Big Technology Podcast - Why Crypto’s Thriving Post-SBF, Sports Betting Crisis Deepens, Jon Stewart vs. AI

Episode Date: April 5, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news, with special guest Zeke Faux of Bloomberg News and Number Go Up fame. We cover 1) Why crypto is thriving after poster boy SBF was convicted and sentenced 2) The latest rise of memcoins including dogwifhat and NFTs like CryptoDickbutts 3) Is this evidence of a deeper societal problem or just gambling? 4) The resilience of crypto, including Tether 5) Zeke's reporting on pig butchering scams 6) The rise of Nudes In Bio scams on Twitter 7) Sports betting's deepening crisis 8) Louisiana bans prop bets on college players 9) Jon Stewart's position against AI 10) Is a broader societal backlash against AI coming. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Want a discount for Big Technology Premium? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [e-mail]

Why is crypto thriving after SBF? The sports betting crisis is deepening and John Stewart comes out against AI. All that and more is coming up with special guest, Zeke Fox, right after this. Welcome to Big Technology Podcast Friday edition where we break down the news in our cool-headed and nuanced format. We have quite a show for you today. We have Ranjan Roy here. Ranjan is back from France. Ron John, welcome.

I'm very excited about today. Number go up was one of my favorite books of last year. Yeah, this is another episode that's Ranjan inspired. Ranjan, you kept shouting out, Number Go Up on the show. I read it definitely one of my favorite books as well. And we're so lucky to have the author here, Zeke Fox, who's the author of Number Go Up. He's also a reporter at Bloomberg. Zeke, welcome to the show.

Thanks for having me on. And I should, I'd be remiss if I didn't point out that it's Earthquake Friday here in New York. I know anybody listening to this show is probably over the long media cycle that New Yorkers have had. over a manageable 4.8 magnitude earthquake, but I'm not. I mean, we just had the earth shake beneath our feet. Pretty cool stuff. We should continue talking about it for weeks on end as New Yorkers experiencing that. That's my platform. We also have some big earth shaking developments. See what I did there? In the crypto world, including the fact that SBF is going away for 25 years, or at least that's the sentence, it will probably be less than that.

last week we talked about the sentencing this week i want to talk really about the most confusing thing about all this which is that sbf is gone a 25 year sentence yet bitcoin is up 53 this year mean coins are proliferating and it seems like crypto really hasn't lost a step in fact it's gaining and you know zeke you have a story out in bloomberg talking about how the fall of ftx wasn't the exception or it wasn't just a good uh company that had some bad decisions it was rotten to the core and it's a warning to all of crypto. So with that lens, I want you to explain to us why crypto continues, is having really a banner year when the warning signs are still ever present and a lot of the problems that led to the downfall of FTX and a legion of other exchanges

and banks, you know, they have not been fixed. One funny detail from that story is that apparently Sam Bankman-Fried has been giving some trading advice to the guards at MDC Brooklyn, the prison where he's been confined since before the trial. And he told them that they should sell Ripple and buy Solana. And if they took his advice, you know, they've probably like doubled their money. Right. It was excellent trading advice. Yeah.

And but so all of crypto is back. But then the flip side is that we learned at this trial that if anything, the FTX scam started really early. They were dipping into the customer fund. He was eyeing the customer funds before he even started the exchange and started dipping into them pretty much right away. And when you talk to crypto traders now, I mean, I've heard this from quite a few people. It's almost like they've dropped the pretense that they're creating the future of finance. that something cool is going on and totally embraced number go up thinking you don't hear people talking about defy talking about nfts i don't even really get the same chatter from like

normal people being excited about crypto but they're buying just like ever stupider meme coins and for now they're they're all going up uh it's it's truly unbelievable to me i would be lying if i said i predicted this but conveniently you did though your book is your book is called number go up Zeke you can't take can't deny credit for what's happening right now take credit this is your time that that was my that is my favorite part of this entire cycle is that exactly the blockchain is not the key development as you said defy it's not ao's and decentralized communities it's literally the price is going up and everyone is happy but yeah but yeah what are the mechanics behind here yeah What do you think the mechanics are that are pushing this?

It's, if it's, if there's no underlying narrative, each previous hype cycle had, you know, a very clear narrative, then what is it? I would separate it into two categories. And category one is just like gambling is fun. And people love playing the lottery, even though the odds of you winning are like one in 300 million. And so people want to play this meme coin game. or not everybody but just some percentage of people find this game entertaining and thus it continues um i mean one funny example of that is this guy machi big brother i don't know if he already had the dog or he acquired it for this purpose but he got like a very cute dog and then

he posted his solana address and said like you know if you send me money at this address i'm going to send you some dog tokens. I mean, it was, there was no formal setup. It was just like, here's my address, send money, the dog tokens will come. People sent like $40 million. Is this dog with hat? Because dog with hat is my favorite of all the coins. Oh, oh no, this is like dog with hat is like a blue chip stock. It's kind of boring. People have moved on to like new, new dog tokens and I just love the way that journalists have to write about this. So this was on Yahoo Finance. It's talking about Doug with hat. It says based on the salana chain, the token is based on a meme of a dog wearing a pink knitted hat, a cap. So it makes sense that the project's headline is that it's

literally just a dog with a hat. Despite its simplicity and lack of innovative ideas, the token has performed far better than anyone could have imagined. It began trading in 2024 for just seven cents, gained steam by the end of February, the price surpassed $1. By the end of March, the price broke an all-time high and reached $4.85, a gain of 7,000% in less than three months. Dog with Hat, I'm telling you, there's something to it. I mean, so this is just like, it's this sort of, it's like the meme stocks, like GameStop or AMC, and where it's just sort of this fun new game that didn't really exist in

markets before where it's like it's like a pump and dump scheme but people are doing it to themselves they're like let's let's all buy dog with hat and if enough people buy it it's going to go up and I'm going to get out before I'm going to be one of the lucky ones who gets out before it all collapses and I was trying to research like the psychology behind this I was reading a 1936 book by John Maynard Keynes and he He compared the stock market to a game of musical chairs and said, hey, people just, it's a game that we can, everyone still enjoys playing it, even knowing that there are going to be like winners and losers. It's kind of like a zero-sum game. So I think that explains a lot of the crypto activity.

Then you've got Bitcoin, which is a little different, although maybe just sort of a more long term. version of the same thing, where people have sort of given up on this idea that Bitcoin is the future of finance, that it's good for transactions. But you see the price going up. You start to feel like, oh, man, wouldn't it be nice if I had some of that in my portfolio? I wish I had something that gained 50% this year. You buy. And that, you know, pushes the price up a little more. And so also addressed by Keynes conveniently, we're all trying to guess. Not like do we think Bitcoin is good, but like do we think that other people think that Bitcoin is good? Or do we think that we're trying to guess like other people's opinions of this?

And lately everyone's opinions have been, look at the price going up. Let's get in on it. And I keep coming back to this idea that in the long run, value has to come from some sort of profitable use. case. Don't be ridiculous, seek. Come on. Number go up. Yeah. This is amazing. I like that we, I like that we were bringing in Keynesian historical, uh, you know, references, whereas to me, the more interesting part was the psychological part of essentially a self-inflicted pump and dump. People want to pump and dump onto themselves, but in reality, I mean, that is what meme coin trading is. There's this, this is from Molly White this week. Uh, she,

She has this amazing story. There is a project promising to a rugpole, and it's raised almost $29,000. And this is what she says, a project describing itself as the world's first meme coin pre-announced as a rugpole was explicit in its marking. Do not buy this coin.

It will go to zero. Despite that, people sent the creator over 8.8th, which is $29,000 approximately during the project's pre-sale. I mean, does it get any dumber than this? you know i feel like part of crypto is sort of a competition to come up with the dumbest ideas so that everyone will be like wow this one really takes the cake let me invest in this one

there's this like kind of nihilistic attitude that dumber is better and i thought i had always admired um the nfts collection crypto dick butts and do you remember this one of the greats one of the greats yeah yeah so it was like butts pixelated butts with penises growing out of them and i thought this is the dumbest one ever i can see why this went to you know five thousand dollars and if i could think of something dumber maybe i could be a billionaire um but i was was never able to think of something dumber than that. But now, yeah, with the dog coins, people have topped it. Here's my theory on this is, is do you believe there is something more sophisticated?

I don't want to use the word nefarious behind all of this in the sense that one of the things that always, I remember when Beeple sold the, I think it was $64 million digital art, it was essentially kind of like crypto NFT promoters who were buying that using crypto given gains and then they were going to like going on once they create that hype cycle to sell other tokens try to make more money on top of it so the initial ridiculousness you know the same way with the rugpole maybe is the idea put a little money you put eight eth in the dumbest thing out there and then the thing you're selling to the market is actually not that dumb as you know the rugpole token like are there are there sophisticated ideas behind crypto dick butt and uh the

project rug pull that might be the best question ever asked on this podcast i did it with a series voice too i'm i'm not going to i don't want to accuse mr rugpole of anything um but i'm just going to throw this out there as a possibility of something that a scheme that one could do um I mean, I could announce, let's say we all teamed up, I could announce rugpole token and we, let's say we all have, we're all working together. And then you guys could send me, you know, seven eth. And then the internet would see this and be like, oh, looks like rugpole tokens really taking off. It's collected seven eath. Somebody else sends me one eath. And we just made, I mean, it's very easy to make these tokens. We just made, you know, a one-eath profit, we could split it three ways. So like the people who are organizing these coins, it would not be difficult for them to rig it so that they were going to profit no matter what

happened. I'm not saying that they all are, but like when you come in and like, you're sending some money in because you think it's funny on the internet, like the odds are against you. The insiders, there's at least like a possibility that they've rigged this in their favor. I mean, they didn't set it up just to laugh. I mean, you never know. Maybe they did, but there's some chance they didn't just set it up to laugh. First of all, great business idea. We'll be in touch after the show. Second, is there something broader about our society right now where we have, for instance, potentially not given a large portion of a society a path to, you know, build wealth. Like last week on the show, Reid Albergotti and I were joking about like, you know, how difficult it is to

retirement savings? And is it that we've just created such a desperate moment in society that people decide that they need to go this route? I mean, there was a story that I read recently about people taking their student loans and putting them into sports betting. It's insane. But is there a broader commentary that we should be thinking about here when we talk about all of this insanity? I totally think you're right. And I once had a really interesting conversation with a closet salesman at IKEA. And like, I chat everybody up about crypto. So we started talking crypto and meme stocks and he'd lost some money on them.

And I was telling him, I hope I wasn't being too obnoxious, but just trust me, this fit in the flow of conversation. I was telling him, you know, I just go with broad market ETFs and that historically they've gone up, you know, eight or ten percent a year. year. And I think it's kind of a fool's game to try and beat the market. And he was like, that might be well and good for you, person who's about to drop, you know, a thousand bucks on a closet. I work here. I don't have any extra money. I need a hundred X. Like, I'm going to go buy the next crypto token and hope that it helps me get to my financial goals because eight or 10% is not doing anything for me. I'll disagree with both of you here, though. I, the narrative that, you know, After the financial crisis, people lost faith in traditional, like the banks and infrastructure

and obviously student loan weight and there are income inequality and these are things that are clearly, you know, ever present in society. But to me, this is more just a lack of regulation. It's a new type of technology. It's made for betting and it's fun. But again, the idea that people have lost so much hope, how many people really paid attention to 8%? you know, returns over time, annualized, you know, will give me, help me achieve a financial goal. It's always been more fun to bet on crypto dickbutt or whatever the corollary was for Thai memoriams. This was a family show up until the day. You just weren't allowed to bet on crypto dickbutt in the past. Or you had no easy way to do it. That's, that's what Warren

Buffett said in his most recent annual letter. He was just like, you know, It was mostly about how much money he'd made on crypto dick butts. But then there was like a sub, there was a footnote that. He Warren Buffett and his with his Omaha accent, yeah, well, crypto dickbutts been good to us. It's been good. He said it's never been, the casino is in everybody's pocket. It's never been easier.

And that may be what's driving this more volatile stock market and also these weird crypto things. If this is a betting thing, then what do we think about the institutions that are trying to take advantage of the DGens or degenerate gamblers who are putting all this money into crypto projects? And, you know, I'm going to point to like where this discussion initiated where I read your book and I was like, Zika, why don't you come on the show to help us review Chris Dixon's book, the Entresen Horowitz venture capitalists who wrote Readwright-Own. It's been part of the institutional movement to try to get people. You know, it's not just the Bitcoin ETFs that I understand a little bit more, but like to, he's been investing in these projects, these Web 3 quote unquote projects, which have been effective, many of them effectively have been rug pulls for the, you know, degenerate gamblers who've gone in. Meanwhile, it seems like Andrewson Horowitz has done quite well. Yeah. I mean, that book, it was shocking to me that this book was about the promise of Web 3, but it did not address.

the abject failure of so many of the projects that he had invested in. And in number go up, I investigated one of them, the game Axi Infinity. And this was like, if you're not familiar, it was kind of like a Pokemonish game where you assembled a team of monsters and battled other monsters. And what made it a crypto game was that you had to buy your monsters and you owned them. that's web three and then when you battled you would earn smooth love potions and you might say like well why would you want smooth love potions well you need them to buy your monsters why do you want the monsters well you can earn smooth love potions so uh it it turned out that the way they set up

the economics of the game you could essentially earn like a five or 10 percent daily yield in smooth love potions by purchasing these monsters. So people caught on to this and it took off. It was huge in the Philippines. There were like more than a million people playing it. And of course, Andreessen Horowitz invested in the company that created this. Their fund has great returns. But what naturally smooth love potion prices collapsed, like this scheme was unsustainable. And I went to the Philippines and talked to people who had, you know, taken out loans may change altered their life plans went into big debt to buy these axi infinity monsters and who are devastated when the price of smooth love potions collapsed um so i think there's probably

some argument you could make in favor of web three but at least address how this was screwed up nobody has said sorry you know they keep uh nobody's really said like oh wow like we really set up the economics wrong um so yes so i i did find that surprising that he's um they've invested in some of these in many failed projects and he just sort of hasn't changed his story about how web three is the future yeah i think axi infinity to me and actually i mean in terms of one of the things number go up i think did very well was tell the human stories of the people who lost out because again the only stories we traditionally hear are the people who won for short periods of time in order to get more people interested but you know these stories of

because especially i remember axi infinity when it launched and what really drove the hype was there are these viral videos of people in the philippines finding economic empowerment through smooth love potion and turning their lives around and anyone i spoke to in crypto would point directly to that and say look we're already changing the world and then until they weren't so yeah and i think that's important i might be showing my age here but i always thought of axi infinity as sort of being like the uh second monorail episode of the simpsons you know where the neighboring town this monorail salesman comes to Springfield and just like gives this whole pitch about how it's going to change the town to get this monorail. And then I think it's Marge goes to investigate and she

goes to this neighboring town that got a monorail. And like the whole town has burned down for some. It's like this waste land. And to me, Axi Infinity, it's like this is where you tried your Web3 plan and it totally sucked. You know, it's like our vision of our Web3 future. And so, you Yeah, if you're still promoting that, you need to tell me why it makes more sense. And another one that, I mean, they were investors in, in Yuga. I think, didn't they invest in Yuga Labs? Were they, they invested in Bored Apes, right? Yep, $450 million round led by A16 Z.

Yeah. So like, what were you thinking there, Chris Dixon? What was the logic behind the board ape investment? now those have become like a total laughing stock. Well, do you think there's that idea of no one has said sorry? That's something I've thought about a lot because even Sam Bank-Bin-fried is heading to prison for 25 years and hasn't really said, I'm sorry. But do you think there needs to be some kind of compunction or recognition of what happened

over the last four years or do you think, I mean, is the strategy which it looks like? it's happening is to just triple down on this is the future. We're going to make money again on the next cycle. Yeah. I mean, I was pretty shocked recently. It took, it took me a while to get around to it, but I, so Coinbase, Brian Armstrong, they've definitely been big on the message of like, it's safe for crypto now. The bad guys are gone. Let's get the next cycle going. And they have this new product called Base. It's their level two. And essentially, it's very easy to create your own coins that, like, live on this base network. And it's got lower transaction fees because it's sort of self-contained, as opposed to, like, Ethereum, which has gotten very expensive to transact on.

So I gave it a try the other day. I went on there to see, like, okay, I'm all continually, my expectations are too high. And I'm like, well, if Coinbase is really pushing this, there must be some cool things on base. and I get on there to trade some like base coins and all it is is the same it's like I guess people associate blue with base because coin base base is blue so it's like blue dog with hat blue cat with hat blue Elon Musk like literally is diversification of your portfolio dog with hat blue dog with hat got out of a little of each that's for sure so look but as we're talking about this, I just want to say, like, is it possible that this has more staying power than we're giving

a credit for? Because, Zeke, like, the core of your book is investigating tether, which has all sorts of shady things happening beneath it, which you're able to uncover, and a real questionable sort of provenance. However, tether is still at a dollar, right? It's a coin that's just tethered to the U.S. dollar, still at a dollar. None of these shocks have taken it down. Bitcoin is high. I mean, yes, there's going to be this like wacky movement on the, um, on the fringes, but does the crypto movement have a brighter future than perhaps we're giving it credit for right here. Yeah. I mean, right now, you know, you can the, if you like crypto, you're thinking this guy is so dumb and the market proves it, you know, his, his book title is dead wrong

because it was intended to be a joke. It was not predicting the number would go up. Um, but, But what I would, I think this isn't like a real technical analysis, but I would look at, I would think hard about these bored apes. You know, why did they, as a sign of what might happen to the whole market? Like, for a while, I guess enough people thought they were cool somehow that the price got very high. And now, since they don't do anything and they aren't cool, the price is going down. So while you're out there promoting all these coins, they either have to be like fun and cool or they have to do something. And if they don't meet either of those criteria, I think eventually people will lose interest and they might find something else to do. So I still am very negative on this

long term for those reasons. I just think if it's not, it hasn't found like a product that's got mainstream acceptance. Just being gambling games is not enough. Do you think part of the recent rise of crypto, at least one of my theories is anytime hype returns to the market even for a more fundamental reason, it will have trickle-down effects to Doggwif hat. And in this case, you know, people saw Nvidia skyrocketing, AI driving the standard stock market, a lot of, and again, you look at the regular stock market there's not much left in the meme stock way but you know more of the blue chip stocks positioned well to capture generative i have absolutely blown up well um do you think it's more the people who didn't

get in on invidia want to buy dog with hat because it's the next thing i guess there could be some of that where yeah just things were moving around a lot so let's we've seen in the past that when risk assets go up. Dog coins also go up. So let's, let's buy some dog coins. I mean, I do think there's a risk if you buy the dog coins that you could be the guy who is holding the dog coins when everyone else remembers that the dog coins don't do anything and we don't, there's no need for, they're worthless. But I don't know. It's like GameStop AMC, those did go down over time these like memes are not are not forever but but i guess what yeah like what do you think is holding it because even tether like as i like said and reading through your whole book and for a long time

i've followed the tether story closely as well and obviously the absurdity isn't quite crypto dick butt level but inspector gadget creator being part of it or all these other nuances is quite incredible but but again the idea that every sign points to it should should collapse and yet it holds. Like what are the forces that, because in the book, I think you push towards a lot of ideas, but I mean, I think in fairness, don't definitively say what you're thinking

of what is actually keeping tether up. And we, but like what is it now? Since the book has come out, Howard Lutnik, the CEO of Canter Fitzgerald, which is a, you know, respectable New York Investment Bank has come out and said, I'm holding most of Tether's money and I've seen the rest. They have the money. And I think barring evidence of some sort of crazy conspiracy, his comments carry a lot of weight with me. And I think that Tether has been helped by rising interest rates. And now, so they're sitting on like $100 billion. That's how many Tether

tokens are out there, they don't pay interest, and they haven't invested in treasuries at like 5%. So they're clipping $5 billion in profit a year now. And so if in, let's just say for the sake of argument, Tether had a Sam Bankman freed sized hole of $8 billion, they could earn that back in a year and a half. Where I come down on it is that there's like clear evidence of a lot of shadiness in tether's early years but now what's it seems to me is that tethers found widespread acceptance among people doing shady things around the world who are willing to overlook red flags and are willing to hold a dollar coin that doesn't pay interest you know whereas in the u.s you'd be like why don't i just put this in my you know apple wallet and get

5% as we round out this segment i want to talk to you about like one of the like clear negative externalities or uses of tether which is pig butchering which you go into depth and take an amazing trip and your book to a place that was tied directly to these scandals so love to hear you talk a little bit about that and then just as a corollary to that does that relate to all these nudes and bio uh tweets that we're seeing on twitter today Sure. So if you're not familiar, pig butchering is a scam where someone approaches you either on a dating app, LinkedIn, whatever, a wrong number text is common. And they try to be your

friend and they start to drop hints that they're really good at trading crypto. And eventually they get you to download some sort of bootleg crypto app and to send them usually Tether to deposit into that app and they'll even you can open the app it looks like you're making money it seems great and people start to send in more and more money like i was just uh at a press conference held by the brooklyn d a yesterday where they talked about victims who'd sent hundreds of thousands of dollars and eventually the scammer will just ghost you and take all the money and the really dark part of it that i write about in the book is that the people the scammers themselves are often victims of human trafficking. And there are these scam compounds in

Cambodia, Myanmar, and Laos, which are like evil office parks filled with thousands of people who've been lured there with the offer of like a high paying job and customer service. They get there. They're trapped. They are tortured. They're beaten. They're forced to send to run these scams. And it's hugely lucrative. It's mostly run by Chinese gangsters. And new research by professor at UT Austin says that these gangs have collected in the last few years, something like $75 billion, mostly using Tether, which is pretty wild. And if you go to, so this doesn't, you know, this obviously doesn't prove anything. But in my, I'd spent like years looking into tether by this point.

The first time I saw tether in use in the real world was when I was in a border town on the border of Cambodia and Vietnam, one that's known to hold a lot of scam compounds. I get off the bus and right in the parking lot of one of these casinos that is known to be a site for forced labor, there's a little booth that's like, we'll trade your tethers for, local currency and I'm like I literally don't think I'd seen the tether logo outside of a crypto conference until I got there and I'm just like hmm doesn't prove anything but kind of a bad sign that this is the the place where I actually see crypto in the real world that's crazy and so is that what's going on with these nudes and bio scams on on Twitter so based on research by John Herman

for New York Magazine. He followed some of these scams and... Wait, sorry, could you guys explain the nudes and bio scam? Oh, yeah. So there's often on any sort of popular tweet, someone will reply

with this tweet in a kind of funny format with a lot of weird black spaces in it, they'll write like nudes in bio. And they're trying, to obviously lure you into clicking. And if you do click through, it takes you to like a very particular fake dating site called provocative neighbors where you can pay to chat with, I guess, like, supposedly horny singles, who are actually gig workers who get paid on commission on

So it's kind of similar to the pig butchering model, but I do not, I've yet to meet anyone who's escaped from a scam compound who had to work on these nudes in bio replies. So they may be fully voluntary. This is more traditional catfishing than something more sinister. And I think it just shows, um, So I once spent a while researching affiliate, the shady side of affiliate marketing. And there's always been these guys who there will buy up ads on like porn sites and direct people into these kind of low end scams. They call them like dating sites, but it's not real dating.

And I think what happened is that Twitter has such a, bad content moderation and is getting really low prices for its ads now so it's it's getting like these porn site quality ads that used to be screened out by better moderation or just higher prices for their ad inventory. They're not just ads though like they just show up like in the replies as like bots and I mean it could all be true was going to save us from the bots on Twitter yeah but okay one last thing about this and then then we'll go to break it's what's interesting I also read in the Herman story is that like this is just sort of like the tip of the iceberg when it comes to only fans agencies. So there are companies that run, this is what he says, there are companies

that run only fan accounts that are staffed and they talk simultaneously with dozens of users who are led to believe they are talking with real models, not mail operators and say Poland. And there's a quote, every guy has three monitors, three chats at a time. Wow. It's just sad. So, before we go, I just wanted to ask one thing, because again, from reading the book, there's one thing that I kept thinking about going back to pig butchering. It's almost rare you have a scam where both sides of the scam are victims.

And then, you know, there's a middleman who's kind of controlling it versus usually you have the very clear scammer and the scammee. But here's something that's so awful where you have people losing their, money on the being scam side and then literal human trafficking to help drive these scams. And obviously, like, why is this not more of a story? And I've seen, I think John Oliver did a segment. I've started to see it some more coming out. But you know, there are some stories when I read them. After reading your book, all I can think about is why are more people not talking about this or why hasn't this got more attention? And I'm assuming you want more

people to read your book and that would be step one. But in general, like, is there something to this story that prevents people from just, you know, jumping towards it as this massive thing we need to work together to solve? From a government perspective, I think it's tricky to solve because the criminals are in other countries where in some of these places, they operate pretty much with impunity. And the U.S. doesn't have any authority there. So what people, activists are doing is trying to work with law enforcement in those countries to push for more raids of scam compounds for them to stop, you know, looking the other way and to make it into sort of an embarrassment so they can't, like in Cambodia, it became kind of like a national embarrassment,

which led to at least some raids, although they continued to operate in Cambodia. But from a law enforcement side here, somebody comes to them and they say, hey, I lost a million dollars to pig butchering. And if you're lucky enough to find, first of all, a lot of police officers don't know about this. They might not understand what happened

or how they might be able to help. Even if they are savvy, the money is long gone. and that's why crypto that's why crypto is so great for these scams because like if you're a crypto person you're like come on it's not crypto's fault but the thing is is if you

uh like if you send some tether to someone who you think is a pretty girl but is actually a victim of human trafficking in Cambodia you zap them a million tethers that money is gone and you don't have any clues you don't have any address or any name it used to be like for a Nigerian email scam they would often work with money mules in the US who would let the conmen use their bank accounts um so that would at least give law enforcement

something that go off of and also like I mean some of these pig butchering scams do use bank wires too but you're going to set off a lot of alarms at the bank you're going to get a lot of warnings on but yeah honestly i'm surprised that people haven't tried to do more to stop this too it's really like it's really massive in dollar amount in terms of the amount that americans and people in other countries are losing and the united nations has called it uh possibly the biggest human trafficking operation and history they estimate 200 000 people are trapped in scam compounds. That's crazy.

Yeah. So I would say people should work on figuring out how to solve this. And it's another place where I would argue that the crypto promoters who are run the coins that they're like if you run tether and all these criminals are using tether to do horrible things, you may say like, well, I don't I don't know these people. I didn't mean for this to happen. But it's like, well, they're using your product. to do it. So maybe you should try and figure out how to stop them, you know? Yeah. Okay, so we've

talked about gambling with crypto. Let's talk about gambling for real on sports betting. And then, of course, John Stewart's stance against AI when we come back from the break right after this. Hey, everyone. Let me tell you about The Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than two million professionals read The Hustle's daily email for its irreverent and informative take. on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines

in 15 minutes or less and explain why you should care about them. So, search for The Hustle Daily Show and your favorite podcast app, like the one you're using right now. And we're back here on Big Technology Podcast with Zeke Fox. He's the author of Number Go Up. It's going up, but he wasn't predicting that. So he tells us, or maybe he was. It's a mystery.

We'll leave it for you to decide. And Ranjan Roy is also here, Ranjan of Margins. So Ranjan, first of all, welcome back. Ranjan, you and I have been texting about sports betting. And I've sort of been like, this is a growing disaster. We have this NBA player, Jante Porter, who made some like really suspicious prop bets about his output on the court. And hit, well, sorry, we don't know if he made them, but we do know somebody who made some of these bets hit on every one of them and was like a big winner. on draft kings or whatever it is, whatever sports betting platform it is, it seems like it's

corrupting sports and it seems like it's also turning people into serious gamblers that might not have been otherwise. What's your perspective on it? All right. When I think about sports betting the United States, I have to compartmentalize myself because on one hand, I agree. I think it's going to really have a negative impact on especially college sports or lesser compensated sports. and it's going to cause a lot of problem for, you know, addictive behavior. On the other side, I love it. I absolutely love betting on sports. And in a way, I am very controlled on it.

You know, I literally can get a tremendous amount of joy on putting $5 on a random NBA game that happens to be televised and keeping it on my TV on like a random Tuesday night and just having the time of my life. So it doesn't even need to be big money, five, ten bucks here and there. And it's great. So I gamble on sports very regularly, and it provides me a great deal of entertainment. But I do think, like, for college sports, and I was also another thing that I was reading in the athletic that there was an athlete.

And this stuff, I mean, I will myself yell at the screen where he took a last minute three and they were already down by, they're up by 25 points. It put them up by 28. the line was 27 and a half and he started getting death threats and you know this is like some like division one game middle of the season up by 27 takes a random three just kind of heaves it up at the end it happens to hit and they get death threat so the amount of weird behaviors and problematic behaviors this is you know generating on every side as a reminder that to me the problem is when these things come at full force with absolutely went from completely illegal in the majority

of the country to very legal in a lot of the country and tons of TV advertisements, tons of apps available, whether you want draft kings or Caesars or what a fan duel or whatever else, I mean, I don't know. I think the speed at which it came and the ferocity with which the marketing comes with it. That's the problem here. Do you know how it happened, by the way? No, I'm not actually never, why it happened so fast. I did some research. It's an amazing story. And it all comes down to Chris Christie. So this is from some AP reports, a combination of AP in the New York Times. Yes, it really is a Chris Christie thing. In 2012, New Jersey governor, then New Jersey governor, Chris Christie signed legislation authorizing sports betting in the state. It was seen as a way to attract more visitors and

gamblers to help revitalize Atlantic City and generate tax revenue for New Jersey's budget. Then the leagues sued him. It went all the way to the Supreme Court, and the Supreme Court made it constitutional everywhere, allowing states to make their own rules, right? So the Supreme Court makes that ruling in 2018, and then now there's 40 states that allow sports betting, and that's why it's exploded. So it all comes down to this initial, you know, moved by Chris Christie to revitalize Atlantic City, which I just visited for the first time and had a lovely time out there. And I see Zeke reacting with indignation. So I'll turn the floor to him. Well, I think like sports betting is one of those things where it's really gambling in general.

It's really well established that most people can like enjoy gambling and can do it without ruining their lives. but there's some percentage of people who will gamble compulsively and where this is really, really harmful to them. And so by expanding the universe of gamblers, we're creating more people who are going to be these big losers who are going to hurt themselves. And is, look, you can say everyone should be allowed to do what they want. But is it really desirable? to let everyone have access to this, like, in their pocket, you know? Like, are, is the good that we're creating for society by helping other, you know, somebody like you have more fun outweighed by the small percentage of people

who are going to have, like, serious negative consequences? And I would say, like, maybe yes, you know, don't. And it's also kind of gross to just, let's like just watch sports and not talk about betting lines the whole time. Such a good point. ruins it for me because that's that's i think the big problem here it's not just that fact that it's become legal it's the fact that leagues have so integrated it and and media by the way not getting off the hook here have so integrated it into the experience you're like watch a game and you

see the line you have gambling shows on you know networks for instance like yes pn etc etc they it used to be announcers would never talk about the line would never talk about a team covering and now it's everywhere and that popularizes it to the point where you feel like you're not you're not really part of the sport if you're not betting on it and that's really the issue and you're right it's led to some crazy stuff we even have this uh there was this cavaliers coach cleveland cavaliers coach jb bickerstaff talking about what the gamblers are doing you know again because of like um you know the line and trying to make sure that they hit on their bets he says they got my telephone number and we're sending me crazy messages about where i live and my

kids and all that stuff. It's a dangerous game and he says it right here in a fine line that we're walking for sure. And you look at what's happened in the major league baseball with Shohei Otani, the game's biggest star in a game that really needs stars being involved in this with his interpreter. We still don't know the extent of that. And it is going to spiral where you have, you know, of course, players are going to be involved. We know that. And the leagues are going to really harm some people's lives by pushing this stuff so hard. Well, I want to to say that I, I mean, I say this kind of hypocritically because I, I don't really gamble anymore, but I have enjoyed, I wanted to bet on the Mayweather, De La Hoya fight so bad that I took,

you know, a thousand bucks to Western Union and sent it to some online casino in Jamaica. As long as you don't send tether to some lover out there, it's much better. Western Union was the original tether, I feel. but yeah i kind of yeah it's like it's another example where it's like do you really want to make this easier like maybe a little friction was good for society exactly i think that's that's the right point that friction is the most important thing i mean and and again in terms of the amount of energy with which the leagues are integrating themselves into this because even from a media standpoint i forget who it was but i think one of the prominent espn journalist started his own

sports gambling media site account or whatever and i don't know do you guys remember in the early days by i think what's that a year and a half two years ago of it being legalized in new york new jersey there was just viral tweets of people who like hit a parlay that they bet like 25 bucks in one two million dollars and it would all be pushed by this one person who had just went over to start a sports media empire gambling media empire yeah i mean and it was so obvious like And to me, the corollary with crypto is so clear where it's like you have to tell that story of winning. You have to make it go viral and everyone else will rush in. And again, like that's where if you, even the UX of one of these apps, like it's not encouraging you to put 10 bucks on a, you know, like a 5149 bet.

Everything is about the parlay because they know the promise is high, but you're you will likely lose. and that's where they make their money. Before I knew Sam Bakeman-Fried was running any sort of fraud, when I was down with him in the Bahamas when things were going great. This is what I was like, Sam, you're essentially, as you take out promoting FTX with like Tom Brady and Larry David, you are promoting gambling. And like you yourself say that it's even worse because a lot of the crypto coins on your exchange, you yourself say it are probably fraudulent and going to zero.

So you're promoting something that's just going to lose. money for most people. Isn't this inconsistent with your, you know, effective altruism mission? Yeah. And he never really had a good answer for that. Maybe because he was too busy covering up his massive fraud. Exactly. It takes a lot of time. It takes a lot of effort. So we have a few minutes left here. I think we should talk. I'll just, just to wrap up this segment, this is a huge story, the sports betting story. And I think we're just at the very beginning. And it is, in its early years and it will get worse and there's going to be some massive scandals and the leagues and state governments are going to have to reckon with it and we do have

some late breaking news that Louisiana is going to ban prop bets for college players starting this summer so I expect more of this to hit and that might have reverberations for these betting apps like draft kings and actually maybe it will send more money into crypto because if people hit restrictions with sports betting they're going to just want to get more dog have had. So now speaking about this John Stewart thing, I thought it was really interesting that John Stewart went after AI in his segment on Monday. He made a really good point, right? And that was that there are all these people out there, all these tech executives out there promoting crypto, I mean, so AI's benefits and saying that AI is going to help save the world. Meanwhile,

on the other side of their mouth, they're talking about how it's going to reduce the need for labor and and he basically hammered home this inconsistency saying you're talking about how AI is going to help cure disease meanwhile what you're actually doing is inventing labor replacing technology now i've been on record about how i think that the labor fears are a little bit overblown but recently i've started to think actually you know this is going to be something that displaces a bunch of jobs um Stuart was not nuanced about this right he didn't talk about the the fact that there was actually going to be a lot of good that comes from AI. He basically discounted that.

But I thought it was a good point. And I'm curious what you guys think about it. John Stewart, I am very excited for his return away from Apple, which I didn't really watch him. I was a huge fan through the 2000s and of the Daily Show. I love listening to him still on politics and more societal commentary. But when he talks about tech, the episode of Lena Khan, I did not love like he was trying to make jokes about the wrong things or trying to, you know, bring too much light to what I think anti-trust and monopoly is a serious issue. And even on AI, when I'm listening, like, yes, every

CEO who's in an earnings call trying to say how AI is going to increase productivity and cut jobs is that's what they are supposed to say essentially. And that's just the way, you know, the stock market will value things and investors will look at things. So I think trying to use that, to try to make an argument about the actual implications around job loss does not make sense. And as you said, the question of impact on labor is an important one and is an interesting one. But I think this was one of those examples where when it comes to tech, a lot of the time do feel just steward, it oversimplifies things. Like on the face of it, to me, it's sort of impossible to imagine that AI would not lead to a big. job loss but in the past when there have been innovations that have

replaced certain classes of workers it had we've found newer and more productive things to do so could this be like the the one time that it's different like it sort of seems like maybe yes but I also it always seemed that way in the past too when there have been like scary new innovations Stewart's argument here is that this is going to happen faster that in like for instance take the industrial revolution that happened over dozens or more than 100 years whereas AI he says is something like coming Thursday what do you guys think about the speed of this that that's again like for anyone and we've on this show talked about this a lot like the for all the talk and the hype and the toy you like use

cases for anyone really trying to operationalize this for work purposes we're still a long ways away. Yeah. I mean, again, for all the talk, for, like, and using it in your job in different ways, people are starting to understand and acclimate things and come up with different, you know, like halfway use cases, but the complete replacement in automation were there, I don't know. I think there's still, it's not coming Thursday, maybe not a hundred years, but it's, it's going

to be in the years at least, especially if there's not some huge pushback because those benefits and gains aren't seen in the next six months like everyone's promising us. I mean, I've been playing around with this one app that I think shows kind of a paradox about AI. It's kind of a silly one called Suno. You give it a little one sentence prompt and it'll make a song for you. And it's like, it's kind of amazing. Like I told it to write a song, like a country song about my daughter and her friend going to the movie. and it did and it sounds kind of like a real song and my daughter was kind of amazed by it but then the song is kind of also like the most terrible song ever and no one has asked to listen to it again

and even my six-year-old daughter has not expressed any interest in playing with this app anymore and I think there's like one version where in like a couple years this app becomes amazing and we do want to use it and it is like displacing real artists. And there's another version where we sort of plateau in this uncanny valley where it's like this really cool trick, but it is sort of useless for the types of things that we want. I'm so glad you brought up. My favorite discovery of the week was Sonato, S-O-N-A-U-T-O-O-A-I, also a music creation app and had the same exact experience. Really cool, fun, making novel songs about really stupid, funny things. And then you

listen to them once and it's fun and then you move on. But it's not, some of them, but again, there's glimmers of genius almost where you're like, wait, if it could do that and make the entire song that good, this is amazing. But which way this is going to go? Yeah, I don't think it's a guarantee that it gets better and better and better and better every single day at a scale that we've never seen. I'm a little surprised that there hasn't been some like groundbreaking making AI created art that's gonna get all of our attention. I mean, it seems like there'd be a lot of interest in like the first AI this or the first AI that.

And so there'd be like some incentive to be the one to create it. And yet I don't know, maybe I've missed something, but I haven't seen this thing that has people saying, oh my God, I can't believe like AI did that other than like these little demos. So John Stewart, for all his faults, he's been good at tapping into the nerve of in the vibe in the country. And it's, I find it just interesting that he's come out against AI and I haven't really seen an overt AI backlash yet at least.

So do you think there's something under the surface there that he's seeing and that potentially we're missing? Or do you think this is just a misfire on his part? I would say like among like regular people that I talk to, they are pretty down on AI and think more about kind of the annoying spammy aspects of it than, you know, the. potential for helping make new advances in medicine or things like that. So I think he's not, he's tapping into like the mainstream sentiment there. Zeke, how many of your friends have fallen for the nudes and bio scammen? Are these the ones that hate AI? And that have come forward and are ready to be named to the world.

I think, first of all, and John Stewart, I wouldn't even say, all his faults. I still think overall, like, you know, he's still a force in the media. But, but I agree. I do think he's tapping into something. I just don't think this specific topic, he did well, in my opinion, but, but he totally is tapping into something. Because if you think about it, you know, the Taylor Swift deep fakes on Twitter, these are the things that are going to be much more present in the conversation. Again, as Zieg said, as, you know, like the, like breaking down of protein structures via alpha fold and the rewriting of medicine or whatever it is like no one's going to talk about that. So especially in the election year, you're right. It hasn't been a debate

or a topic yet, but maybe it could be. And if so, who comes out on which side? Yeah, it's going to be interesting. I mean, him jumping into the fray, I think is a signal. Oh, John Stewart. Yeah, but Trump Biden. Who's pro? Who's anti-AI? I think you got to, You've got to be pro-American innovation, right? I think they both go pro-AI. Yeah, that's what makes this one complicated. The American innovation side. Maybe there's a third-party candidate that comes out anti-AI

and ends up winning because of that, like, R-FK Jr. That would threaten his support from the all-in podcast. That would be really rough for him. His crucial backing. He's going to turn on them. That's the heel turn. He goes anti-A-I, come. October. I mean, Alpha Fold is laying the groundwork for lots of vaccine development. So you would

think that RFK Jr. would be reflexively anti-AI. Oh, I think we're on. Nobody tell them that. Okay. The book is called Number Go Up. It's by Zeke Fox. You can get it in any bookstore of choice. A favorite of Ron John and I's. We'll be talking about it on the show for quite some time. And so great to have you join us, Zeke. Thank you for being here. Thank you so much for having me. It's really fun. Super fun. And Ron John, welcome back. Thanks for being here with us. This was fun. I'll see you next week. Great stuff. Ron John and I, one-on-one for the first time in a month coming up next Friday. In the meantime, I'll have Jack Clark, a co-founder of Anthropic, joining me for an in-depth episode on what Anthropic is up to on Wednesday. So until then, we'll see you next time on Big Technology Podcast.