching them sit there and it's like, oh, they have to tell the truth now and they have to say it out loud.

55:26And I get to just sit here and listen to it. It's the best. It rules. Sometimes it's very boring and procedural and it takes a long time, but eventually they have to answer the question and it's kind of great. All right. Well, we're going to check in a bunch over the course of this trial. Like you said, it's it's long. I suspect if I had to guess, I would say it's going to kind of ebb and flow. There's going to be a lot of really wonky talk about how money moves around. But then we're going to get a lot of shenanigans and we're going to check in on both of those things. I'll tell you what, David, because I don't know how many of our listeners are aware of like the sort of the reporting that goes on.

55:59But because there's a limited amount of people that just a limited physical number of bodies that can fit in that courtroom. I'm usually like for something like this, I'm going to be standing outside at like an unholy hour in the morning. And so if there are shenanigans, I have some time where I'm doing nothing standing on the streets of New York City. And so, yes, I will be calling in. You'll get to hear the cell phone report. This is what I like to hear. All right. Thanks, Liz. We'll talk to you soon. All right. Bye, David. All right. We got to take one more break and then we're going to get to the Verticast hotline.

56:28We'll be right back.

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59:11Welcome back. Let's answer a question from the Vergecast hotline, as we do on this show every week. As a reminder, the hotline number is 866-VERGE-11. Call and ask us all of your best tech questions. No question too big, no question too weird. The weirder the better, if I'm being honest with you. We've gotten some amazing questions recently. Thank you for all of your most bonkers thoughts about all things technology. Oh, and if you don't want to call or can't, you can always email us, vergecast at theverge.com. That works just as well. Today's question comes from Zach. Hi, this is Zach. I'm in Milwaukee, Wisconsin.

59:46My daughter is a voracious reader. Very proud dad. That also means she just goes through tons of library books. Basically, anytime we go to a bookstore, she's picking up something. I kind of don't know where to go as far as an electronic reader. This feels like a really natural holiday gift, but do I just go for the iPad because it's got the most access to apps, especially things like Hoopla, things that work with the local library system? I don't want to really get super locked into an ecosystem. But on the other hand, like if you go with the e-ink, it's not going to be used for anything else.

1:00:20It's just going to be for reading, but then it doesn't have access to those library apps. And we're kind of back to square one spending, you know, 10 to 15 dollars for every single book, especially books you will read once. I don't know what the correct answer is. So light up the crayon signal and give me the best information you've got. Thanks. Bye. Ask and you shall receive. We lit up the crayon signal. Alex Kranz is here. Hi, Alex. Hi. Oh, my God. This is a great question. Right. There are so many layers to this question in ways that I find so very interesting. So let me just try and like lay the land for you here and see if you think about this the way that I do.

1:01:00Okay. There's like a hardware and a software question here. I think we can immediately rule out buying a Kindle. Yes. Because we don't want to be tethered to one ecosystem. Right? Fair? Yeah. Good on that? Okay. So I think we're basically in one of three places now. We can either tell our buddies Zach to buy an iPad. We can tell our friends Zach to buy a different e-ink e-book reader, which is, I know you're going to have several thoughts about certain brands that may or may not exist in America, but are possible to find. Or you can buy a different Android tablet. Those seem like the three categories.

1:01:33Am I missing anything? I think that's exactly right. Because the Kindle, Kindle can work with some libraries, but it only works with Libby and Overdrive. And that's not like the only library ecosystem out there. And it's also kind of wacky and complicated. And yeah, Yeah, they just haven't done a good job of that. For kids, like it's very involved. And Kobo is kind of built itself as like, oh, you can use it for your library books and all these other kinds of reading. Like I think it's got Pocket built in or used to. It's also not really great because, again, it's really limited to overdrive. And otherwise you're going to be like teaching your daughter how to sideload stuff.

1:02:10And that is a great skill she should have. Like I highly encourage you doing that. I don't know if this is the time you want to do that. Yeah. So I don't want to get into your parenting like you teach your kids to sideload whenever feels right to you. Yeah, that's a very personal moment for you and your daughter. So, yeah, it really is like, OK, do you want to go iPad? And, you know, it's more likely to she can crack it and break it and make it more difficult to use a lot easier than a lot of other devices. But it is very, very flexible. But also, like, you could catch her playing Roblox on it or watching YouTube.

1:02:42Like, there's a lot of things that could happen there. Or you can go with something like probably the best brand. And I've mentioned it a bunch of times on the show. And David already knows what I'm going to say, which is books. B-O-O-X, we should say. B-O-O-X. And they're probably the best at Android e-ink tablets. I'm a little hesitant to say go that route just because she is a child. And it can be a little complicated. And so you will probably still have to teach her the sideloading situation. But also a whole bunch of other things. And like, if you want your daughter to be really, really understanding of how technology works, the books is the best way to go.

1:03:20If you don't want to also be participating in that educational activity, the iPad or like an Android tablet, like a traditional Android tablet feels right. Yeah, my heart wants books to be the answer. Because in theory, that combination of it's almost exclusively a reading device, but I also need all the other apps because there are lots of places you read, not just in the one ebook system. Right. Like, yes. What an incredibly common use case that no one has fixed. I want books to be the answer, but I do agree. I think for most people, the books version of Android is just like somewhere between one and five ticks too complicated to really work.

1:04:01I'm using like the most recent color one and it's got the most recent software on it. Night and day difference in onboarding versus, yeah, like the Google Play Store is built in now. So you can just start using the Google Play Store, whereas before you would have had to teach your daughter about patience and waiting for 24 hours for Google to register the device after you register it. Now you can just start using it. So it has improved a lot. And there's some pretty affordable ones. There's some, I think like the Pokey 3 is like$150 maybe. It's a little more affordable. I definitely would look into it and have a serious conversation with yourself on how much you are willing to troubleshoot things.

1:04:46Because I think it's still going to require it. Even with a software update, there's still going to be more handholding than with an iPad. But it's probably going to get you closer to that experience you're looking for. So yeah, it just depends on how often you want to have to answer tech questions for your daughter. Fair. Can I throw one wrench in here that I am not 100 % sure I think is a good idea, but I think might be a good idea, which is one of Amazon's tablets my hesitation with all tablets whether they run android or ios is that they have all the apps that's true but buying stuff on those devices is a gigantic pain in the ass because of the way that google and apple run those platforms you can't buy kindle books in the kindle app you know where you can buy kindle books in the kindle app and buy other things in other apps is on the fire tablets and those tablets aren't like amazing hardware but like the the fire hd plus eight inch has a decent screen it's pretty rough and tumble you're not really going to break it if you beat it up they make a kid's version that's even more rugged and it's 70 like i cannot explain enough how much more expensive every other tablet is this one is not a great tablet but if if truly all you want is a reading device this feels like it might be enough it might be i think you'd have to double check on what apps will work with it because it's still like amazon's thing and they want you to buy their books, they might make it difficult.

1:06:11I don't know the state of the Libby app on a Fire tablet or the Hoopla or whatever. So you probably would need to do just a touch of research there because I haven't used one in a little bit. It's definitely significantly more open than the Kindle, but significantly less open than full Android. You're still getting Amazon spin on Android. That's definitely true. Yeah. But if it's got the apps, it's probably like the most affordable and like easiest to use of it. It just requires like quadruple checking that the app is available for it. Also, it's like a hundred bucks and easy to return. So if you get it and it doesn't work, return it, buy books, buy an iPad and you'll be happy.

1:06:50Yeah. I will say, I think we're probably aligned on this one that like, if money is no object and you're not worried about like breaking the thing, the iPad mini is the correct answer, right? It is like objectively the best device of all these devices. Yeah, I try to switch between my e-reader and my iPad mini a lot. And I oftentimes will find my iPad mini just does more stuff. So I use it more. But I love having my e-reader. I love being able to read it outside. I love it for just focus. And I think for a kid, that might actually be a good thing in some cases, right? They got to focus on the reading and not just go off on a tear being like, I wonder...

1:07:27When you read a chapter in a book and you're like, oh, that's interesting. And you immediately go Google it on your iPad. That's easy on your on your e-reader. You have to wait and do it later. And that's kind of nice because then you just keep reading. Right. Yeah. It's either a feature or a bug, depending on how you look at it. And I think that has a lot to do with it. So I think we're relying on that. I would say if you're feeling ambitious, Zach, buy a books device, see how it feels. My sense would be it will immediately be obvious to you if it's more and more work than you want, right? Like you're going to take the thing out of the box, turn it on and immediately just be like, nope.

1:08:02Or you're going to be like, oh, this solves all my problems, right? That's that seems it will not be unclear. I wouldn't think. Yeah, it will not be unclear. You're going to know really, really quickly. And generally speaking, the new the new operating system, the new version they've rolled out has been really, really good. They're very good about like getting the latest version of Android on things. You just can't use 70 % of Android because it's not meant for a black and white tablet. So you can watch YouTube on it. Don't. Yeah, it's a specific kind of torture trying to watch YouTube on a device like that.

1:08:34So my other question for you is, where do you buy your ebooks? I realized in prepping for this that I accidentally just became sort of Amazon exclusive. Like a million years ago, I loved the Kindle and had a bunch of Kindle books. And now that's where all my books are. So I have kept buying Kindle books. And like, am I here to tell you that the Caliber app exists and does a really good job of stripping DRM from your Kindle books so that you can use them on other devices? No, that's not what I'm here to tell you. It's true. And the app is free and open source and it strips DRM from all your eBooks so you can use them on other devices.

1:09:04But that's not the point. My question for you is where do you get your eBooks if not from Amazon? I originally started with Nook and then I found Caliber and made the switch to Amazon and took my whole Nook library with me, which was really, really nice. And then I was at Amazon for a while. And then I was like, I feel weird being in this one ecosystem. So I switched back to Nook and brought all my books back via Calibre. And so now I'm usually like, I tend to go Nook, but I've got a couple of like, there's ebooks.com. There's a couple of other ones. And I'll kind of look around because sometimes the selection is different.

1:09:38And honestly, Amazon has a ton of books. It's gotten so big with self-publishing that a lot of like self-published books, Somebody will say, oh, you got to read this. It's really good. It's only available at Amazon, which is super frustrating. And also sometimes I'll just buy it directly from the publisher and the author gets more money that way. So that's if you really are supporting an author, buying it directly from their publisher, if available, best way to buy the books. Yeah. And you can usually if you know what you want to buy, if you just Google the title and e-book, you can pretty quickly find that publisher website usually and get the book that way.

1:10:12That's a good trick. What I wish existed, like bookshop.org, which is this amazing website for buying physical books from like actual bookstores that are better citizens of the publishing world than your Amazons. I love that website. And I wish something like it existed for e-books. It feels like e-books.com is like kind of that, but not quite. E-books.com is kind of doing that. Libro FM does that, but it's almost exclusively audiobooks. I spend like$15 a month there and it gives me one book credit and that's nice. And I know I'm supporting an author and I'm supporting my local bookstore. Like, feels great.

1:10:48You can also find your local bookstores. A lot of them actually will have partnerships with booksellers online and be like, oh, yeah, you can go here and buy any e-book from us at this. They often will have garbage websites. But if you want to support your local bookstore, that's the way to do it. It just unfortunately requires more work than logging into Amazon. The only thing I would add to your list of websites, which is very good, and I just am going to go sign up for Libro FM right now, is there's this website called BookBub, B-O-O-K-B-U-B dot com. And its whole thing is just spectacular deals on e-books from around the Internet.

1:11:22And so it's like not a place to go if you're like, I want to read this specific brand new book. But if you're just like, I like spy novels, let me know when I can get a spy novel for$1.99 as an e-book. They send emails and it has become my like most quickly clicked email every week because it's just nonstop ebook deals. And it's great. And I use it all the time. So highly recommend. I'm doing that as soon as we're done with this podcast. I think we've helped, right? This feels, Zach, let us know what you end up doing. I think your instincts are good. And if you buy a books and you love it, it will warm Alex's heart.

1:11:57So let us know. It will. It will. Alex, thank you. Appreciate it as always. Always.

1:12:05All right, that's it for The Verge Cast today. Thanks to everybody who came on the show today. And thank you, as always, for listening. As ever, there is lots more from everything we talked about at TheVerge.com. We're covering all of these trials pretty closely. So we'll put some links in the show notes, but also we're posting all over TheVerge.com as everything happens. So keep an eye on the website. Also, if you have thoughts, questions, feelings, or tips on how to improve my handwriting, because I'm not allowed to have electronics in the courtroom, you can always email us at VergeCast at TheVerge.com.

1:12:32Or keep calling the hotline. 866-VERGE11. We love hearing from you. Send us all your thoughts and questions and ideas for what we should do on the show. We do at least one hotline question every week, so please keep them coming. This show is produced by Andrew Marino and Liam James. Brooke Minters is our editorial director of audio. Vergecast is Verge production and part of the Vox Media Podcast Network. Mealai, Alex, and I will be back on Friday to talk about the Pixel event, the Sphere in Vegas, the sad fate of the$17 ,000 Apple Watch, and all of the rest of this week's tech news. We'll see you then.

1:13:03Rock and roll.

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