 Because I wouldn't recognize that dogecoin is going to have a flippening and will exceed the market capitalization of Bitcoin before the end of the year. And then I laughed at that so they called me a Bitcoin maximalist. It really has gotten to ridiculous levels. Hey, folks, I'm Adam B. Levine, and this is Speaking of Bitcoin. As always, I'm joined by the other host of the show, Jonathan Mohan. Hey, hey, Andreas M. Antonopoulos. Hello, and Stephanie Murphy. Hello, everyone. Hi, Stephanie. I thought I'd give a bubbly hello for our bubbly show that we're about to do. This is a very good point. So we're now about a third of the way into 2021, and things can broadly be described as manic. Bitcoin and Ether have been making new all-time highs with relativies, but that's nothing compared to little dogecoin, which has spiked up as high as 10,000 percent gains just the beginning of this year. Unless you really need it, money is cheap and plentiful. And while the Federal Reserve claims to be desperate for more inflation, it seems like for normal people, anywhere you look and anything that you just might want to buy has gotten more expensive in absolute terms. Lumber alone is up more than 250% since just last year, and it's not a supply issue. I could go on, but I think that this is kind of a good point to talk about it. Folks, I have a lot of concerns here, not around kind of the crypto space. I think the crypto space is certainly showing kind of what's going on elsewhere, but just broadly, like I got a mortgage a couple of years ago. My house has gained almost 40% value in like two and a half years. That's not normal. Why are you concerned about that, Adam? No, you have your houses worth more. You got a good deal on that mortgage. It's true. I mean, like in local terms, it is, but again, like it's just kind of an acceleration of the trend that we've been seeing for so long. My house, of course, worth 40% more now that I bought it, but the people who had owned it before had gotten it at a price that was about 40% lower than what I paid for it. So if you've got a lot of assets, then it's really, really good because, hey, all of your assets are worth so much more money right now, and that's like a decent way to store your money. But if you're just like some schlub who's just trying to like live, well, it doesn't actually help you that your house is more expensive unless you're trying to sell it. And then if you are trying to sell it, well, now you got to buy another house and you kind of just wind up where you were before. Right. Then you have that problem of where are you going to go? Exactly, right? Like, I mean, I honestly looked at Wyoming, I guess about six months ago, because again, like Wyoming has this really favorable tax environment. And you know, like mostly I just don't particularly like living in places where the government gets involved with my stuff. But even trying to find something in Wyoming that's like really modest is crazy expensive because everybody's doing that right now. COVID certainly made that trend worse as people moved away from the big cities and more towards these sort of outdoors places. But I mean, it's not a new trend and it certainly is one that's accelerating now at a time when COVID is supposedly not as much of a problem as it was before. So there's no real specific topic here outside of just the kind of craziness of what's going on with prices and with markets and how everything seems to be going up, you know, except for the Federal Reserve's inflation index, right? The way the Federal Reserve measures inflation, they still are just desperately looking for it. So if you see any, just tell them about it because they really need some. Yeah, we talked about this a few shows ago too with what is money and how to prices affect people. And everyone knows like you can feel that something is amiss. The prices of everything are going up and it's not just things like real estate like you mentioned, Adam, it's like the stock market, which seems really counterintuitive has been just going up ever since the pandemic, at least here in the US. And why is that? Why should that actually be happening? It's because people don't know where to put their money to try to beat inflation that they know is going on. And also, you know, it's things like coffee and lumber. Like the price of lumber has just shot up really high and there's always supply chain disruptions. There was this thing with the container ship that was stuck in the Suez Canal and there was only global shipping delays. But aside from that, there's like shortages of container ships and everything is just messed up and the prices are just going up. I don't know why you're all complaining. I mean, coffee is more expensive, especially the amount I'm drinking. But I just basically go from the screen where I'm watching my doze investments to the coffee maker back to the screen where I'm watching my doze investment back to the coffee maker and I'm fine. I'm fine. I'm totally fine. Listen, I'm fine. I'm fine. Sounds like you're fine. Yeah, the market's crazy. The stock market's gone up 53%, I think, here to date. And that's not normal. I've got another statistic for you as well. More money has gone into stocks in the past five months than over the prior 12 years. That's from a report from Bank of America reported in Reuters. So it's not like this is conspiracy theory fringy stuff here. Like this is the world today, right? Like money is cheap and just highly accessible so long as you don't really need it, right? Yeah, exactly. Anyone who has money is panicking, doesn't know what to do with it. And the only thing that kind of makes sense is putting it in the stock market, but that doesn't really make sense because it's like obviously behaving in a crazy way. And everyone else doesn't have any money, so they don't have to worry about that problem, but they do have to worry about the rising cost of everything. Yeah, there's another word for when everything's in a bubble. It's hyperinflation. Like I think a while ago we did a COVID, like the lockdown episode. And I think we had talked about how those three factors when combined make America, Venezuela, this is what the first couple of years of Venezuelan look like. And we need to do an entire episode on this and get a proper economist on. But for those who want to fall down this rabbit hole, it's called a crack-up boom. And the crack-up boom is the hyperinflated failure state when people realize that cash is cheap. It's going to lose its value. And literally anything that you can switch your dollars into is worth it. And so everything goes up, but this is where it gets super permanentious because everything's going up in nominal terms, but it's going down in real terms. So if true inflation is 20%, but your stock market portfolio goes up 10%, you didn't make 10%. You actually lost 10% in value. However, because of the government taxes you in notional terms, you actually get a tax increase, not a tax decrease. And so the pernicious thing about crack-up booms is assets are not inflating in real terms. They're inflating in nominal terms, but going down in real terms. But because the government only cares about dollar terms, you're not only losing your assets value. You're getting an increase in your tax rate because by the numbers in dollars, they're pretending you're making money. So imagine if the inflation was 20% and your stock portfolio goes up 10%, you had a 10% loss in real terms, you should actually be able to write that off. But in nominal terms, the government would say you owe them even more money. That's a wealth tax. It's a wealth tax, not even from the inflation, but because the government's pretending that you even had an increase in the cost basis at all. And so this is what the beginning of a crack-up boom looks like. And the question becomes, is everything in a bubble or is it the dollar collapsing? And there's the flip side of all of this, which is that on the other end of the scale as income and wealth inequality have reached record levels in the United States at least, but increasingly, this is spilling over into many other parts of the world. The end result is that right now, there are an enormous amount of bankruptcies happening and of course, bankruptcies as well happen in an unequal way. For example, the vast majority of minority bankruptcies are channeled into Chapter 13, which is debt restructuring and not Chapter 7, which is dismissal of debts. And there are some interesting mechanisms by which part of that happens. For example, if you want to declare bankruptcy, if you go through Chapter 13, you can include the filing costs of bankruptcy in your bankruptcy and pay it over time. If you go to Chapter 7, you have to pay your bankruptcy filing up front, which of course, if you're bankrupt, you can't. So you get to the point where people are too poor to declare bankruptcy. There is a backlog of foreclosures, a backlog of evictions, a backlog of bankruptcy, job losses, unemployment, etc., that are all hanging from a single stimulus payment check thread that's running out really, really fast. And there's not really much after that because the economy was really hurt by the pandemic. It was already really hurt by a thousand other structural things and there really hasn't been a recovery. Forget what you see in the stock market from an actual productivity perspective. Things are bleak out there. So even while you've got one group of people who are looking at massive returns in real or nominal terms, take it any way you like in the stock market, massive increases in portfolio and they're basically outbidding each other in real estate and we're seeing some of these crazy booms in prices. The average house sale now has more than two offers on it and they are above asking. Just to put a little bit of context to that. So I was talking with a friend the other day who just bought a house in Toronto. They won a bidding war with 26 other people and the bid was more than 20% above the asking in order to win that. And that, again, speaks to just incredible desperation to get into these types of assets before the opportunity passes you by. And that's even again for people who have a lot of resources to throw at these problems, much less the record numbers of people who are stuck living with their parents. So I mean like it's a wild, crazy time where it looks like things are going well if you don't understand what's happening. But to Jonathan's point, I mean like the crack up boom thing is the thing that I've been thinking about a lot too because let's just talk about Dogecoin for a second. Like Dogecoin is a project that got started in 2013 was abandoned in 2013 effectively. It was very popular for a couple of minutes and then it was so weak that it had to hitch its wagon proverbially to Litecoin because it could not support its own blockchain. So it's now merged mind with Litecoin. Dogecoin started the year at under a penny. I think it was about a four tenths of a cent and it hit a height of about 45 cents after just three months. This seems like in large part, it has been driven by people who are looking at their Robin Hood app or whatever. I'll tell you a quick story actually. So at the end of January, when the GameStop thing was going on, I was ready to FOMO into GameStop at the end of January. And I was like, I'm going to put, you know, $500 into this and just like be part of this whole thing and see how it goes. So this was the same time that they turned off the ability to purchase, but not the ability to sell GameStop shares. And so I was like, ah, man, well, I guess I'll buy some Apple and I'll buy a little bit of Doge. And so I bought a little bit of Doge because it was easy because it didn't take signing up anywhere else. I had the money sitting there that I was planning on using for something and I was kibosh by that. So I put it into there. Like I said, I got the Apple stock. I got the Doge. Apple did nothing. Sat there. I'm poking it with a stick. It does nothing, right? Doge just goes up and up and up and up and up and up. And I finally exited the position when I had about 1,300 percent gains on it. Again, it was a very small amount, just a couple hundred dollars for like a big game. And I was like, ah, we're at 14 cents. This is ridiculous. It's never gone higher than a penny until this year. You know, and now it's up at this ridiculous price. So I'm just going to take my winnings. As soon as I sold it, bam, up to 30 cents and then up to 45 cents after that. And it's been really interesting watching that rise, which is partly, I think, attributable to this increased access and sort of the friendliness that Doge has always had. And then on the other side, there's this really interesting phenomenon. Did you guys see the Slim Jim Doge connection thing that happened about a week ago? Yes. It's almost like ridiculous to like say it out loud. But yes, there was some kind of deal between Slim Jim and Doge, some kind of partnership. I don't know what it was. Do you know, Adam? I do. So not a deal. Effectively, what they did is they just started making up Doge memes and tweeting them. And they found that over the course of just three months, they doubled the number of followers that they had and they five xed their amount of engagement. And so where I learned about this actually was when a coin desk reporter sat in on a Conagra, which is the parent company of Slim Jim Conagra foods call and the CEO of Conagra Foods, which is a company that owns lots of food brands. So they own like Marie Calender's restaurants and they own Hunt Tomatoes. They're a big company. Yeah, they're like an agro giant. Exactly. It's a big company. And so like during their earnings call, they talked about their Doge engagement strategy as like a gigantic win that they were ready to double down on, right? And like this is at the same time that Mark Cuban is saying, well, you know, we accept Doge for a sports franchise that he owns, right? And we're keeping all the Doge, right? We're such believers in it and Elon Musk, right? Like, yeah, Elon Musk was talking about it too. Yeah. You know, so like I saw a post that he made that was like one of those pictures of like a giant sandstorm in like Arizona, right? Where like the giant sandstorm front is about to kind of sweep over the thing. And so he put a Doge face on it and it says Doge economy, right? And then the kind of area that it's about to encompass is traditional financial system. That's how we go to the Moon man. One small shitpost for Elon. One giant shitpost for mankind and we ride this wave to the moon. I had someone on Twitter come at me because I wouldn't recognize that Doge coin is going to have a flippening and will exceed the market capitalization of Bitcoin before the end of the year. And then I laughed at that. So they called me a Bitcoin maximalist. It really has gotten to ridiculous levels. And I thought that was a pretty funny joke at first. Then I realized this person was serious. And when I laughed at them or with them, I thought I was laughing with them. Awesome joke, but they thought I was laughing at them because they were dead serious. And then their whole army of Doge investors. I can't believe I'm saying those two words together. Doge investors came at me. So then I turned off Twitter and burned down my laptop. Good call. Have you guys heard the Elon Musk Doge conspiracy? Because I've talked to a number of people who hold Doge and a surprising number of them genuinely believe it to be true. No, tell me. Oh, I love a good conspiracy. So the people who are, you know, slightly more sophisticated than just throwing money at GameStop, I guess you could say, who are holding Doge genuinely believe a QAnon level of Glenn Beck inspired series of questions. Not saying anything, just questions. But Elon Musk is a huge ethical supporter of some concept of UBI and wants to help the poor. The problem with that is the distribution and the middleman fee trying to deploy capital at scale. It's something like 10 addresses in Doge hold the vast majority of all Dogecoin and there's one buyer who buys in increments of 420 and 69 but like the same amount irrespective of the price. So it's some insane whale that's buying a lot. Now that the price is increased, it doesn't matter what the price goes up. It's the same amount that they're buying. And so Elon's pumping it. And so Elon can't pump it if he's buying because if he sells that would be on Justin Richmond if it ever goes down. But what if he's intending himself to literally be the bag holder and he's using Doge as a distribution mechanism for a functional UBI to the people who wouldn't have been saved by Bitcoin or Ethereum and aren't sophisticated enough to have any exposure in the stock market. And so it's the most directed targeted way for him to transfer wealth to the people who would not have been saved and just literally make a small percentage of his portfolio be the bag holder as a mechanism of transferring these funds to them. So that it's the access token to the Rockets and becomes the reserve currency of Mars. I see it. I mean it's brilliant clearly. I mean that's what I would do if I had hundreds of billions of dollars. I think that may be why you don't have hundreds of billions of dollars. Yeah I was going to say I'm not sure I would do that if I had hundreds of billions of dollars. None of us do that's probably why. In terms of people who hold Doge who can create a constructive narrative as to what's supporting the price of Doge right now that's been the most compelling argument I've heard. The second most compelling argument I heard was someone who said you know something doesn't have to be a scam to be inferior to Bitcoin it could just be inferior to Bitcoin. And so they said a hundred years from now what do you think is the greater scam coin the dollar or Doge. You can look at the inflationary path of Doge and all these other things and yet on its merits it might still be a superior product to the dollar. And so the memes are better. Wow such logic. Those are the only two arguments I have heard that are the most sort of constructive as to how the price is sustainable. Okay so that's fair those are arguments for why the price is sustainable a theory that I've kind of been developing over the course of this year and the Conagra thing really seems to back it up is that so we did a series of interviews on this show maybe about two or three years ago at this point with Alex Gladstein from the Human Rights Foundation where he and I talked with a bunch of different people from Nigeria the Philippines Iran Venezuela like a handful of other countries and I went into that with one kind of major question which is given that the scale of value around Bitcoin and at that time Bitcoin transactions were quite expensive you know given that like a single Bitcoin transaction can be more than like an average days wage in that local area like is Bitcoin still the choice or does that transaction fee get in the way and is there something else that has consensus and across the board very surprising to me we learned that effectively there's a coordination problem there that makes it so that Bitcoin is hard to beat and the coordination problem basically has two sides. One is effectively what is going to be the most valuable form of money to me in a given area right and so part of that is Bitcoin's monetary policy it has major advantages on that side but another part of it is the liquidity thing and the answer to this question if I want to sell this who will I be able to sell that to things that have come after Bitcoin may offer better advantages better rates other kind of like minor improvements but because they came after Bitcoin you have this coordination problem where you might think that one thing is better but someone else might think another thing is better and that disagreement about it makes it harder to trade harder to find someone is willing to buy yours or to sell you something at a price that you think is fair and so Bitcoin just kind of becomes the de facto standard because people don't know the answer that question and the easiest way to answer it is to just have Bitcoin now I've been thinking that there's maybe a similar thing going on here with Doge in so far is that you know while Bitcoin is kind of like long-term predictable money with Doge you have like a joke and it's a really early joke and so when people are now looking for what joke currency do I want to buy or what joke do I want to invest in since everything has to be an investment these days Doge is kind of the obvious choice and sure there are other things that you could buy out there that are trying to be different meme things but none of them have that consensus and so again when I see the Elon Musk's the world the Slim Jim's of the world you know and kind of the variety of other people just out there sort of centering on Doge is like the big joke that they want to be part of kind of makes me think of Bitcoin in that way and kind of makes me think that like consensus around predictable monies is important to a lot of people but not really in the United States not really in the Western world where we for the most part at least perceive ourselves to have stable money even though as we've been discussing seems like that stability may be a bit more of an illusion today than it was last year so I'm just kind of curious about that like what do you think is there any kind of validity to that type of approach or thinking about this could Doge be something that does parallel Bitcoin even if it's just in that story for a different group of people so if you look at which assets perform well in a crack-up boom it's assets sometimes securities but it's also art and collectibles and so if you could think of Doge as this cross-section between a collectible that presents itself as a currency you know art is one of those vehicles that maintains its value in a crack-up boom contingent on what the art is and so to the extent that Doge is the most liquidly commoditized sort of art project you would see it correspondingly increase in a crack-up boom like you would other types of collectibles are so that's like sort of one kind of argument for it I would like them to change the slogan so like you know how light coin is silver to Bitcoin's gold so you could go one step further to discuss this kind of mass availability of something that has no real scarcity or value and Doge could be like toilet paper to Bitcoin's gold and before you start laughing about that the scarcity isn't there no toilet paper is valuable exactly right so if you think about it from an Austrian economics utility perspective you will laugh at toilet paper to Bitcoin's gold until you're standing there with diarrhea in a field of stinging nettles and then my friend I mean like this is a longer topic certainly one that's not going to end today I think we're just going to continue to talk about this periodically when it seems like we had particularly ridiculous inflection points you know we've been talking a lot about nft so we're not going to talk about him here but let's just be real that's a big part of this too again sort of the mania that seems to be encompassing not just the crypto space but the world at large certainly applies there as well so have fun stay safe out there and you know watch out for the crack up boom if anyone's listening is writing a book or thinking about writing a book about the financial collapse and what it's doing to people what Andreas said I think is a phenomenal book title which is too poor to declare bankruptcy I think if anyone there needs a book title I think that's a good one I used to really like doge because of the culture of memes and jokes and the tipping culture around it so I was really into it when it was just a joke and nobody took it seriously and that was great in fact I spoke at the first doge conference which was in San Francisco and I think it was like maybe what 2014 2015 sounds about right yeah and that was so much fun I mean just completely silly and I did a fairly serious talk about the value of a meme culture in promoting an idea that requires kind of social ties to develop etc etc so that talk I think I have that video or it's on YouTube so I'm thinking if I take that talk and turn it into an NFT you know go along with me for a second here so this is the first doge conference video talk of me a Bitcoin maximalist and I turn that into an NFT and publish it as an ERC 771 on Ethereum I think I win I think I win the keyword bingo at very least I think you should only take you must swap dogecoin though for it yeah very good and then I'll be richer than Elon Musk right there I hate to ask this but like I don't really know anything about this does doge actually have any fundamentals like is that even worth talking about maybe not it has negative fundamentals I mean a big question is how much of it is lost right so doge has an unlimited issuance schedule we can talk about this might be worth honestly doing an episode on doge just kind of talk about the path of the project now that it does seem to be you know a thing that is not going to go away anytime soon it's merged mind with litecoin and so it doesn't really have its own infrastructure and interestingly in this kind of latest run up in price I believe it has and currently remains a higher market cap which is obviously a flawed metric but it's larger in total market cap than litecoin is so what was you know kind of like a ride along has now sort of become the larger of the two which is kind of interesting you know it didn't really have development at all for a number of years but this is kind of inspired people to get back involved and in a lot of ways you know like I said there are some interesting parallels to Bitcoin just in so far as it really has no founder there's no company behind it and you know it's really just kind of a community driven phenomenon although obviously Bitcoin has a lot of developers just no founder at this point yeah but why reinvent the wheel I mean I think it's kind of smart to hitch the wagon to litecoin like you said because you know then it's like hey you just read that wave and then they've actually become bigger than litecoin and a rising tide lifts all boats I don't know all wagons yeah but I mean that wasn't like a smart move that was a move of utter desperation doge wasn't getting minds on its own and therefore had no security well at first it was desperate and now it's smart right yeah I guess yeah wow much smart so early yeah I mean and you can't underestimate like it is a good thing like if you can make people laugh George Carlin said like make people laugh so they don't kill you right like people are constantly like hating on cryptocurrencies and getting mad about this and there's so much stuff to be mad about in the space but it's like you can't be mad if something makes you laugh and it has this disarming quality that it's kind of cool and it's great promotion I have one parting little gift for you which is a site called doge seed dot com and doge seed dot com generates bib 39 compatible actual doge seeds of course it's not secure because it's a website generating your seed but what it will do is it will add actual doge meme words into the seed from the standard bib 39 dictionary so for example you know this 24 word seed much profit very pyramid mechanic sugar name foam route merit thunder other etc etc etc but starting with much profit very pyramid I think just says it all and you can find that on dosheet.com I use it for all of my demo seeds I love it I think there's nothing more beautiful than doge bib 39 air quote compliant word seeds that have like 16 bits of entropy what's the word list like 100 no it's 2048 words all it does is it creates combinations in the beginning that includes words like much and such and it has a little table with analysis so a standard bib 39 has 128 bits for 12 words a doge seed of 12 words is 108 bits of entropy at 24 words a standard one is 256 and a doge one is 236 which you know is still perfectly adequate the entropy is still good the problem is of course that is web generated but if you could take this and implement it on a hardware wallet or even better an application specific integrated circuits I'm talking directly to you asic manufacturers this is a great idea you could make a doge seed generator and hardware perhaps silicon on chip so you could sell it to phone manufacturers I have a friend it's really interesting when you look at seed word generation and he took the seed word list and cut them all into little strips of paper and then randomly chose them out of a bag and that's how he generated his word list and so my problem was he kept the bag and I told him he has no idea how easy it is to undo all his entropy and I told him well I would just go to his place get the bag and then coat them all with powder and see which of the words have more oils on them than the others and then use those words to brute force it so I'm always very suspicious of any form of non-standard word generation because there's always an exceptionally weird way to break the way that you generated it but you know what it's better than keeping your coins in an exchange yes but in keeping with the spirits of doge this is funny it's fun and it's not actually secure or worth investing in okay and with that I think I'm going to take us out folks that's a wrap on another episode of speaking of Bitcoin today's episode featured Andrea Sam Antonopoulos Stephanie Murphy Jonathan Moyan and myself Adam B. Levine this episode featured music by Jared Rubins with editing by Jonas if you enjoyed this episode send us an email at adamatspeakingofbitcoin.com or just leave us a review on your favorite podcast player and until next time thanks for listening