Grant (5:42)
So how does this crypto launch for Hawk Coin go from being Hailey, Doc Hollywood and team hailing it as the biggest opportunity in years to dock Hollywood calling everyone who had invested mentally ill in under 24 hours. Well, first, let's set the scene a brief history of Crypto alongside a recap of Haley Welch's life. Attempts at cryptocurrency were underway years before Haley was born. The idea was first conceived in 1983, was acknowledged by the NSA in 1996, and systems like Bitgold were bandied about before the Internet went mainstream. And finally the technology ran smoothly enough to announce formally over a decade after that. Hayley Welch was born in 2002 to a lower class, fractured family in Tennessee. Her earliest years were under two consecutive George W. Bush presidencies heading into kindergarten, around the time that the housing bubble in the US got really bad during the mid 2000s. Then in late 2007, the Great Recession began and it had a massive effect on Tennessee, slamming the job market for years to come. And in a complete coincidence, I'm sure, as the public's faith in big banking understandably plummeted, the idea of cryptocurrency finally became palatable in the mainstream. In 2009, Bitcoin was launched by Satoshi Nakamoto, who Hayley Welch, not for nothing, regularly parodied on X, calling herself Haktoshi Tuamoto. I know, really creative. Anyways, crypto continues to grow and shrink in a pretty niche market in these early years. Silk Road is launched in 2012, and then it is shut down by the FBI several years later. The way that the crypto blockchain works at its simplest is that it's a decentralized activity log of financial transactions that relies on a consensus mechanism among users that often ends up sowing a fundamental distrust in understanding what these numbers on this blockchain actually mean. Basically, it requires a hell of a lot of checks and balances for users to get clear answers. And that kind of labor can be very time consuming for someone who's just an individual doing crypto in earnest alone. So most people you hear that have been very successful in crypto have a team doing this labor for them in order to maximize their own personal profit. Crypto, as professor of Computer science and economics Jen Lansky qualified, requires the following. First, its value is maintained through consensus and not a big bank central authority. Second, the system will decide when new cryptocurrency can be minted. Third, ownership can be proven only in the crypto blockchain. Fourth, crypto can be transferred, but transaction statements can only be accessed by the current owner. And finally, if two ownership changes are requested at once on the blockchain, only one of these transactions can be acted on. Something that ends up screwing over a lot of people down the line. It seems like as Crypto becomes more normalized, even in niche Internet communities. Interest then moves to a currency called Ethereum, a version of cryptocurrency that became very successful by marketing itself on the idea that crypto bypasses government corruption and doesn't just force you to sign up for a new set of unregulated corruptions. For years, as Dan Olson explains, there were these UN based rumors that various countries, Brazil, Venezuela, were on the brink of switching their entire economies to cryptocurrency. But this was never really true in retrospect. In fact, it was a result of the effort of crypto boosters, making it seem like the currency was far more popular abroad than it actually was. After the Ethereum Boom came the NFTs, a crypto gateway of sorts that was something of a play to get normies into crypto. That seemed to work pretty well at the time. For a couple minutes at least, you probably remember this. NFTs were a craze in the early 2000s, which happens to be another time of incredible economic despair in which people paid for, quote, unquote, true digital objects, which many, including me, thought meant that you were buying the copy, the definitive copy of a digital artwork. And so, in the early days of its mainstream popularity, NFTs expanded to the sale of memes. We've actually talked about it on this show before. In our overly Attached Girlfriend episode, there was this small boom where the major meme main characters of the 2000s and the 2010s took the chance to monetize their image that in most cases had been involuntarily taken and co opted from them and actually made money off of them for the first time. However, as Dan Olsen's documentary explains in great detail, NFTs ended up being a scam of their own. It was a way to imply scarcity about an infinitely reproducible image. And NFTs became synonymous with art during this boom in the early 2000s, first coming into the news when an artist named beeple vine sold $69 million worth of NFTs. What's even more relevant, though, is that this sale was made at legacy auction house Christie's, which gave a whiff of legitimacy to the project that NFTs previously had not had by a long shot. NFT ended up being the crypto version of the Swiss speculation market, or the collector's market, which always crashes. The example that comes right to mind for me is Beanie Babies. When they're first released, you can get them for about five to seven dollars. Once they retire the value goes up in like two years. They're worth like $245 and stuff. He's worth about $4,000. But it goes far back as the tulip bulb spec bubble of the 17th century. We've been overvaluing things that are ultimately kind of trash for a long time. NFTs were perceived as exclusive collectibles, which on most timelines boils down to, I hope you actually like them because they almost never retain their value. Thankfully, I love my beanie babies and I don't care that my mom spent my college fund on them. In line goes up. Dan Olsen also emphasizes that the marks and the targets for these crypto scams aren't the fabulously wealthy that we see in media. The marks are people somewhere in the middle class, people with some disposable income who are still long term financially insecure enough that they'd take a risk on something as tenuous as a crypto scam. As Olson puts it, the target of these scams are, quote, tenuously middle class, socially isolated, and highly responsive to memes. While this was happening, Hayley Welch graduated high school in 2020 in the midst of a worldwide pandemic, beginning community college but dropping out to focus on her day job. As we've talked about before, Haley loved her home, her family, her friends, but unquestionably her grew up during a time of extreme economic and social precarity. It would probably be hard for her to remember a time before bad job markets and gun safety drills to evade mass shootings in school, when all the while, the way to make it in America was shifting from the conventional become a star model to the Internet version of the become a star model. Become a star, get your grift in and get the fuck out of there. Which brings us to meme coins. Meme coins are a newer form of crypto that are famously unstable and scammy. And saying something is particularly scammy in the crypto world is really saying something. Meme coins are exactly what they sound like. They're a currency whose relevance depends on the appeal of the meme personality who is the face of them, whether that meme is a person or a fictional character, character or an idea. The most successful examples, and one that I think has tragically crossed into the mainstream, is the Elon Musk touted dogecoin, which is based on a meme of a Shiba inu, who, bless his heart, he didn't see the storm coming. Meme coins of this nature tend to be sold as crypto on the bizarrely and I guess aptly named website Pump Fun. And the name itself is a wink at how many pump and dump schemes the space has been known for over the years. The site was started by three guys in their 20s in London, and this was a space that sort of facilitated the resurgence of crypto after NFTs sort of took a turn in the early 2000s. The New York Times reported that in the front half of 2024, 1.7 million coins launched, compared to just 250,000 ish in the same period of time in 2023. So if you've heard about meme coins more, it's certainly not an accident. And stars of the 2024 space outside of Halee, whose eventual coin was called Hawkcoin, were Magacoin Ear Coin after Donald Trump got shot in the ear Baby.
