CRYPTO INTERRUPT: Attack of the 50 Foot Blockchain on video!

How dare they pull me back in again.

I have a fabulous new microphone! It’s a Røde NT-USB Mini and its sound is everything I ever wanted. I am utterly delighted. Thanks to reader Firegravity who bought it for me. [Amazon UK; Amazon US]

So I thought, why not just … ramble like I’m on a podcast?

So I did this very quickly! … and then spent a few hours dressing it up with slides and video clips. Then I put it up on the Pivot to AI channel. It’s just 12 minutes. [YouTube]

$5-and-up patrons can read the transcript of this video now. EDIT: it’s been a week, so now it’s below as well. [Patreon]

I might do more of these, probably. Let me know what you think about slow rambling with hesitations versus the faster scripted things I do for Pivot to AI.

Who here uses a podcast catcher? Which one do you use? I’m wondering if audio (just the soundtracks) might be worth it.

 

Transcript

Good evening, I’m David Gerard, and this is not quite Pivot to AI. Instead, you know what I’m doing today? I’m doing blockchainy stuff. Why? Because I could.

This is just a quick casual post. I’ll write and post the Pivot post later. I’m not doing this with a script. I’m just talking to you, my dear viewer, like I’m interviewing myself on a podcast.

So, David. Why the heck are you doing this?

I mean, arguably I should have become a crypto video star in the last two bubbles. I could have made a bundle, but I didn’t have a video setup at home and I didn’t feel like it, and ehh, whatever. So I have no regular plans for this. We’ll see how it goes.

So, crypto slowed to a near halt in 2024. My esteemed co-writer, Amy Castor, and I got thoroughly bored with covering the dregs of what looked like a dying system. So, we started the AI site, and it was fun. It’s great fun.

It’s very busy, because you wouldn’t think it was the same, but AI, it attracts the same sort of grifters who are attracted to cryfto. Grifto. Criftocurrency. The same sort of guys — I’m really struck over and over by how it’s often literally the same guys — but the same sort of guys and the same sort of ways of promoting technology that doesn’t do the job you say it does. Because it’s obviously just an economic function, not a technology function. And it doesn’t make sense if you look at it as something the tech can do, because the tech can’t do it.

AI is a bit better than blockchain in that regard, because machine learning exists. Machine learning’s problems come when it’s too effective and it’s used for abuses. Large language models are pressed into places they don’t work. They’re good at glib speech and generating words. They’re not good at being accurate or having the facts.

One thing LLMs are surprisingly good at is translation, which shouldn’t be so surprising because the transformer architecture was invented to do machine translation. So yeah, it’s going to be okay, but watch out because it’s generative, so it makes stuff up.

But the technology in AI actually exists, actually does things, but there’s still the infrastructure of grift around it.

I am pretty sure that nobody cares about the technology. You could slot anything in there. If they thought they could have an economic bubble based on an ELIZA chatbot, it would look very like what we’ve got now, with hyperscale ELIZA data centres. It would be just as bad in just the same ways because it’s just the same grifting bozos.

But back to crypto, it’s like, we thought it was dead. We thought it was just the arse-end of a decaying paradigm which was stupid and didn’t work.

Then Trump comes along and the crypto bros spend more money than anyone’s ever spent in an election to re-elect this guy. And he’s repaying them handsomely, because he also understands he can get free money from it, and that is one thing that Mr Trump definitely understands.

So here in 2025, crime is legal. Like, even Matt Levine was just straight up writing, “I guess crime is legal now.” Money laundering is legal. Literally, they took out a bunch of money laundering rules. North Korea’s nuclear program is going great. It’s going to keep its funding because they switched Tornado Cash back on. Fantastic. [Reuters; DoJ]

Amy Castor, by the way, is alive and well and is definitely not leading a guerrilla resistance group high in the mountains of Massachusetts and making occasional terrorist sorties to blow up a Tesla supercharger. That is not a thing that is happening. Definitely not.

So what’s the state of things with crypto? The actual facts haven’t changed. The bubble isn’t real.

For all the headlines you see about the number being very, very high, the mechanism is the same thing I’ve written in the same crypto article over and over for the last nine months, which is: the price is set by trading on unregulated offshore casinos.

The trading is not against dollars, it’s against fake dollars, stable coins, which are backed by hot air, frequently.

The trading is highly manipulated because they’re offshore casinos with no regulation whatsoever.

And it’s just a very fake market. The number is whatever it needs to be. They don’t want to take it too high because otherwise the suckers might want to cash out. And then it drops again. You can crash the Bitcoin price by selling some. It’s pretty cool.

But I’m pretty sure the bubble has not come back because Coinbase’s reported retail volumes in their 10K’s and 10Q’s, where they’re not allowed to lie, are still down. So they’re up a bit, but they’re nothing like what they were in the actual bubble in November 2021. I’m sort of surprised. It’s heartwarming that it hasn’t actually set everything on fire.

But yeah, now it’s all grifting trash, but now it’s officially government sanctioned. Jesus Christ.

So let’s see, we’ve got some stupid news here.

Michael Saylor is still running his bitcoin stock scam. There is a very, very complicated mechanism. I wrote about it in the newsletter a few days ago, which basically is designed to confuse you. It’s one of those things that make it so complicated that you can’t understand what’s going on, so assuming this must be normal.

But what he’s actually doing is, he is printing MicroStrategy stock, and then just out of thin air, and then using it to buy Bitcoins with. He is printing his own money, except it’s stock. [FT; FT]

Who’s going to stop him? The number’s going up. Obviously this is excellent business practice. So that’s fantastic.

GameStop recently, this is fun, they tried to copy Saylor’s idea because GameStop is very into being a meme stock. But somehow the price went down when they did that because buying a bunch of bitcoin for a reserve is stupid. [Reuters]

An even stupider idea, though, is coming from, again, the government, where Bo Hines, the executive director of the White House Crypto Working Group, did an interview with Eleanor Terrett from Fox News, who’s actually quite good. I follow what Ms. Terrett writes. She’s surprisingly on the ball for this stuff.

So he spoke to her about the bitcoin reserve plan and how he plans to get the gold in Fort Knox and sell it to buy bitcoins: [YouTube, 5:08 on]

HINES: I want to point you to Senator Lummis’s Bitcoin Act of 2025, in which she believes that we can identify the real true value of some of these gold certificates that are, you know, basically, I think it’s like $170 an ounce is what they’re categorized at right now. And if we actually realize the gains on that, that would be a budget neutral way to acquire more bitcoin.

TERRETT: Theoretically, could you sell some of the gold in Fort Knox to buy bitcoin?

MELINEK: Can we? Is that possible?

HINES: Well, if it’s budget neutral and doesn’t cost the taxpayer a dime.

Jesus Christ. So that’s just incredible. When Trump went to look at the gold in Fort Knox, I have to break it to you that the wallet inspector did not go there to inspect the quality of the wallets. That was not what that was about.

Wyoming State is talking up officially issuing a state stablecoin. This is not quite the same as their previous stablecoin plans with Caitlin Long’s Custodia Bank and stuff. This is, they want an official state-issued stablecoin. The reason for this is they want the interest on the reserve, now that interest rates exist again. It’s the governor looking at money, basically. They want to do this by July. And because nothing matters and crime is legal, why not? [Bloomberg]

And the third bit of stupid news, Pete Hegseth, the administration’s most able and adept user of secure communication protocols, has many qualities, like he’s drunkard, he has many alleged sexual assaults which he paid off, all manner of things. Look at his Wikipedia, it’s awesome. He’s not quite as qualified as the literal ephebophile that Trump tried to hire, but he’s well on his way. [House of Representatives, PDF]

He’s got another important qualification. He’s a crypto dumbass. Hegseth lost a bundle in the Celsius network. [Michel de Cryptadamus]

Now, a lot of ordinary people lost money in Celsius because Mashinsky — who has pleaded guilty to being a massive fraud, thankfully, he’s done one good thing, he pleaded guilty — Mashinsky is a good salesman. He’s a good talker. He can convince people of things. It was all lies, it was a Ponzi, but he convinced a lot of ordinary people that this was a good investment.

Hegseth is rather more educated, rather more worldly and should have known better. But he got greedy. And this is yet another of Hegseth’s admirable qualities that make him just the man for the job.

So yeah, I expect more dumb stuff to happen.

I don’t know how often I’ll do one of these when I feel like it. This is purely experimental. This is me rambling at you. Hi. And I will write posts and so on. There will be a proper Pivot later today. I’ve got to write it and we’ll put that up and it’ll be fantastic.

Today I’m wearing my Zeke Faux Number Go Up t-shirt. Zeke sent a pile of these out after his book was published. If you want to know what the heck happened in the 2021-22 crypto bubble, the first book you need to buy is Zeke Faux’s book, Number Go Up. That’s Faux F-A-U-X. [Amazon UK; Amazon US]

And the second book you need to buy, it’s a very close second, is Ben McKenzie and Jacob Silverman’s Easy Money. They were both written at the same time, published at the same time. They’re both great overviews of the whole thing. So, enjoy those. [Amazon UK; Amazon US]

I’m gonna get back to the AI now. But sadly, I thought I was out, and they dragged me back in, so there’ll probably be a bit more crypto by and by.

Have fun kids, don’t take any wooden bitcoins. Catch you later.