← On the Media
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- [00:00]
Brooke Gladstone
On this week's on the media, where art, Internet culture and money converge. Some see a bull market, others see bull. Charlie bit me.
- [00:11]
Charlie
Ow.
- [00:12]
Brooke Gladstone
This famous viral video has been auctioned off overnight as a non fungible token or an nft.
- [00:20]
Anil Dash
I do not pretend that most of the art being traded as NFTs is the Mona Lisa.
- [00:25]
Kevin McCoy
That's the kind of thing in crypto. Sometimes it's like the dumber the investment, the better it is.
- [00:29]
Charlie
Why is that?
- [00:30]
Kevin McCoy
Because the community is around sor of flexing. It's the more useless thing you can throw your money at. Like the bigger status symbol it is.
- [00:37]
Anil Dash
We could say the bubble will burst as they inevitably do, but NFTs are already too big to fail.
- [00:42]
Carlos Matos
You know, you can call it a scam all you want, but at the end of the day, here's how a market works. If you buy something and somebody's willing to pay more for it than you, then you can make money.
- [00:52]
Brooke Gladstone
A much needed primer on the world of NFTs. Coming up.
- [01:01]
Mary Harris
The election has come and gone. Now we're in a new era. It can be easy to get discouraged, frustrated. But you can't afford not to pay attention. You need trustworthy independent journalism to cut through the noise and hold power to account. I'm Mary Harris, host of what next from slate.com. we are a Daily news podcast with a kind of transparent, smart, yet tongue in cheek analysis you can only find at Slate. Follow and listen to what Next wherever you get your podcasts.
- [01:32]
Brooke Gladstone
From WNYC in New York, this is on the Media. I'm Brooke Gladstone. 21 months into the pandemic, the economy is recovering in a way that can only be called uneven.
- [01:44]
Anil Dash
The global supply chain crisis continues to slow the economic recovery from the pandemic and is threatening to continue into next year.
- [01:52]
Brooke Gladstone
The Federal Bureau of Labor Statistics reported.
- [01:55]
Anil Dash
This week that 4.3 million US workers.
- [01:59]
Brooke Gladstone
Quit their jobs in August. That's the highest number of out now.
- [02:02]
Anil Dash
Job quits since the tracking started way back in 2001. Today's economic reports showing unemployment continued to fall, but consumer prices remain too high. Tell us the American people in the midst of this economic crisis, the recovery is showing strong results, but not to them.
- [02:21]
Michael Loewenger
They're still looking out there.
- [02:22]
Anil Dash
Everything from a gallon of gas to a loaf of bread costs more. And it's worrisome.
- [02:27]
Brooke Gladstone
Amid it all, one sector's doing smashing, speedingly, gobsmackingly. Well, let's talk crypto.
- [02:34]
Anil Dash
The market now worth more than $3 trillion.
- [02:36]
Michael Loewenger
We understand Bitcoin.
- [02:37]
Anil Dash
Well, if you didn't think it could go any higher. Think again. If you think you've missed the boat. Guess what? Might not be too late. We got Bitcoin and Ethereum at record highs. We even have the laggards. Litecoin up 22%.
- [02:49]
Charlie
Tim Cook says he's a crypto investor.
- [02:51]
Brooke Gladstone
And Apple is looking into digital currency features. Yes, it's crypto season again, and this time local politicians are staking their claim as leaders of this brand new future.
- [03:04]
Anil Dash
Miami's mayor is betting big on a growing tech community and especially crypto, even announcing the city's own cryptocurrency a few weeks ago.
- [03:12]
Brooke Gladstone
Miami Coin Incoming New York City Mayor Eric Adams wants schools to start teaching students about cryptocurrency after vowing to take his first three paychecks in bitcoin. Even the animal kingdom's getting in on the game. Like Mr. Gox, a hamster who some months ago was outperforming the S and P. Really?
- [03:32]
Anil Dash
We don't know who Mr. Gox human handler is, but we do know where he makes his trades. The Gox box. It's rigged to automatically trade crypto. Then it can enter either of the tunnels, the decision tunnels. Buy or sell.
- [03:48]
Brooke Gladstone
Amid this crypto feeding frenzy, one form of accumulation stands apart from the rest.
- [03:55]
Anil Dash
NFTs. They're non fungal toenails or naked flag.
- [03:59]
Charlie
Tricks or non fungible tokens.
- [04:03]
Carlos Matos
Whatever they are, everyone is talking about it now.
- [04:07]
Brooke Gladstone
What the hell's an nft?
- [04:09]
Anil Dash
Apparently, cryptocurrency.
- [04:11]
Charlie
Everyone's making so much money.
- [04:13]
Carlos Matos
Can you please explain what's an NFT?
- [04:15]
Charlie
I said what the hell's.
- [04:17]
Brooke Gladstone
Actually, NFTs are unique units of data that can be linked to images and other types of media for purchase.
- [04:25]
Mary Harris
Right now, NFTs are very much focused on art.
- [04:28]
Brooke Gladstone
Last week, a buzzy conference all about NFTs came to New York and the city's tech journalists poured in. At the Times, journalist Kevin Roose met a crypto enthusiast who likened the event called NFT NYC to Woodstock. We sent our correspondent Michael Oinger, and you'll hear from him later. But first, how did the non fungible token ever come to be? He may feel ambivalent about his invention, but it all begins with Anil Dash, who today is the CEO of the tech company Glitch, and his collaborator, artist Kevin McCoy. Welcome back to the show, Anil.
- [05:09]
Anil Dash
Thank you so much for having me.
- [05:10]
Brooke Gladstone
Speak to me of how NFTs came to pass and your role as progenitor. Start at 2014. The event called 7 on 7 that annually connects artists and technologists to spark new ideas. You were paired with artist Kevin McCoy. What was the problem you aimed to solve?
- [05:32]
Anil Dash
Both Kevin and I had been poking around the edges of this idea of digital ownership. Kevin's motivation? He and his wife Jennifer are very accomplished artists and their work's been exhibited everywhere. And they have collectors very interested in their work. And so they had a very visceral need for when you make digital art, how do you transfer ownership to a collector and say, this is the original that you have?
- [05:53]
Brooke Gladstone
They were getting ripped off.
- [05:54]
Anil Dash
Well, I think they were worried about it. They also wanted to make sure that collectors who bought their work felt like they got a real value. It wasn't just something that somebody's just going to reblog this on Tumblr and then the work isn't original anymore. And so it was a real concern. I've long been interested in equity and ownership, especially in digital space, especially for creators and artists. The big deal auction world was not something I knew really much about until the consultancy I worked with had started working with some of the big ones. And I learned how much they very earnestly cared about provenance and title and ownership and whether it was all the way traceable back to the original creator. They had been thinking about these problems for hundreds of years.
- [06:32]
Brooke Gladstone
So you came up with your idea with McCoy in the wee small hours of the morning?
- [06:38]
Anil Dash
Yeah, yeah. They have what's called a hackathon where you're supposed to stay up all night coding or something. And the truth of it is we're both middle aged dads. So at that point we put a couple hours in and we got something working and we were both like, okay, we're going to go home, go to bed and we'll pick this up in the morning. And it was pretty amazing because we realized that all the pieces had been laid out there and all the technology was available.
- [06:59]
Brooke Gladstone
So what was it?
- [07:00]
Anil Dash
Well, blockchain had already been hyped within tech circles at that point.
- [07:04]
Brooke Gladstone
What I understand a blockchain to be is a kind of technology of record keeping for facilitating cryptocurrency transactions.
- [07:14]
Anil Dash
It could do some things that systems that came before couldn't. And primary among them was conceivably it could certify that a certain digital work was unique, was original.
- [07:25]
Brooke Gladstone
The whole point with blockchain is you have a copy of the same verifiable record, you know that something is real and not forged, right?
- [07:34]
Anil Dash
Yeah. If everybody had a copy of the same spreadsheet and you could verify that any change was made was made in all of them. Then one of the things you could do is you could keep track of art in there and say, this is this original artwork, this is who made it and this is who owns it. The idea was to use a blockchain called Namecoin, which is similar to Bitcoin that everybody's heard of. But the thing about Namecoin is it had a little bit more room to store information, including information like, hey, here's the original location of this artwork and who owns it. And so they gave us just enough space to work with and we made a system where you could take an image and the first image was actually art that Kevin and Jennifer McCoy had created.
- [08:11]
Brooke Gladstone
You bought it?
- [08:12]
Anil Dash
Yeah, I did. So as I said, the next day, after we'd gotten the code working, we did a demo. And during that demonstration, since Kevin had made it, I was buying it and I actually gave him $4 in cash out of my wallet. That's all I had. He said, now you own this. And we transferred the title on the blockchain. And that was what I've been told later, very inspiring to a lot of folks.
- [08:33]
Brooke Gladstone
You didn't call it a non fungible token.
- [08:35]
Anil Dash
No.
- [08:36]
Brooke Gladstone
You called it a monetized graphic or a monograph.
- [08:40]
Anil Dash
It was a bit of an ironic name, which hasn't probably aged as well as I'd hoped. It was this tongue in cheek thing of like no artist would ever call selling their work monetizing their graphics. It was deliberately absurd. Of course, as soon as the tech people started hearing about it at the tech conference we went to the next week, they were like, sure, monetize your graphics.
- [08:58]
Brooke Gladstone
Not funny.
- [08:59]
Anil Dash
Yeah, exactly. Just very straight facedly. And to his great credit, Kevin took the idea and ran with it and actually built a company and a product and a platform around that over the following years.
- [09:09]
Brooke Gladstone
For most of us normal folks, the digital elephant in the room is the fact that you are trying to create a form of ownership for digital properties, digital art, but anybody who wants to can just save a picture identical to the one that you have claimed is the first one and the one that you own.
- [09:34]
Anil Dash
Yeah, well, I recently bought a photo print from an artist I love and the original was actually a digital photo. But because it was the artist and I got the certificate of authenticity and got it framed at the gallery that I sold it from, it was a lot more expensive than it would have been had I just printed that thing off of a website. Right.
- [09:52]
Brooke Gladstone
I've paid a pretty penny for digital photographs. They're beautifully printed.
- [09:58]
Anil Dash
But conceivably you could have done that on your own. You could have taken the original photo file and printed it yourself.
- [10:03]
Brooke Gladstone
I didn't have it, but I take your point.
- [10:05]
Anil Dash
This is the thing that today's NFT advocates talk about a lot, which is even if you made a picture pixel perfect copy of the Mona Lisa, it doesn't mean anything because the original has social, cultural, historical value. Now, I do not pretend that most of the art being traded as NFTs is the Mona Lisa. A lot of it is deliberately not supposed to be pushing the boundaries artistically. But we have consensus that art has value because of context and because of community and because we've sort of agreed that it does. And I think a lot of the NFT advocates are advocating the same. They're sort of saying we're not deluded, that you can't just go and make a digital copy of this file. But the fact that one of those, that first original before it was copied, can be verified as being owned through this system confers some kind of value. It gives some kind of uniqueness. The others are all copies that are the same. This one has been tied in this way to the blockchain. And as someone who collects art, that makes sense to me.
- [11:04]
Brooke Gladstone
You had written off your project of making verifiably unique digital artworks as a footnote in Internet history. You never even patented it. But in 2021, it's now called Non Fungible tokens.
- [11:20]
Anil Dash
Non Fungible token. As a name, it's not something I would ever come up with. It came out of a very technical discussion of people on a particular blockchain called Ethereum.
- [11:29]
Brooke Gladstone
The word art is completely extirpated.
- [11:32]
Anil Dash
That's right. The fact that it got applied as almost a brand name to the art trading on it is awful. It's bad for artists because it's hard to understand. I think it's been used to exoticize this for consumers so they feel like it's a little more magical than it is. And I would rather they'd pick something mundane and functional as a name. But, you know, that ship's already sailed. But I think if you give it an exotic technical name, that makes people feel like, I can't possibly understand this, that lets you sort of pull the wool over their eyes around some of the dynamics around it.
- [12:02]
Brooke Gladstone
We saw that in the run up to the 2008 crash.
- [12:05]
Anil Dash
Yeah. Or the dot com bubble in the 2000s. The other thing is, as will always happen in a new technology, there are these opportunists who came in and have made copies of art that succeeded, that actually was connected to people in the community where they sort of said, well, it's really popular to do pixel art of animals and what they call generative art, which is machine made art. And I love generative art. I have collected pixel art pieces. This is something I've cared about for many, many years and funded the work of. I don't think most of the people buying cloned generative art in the NFT world are in dialogue with decades of pixel art that came before. I think they're seeing these as assets that they hope appreciate it's a financial instrument.
- [12:47]
Brooke Gladstone
The art market in general has long headed in that direction. Lots of people take art and put it in a warehouse, temperature controlled, and they never even look at it.
- [12:58]
Anil Dash
That's right. So I fear that we've really, really quickly replicated the worst of the physical gallery art collecting world.
- [13:05]
Brooke Gladstone
Why is this suddenly the basis of a billion dollar market? Who are the buyers and why are they buying?
- [13:14]
Anil Dash
There are a couple cohorts. I think the one that's most visible is a group of people that is overwhelmingly pretty young, overwhelmingly pretty male. For them, a lot of this is actually about community, right? So they're going online, psyching each other up about, hey, we're all going to make some money and get rich. But also they're very genuinely greeting each other and supporting each other and forming a home for each other that is not as antagonistic as the gaming world. And if along the way they feel like they're supporting art and they feel like they're going to make some money, those are even better. But I think in a lot of ways it's sort of the community driver of it.
- [13:48]
Brooke Gladstone
But I think you're leaving something out. It's not just guys supporting each other for fun. These people are generally buying this stuff with crypto money, money that there aren't a lot of places yet to spend elsewhere.
- [14:06]
Anil Dash
That's a huge factor. There's all these things you can't spend this money on.
- [14:09]
Brooke Gladstone
You can pay the New York mayor for at least a little while.
- [14:12]
Anil Dash
We'll see. There's a tangent. But if Eric Adams is able to get payroll processing systems in the city of New York to adapt to an entirely new currency in the span of a couple weeks, I will be shocked and impressed. But putting that aside, I think there's this accumulation of presumed value that can't go anywhere. This actually mimics the income inequality structure in our whole society where billionaires are so rich they don't have anything to do except buy rocket ships and yachts. So if you are crypto rich, you can't buy real estate, you can't buy most other commodities. Art is an area that you can funnel it to. And so I think some of that is just this enormous amount of assets being put to work. There's also huge incentives from the power players in the tech industry, especially the investor class, who want to prove that crypto is a legitimate thing. So they've said, oh, finally we found a consumer use for this because we've been doing this for a dozen years and there hasn't been a single app that people want to use this for. You could be somebody well intentioned who just wants to be in community and support artists and be as much a part of this community as the most opportunistic grifter there. And I think that's a tough thing for us to sit with is it's not this bright line distinction.
- [15:17]
Brooke Gladstone
There are a handful of really big NFT projects, right, that our listeners might have heard of Bored Ape Yacht Club cryptopunks. Describe a couple and why the crypto world is so enamored.
- [15:29]
Anil Dash
I would add one more to the list, which is Beeple's collection of orcs, which was the largest sale of an NFT ever.
- [15:36]
Michael Loewenger
The buyer paid more than $69 million.
- [15:41]
Anil Dash
Beeple created and posted a drawing every.
- [15:44]
Michael Loewenger
Day for the past 13 and a half years.
- [15:46]
Anil Dash
And this digital collage of all 5,000 of them is the piece. The Christie's sale made him the third most valuable living artist after David Hockney and Jeff. One thing you'll find in common across all of these NFT efforts is they're very much meme art, selling again mostly to young men who have grown up in the meme culture of Reddit and 4chan. And then there's a sort of inherent irreverence to it. There's no aspiration to, in these works, dialogue with art movements that have come before, or even what is sort of vaunted as the cutting edge of digital art today. They're instead very structured and repetitive. Cryptopunks are very low resolution pixel art, profile of a person's face, variations on a very simple theme. And they'll change their hair color or the eye color or the skin color or what have you. They're all very, very similar from a creation standpoint. And this is the sort of thing people say about art all the time. Anybody who is even minimally adept with a paint program on a computer could replicate a cryptopunk in probably a few minutes. The Bored Ape Yacht Club images are very similar to the cryptopunks in terms of being this profile of a head, but it's not a person, it's a chimp. I think they're all facing the exact same way, the same expression, and primarily differentiate by the colors and which glasses they're wearing and what have you.
- [17:16]
Brooke Gladstone
Anil Dash is CEO of the tech company Glitch. We'll pause our interview there because now that you can visualize the art, we're eager for you to visualize the people who buy it. But Anil will return at the end of the hour with some essential thoughts about the how and the why and the what it all means to global culture and human civilization. But right now, where the Wild things Were this week at nftnyc. Come see how the other half lives. This is on the Media.
- [17:56]
Mary Harris
The election has come and gone. Now we're in a new era. It can be easy to get discouraged, frustrated, but you can't afford not to pay attention. You need trustworthy, independent journalism to cut through the noise and hold power to account. I'm Mary Harris, host of what next from slate.com. we are a Daily news podcast with a kind of transparent, smart daily, yet tongue in cheek analysis you can only find at Slate. Follow and listen to what Next wherever you get your podcasts.
- [18:26]
Brooke Gladstone
This is on the Media. I'm Brooke Gladstone. In the first segment, you heard Anil Dash describe memes that were created specifically to be sold as NFTs. Parallel to this trend are the finely aged memes being fashioned into valuable NFTs. Charlie, Charlie bit me.
- [18:50]
Anil Dash
Ow. Ow. Charlie. Charlie. That really hurts.
- [19:00]
Brooke Gladstone
Yesterday was the 14th anniversary of the uploading of this famous viral video, which has been viewed almost a billion times with a B. A billion times. But guess what? It is officially off the Internet after being auctioned off overnight as a non fungible token or an NFT. The video listen to this sold for $760,999. This cat meme, though downloaded millions of times, sold for $600,000. Remember this one? It was the four year old in.
- [19:33]
Anil Dash
That picture known as Disaster Girl is.
- [19:35]
Brooke Gladstone
Now in college and nearly half a.
- [19:37]
Anil Dash
Million dollars richer after selling the photo.
- [19:39]
Brooke Gladstone
In an online auction. You can view these meme sales as cosmic justice for their creators. Most people who create a viral video or are the subject of one experience the negative consequences of virality without fair compensation. One person trying to make lemonade out of his own viral meme is Carlos Matos. OTM reporter Michael Owenster met up with Matos at the NFT auction of the meme that made him famous.
- [20:11]
Michael Loewenger
My name is Carlos Matos, and I'm known as the king of all the cryptocurrency memes.
- [20:18]
Charlie
Okay, so let's start way, way at the beginning. How did you get involved in cryptocurrency?
- [20:23]
Michael Loewenger
I got involved into cryptocurrency at one point in time when I saw a friend of mine through Facebook that shared with me that there was some idea called bitconnect. And I was just very curious about it. So I put $25,610 and said, let's see what happens with it.
- [20:41]
Charlie
And what happened?
- [20:41]
Michael Loewenger
What happened is my guy just went crazy. Like, within a couple of months, my 25,000 became like $125,000. And I was like, what?
- [20:56]
Charlie
These massive returns were exactly what bitconnect anonymously run service had promised its investors. But Carlos didn't understand how his money was growing so fast. How it worked. As BitConnect described it was that first he deposited his investment, $25,000 worth of Bitcoin, on the BitConnect app. Then BitConnect Day traded his bitcoin using software, which the company described as a, quote, volatility trading bot. For the bot to work, your bitcoin investment needed to stay locked in the app. So Carlos was paid out 1% per day, a guaranteed profit in the form of BitConnect Coin, its own cryptocurrency. Carlos says his wife thought this was a big scam, but he brushed her off because, well, look at those profits. And because he had invested more than $20,000, he was invited to BitConnect's 2017 first and only annual party in Thailand.
- [21:55]
Michael Loewenger
I was very excited because it was an amazing ceremony, an amazing event. There was a party, there was dancing, there was a whole bunch of different things. They were giving Lamborghinis and Ferraris and everything to the highest promoters.
- [22:09]
Charlie
In BitConnect, Carlos watched some investors get on stage in the main banquet hall to celebrate BitConnect. He said he was moved to share his experience too, because I felt like.
- [22:19]
Michael Loewenger
That was a moral obligation for me to go ahead and share with the world and to say to the world, that happened to me. It's very possible that happened to you, so why not take advantage of it?
- [22:29]
Charlie
He's looking out over this sea of people sitting at tables, and he begins giving a speech that would change his life.
- [22:49]
Anil Dash
What's up?
- [22:53]
Michael Loewenger
They never pay me for this. This is not something that I did because I wanted to have some personal gain out of this. I am really so thrilled to be right now sharing this amazing, glorious, super and exciting moment of my life with all of you guys.
- [23:10]
Charlie
Were you sober when you gave the speech?
- [23:12]
Michael Loewenger
Absolutely. I never have been drunk in my life, by the way. Guys, I did not practice or did a prepared speech or anything. It's just flow. I am saying to so many people who said that this was going to be a con artist game, that this was going to be a scammer game. Hey, you're gonna lose all your money. My wife still doesn't believe in me. I'm telling him, honey, this is real. No, no, no, no, no, no.
- [23:37]
Anil Dash
That's a scam.
- [23:40]
Michael Loewenger
Faith and belief is the one thing that we all need to be able to change the world. So, guys, let me tell you, I love.
- [23:54]
Anil Dash
Be connect.
- [23:56]
Charlie
What happened? When the speech was over, a lot.
- [23:59]
Michael Loewenger
Of excited people, you know, were hugging me, were congratulating me, and we're now feeling like that was like the most amazing moment of their lives. That famous speech became an iconic moment, a moment to remember for the rest of cryptocurrency history. It was after certain time that I realized the magnitude. When it started going viral.
- [24:24]
Charlie
The video was all over YouTube. People started remixing it, making songs out of the speech, plastering gifs of Carlos, dancing on crypto forums.
- [24:33]
Michael Loewenger
If you go into any cryptocurrency chat room and people are talking about cryptocurrency currency, if you're not saying like, hey, hey, hey. Or if you are not going, what's.
- [24:42]
Brooke Gladstone
Up, what's up, what's up?
- [24:44]
Michael Loewenger
It's like, you are not in all this.
- [24:47]
Charlie
Free marketing helped BitConnect reach a valuation of $2.6 billion worldwide. But not everyone was quite so bullish. This is Keegan Michael Key on Last Week Tonight with John Oliver and 2018.
- [25:03]
Anil Dash
This mean I shouldn't just throw everything I own into cryptocurrencies? That's right, John. That's right. I should. I shouldn't do it. No, no, no, no, no, no. That's a no.
- [25:12]
Michael Loewenger
The crypto market is extremely volatile and insufficiently regulated. They pump.
- [25:16]
Charlie
They don't. In 2018, American regulators started to crack down on BitConnect, accusing the company of running a Ponzi scheme. The securities and Exchange Commission alleges that those returns Carlos saw that were supposedly produced by the volatility trading bottom were just funds from newer investors. A couple weeks after the government got involved, Bitconnect shut down, and thousands of people who had invested in the company saw their money vanish as the value of the BitConnect cryptocurrency tanked. Earlier this year, the SEC sued the founders of the company, along with a handful of YouTubers who had taken secret payments in exchange for promoting the scam to their followers. Even Carlos got a knock at the door.
- [25:55]
Michael Loewenger
The SEC came and they did an investigation on me. I was expecting that, because that's the normal thing. They are looking for the masterminds of the organization. And all they found out with me was that I was an investor, just an enthusiastic investor.
- [26:10]
Charlie
Were people angry with you when it came out that it was a scam?
- [26:14]
Michael Loewenger
Yes. I got threatening messages and people saying that I should go to jail.
- [26:18]
Charlie
How did your wife at the time react to it? Did she say, I told you so? I told you this was a scam?
- [26:23]
Michael Loewenger
Absolutely. Absolutely. She said, you know, you should have listened to me. Look at what happened now. You are the livestock out of everybody around the world. I don't even wanna go out anywhere with you. Everywhere. Somebody must be laughing out of you, you know, she couldn't take it. She couldn't take that shame. What happened after that? We got divorced. I do not judge her. But, yeah, it was a very dark moment in my life. There was a point in time that I got depressed and that I gained weight. I was like £248 after BitConnect. And it was directly related with the fact that I got divorced and all that stuff that happened. And then I just took that and turned it around. And my life now is amazing.
- [27:03]
Charlie
Carlos says he looked in the mirror one day and decided he needed to start taking better care of himself. Nowadays, he's muscular, and he keeps a rigid schedule that involves waking up in the middle of the night to stretch for an hour. He's 57, and he told me he intends to live for a very long time. He's laid low for a few years, working as a therapist, treating kids with autism, but he's approaching this NFT craze as his public comeback moment. We're speaking at a comedy club called the Stand in Manhattan. Just an hour before he's scheduled to take the stage to address crypto investors again at an event he's calling bitredemption.
- [27:41]
Michael Loewenger
Bit redemption is Carlos Mato saying to the world, listen, I am not the one who scammed you. I am simply an enthusiastic investor who was roamed by bitconnect and who right now is redeeming myself by providing Something which I believe is going to help them grow.
- [28:01]
Charlie
That something is a series of NFTs based on his famous BitConnect speech. 28 NFTs related to 28 segments of the speech. One where he says, hey, hey, hey. Another where he introduces himself, another where he talks about his wife and so on. Carlos is launching the auction at this event.
- [28:21]
Michael Loewenger
Once the first NFTs release and whoever the lucky person is going to be, at whatever price, they get it, trust me, that's going to be an amazing, very lucky person.
- [28:31]
Charlie
The video is on YouTube. I can watch the video. It's not as if by selling the NFTs, the people who own them have exclusive right to the video. So what is the value of owning an NFT for a meme that's already so popular?
- [28:48]
Michael Loewenger
The NFT is coming directly from the living meme that really created the speech. It's coming from my specific wallet address. The Metamask address has a signature in the blockchain, the signature of Carlos Matos.
- [29:06]
Charlie
And you're about to launch the auction, I think, just in like, what is it, like, 10, 15 minutes? I'm sure you and your team have had some conversation about how much you think these are worth.
- [29:17]
Michael Loewenger
Yeah, Metamorphosis and I have an arrangement.
- [29:20]
Charlie
Metamorphosis, the company behind us.
- [29:22]
Michael Loewenger
Yeah. I get 85% of the sales at the beginning, up to a certain amount, you know, 5 million.
- [29:29]
Charlie
Careful, I've just accidentally knocked over a glass of water.
- [29:32]
Michael Loewenger
So if he reaches 5 million, they only get 15% and I get 85%. But if they pass a certain amount, you know, $25 million, and then, then they can actually get up to 48%.
- [29:43]
Charlie
This is for an individual NFT, or the sum total.
- [29:46]
Michael Loewenger
For the sum of total. We're going to give people all over the world the opportunity to own a piece of cryptocurrency history. Who knows what's going to happen, But I'm going to tell you what's going to happen. Boom.
- [30:06]
Charlie
Amazing. Carlos, though, when I first saw your video, for me, it seemed to, like, symbolize the caution we should have when approaching these new technologies that we don't totally understand. And I feel like maybe that's why it's so famous. I can imagine somebody's listening to us talk and they're hearing you talk with the same confidence about NFTs. How do we know the same result is not going to happen again?
- [30:33]
Michael Loewenger
You know something, Micah? I, I, you know something? I'm going to give you a hug for that question. That was just Right on. I mean, I love the question. Well, let me, let me just, just share something. It is very probable that it's not going to work out. It might blow up on you. It's true. Yes. But what if, what if it's the opposite? What if what you have is something that can dramatically change your life and the life of your family and the life of generations of your family to come? How are you going to feel when someone else looks at you and say, you remember that time when the opportunity was right there knocking at your door? It was right in you of front, front of you. And can you imagine yourself in that position? Is that the position where you want to be fomo?
- [31:27]
Charlie
It's always been a powerful force in speculative markets and something that people in the crypto world actually talk a lot about.
- [31:33]
Brooke Gladstone
Well, the FOMO is kind of real. I was left for days.
- [31:36]
Charlie
This is Gwen, one of the people who showed up for the auction. She learned about the event when she met Carlos at another NFT party earlier this week.
- [31:44]
Brooke Gladstone
Whenever this hype around something, it's. For me personally, it's just hard to miss out on it because you could be part. You have the potential to be part of it, so why not?
- [31:55]
Charlie
Yeah, There are probably around 50 people here at Carlos's event, but the crowd seems right for this. They're stoked on NFTs. They're young, almost everyone is in their 20s, and they're wealthy.
- [32:07]
Carlos Matos
I've been lucky enough to have also.
- [32:10]
Charlie
Purchased an Etherock and sold that for a ridiculous amount of money. You got to tell me how much. Well, I bought it for roughly $25,000 and three weeks later I sold it for 1.2 million. Holy crap. How many NFTs do you own?
- [32:31]
Anil Dash
70. I have quite a few, but I'll sell them and then I'll be like, I'm done. And then I'll buy more. So it's kind of like, like an endless cycle.
- [32:39]
Charlie
You would consider putting in a bid on the first NFT? Yeah, 100%. How much do you think it's going to go for? 5 digits. My cutoff is at 6.
- [32:51]
Anil Dash
I would play in the 5 range. 5 digit range.
- [32:53]
Charlie
Yeah, yeah. Eventually, everyone began to congregate near a stage where Carlos was speaking.
- [33:05]
Michael Loewenger
Each and every one of us has.
- [33:09]
Brooke Gladstone
The power of property. Yeah.
- [33:15]
Charlie
Carlos made his pitch for the auction very similar to the one he made to me, that his NFTs would appreciate into a family nest egg, a ticket to generational wealth.
- [33:24]
Michael Loewenger
And you say, well, that's not true.
- [33:26]
Brooke Gladstone
That's not going to happen. What?
- [33:28]
Michael Loewenger
Don't you see some of the things that are going in the market. NFTs selling at $12 million. NFTs selling at $69 million.
- [33:35]
Charlie
There's this one part of the presentation that I can't stop replaying in my head. When we all started watching this video being projected onto a screen on the stage.
- [33:45]
Anil Dash
Are you guys like Crypto Bros? Is that.
- [33:47]
Michael Loewenger
What kind of this would you consider?
- [33:49]
Anil Dash
Yeah.
- [33:49]
Charlie
The day before the event, Carlos and his team from Metamorphosis had done an interview with Ethan Klein, host of the H3H3 podcast, one of the most popular talk shows on YouTube. This video, which again is being projected at the club, slowly turns into a roast.
- [34:05]
Michael Loewenger
I don't believe that Carlos owns the.
- [34:08]
Anil Dash
Rights to that video. Am I wrong?
- [34:10]
Michael Loewenger
How are you guys licensing that? The actual person in that video is.
- [34:18]
Anil Dash
Me, but whoever took the video probably.
- [34:21]
Michael Loewenger
Owns the license to the work, right?
- [34:23]
Anil Dash
That's how that works.
- [34:24]
Michael Loewenger
They are exploiting who I am and they did it without my consent, so.
- [34:30]
Anil Dash
But it is ironic because it's called the Redemption Arc. It'd be funny if you guys got.
- [34:34]
Michael Loewenger
In legal trouble for this. Yeah, it would be hilarious.
- [34:40]
Anil Dash
Humor, for sure.
- [34:43]
Charlie
Ethan goes on to say he thinks the project will make a lot of money, but everyone in the audience was getting a kick out of these jokes at their expense. And no one more than the Metamorphosis guys themselves. And at the time, I was confused why they would share this video with the very investors they were trying to impress. My best guess is that it had something to do with what Carlos meant when he referred to himself as a living meme. Perhaps this was proof that he's not just that guy that gave that speech that one time, whose value is limited to a viral moment in the past. But maybe the roast illustrated that Carlos and his team could continue to drive attention and clicks and therefore increase the value of his NFTs now and into the future. That, or they were just totally goofing off and making this all up as they went along. Whatever the intent, the Metamorphosis team didn't seem satisfied with selling that first NFT to the people here tonight. Instead of holding the auction in person, they did a last minute an announcement saying that it would be up for sale on OpenSea, one of the popular sites for buying and selling NFTs. I pulled aside Alex Goldberg, the company's 26 year old COO, to try to make sense of their business philosophy and what they saw in the Carlos Matos nft. Alex told me the group got their start when they made close to a million dollars flipping an NFT called the Ether Ross a play on the Pet Rock.
- [36:07]
Kevin McCoy
Back in, I think it was the seventies.
- [36:09]
Charlie
The Pet rock.
- [36:09]
Kevin McCoy
The Pet Rock, it was just like the dumbest thing, but like, people bought them like hotcakes. So someone decided to say, I'm gonna bring pet rocks to the blockchain. So I just made a hundred rocks. It was like a free clip art picture of a rock from like Windows 95. And they just made a hundred of them and put them up on the chain. And we saw that and we're like, damn. Like, that's so stupid. It's gonna move. That's the kind of thing in crypto. Sometimes it's like the dumber the investment, the better it is.
- [36:41]
Charlie
Why is that?
- [36:42]
Kevin McCoy
I mean, because the community is around sort of flexing. And what bigger flex is it to say, I just spent $2 million on a pet rock? It's the more useless thing you can throw your money at. Like the bigger status symbol it is.
- [36:56]
Charlie
I left the club to speak with Maximilian Zim, the 25 year old founder of Metamorphosis.
- [37:01]
Carlos Matos
This idea of possession, this idea of we own something, is evolutionary in our culture.
- [37:08]
Charlie
He's vaping and waiting for an Uber.
- [37:10]
Carlos Matos
It's why we wear Gucci shoes or designer brands or people buying Basquiats and spending all this money at Christie's just to show that they own it. You know, whatever sex we're interested in, you know, potential mates, we're showing them we have this balance of full wealth.
- [37:28]
Charlie
Some people are gonna look at this and they're gonna say, here's this video of this guy who got scammed, right? But a lot of people look at NFTs and they say NFTs are a scam. And I think a lot of people listening are gonna find this quite ironic because they're gonna say, here's a scam about a scam.
- [37:47]
Carlos Matos
Sure, you know, you can call it a scam all you want, but at the end of the day, here's how a market works. If you buy something and somebody is willing to pay more for it than you, then you can make money. If I sell a pencil to you for a million dollars, it's not a scam. Only if you don't want to buy another one. Now, if you want to buy another pencil for me for a million dollars, I didn't scam you.
- [38:10]
Charlie
You're so deep in it. But there's extraordinary wealth inequality in this world. There are.
- [38:17]
Carlos Matos
This gets worse.
- [38:17]
Charlie
Every day there are people who are dying because they can't pay for a hospital bill. And you and I are standing on the streets of Manhattan talking about spending tens of millions of dollars on a clip art picture of a rock. Does that ever strike you as absurd?
- [38:36]
Carlos Matos
It doesn't, because this is the way the world works. I mean, wealth inequality has always been that game. The rich want to get richer. And it's not just crypto, people. I mean, look, we got my boy Mike here. Mike is an example, right, of somebody who had hardship his entire life, but understood crypto was online. Dude hustles like I've never seen anyone before, right? It's not about the, the rich surviving, it's about the intelligence surviving. Mike is extremely intelligent. The intelligent are surviving the people that are catching the waves. And they really are driven to see where this money is going because in this blockchain world, I can see where all the money is headed. People who hustle and want to get more, they always want to get more because they're addicted to dopamine. It's like cocaine. That's why people take cocaine. It releases dopamine. It's your brain firing off that want more molecule. It's not that you're actually getting more, it's that you always want more.
- [39:30]
Charlie
There's nothing about that that bums you out, just this drive for more.
- [39:34]
Michael Loewenger
It is what it is.
- [39:35]
Carlos Matos
Play the game, play to win.
- [39:39]
Charlie
Fair enough.
- [39:39]
Carlos Matos
What a choice you have.
- [39:41]
Charlie
Thanks, guys. I appreciate it. This has been a really.
- [39:44]
Carlos Matos
That got really deep. That got really deep.
- [39:48]
Anil Dash
Yeah, yeah, yeah.
- [39:50]
Charlie
The First Carlos Matos NFT is being auctioned on bitredemption.com at time of recording. Its top bid is 4.1 Ethereum, about $477.05. For on the Media, I'm Michael Oenger.
- [40:05]
Michael Loewenger
Hello, my name is Carlos Mantos and.
- [40:07]
Charlie
I am coming from New York City, New York.
- [40:11]
Michael Loewenger
Let me tell you guys, I am so excited. I am so happy.
- [40:18]
Brooke Gladstone
So if you joined at the start, now you know the when, what and who. Coming up, we conclude on the why. This is on the media.
- [40:36]
Mary Harris
The election has come and gone. Now we're in a new era. It can be easy to get discouraged, frustrated, but you can't afford not to pay attention. You need trustworthy, independent journalism to cut through the noise and hold power to account. I'm Mary Harris, host of What Next from Slate.com, we are a daily news podcast with a kind of transparent, smart, yet tongue in cheek analysis you can only find at Slate. Follow and listen to what next? Wherever you get your podcasts.
- [41:08]
Brooke Gladstone
This is on the Media. I'm Brooke Gladstone and I'm back with Glitch CEO and NFT progenitor Anil Dash, who's just been asked to reckon with what he and his then collaborator, artist Kevin McCoy.
- [41:22]
Anil Dash
When Kevin and I talked about it at the beginning, I think we said this could be something really big. And certainly he believed it deeply enough to build a company around it. And he's still doing this work. I mean, he's still a pioneer in this space. And I think we've diverged in our optimism about it. He sees that sort of silver lining to it for the creators within the NFT community. People really believe, oh, the bubble will pop and then the true believers will stay and this thing will all become the happy future we were promised. You know, for me, I come from the community that created the first wave of social media tools. We really thought we were going to empower people to have a new voice, communicate and connect in new ways. And all of that did come to pass, along with unimaginably terrible harms. You know, and I think that colors a lot of my perspective on it, which is that, you know, be careful what you wish for. You can make the technology, it can do the thing you hoped it would do, and. And you can still lament the impact that it had.
- [42:15]
Brooke Gladstone
Even people who collect NFTs describe this gold rush as a bubble. What do you think? Are we headed towards a big explosion?
- [42:26]
Anil Dash
We could say the bubble will burst, as they inevitably do, but I think our reflexive view of that is to say, and therefore it'll all go away.
- [42:33]
Brooke Gladstone
Yeah, that doesn't happen.
- [42:35]
Anil Dash
No. NFTs are already too big to fail. The idea of community plus art plus buying works online is too big to fail. At the major auction houses, between 5 and 10% of their transaction by dollar volume is already happening through NFTs.
- [42:50]
Brooke Gladstone
Wow.
- [42:50]
Anil Dash
They're never going to let that go. They're not going to just leave that money on the table. The ship is sail. The question is, what do we do about it and how do we have it be something that is positive for artists and creators, positive for the people who are collecting and not destructive in society? Especially when the entire blockchain world, especially NFTs, have such an egregious environmental cost?
- [43:09]
Brooke Gladstone
Let's talk about the environmental cost. It uses up a lot of energy.
- [43:15]
Anil Dash
The environmental impact is true of all of blockchain technologies and crypto technologies, especially in the earliest implementations like Bitcoin. In order to Keep things honest and keep them in sync between all the people that had a copy of this ledger, this record. They use tremendous amounts of electricity. They have a concept they call proof of work. You prove the computer did these increasingly complex computations, but it effectively, if you're a layperson, can be known as proof of waste. The way that they verify this is really a correct and true change to the blockchain ledger is by verifying that you really did burn that many computing cycles on absolutely nothing of worth. There are newer technologies that are not so wasteful. However, those are not what underlies the vast majority of NFT transactions today. Some people are saying, well, the NFTs are all switch over to these less wasteful blockchains. Technically absolutely possible, incentive wise. It would be costly and they're not motivated to do it. If you cared about the environmental impact, you probably wouldn't already be in the community.
- [44:15]
Brooke Gladstone
Right.
- [44:15]
Anil Dash
It sort of self selects for people that were already willing to look the other way.
- [44:19]
Brooke Gladstone
What about regulation? We know these transactions are used to launder money. We know that groups have funded white supremacy and fascism through these things. If they were using conventional banking, there would be laws against it.
- [44:34]
Anil Dash
I mean there are laws against it in conventional banking, right? Physical, traditional art has absolutely been used to launder money, including from the Nazis. There's a horrible history of art as asset class for evil. Right. The evidence is we actually don't prosecute it in any context. Like the FBI doesn't spend a lot of time at art galleries. And so I don't have a lot of faith that that lack of motivation is going to get any less acute when it gets 10 times harder to do because technology is complicated. The thing I actually think can help in some cases in past times with for example, again social communities on is if the norms of the community are that certain things aren't allowed, that actually is the most effective, long term preventative. There are healthy communities online that haven't been taken over by people being horrible to each other with racism or sexism or all the other awful things people do online. And it's because the norms of the community are like, we don't do that here because there are genuine communities around NFTs. If the communities had norms of like we're going to suss out who's using this infrastructure we're in to do bad things. If that energy is translated, it's like we're protecting our community from people exploiting it. That I think could be a long term, resilient, effective way to cut some of these harms and reduce some of these risks.
- [45:52]
Brooke Gladstone
You observed at the top that a lot of these blockchains don't have room to actually put the entire art into it. You took a shortcut back in 2014 and you just included the web address of an image onto namecoin, that particular blockchain. But that's still going on, essentially. And this means that when someone buys an nft, they're not buying the actual work, they're buying a link to it. And worse, they're buying a link that in many cases lives on a website that could fail in the next few years.
- [46:26]
Anil Dash
I mean, how many websites that we used 10 years ago are still around? Like entire websites disappear. That's something that, you know, again, you have to really care about the art and the artist and the legacy of preserving a work for that to matter to you. And a lot of people don't. A lot of people are like, I'm going to get in, sell these things for 10 times what I paid for them and get out. So the idea that the artwork disappears in 10 years, who cares? Right? The problem is that same person who feels that way is in a chat server alongside somebody who's dead sincere is like, I love this artist and I want to support them and I hope this work is there forever. And that's what I was told by the person that put it up for sale. We have the highest and best purpose of this technology alongside the venal, opportunistic, cynical use of this technology. And they're indistinguishable from a distance. And the criticism is not even fine grained enough to tell the difference.
- [47:16]
Brooke Gladstone
I don't know if there's any way to know how many of the people in this market are sincere compared to how many are crypto enthusiasts just eager to spend their crypto dough. There are a lot of people in this market who don't seem terribly interested in engaging with the critiques that we just discussed. They have some catchphrases. Hfsp, have fun staying poor or ngmi, not gonna make it that they throw around in response. But you still have some sympathy for those guys.
- [47:55]
Anil Dash
I do, I do. There's an enthusiasm bordering uncult, like in a lot of the communities. And they have their own language. You know those phrases like, yeah, have fun staying poor, which is like just the most cynical, awful, obnoxious. But the performative obnoxiousness of it is part of the culture.
- [48:13]
Brooke Gladstone
Let's trigger the libs.
- [48:14]
Anil Dash
Exactly. It's again, it's in gaming culture. It's in political culture, it's in all these other domains. And I think it's very hard for, well, people that are more polite to see that as like, that's reifying identity for these people, especially for young men. They're showing off each other's bravado and obviously grounded often in insecurity. What I know is not going to work is critics from outside being condescending and talking about ancient history. Like things that happened in the last century. That does not work. At 23, I felt the same way.
- [48:49]
Brooke Gladstone
Did you?
- [48:50]
Anil Dash
I was not as obnoxious about it, but did I think I saw the future and others didn't? Absolutely. I don't think we can write them off because it's not going away. I mean, I think that's the most important thing is I have been fiercely critical and I pointed out these flaws and the technical flaws and the social flaws. And you know what? Scolding them is not going to make it go away. And what happens when we have the people who care about the ethical, social, cultural, environmental impacts when they go away and walk away and wash their hands of it? That happened in social media, like, we're sick of all this thing, we're all going to walk away. Who's left is the worst? Who's left is the people that run Facebook. Right? That's the nightmare here is if you leave the future of artists on the Internet to the people who are most willing to wade in the muck and the mire, that is not going to be good for the world.
- [49:38]
Brooke Gladstone
Blockchain technology theoretically was going to help decentralize the Internet, redistribute power and ownership. You know, that was your goal with the NFTs, to empower artists, address some of the problems of the existing art market. Do you still hope that this technology can be used to build fairer, better Internet?
- [50:02]
Anil Dash
I'm torn. And I really do go back and forth almost on a daily basis because I will see the most despair inducing exploitation of vulnerable people, vulnerable artists. And I'm like, throw the whole thing into the sea. You know, it really is very hard not to feel that way. And then the next day I'll hear from an artist who was skeptical and cynical about it, said, let me just dip my toe in and try it. Even though I know there's all these warnings and red flags and they'll be like, God, this thing paid my rent this month and I never thought I'd get the, to sell something as an artist. You know, I was talking to a woman who's a filmmaker and she said she's going in eyes wide open. She knows the NFT world replicates the same sexism and misogyny and homophobia and racism as the industry that she's been in her whole life. And what she said is, well, where am I going to go to sell my art and support my work that's not going to replicate those systems? I don't have an option with that. And so if there's a chance that this can support me and maybe connect me to a community that'll care about my work on the other side of it, I have to try it. And I was very empathetic to that argument.
- [51:06]
Brooke Gladstone
You've mentioned you're a dad. How many kids have you got?
- [51:10]
Anil Dash
I got a 10 year old boy.
- [51:12]
Brooke Gladstone
And you have an 8 year old NFT.
- [51:18]
Anil Dash
I do, I do.
- [51:21]
Brooke Gladstone
Thank you very much.
- [51:22]
Anil Dash
Thank you for having me.
- [51:23]
Brooke Gladstone
Anil Dash is the CEO of Glitch, a developer community whose coders collaborate to create and share millions of web apps. That's it for this week's show on the Media is produced by Leah Feder, Michael Loewenger, Eloise Blondio, Rebecca Clark Callender and Eli Cohen with help from Jewaria Wright. Xander Ellen writes our newsletter. Our show is edited by me and Katja, our technical director, Jennifer Munson, our engineer. This week, Adrienne Lilly. Katya Rogers is our executive producer. On the Media is a production of WNYC Studios. I'm brooke Gladstone.
- [52:06]
Mary Harris
Since WNYC's first broadcast in 1924, we've been dedicated to creating the kind of content we know the world needs. In addition to this award winning reporting, your sponsorship also supports inspiring storytelling and extraordinary music that is free and accessible to all. To get in touch and find out more, visit sponsorship wnyc. Org.