What Ben McKenzie Learned When He Started Investigating Crypto

Hello, Olins fans. This is a special episode of the podcast that was recorded June AIDHS at the Bloomberg In Conference. Our guest Ben mackenzie. He's a well known actor. You might remember him from the oc and he's the author of a forthcoming book called Easy Money about his journey into the world of cryptocurrency. Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Wisenthal and

Yeah, this week it's actually true. We're going to be talking crypto actually with someone who you wouldn't necessarily expect to be the perfect guest to discuss crypto.

No, but he is.

So obviously this week we're recording it the same week after the SEC filed suits against both coinbase and Binance, So we're going to be speaking with Ben McKenzie, a well known actor and the author of the forthcoming book Easy Money, Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud. Ben, thank you so much for joining us. How did you arrange that sort of like from a pr standpoint, that you got the government to file suits against Coinbase and Finance as a lead up to your book.

That's very well done. Yeah yeah, I had nothing to do with it. OK, very grateful.

And if they could just hold off on any DOJ pending action and to just wait.

Until wonderful, you're going to have to keep rewriting the epilogue. I think, well, why don't I ask the obvious question, which is how does an actor get into the profession or hobby of investigating cryptocurrencies?

Sure, there's a longer answer.

The shorter answer is a sort of a mid mini midlife crisis, like a just sort of a It was the fall of twenty twenty. It was the height of the pandemic, and I came down with a serious case of fomo.

I saw all these knuckleheads getting rich, and I thought, hey, maybe I should, you know, try to try to get rich as well. In a roundabout way. That that led me to crypto.

A very good friend of mine who in my twenties encouraged encouraged me to invest in an obscure medical device company that was going to create synthetic blood and it was going to make a ton of money. A random guy at a wedding had assured him so, and so we definitely needed to invest in this. I put money into it and promptly lost almost all of it. Might have been a penny penny stock pumping up. Anyway, that same friend came back to me in twenty twenty one and said, you gotta buy.

Bitcoin, and I thought, hmm, I wonder what.

Is this cryptocurrency stuff. So I have a degree in economics from the University of Virginia. It's about twenty years old. So I dusted that off and I ended up writing this book. So as to why I'm here, I would say the book is really it's really.

About money and lying, right. And I know about.

Money because a little bit because I have an econ degree and it made a little bit up two decades of show essence. But I know about lying because I'm an actor and I do it for a living. And so when cryptocurrencies were calling themselves currencies, the first thing I bumped up on was the word. You know, as an actor and a storyteller, where it's are our tools, and they can be used for a variety of purposes. Some of them are honorable and some of them not.

So that's where I started, like, these are our currencies? So what are that?

So the friend came and you already had to be okay, this is the guy who lost you a bunch of money. Yeah, so rather than because you said you in fomo, so a lot of people like they just went out and bought when your first instinct was like a brush.

Off the old economics books.

Yeah, but what where where did you see? Okay, so you like plow your money into crypto at the top. No, but that's still like like, how did you sort of begin your exploration of this industry?

Short?

Well, I read a lot of so first I needed to understand, like, okay, where were we in in twenty

I read a.

Bunch, and I just I was stuck with the feeling that so fraud, historically speaking, runs rampant during easy money times, during bubble times for fairly obvious reasons. Right when there's access easy access to money and credit, people speculate wildly in term in search of high returns. Some of those, you know, innovative technologies are truly innovative, and people make a ton of money, but some of them are fraud.

She was six at the time.

And I remember the gist of the story, but I had forgotten a couple of points. The first, the tailor's trick everyone basically an appeal to ego and statush worship. Right, only the smartest people can see this, only the people of highest station. And the second thing, the thing that really stuck with me, was as the at the end of the story is the Emperor's gallivanting through town naked, and the adults are pretending not to notice. It's a

But I don't know.

Maybe I'm right right, like like, and how often in life do you get a chance to have an adventure? So I got high. I got my medical marijuana card over the pandemic because you know, I like alcohol, but like there's a limit, you know what I mean? And right, and I was definitely over it. And so I got high, and I was like, well, I should.

Write a book about it's really retro that anyone would like go to the now that they literally on the street, that someone would go to the effort of like getting.

A g No, I'm such a like goodie two shoes, right, I have my card and I like overpay for my marijuana, like, but yeah, I got high, and I was I should write a book about about crypto, and which sounded like it sounds like a really good idea when you're high. The next morning, sober, I realized I didn't know how to write a book. So I got high again, and I realized this journalist Jacob Silverman had written an article

So I love that.

During the debts of the pandemic, while other people were getting high and baking soury dough bread or watching Tiger King, you were like, I'm going to launch an all out investigation into the cryptocurrency market.

Well, I'm a weird guy.

You touched on the easy money aspect of it and also the fomo, but can you talk a little bit more about, like what is it that makes cryptocurrency so attractive to so many people, and particularly one segment of the population, it seems, which would be young men. Like, what is the you know, the attraction there?

Well, that's a great that's a great question. So I kind of look at as a storyteller. I became fascinated by Robert Schiller's work, the Nobel Prizeman Economists, who's talked

Also the next big thing on Wall Street at the same time.

Exactly what it was marketed is the future of money, and all you needed to invest in the future of money was the willingness to part with the current version of it. Yeah, so it had a very broad which was also one of the reasons why was so skeptical of its authenticity was that how can it be all of these different things at the same time, and yet of course it wasn't the currency, so then what the

You know.

One of the things that's a little bit surprising or sort of interesting is that for as much talk about crypto that exists, like, it's not that big, Like the total value of all the coins I think is the total value of all the coins I think is like around a trillion dollars supposedly, supposedly, and then like you know, we discover you know, and you've you've reported this out like it's it's small. There are a lot of people who are just like on a group chat together and

In your it's it's much much much smaller than then you know that one trillion dollar number for that market cap.

Number, so and you don't have to take my word for it. In March of twenty twenty two, I was at south By Southwest.

It was my first venture into the real world Jacob and I had done everything virtually up to that point. I ran into a guy named Alex Mashensky. Alex Mashchenski was the CEO of a crypto lending firm called Celsius. It's now bankrupt. I he agreed to be interviewed. I asked him how much real money is in crypto. He didn't ask me what real money was. He said ten

Isn't there.

It's it's speculations, leverage, it's all these other things. At Chill ran through my I mean he said, it's sort of nonchalantly, but at chill ran through my spine because regular people don't understand that. I mean, they think when they buy a bitcoin, they had, you know, bitcoins whatever.

It is twenty six, twenty seven. I had no idea.

They think they have twenty seven thousand dollars, but in a way they actually only have maybe ten or fifteen percent of that.

Maybe if they can get it out, it's not.

A sorry, sure, explain that if if someone has a bitcoin on coinbase or whatever, yeah, what's the twenty eight twenty six thousand? True, they could sell that and get twenty six thousands. So what do you mean when you say there's untill fifteen or twenty.

Sure.

Yeah, And that's a very good point, and I do want to covey on it. If you're going through a licensed exchange, well perhaps not a license exchange, but one that's operating as an exchange, and yeah, you're you're, you're, You're probably good. And if you're not trying to move a lot of money, you're probably good. But the liquidity in crypto is very, very low. And Brian Brooks.

Who was the chief legal officer.

Of Coinbase and then he was the acting control of the currency and then he went to binance US for like three months, he testified under oat to Congress about this, So you know, you don't have take my word for it.

Again, like, the liquidity is very little, So how does it work?

Well, most of the volume and crypto runs through the overseas exchanges, right, it ran through FTX before it was shut down. It's now running through finance or you know, finance is the biggest crypto exchange by a country model. It's huge, But the question is how much of that volume is real. Wash trading is an enormous part of cryptocurrency. I mean, you've seen it in the SEC charges against Finance.

I've read papers, academic.

Papers that have surveyed I think they surveyed twenty nine different exchanges.

They found seventy percent wash trading on the unregulated exchanges. So it's just not there.

People are able to create I'm leaving Bitcoin aside for the moment. Talking to the other cryptos. People are able to create as much crypto as they want. That allows you, if you can borrow against it, to create as much leverage as you want. When I testified against testified to Congress in December, Professor Hillary Allen, professor of American University, was on the other side with me.

Testifying alongside me.

She wrote a paper in February of twenty twenty two, so just a few months before crypto kind of fell apart and She compared the dynamics of crypto to the subprime crisis, and they're very similar in many ways. Leverage, complexity, rigidity plus a bank run.

Equals a crash.

The difference is in crypto, the leverage is unlimited because you can print as much crypto as you want.

The complexity is similar.

You know, these all of these things are so complicated, at least theoretically, right, staking pools and protocols and smart contracts and blah blah blah blah.

The rigidity is even worse.

Because of the things like the smart contracts, and even you know, the code itself, it's irreversible. It only moves in one direction. So it's a blockchain that can be added to but never subtracted from. So when fit hits the shan, there's nothing you can do.

It just blows up.

And if you combine that criminal activity, you know.

A lot of people lose a lot of money, but not as much money as as clan.

Can you talk a little bit more about the leverage example in the context of specifically I'm thinking about fts, yes, right, because they were sort of the trifecta of creating new tokens out of nothing, borrowing against them and then also potentially allegedly using wash trading to push the value of those tokens up so they could get even more credit.

Exactly exactly right.

So FTX said this token FTT, and I think you should. You know, let's just start with the obvious. You have an exchange that's issuing its own token, right, its own security basically, right, and as Finance has the same Finance has BnB, and.

It also has its own stable coin b USD. So already you've got you know.

Potential massive conflicts of interest, right. Imagine if the Nasdaq like issued its own you know, I mean, we're going to trade the stock, We're going to issue the stock.

We're gonna.

And another thing that I think was sort of the poker chips and the crypto casinos are tethers. Tether is the biggest stable coin in crypto by an enormous amount. There's supposedly eighty plus billion tethers out there. The biggest client of tether, according to protos is Crypto publication, was Alometer Research. Alometer Research supposedly bought I think it's thirty six point eight.

Billion dollars worth of tether. How how did that work?

How Alameda gave thirty six point eight billion real US dollars to Tether. That seems unlikely to be true, given that that Alameda had raised a few billion from vcs and allegedly perhaps had stolen some money from their clients. But how did you get to thirty six point eight So how did it work?

I don't know.

So there's been a lot of skepticism about the existence and the persistent existence of Tether over the years, and I think both of us have joked that, like, you know, in the year twenty two one hundred, whether there's still gonna it's like the cock croach surviving the new their winner. It's like somehow Tether's gonna be there holding the peg.

In the course of writing this book, t Other's a fascinating company.

The c fo is paid a sixty five thousand dollars settlement to Microsoft for software piracy. The CEO hasn't been seen in public in many years. That public face of the company is their CTO. The Wall Street Journal reported that as recently as twenty nineteen, four individuals controlled eighty six.

Percent of Tether.

So it's this very very small company supposedly dealing in you know, up to eighty billion dollars.

Yeah.

I don't know how much more I should say except that that's very suspicious and it is incredible that they've survived. But they have deep ties to to SAM and FTX and Alameda, and you know, I guess we'll see what happens.

Let me ask that question in a slightly different way, which is because I think one of the frustration for a lot of journalists is, you know, cryptocurrencies have been around for a long time at this point, and I've certainly written my share of eulogies for things like that coin. I think the first one I wrote was in twenty eleven, if you can imagine, Yeah, and then I did it again in twenty seventeen, and each time it comes back.

These are not honest markets. I don't know how.

Else to to say it, given the amount of wash trading and god knows what else what other shenanigans, you know, Sam into Twitter spaces. Somebody asked him, did you even make these trades? Like this even exists? And he said some of it no. So that's a bucket shop, right, I mean, that's that's what that is. Bucket shops or maybe I llegal in the twenties, So in some senses we are revisiting, you know, a century ago. So as as to why it hasn't fallen apart.

In what it would take, I believe it would take law enforcement action to to to really kind of get to the bottom of where the actual real money is. We'll see if that happens.

But you're you're getting closer to I mean, the season assists that the SEC issued to Finance to freeze their money. I think is sort of the next thing to kind of watch because they're clearly concerned that that the money could be could be moved away and that the customers, US customers can't get the money up.

So again we started this conversation by noting the timing this week of the what is Finance where did this? I mean, it's obviously massive, and there's been a lot of reporting on it, but in terms of like how you studied the company in your book, like what is it the gay that just like such an extraordinary footprint in the global market, How did it establish this? And how crucial is it to like all of the you know, these fake prices, the.

Prices that exist on binance. It's absolutely crue finance.

I don't know today, but it's I believe actually it's still over half of the of the volume in crypto is a spot volume trades through finance. I think it's been as much as I believe seventy percent, So it's just absolutely massive, just dwarfs every other exchange. As to how it succeeded, I mean, chanpeng Xiao started early when when when crypto is in a much smaller stage. He's very aggressive about courting clients, especially big firms, to trade

Pin you down there is a rumored headquarters, but yeah, we won't go into it.

Yeah, let's not go into that quite unless you want to know what there are our local.

Affiliations, Right, there's a Binance US, there was a Finance Australia.

I think all these places.

Well, in the SEC lawsuit they mentioned this tai chi document. So the tai chi document is this allegedly a document, the internal document from Finance.

Basically, we're going to practice tai chi.

We're going to set up locally compliant places like Finance US that are going to plain ice with the authorities and follow the rules.

But the volume, we're going to push all the volume.

Onto the main exchange, so redirect to the regulator's energy towards the towards the local shops. If that's true, then interesting strategy, heretofore successful. I believe the yen of Champeg Jao's tai chi may meet the yang of US law enforcement.

But I guess we'll see. Well.

So one thing on that note, I mean, the proximate cause of a lot of the recent crypto drama was CZ starting to criticize FTX and ft T TOE, in which a lot of people I think commented at the time was kind of weird. If you think of crypto as a sort of house of cards market that involves a few big players, it seems like a very dangerous strategy to start attacking each other. Do you have any idea or like conspiracy theory about what was.

Going on there?

Well, I mean I was talking to Sam. I interviewed Sam in July last year, and then we continue a DM conversation through October. Things were clearly getting pretty bad.

He talked of a stable coin war with CZ and Binance, so there was clearly some animosity there. And then yeah, I mean, what I know.

Publicly, what's been presented publicly is that seat that Sam and as cohort Bran Salem started kind of mocking CZ on Twitter, saying can CZ even come to this country? Things like that because CZ's a Chinese Canadian.

Pretty bold strategy.

And then the balance sheet of Alamito leaked I was reported by coin desk and it was you know, can I say shit show on on the okay? It was it was a ship show and and CZ had this chip, which is that he owned he had a lot of the FTT token.

Sam had tried to separate himself from CZ. I believe.

I think they fell out over a Malta as a license in Malta. That that's allegedly that Caz he didn't want to fill out the paperwork or something.

It's like, if you don't want to fill out the paperwork in Malta.

Anyway, Uh, then so they couldn't pay him real money, so they so they gave him some I think, but but he was mainly paid out in FTT, which gave him this chip to play right if he has the law of the supply. So all of a sudden there was a round on FTT. Sam's cohort Caroline Ellison, tried to stop the bleeding by saying, you know, by all the FTT you wanted this price. Since Ceci said no, let the market play out, and it collapsed in spectacular fashion.

So twelve hours later he said no, I'm good.

What was your take What was your takeaway from interviewing Sam obviously prior to the events of November, like, well, what were your interactions with him?

Like, well, our interview in person was interesting. It was July twentieth, twenty twenty two. Was in a midtown hotel in Midtown.

Right around here.

At the time, Crypto had done it sort of first crash, the May crash of Taro Luna.

So it was seemingly on life support. But Sam was the golden boy, right.

Sam was, you know, spending a lot of money on Capitol Hill. He was trying to get a particular piece of legislation through the Ad Committee, the DCPA. He was meeting with the CFTC Commissioner. I believe he met with him at least ten times. And he was being called the JP Morgan of Crypto by none other than Anthony Scaramucci, the Booch with whom he had a business relationship anyway.

So it was weird. It was really weird because I asked him some questions.

I wanted to understand how he could explain cryptocurrency is what good it did? I found that answer very unsatisfying. He said he kind of tried to duck it, and then he went into remittances or sending payments between borders. I had just come from Al Salvador, the only country in the world trying to use crypto as real money. El Salvador's economy, the foundation, I would argue of El

So the government had.

You know, for reasons that we could go into in another question, had decided to set up a system Chibo wallet, and it was suddenly gonna, you know, bring in tourists. But it was going to be a way for the savonor people to profit by or to not spend money on money Gram and Western Union traditional services. And it was going to be this huge boon to the economy. Well, nobody used it. It was a failure. It was complete failure for a lot of the reasons that plague crypto.

Me one company.

Just give me one company, give me one comedy that's doing anything, anything of productive value.

Just tell me.

And he eventually told me Solana. Well, Solana was known as one of Sam's.

Coins because he owned a lot of it.

I think it was like a billion dollars worth of it when they went when they went kablue. Did he really believe in Solana or was he trying to pump his bat, like what was that? Also, Solana has the unfortunate to shut down. It just stops working. I think it stopped working at least a dozen times over the course of its history, so that I found those answers very unsatisfying. You can't give me one company that's of any use in your industry. So there was those questions, and then there are questions.

About his donations. Probably the most.

Nervous I think he got was seemingly was when he wanted to talk about his effective altruism. He's going to give his money away, pandemic preparedness, all that stuff. So how much money have you given to that stuff? He said fifty to one hundred million, So okay, how much have you given to politicians? And he froze and he turned in his seat and deal with stuff. And you know, he's kind of a twitchy guy, and I get that he's got add I'm not trying.

To but like it was weird and he wouldn't tell me.

And at the time, I'm thinking, this is really strange because this information is public, right, Like, I mean, we know he gave forty million to Biden. We know his core gave twenty three million to the Republicans, Like, why doesn't he just and now you know, what's alleged is that he was running a ninety three million dollar straw don't so maybe I don't know, maybe that was why it was a really bizarre interview. It was really one of the most strange hours of my life.

We've we've had our own weird interview with Well that's right, yes.

Well that was very informative. So, I mean, if you don't mind, I'm just gonna you know. So, in the spring of that year, he had been on your podcast with Matt Levine and he talked about I believe it was magic boxes out of which money comes.

The question was how does yield farming work, right, And we were expecting a technical answer of you know, oh, there's this protocol and then this protocol.

Yes, yes, yes.

Instead it was magic boxes out of which money comes, and Matt correctly said that sounds like a Ponzi scheme. I think Sam laughed. I don't know what happened after that, but it's real. It was really strange for me. I mean, I'm you know, I got an ego and stuff, but I'm just I have an undergraduate degree.

I'm I'm an actor.

I've just been looking at this for a couple of years, and I'm here soon talking to the supposed JP Morgan a crypt like, can you give me one satisfying answer? Can we get one moment where we could kind of I could see how this was going to work. I left basically with a lot of questions, but they were all the same one What the fuck was that all about?

Like? What was that? It was really weird?

Yes, all of this sounds familiar. You mentioned law enforcement earlier, so again let me ask the basic question, but where are the regulators? So we're starting to see some actions now, notably from the SEC and the CFTC also sued Finance earlier this year. But where have they been and why the reluctance to crack down on this industry?

Yeah?

So I believe it was twenty fourteen when the CFTC Commissioner Tomy the Massad asserted CFTC.

Control over over bitcoin.

Said, because there's futures were being traded, and under the CEA, the Commodity Change Act making thirty six, they could they could argue that the bitcoins of commodity. Okay, so that already creates a little bit of a gray area, right because if the if bigcoins a commodity, but these, these twenty other twenty thousand other cryptos came into existence, what are they? You can say the sec hasn't been as aggressive as it should have been, and I don't I

The industries, but also to get donations, right.

And the regulators are fighting for turf, sometimes friendly, sometimes not. The crypto industry really really wants the CFTC to be in charge. The CFDC is the smaller agency. It's about a quarter of the budget a quarter of the budget of the SEC. So there's a lot of blame to go around, I would say. But in the defense of regulators, it does take time to build cases, to be photographies and how to require a law.

You know, we've talked a lot about the industry, but your story starts with like a friend, and obviously a lot of people have lost a ton of money.

Over the last couple of years.

Particularly, Can you talk a little bit more in the course of your reporting, like truly the types of people that you met on just this sort of like the buyers, like the people who liked sucked in at the top.

It's everybody.

I mean, it's really fascinating. Like you could interview and I did. I interviewed everyone from you know, kind of regular traders. I walked around the Bitcoin conference in Miami last year just talking to random people.

And then of course there are more sophisticated players.

There are hedge funds, they're you know, high frequency trading firms things like that.

And then there are the sort of the core players.

Which you know, we're Sam and CZ and you know, the folks that are kind of facilitating these transactions. So amongst the kind of the regular folks. Again, I kind of go back to this point of like crypto just becomes whatever you want.

It to become. Right, It's like it's a way of.

You expressing your like your your freedom, your you know, get off the shackles of tradfy and like find your own, create your own financial destiny kind of stuff. And I get that that that is such an intoxicating pitch sales pitch. That's why Schiller talks about these narratives and how powerful they can be and how difficult they are to It

But it's also very sad because I tell a story at the end of the book about a particular case. It's pretty pretty rough. But you are also getting into.

Gambling addiction. I mean, let's be honest, it's young men. Forty two percent of men eighteen to twenty nine have purchased US bought cryptocurrency.

That's a big number. Almost half.

It's gamified, right, the apps are. It's very similarish to robin Hood, but unregulated, and it's easy to hide from friends and family, I mean gambling addiction. We talked to some gambling experts for this and they told us that there's a husband wife. They run a boutique firm in Brooklyn, but that services a lot of Wall Street clients and

It's just it was all men under forty. Some of them are.

Sophisticated Wall Street guys, sophisticated in people that really know their stuff about all sorts of other financial stuff.

But have gotten drawn in.

And everything down to teenagers. I mean parents coming in with their teenagers saying they're gambling away their their minimum wage job, you know, their summer job, paycheck on this stuff.

And that's where it gets into the casino capitalism.

That's why I want the book to be about more than just crypto, because I do worry that we are Canes said this actually you know when I won't try to quote him exactly, but basically, when you turn the nation's capital into capital markets into a casino, you know the job is likely to be ill done. You are not servicing an effective use of capital. And I believe we need to look at some of these things through the lens of how much social harm they can do.

It's much easier to hide because all you need is a.

Phone and a few minutes or even seconds to make some trades, and so by the time families find out about the predictive that usually their son or husband partner is in, it can be too late and money's gone.

It is treatable.

It is a retreatable addiction, but you have to take some pretty serious measures sometimes and remove the ability to make the trades and.

To actually access the accounts.

So yeah, I'm not to turn it into a bummer, but like, I really think we need to talk about these things, because the marketing was, of course the exact opposite.

It was all the shiny stuff and all the amazing things.

But when you come down to it, economically speaking, cryptos a zero something game. It's poker because it doesn't do anything productive, is strictly competitive. For someone to win, someone else has to lose. But it's not a fair game. You're not playing in a rate. You're not playing in Vegas now. You're playing in Vegas in the fifties.

When the mafia rend, you know what I mean.

And then like Vegas, where there's entertainment value, you get comps, some drinks, have a dinner, see a show. You know, Cryptos like Vegas without the drinks, the dinner or the show. So you're gonna lose. You know you're gonna lose. Ninety nine percent of people are gonna lose.

In the book, you actually talk talk quite a bit about the overlap between online poker and crypto, and you almost almost draw connection between the end of online poker and the beginning of Bitcoin talk to us more about the overlap that you see there.

Sure, so in the original code that became the Bitcoin white white paper code, there's a poker lobby. So whoever Satosh and a Kamoto is was whoever they are, we do know they were interested in poker at the tame similar time to when the Bitcoin White Paper came out, online poker.

Was about to get crushed. It had moved overseas.

All these online poker rooms had been set up, and eventually the government got around to to shutting them down on you know what's become famous as Black Friday and online poker, and it was because they were cheating their customers. There's a company called Ultimate Bet that was had a secret god mode where insiders could see the other players cards. Uh. The compliance officer for the holding company of SCAPSA of Ultimate Bet is a guy named Stuart Stuart Hogner. He's

He was ftx's lawyer.

They think he then became their chief regulatory officer or something like that. Interesting, where were the signs? They're really strong parallel, So maybe crypto's maybe bitcoin was set up to be this emancipatory new form of peer to peer currency, or maybe it was literally online gambling two point zero a way of a way of moving money overseas and you know, using it to facilitate gam you know.

One thing that you've talked about, and I think it's it might be it's probably There's probably been other cases like this, but there's a lot of there's been a lot of pure pressure in crypto. It's like people telling their friend it's like you've got to get into the your friend, or just being told online have fun to stay poor if.

You don't, they don't. They tried that line on me.

But like, you know, that's wasn't there in like online poker, like that degree to which like the sort of like crowd whips its own members into a friends face.

Yeah, and that's where I think you get into a multi level market marketing scheme. The abuse of language is similar, the way that they're sort of twisting words and trying to create a pressure filled environment where you feel like, you know, fomo, you're you're going to miss out if you don't invest. Now you know really quick, you got you gotta really quickly invest in the future of money, because otherwise you're not going to get in there, which

Strange to characterize a financial relationship, especially with people you don't even know, right, I mean, so much of this stuff is done online and through synonymous accounts.

That's your community. I'm not saying people don't find community. What's interesting is some of the strongest communities I've found are the participants in the class action lawsuits against companies that have allegedly defrauded them because they're bound by the fact that they had a similar experience where they they had a lot of high hopes and then they were let down.

It is true. No one talks about the community of like T bill investors. Yeah, exactly, it's not really a thing. Let me ask a devil's advocate question. But you know, we've been talking about cryptocurrency mostly as a monolith. We did touch on the narrative flexibility around bitcoin, so the idea that it can be many things to many people all at once. One of the things that it seems to be now, or at least there are some people

So you're saying you need to be more pure, you need to believe more in the decentralization.

If you don't like crypto, you should buy the original.

Crypto exactly exactly. Not a cult, I think. So that's the flip and answer.

On one level, there is some truth in the sense that bitcoin is more decentralized by nature of the proof of work, but that cuts the other way too, because of course proof of work means it can't scale. Bitcoin can only process five to seven transactions a second. It hits limit, it hits what's called a red queen's race, where like you're using more and more energy depending on how many competitors are there. The more competitors come in, the more energy is expended for the same same block.

Real quickly, we just have a couple mints left. You know, you mentioned we're to use the virus analogy and you talk about maybe reaching herd immunity. And then the question is like, is there some pool of new money or new people that could be brought in to like keep it going, Like do you think that like the sort of potential pool of would be crypto buyers are more or less exhausted.

Well, it has utility, you know, for gambling. I mean, you can gamble in anything, so I don't think that makes it unique.

But it has utilities as a gambling device, and it has utility to facilitate crime because you can use it for money laundering and avoiding capital controls, tax evasion, sanctionization, whatever. And I understand that there's there's an arguments like some of that's good, right, we don't like some of these authoritarian governments, Okay, sure, But also if it goes that way, it also has to go the other way, right, If the good guys can use it, the bad guys can use it.

So yeah, I just yeah, I don't know how to answer that question.

Actually maybe a related question, but are you planning to write another book.

What's next, Well, I've filmed a lot of these conversations, so I'm working on a documentary and yeah, I don't know. I mean, I've had such a blast on this book. It's been such an adventure. I think the best part. I know it's a cliche, but it's really the people I've met, especially the skeptics. Skeptics are just a great group of eccentric, wonderful, you know, nerds like we're just it's just fun and it's opened up my view of the world. I just have this much more I just understand.

So yeah, I don't know what the.

Next book is, but I really appreciate that everyone asked you that just as soon as your first book that's not even out yet.

Ben Mackenzie, thank you so much for joining us the book Easy Money July teen. Thank you, congratulations, and thank you so much for coming on up. I really enjoyed talking to Ben. You know, I feel like we're so in this uh you know, follow the crypto stories so much. It's good to sort of zoom out a little bit and talk to someone who kind of came at it with fresh eyees.

Well, totally and to his point, it was all about the outsider perspective. So it was a fun conversation.

Shall we leave it there?

Let's leave it there.

This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway, and.

I'm Joe Wisenthal. You can follow me on Twitter at the Stalwart. Follow our guest Ben mackenzie. He's at Ben McKenzie. Follow our producers Carmen Rodriguez at Carmen Arman and dash Oll Bennett at dashbot. And check out all of the Bloomberg podcasts under the handle at podcasts. And for more odd Lads content, go to Bloomberg dot com slash odd Lots, where we plush the transcripts. We have a blog and

And stream Bloomberg TV on Apple Originals, Roku, Samsung, or any other streaming platform, and make sure to tune in on Bloomberg TV at ten pm Eastern.

Thanks for listening and thanks for watching.