Hacked - The Charizard Charade

Episode Date: January 16, 2026

Pokémon cards became a billion-dollar market—and then a massive fraud target. This episode follows the rise of ultra-rare Pokémon prototypes, the grading systems meant to protect collectors, and the amateur investigator who used codebreaking and printer forensics to expose a modern forgery ring hiding in plain sight. All that plus a nice chatty chat after the break to kick off the year. Learn more about your ad choices. Visit podcastchoices.com/adchoices

I want to start with a story about a veblen good. Typically, the price of a good goes up, demand goes down. Classic economics. Fewer people will buy something the more it costs. A veblen good, for anyone who is unfamiliar, is just the name of a product that defies this. The price of a veblen good goes up, and unexpectedly so too does its demand.

Think vanity and luxury products. the people that buy Lamborghinis would probably stop buying so many Lamborghinis if everyone could afford a Lamborghini. The price being high, the exclusivity, is responsible for at least some of the demand. Birkenbags, Rolex watches, and the subject of our first story this episode, a story about an amateur codebreaker and a technological arms race and a crazy fraud scheme. Pokemon cards. We haven't pissed off the crypto community enough. Now we're going to go after the Pokemon community.

Pokemon cards, I think, have interesting claim, more utility. Really? Because last I checked, people don't even play the game that the cards are a part of because nobody wants to play with the cards because they're just collecting them so hard. Unlike Magic the Gathering, which I play, which I do own way too much money with the cards. But the utility of the card represents the value of it. except for like foils and other kind of like graphical BS, but typically the base card price is related to how useful it is and how rare it is.

It operates very much like a normal good. There you go. And there's the Veblen corner of it, the commodity side of things, the trade. We're going to talk about that a lot this episode. But suffice it to say, Pokemon cards are worth a lot of money. We can't need to explain what Pokemon cards are. It's a collectible trading card game. Pocket Monsters, Pikachu.

people are familiar. Pokemon cards are big business. The primary market is one to $1.5 billion a year. The secondary market's harder to pin down, but estimates cluster around several billion dollars annually. There are cards that have sold for $5 million. There's $65 billion Pokemon cards printed to date. It is one of the most widely produced physical media products ever,

and one of the most valuable per unit collectibles. Last number. over the last 20 years, high-end Pokemon assets have delivered an annualized return of 34%. Yes. I'm aware, and I have a feeling I know where the story is going

as is a very famous Pokemon card up for auction right now. No, it's not. Maybe it connects. Okay. Pokemon cards are big business. So forging them has become big business, which means that grading them,

Verifying their authenticity is big business and a very serious technological arms race. Grading companies come up with some new way to verify the authenticity of the card, some paper, stock, quirk, or like measurable ink quality or, or, or, and the foragers have to crawl through glass to figure out a way to fake it. Just like digital security, there's this arms race that never ends. It just gets harder and harder to run. In late 2020, rumors start to circulate about a guy named Takumi Akabane, one of the original designers of the Pokemon trading card game. Akabane, needing a little liquidity, was slowly selling off his personal archive of Alpha and Beta Playtest materials. Cards printed before the game came out in 1996. Older than the oldest cards, the cards they made to design the game. Holy grail stuff for collectors.

The CGC certified guarantee company, one of the biggest players in card grading, starts officially grading and authenticating these sets. And in September 2024, an alpha prototype card sold for over $200,000 at Asothabee's Fanatics Auction. The market for this set of prototype cards is real. Except, we're talking about it here on Hacked, so of course it wasn't. This is the story of how a billion-dollar industry's bulletproof. proof authentication system was hacked by a dude with a microscope, exposing a forgery ring

that turned about $20 worth of cardstock into a multi-million dollar fraud. Here on Hacked. The music. I thought this was going in a very different way. Okay, before we dig in, what was the way you thought it was going? So there's a very famous internet personality, Logan Paul. I'm familiar. Now of WWE fame as he essentially dresses up as this like, I don't know what his, I don't watch WWE, so roast milling on the comments.

Wait, you see, a wrestler isn't his brother a boxer? I was called him a puncher. Well, I think being a boxer is kind of a form of puncher. It's professional punchery. Logan Paul is a WWE star now. It kind of rocks this yellow leather, Pikachu-ish kind of energy. outfit. And he wears a Pikachu card in a diamond-encrusted necklace and frame

around his neck in his fights. And it is theoretically the rarest Pokemon card in the world. And it has a colored history of this card because Jordan's eyes are lighting up. I'm so intrigued. I'm so intrigued. Oh, yeah. So in Logan Paul's various business ventures. One of them was something called Liquid Marketplace. This is all from the top of my head. So I'm, I'm, you need to fact check that. A half remembered story about an internet influencer who's gotten into wrestling. It's perfect. So Logan, exactly. Logan Paul

owned this card and it's this illustrator, Pikachu. It was a gift at a Pokemon tournament, I think, to like the judges. And there's only like one of them that's at PSA 10 grade in the world. And Logan Paul owns that it's the rarest of the cards. Liquid Marketplace, years later, Liquid Marketplace, one of the many ventures that Logan Paul's found himself involved in that, you know, get talked about by people like Coffee Zilla. He forms this online marketplace where you can buy fractional ownership in these rare collectibles. And this was the rare collectible that he used to launch Liquid Marketplace.

You know, own a piece of this card. So he sells fractions of it to a bunch of people on liquid marketplace. He allegedly, I'm just going off what I remember from this. Off the dome. Sells fractional ownership in this card to a bunch of people at a market valuation set by the liquid marketplace. Then he buys the card back from liquid marketplace for a price that he determines, not the marketplace price. last time I heard about it, the people who had owned the fractions

didn't even receive their fraction of the purchase that Logan Paul had made buying his own card back from Liquid Marketplace. So all of the people that had bought fractional share in it just kind of got hosed. Last I heard, it might be different. So Logan Paul still has this card, wears it in the WWE arena,

you know, kind of has all of this social clout and is now auctioning it online, Right now, the auction went live, I think, at the beginning of this month. Oh, wow. And ends January 30th. And I just looked it up, and it's already over $6 million. For the one card. And it's still got 17 days left in the auction.

Wow. Yeah, it's a commodity. There's a reason I opened the episode, there's a lot of ways into a Pokemon episode, VEbbling Good Economics kind of stuff is a weird way in to a thing about a trading card game. It's a very hacked way in. because it's a commodity. It's an asset that people buy and sell. And it seems important to understand it that way for the purposes of this story.

Over somewhere else, to the game's credit, is a game. The people like to play. Kids like to collect it. When I was getting them as kids, I wasn't thinking about them as assets. I just really, really wanted a certain card because I liked a character. But when you let that rinse and repeat for 20 years and you have like, Bay Area engineers with a lot of dystalgia and even more disposable income, it becomes an asset. The way it becomes an asset in the training card world is there's this term that we need to talk about.

It's going to come up a lot in the story is the idea of a slab. A slab is just a card that has been graded and sealed inside of a hard, clear, tamper resistant case. When you picture it, I haven't seen photos of Logan Paul in his Pikachu leather outfit. Let me help you there. Thank you. But I'm guessing it's a slab version. version of the card. So the card has been... It is. Yeah, it's got the grading, the little grading strip at the top that talks about it. A grading company has authenticated the card, said it's real.

It's very important for this story. And they've graded its condition. And then they've encased it in a rigid plastic holder, ultrasonically sealing it so that it can't be like opened basically without damaging the whole thing. And then they name it, give it some numbers. Basically, you put it in plastic and it becomes fungible. You can trade it. You can sell it. There's now a market for these things and it enters into the market. I'm just opening up Slack so I can see. See the photo of Logopolis? I'm just opening up, oh, that's elegant.

Yeah, elegant. So here's the other thing. There's a little bit more, I mean, I got one more stab of back history on this. I recently heard that this card, so this card is a PSA 10 grade, which I'm sure we're going to get into in this episode. But essentially it's perfection as far as quality goes. Right. It's been graded as a perfect.

specimen. I heard recently that this card actually was originally graded a PSA 9 and then Logan got it regraded and it became a PSA 10.

Right. So I don't know how you I don't know how you do that. You put him in a headlock and you body slam him is what you do. I just have the photo of him up and I'm like that guy's body slamming people left right and center just based on the outfit.

Yep. Oh, man. So, yeah, in this photo, which maybe we'll link to in the show notes, he is rocking a slab of a Pikachu card, you could say. And for just the record, in case it's gotten tangled up, Logan Paul has, is not legally implicated in this story at all. He has nothing to do with what we're about to talk about. I think if you want to just Google Logan Paul and legal troubles, you will find.

We've talked about him previously with his little animal. Yeah, his NFT project. Yeah, yeah, yeah, yeah. One of the other stories that CoffeeZilla would cover about him. Yeah, go watch the CoffeeZillow videos about Logan Paul if you feel like hearing about Logan Paul. In the meantime, our story does have some characters that we should talk about. We've already mentioned one, Takumi Akabane. He's an early Pokemon trading card game developer.

He's the source of the initial archive here. He's the one who's publicly associated with this set of prototypes. His name really is like the gravity well that makes this whole story. story believable and kind of kick off. And I want to get this out of the way in case someone only listens to the first half of this and they think, oh, one of the original Pokemon trading card game designers was a grifter. That's not really where this is going.

His name is very important to this as the lineage of some of these cards. But we can't associate him with the bulk of the fraud that we're about to talk about. I just want to get that out of the way up front. I had already started to associate him with the bulk of the fraud. The fraud. You hear his name and you're like, I think this guy's... Yeah, of course. That's why I'm saying it.

If I was an original game creator, like a game designer that made a game that's now has this commoditization insane aspect to it, I could easily and credibly produce a bunch of assets that I could claim to be prototypical. you know, any of the parts that you need to make the community go furious with their money. Foeing at the mouth. FOMing at the mouth, wanting it all. So the second you had mentioned that one of the original creators was involved, I was like, oh, this is just their payday. Yeah. The ease with which one could fake this is very relevant to this story. Three other characters we should talk about. Two of them, call them the buyers. Jason and Thomas. They're going to come up later in this story. They're both like Bay Area engineers.

Well, one's Bay Area, one's New York, but they're software engineers. They got a bunch of disposable income and a lot of nostalgia, and they become Pokemon card collectors. One of whom puts a really jaw-dropping amount of money on the line in this story. The last character, and kind of our hero, this story is a guy named Scott Mastro Matteo. Mastro Matteo is the one who turns this whole thing. He's an admin of a Pokemon card trading website. and he's going to come up later.

But I want to remember those. Takumi, the original designer, Jason and Thomas, the Buyers, and Mastro Mateo, the Sleuth. If you want to learn more about this story, there's a really wonderfully reported piece and popular mechanic by David Howard. It's totally worth checking out.

We talk about some other stuff in this episode, but that's a really good place to dig in if you find the story fascinating. So, 2022 Akaban Posts kind of announces that these prototypes and playtest materials exist. Origin story stuff. These have been sitting in a drawer there like paper glued to stock. They got the scuffed edges and the creases.

They've just been sitting there since he designed the game over like basically 30 years ago. And now he's selling them. Late 2023, the CGC, that authentication company, starts grading and authenticating these prototype and playtesting cards. For buyers, this is really, really important and exciting. They're making slabs out of these things. There's the sense that someone has done the work. to authenticate these cards. So they go up for sale and they start to sell.

The one buyer that I mentioned, Jason, his decision kind of logic in this becomes a really good mirror of what happens across the market, which is this would be exceptionally easy to fake. These are prototypes. They're made with like, you know, office printers, good printers, but like accessible printers. They're not made at scale.

They're glued together. A lot of reason to be. skeptical, but if a major grading company is authenticating these things, they're probably real. They've probably done the work. Sure. They've looked into the dots and graded and aged, the printing. That's foreshadowing everybody. Yes.

Remember the word dots later. His confidence jumps to 95% and he spends six figures on the first three of these cards. Early 2024, the trickle of cards starts to move a little. bit faster. September 20th, 20th, 20204, the CGC publicly announces,

hey, super exciting announcement, there are more of these cards that we've gotten and we've been grading. Like, there's more of these things.

We're authenticating lots of them. We're authenticating hundreds of them. This is not a one-off archive dump. It would seem, during the development

of Pokemon, a whole ecosystem of these early prototype cards emerged. At this point, collectors on the internet start to get a little

bit wobbly about this. If these are like play testing tools, first off, if these are like used, handled play testing tools, it's really odd that any of them could be graded mid condition. If these were made for a small circle of developers, all of whom like are documented, we know all the people that worked on this game, why is the market suddenly swimming in them? But for a lot of these buyers, the headline, Akabane, this known developer has said some of these I have real cards I'm selling, the CGC authenticating them,

testimonials all across the internet of people saying, I'm looking at these and they're real. There's so much evidence. There's so much buzz that this is happening. And this is real. And I should buy one of these for $500,000. Huge portion of his net worth.

Thomas goes out and buys one. If I had, like, so if three of these things had showed up and I had been the first one in the pool, I would be so heartbroken when 2,000 more showed up, because scarcity is the driver of the Veblen good. There you go.

So if I had the only three in existence and I had paid $500,000 for them, I would probably see great returns, assuming the insanity and frenzy of the Pokemon card collection continues. But the second that scarcity goes from like, there's only three of these things in existence to, It turns out we all have boxes of them. Yeah. No, 100%.

Yeah. Yeah. That would be my thing. Supply and demand is real. And the more supply, the lower the overall price of the average price. Yeah, the exclusivity matters. And ironically, that very first set of buyers of the original Acaban ones, while it seems as though they're losing their exclusivity right now, it will return.

God. Forsattering. Not even foreshadowing. Just just revealing me. Just telling you of where this is going. There was this sense

for these people who are passionate members of this community. I think for a lot of them genuinely really love this community and this world and these characters. Yes, they're buying an asset. Yes, they're buying possibly a Veblen good. But there's a real sense of this thing I've loved

for my whole life. I'm holding the root of it. If you love games, you probably really like game design. You're holding the game design documents. They had the root of something. So there's a real emotional engine to all of this. Can I take us on a digression? I'm about to take us on another, so please.

In classic fashion, I will give you a hot take. Games like Pokemon, magic, anything you're ripping packs, hoping for, you know, hoping to turn your seven. Yes, thank you. Exactly. I just see it as us teaching children how to gamble. Literally where you're going with it. Yeah. That's literally all I see it.

So I was just in Japan over the holidays. They have a lot of these claw machine parlors. Kids go spend their parents' money to try and turn a dollar into a $50 prize. That risk-reward function is the exact same as gambling. And we're just systemically rooting that structure. into our children. You get it with like CounterStrike, with loopboxes, video games, micro transactions. You're not just buying the asset you want because there's no fun in that.

There's no risk in that. There's no reward to it. There's no scarcity. So you buy loot boxes or you buy packs, apex packs. You buy, you know. And to me, as somebody that's worked in social marketing and behavior and norms-based marketing for over a decade, we are just... systematically teaching children how to gamble and how to get them used to it.

And you're seeing an optic. I'm going to continue this digression. I recently was served an ad. We had talked previously about a company that you could bet your bills, like if you have a $900 visa balance. Did we not talk about this? No. Okay.

There's an entire financial tech ecosystem that's starting that allows you to essentially gamble against your personal stuff. So like if I owe a thousand bucks on my visa card, I can gamble that. And either I double it and I owe $2,000 or they'll pay it off for me in a 50-50 game or a 51-49 game. I was going to say the odds there really, really matter. So there's an entire ecosystem.

Yes, there's an entire fintech ecosystem growing out of this. And I was recently served an ad on YouTube, I think. where you could bet against your own weight loss goals. So your New Year's resolution is to lose 15 pounds. You go to this website, you put in all your details, your heights, your weight, you validate it, and you say, I'll lose this money for a thousand bucks. And next year you come back and if you've lost the weight, they'll give you a thousand bucks. And if you haven't lost the weight, you give them a thousand bucks.

Is this like, wow. Is this polymarket? Is this? No, this is a new one. Cool. Not just one. I would say that the number one thing that I've seen in new enterprise startups, fintech weirds, things that catch my eye, I've seen probably seven or eight of these companies show up in the last six, eight months where you can gamble on very specific things. and they're very predatory.

They know that people at the beginning of the year have a resolution to be healthier, run more, eat more, be more active, etc. And they're leveraging that by advertising into those markets being like, would you do it for a thousand bucks? Would you lose 30 pounds?

Like how much money makes you... We're willing to bet you won't. Yeah, we're willing to bet you won't. That's not great, but it's not great in a very different way, maybe without thinking about it too hard, than gambling on debt. There's something really ugly to me and kind of nihilistic about letting a person being like, my life is being destroyed by this debt. I guess it's really no different than going into a casino on credit and gambling

and saying, well, I could either pay off this debt or I can triple the size of my problem. Yeah, exactly. Yeah. Yeah, sure. Anyway, so I think all of this stems back to the fact that we over the last 20 years have normalized gambling one of the most addictive things in the world like gambling is one of the only things where you get the dopamine rush when you lose as much as you do when you win that's that's what makes gambling so addictive and we have completely normalized it into our children through things like ripping packs for Pokemon I'm happy to say two things. One, that whatever

loss aversion I have as a person quintuples in the presence of gambling. Like, I don't know that. I say I have a normal amount of loss ofversion, but the second I know there's you have, the second I know that there's an odd, like a statistical inevitability, every time

I lose, I am filled with rage. So it's just it doesn't work. That's a healthy response. I feel pretty good about it. And I was I was popping booster packs like mad as a kid. You don't get a Charzar by popping one or two of those things. And then the second thing is that's why I'm really excited to announce that this episode is brought to you by Draft Kings. He's joking.

It's not. We wish. Okay. Okay. Pokemon cards. Back to it. This is where the story gets, if not hacky in a cybercrime sense, then very puzzle-solvey and nerdy in a way that I, I think I really appreciate it.

I was reading a lot about this over the holiday break. There's an internet community that ends up kind of cracking this thing wide open. It's called E4. E4 is a forum for like hardcore Pokemon card collecting people. This is a place where people, amongst other things, have a very deep vested interest in how people fake this set of collectibles. How do you spot the fakes before you buy them? How do the grading companies spot and prevent fakes? These are the people and they hone in on a vulnerability in both, I guess, the grading and the way some of these cards are being faked.

Collectors on E4 starts circling on this idea of printer metadata and specifically something called MIC, machine identification code dots. When you print something, there are these barely, barely, barely visible dot patterns that certain laser color printers embed into every print shop. You'd never notice it to look at it. But if you get in there with a microscope, you can see in certain cases this type of dot. And this could be a very powerful tool for forgery detection. Not just forgeries. I was going to say, I think it got, like the reason I knew about it is like ransom notes. Anytime you put something on paper, it's actually traceable to you.

Yes. You print something off? You think it's like, aha, I printed it. Nobody will know who it was. No, it's completely traceable. It's traceable to people that have very specific information that has kept very secret by printer companies, but not necessarily to law enforcement, to the public. Like you and I would have a very different time trying to track this, even if you had the best microscope on Earth because this information is kept very, very privileged. Of course, yeah.

They don't want everybody to be able to do it. But when they need to do it, they want to be able to do it. The codes are secret. But folks we've talked about in the show before, I think you and are quite fond of them, the Electronic Frontier Foundation, the EFF, another character in this, don't really give a shit

that the intent is for these codes to stay secret because they're cool and interesting people. They are. Supporters of the show. So these dots. They can encode date and time, printer, serial device, information, all this stuff into something

that's basically invisible to the naked eye. The EFF has success, successfully documented the Xerox docu-color track and dots. It's a very popular line of printers. And how to decode them. This is a very rare case of one of these secret codes becoming public knowledge. And it's a really, really good collectibles forensic tool because it's non-destructive. You can analyze a scan versus the original. It's not easily faked even accidentally. Like if you printed it, it just leaves those codes there. And importantly for our story, it's outside of, I think, what I learned through this story is like the typical card authentication instincts and process, which typically focus on type of paper stock, the type of ink used, the way the edges of the card look, the way the gloss is treated and aligned. The dots weren't really one of the go-to methods, which I find really interesting.

So enters Scott Master Mateo. Master Mateo is a moderator on E4, and he starts, he's watching this whole prototype cards thing happen. And meanwhile, off to the side, he's learning about these dots from the community as they're talking about it, independent threads, talking about, oh, these machine encode dots could be really, really useful. He starts looking at the rumblings about the prototypes. He's looking at the dots, and he puts two and two together. And he says, someone should look at the MIC dots on these prototype cards. Because again, they're printed on like cardstock. They're not run through the normal process.

We probably learn a lot by looking at those dots on these prototype cards. But they could even be used to validate them. They were printed in whatever, 1992, on this person-specific printer at this place. It would even make them more credible. You sure could. Foreshadowing. Foreshadowing. He starts with what's available.

He doesn't have one of these cards, right? but there are very high resolution images from the auction sites. So he gets the scans. He starts using digital magnifying software and later a literal microscope. And he starts experimenting with ways to make these dots visible on the scans, magnification, but also color and light manipulation, taking these dots that are meant to be invisible and trying to render them visible in the scans. Very interesting, weird, tricky problem to solve.

The EFF Xerox decoding references exist, but applying it to a scan is messy. You have compression artifacts, resolution issues, inconsistent lighting with when the photograph was taken. You're looking for this faint yellow little thing on a busy card surface. But eventually, he has a breakthrough. And he identifies a pattern consistent with Xerox docu-color style grids and uses this EFF decoding tool to translate it into a timestamp of when that printer printed. these mock up dev cards that are for sale. And he looks at the timestamp, and he says a bunch of these 1990s prototypes,

you know, part of this big tide of these prototype cards and this multi-million dollar market sure look like they were printed in 2024. Once he starts pulling on that thread, he realizes this isn't just a few fakes. There's been a manufacturing pipeline booted up here. And not all of the cards are showing the same dot pattern. Some are showing that Xerox-style dot that can be decoded into specific print times.

Other cards that he's looking at the scans of seem to have a pattern that most closely aligns with a Conica Manulta printer that doesn't have that EFF public decoder. So he just goes ahead and goes full send amateur code breaker. Nice. Starts looking up published and researched like data sets on different tracking dots. And he figures out basically like his own version of the Conica Mnama. Manulta printer Rosetta Stone to verify this other set of cards. It assembles like a patchwork data set of these dots for Manulta printers from like old research papers from when they were manufacturing it.

Older dot pattern samples prints other sense send him. He gets a printer prints some himself compares it to that. Like he goes full send on this thing. Love that. It's pretty cool. And the thing he figures out is that certain dot positions correlate very strongly with printer models and manufacturing area information. that lets him estimate that a bunch more of these alpha error cards were built in and around 2016.

So even if you can't nail the exact year the way he could with the EFF documented printers, he could say if these were supposedly made before 1996 and yet the printer technology would date it after 2016, we have another trunch of these things that have proven to be fake. I feel like that's just sloppy forgery. You know? Yeah. Like if you really wanted to make a believable product, I'm sure you could have. If you really wanted to forge a Pokemon card, how would you do it?

Well, first I would need to look into all of the ways they validate it. But even just the printing of like a concept cards, if these cards were supposed to date back to the 90s, why would you not just go out and find a 90s printer? Why would you not just go out and find 90s print stock? I'm sure you can find it. It's not impossible. You'll probably find a ream of old print stock from the 90s and a printer that somebody would have had. Reset the firmware in it or however the date translation comes,

whether it's for the firmware in the printer or through your computer, reset times, even get like a Windows 95 box to do it from. And just like check some of your, set the bios time in the system, set the Windows time to the right thing. And just spend another $200 hours and $5,000 making sure that you check off a lot of these things. So to me, that's just sloppy. Like, I would have thought to do that if I was in the market of forging Pokemon $5,000.

Maybe I should be because it sounds like it's quite the market. It seems like it's quite the market. And there's an interesting question of do you want, say I submit through, proxies a hundred of these things to get graded. And the grading company can either catch 95 of them as being fake versus 85. You can get slightly more through the gate. But they only cost $20 in cardstock in a couple hours of your time. Do you really care about the marginal difference?

Are you just like, no? I actually just need one of these to slip through. Well, and the beauty is, is once they slip through, they're encased in plastic. Slabs, don't. Nobody's checking them again. Nope. Except Mastro Mateo, who's checking that shit like it's his job and who comes to the conclusion that there is a massive fraud inside of this new prototype card ecosystem.

And he writes up a big paper. Big old thing. He's going to put it on E4, the heart of this community. He's going public with it. There's this ethical gut check moment that I find fascinating. He pauses before publishing because if he's wrong, he's not just embarrassing self. He's detonating actual net worth. Yeah, money.

Money is laying on fire. Is on the line here. We're talked about Jason and Thomas. He's going to get sued. He's going to torch CGC's reputation. So he really goes on a fact check tour. He's asking for scans from other collectors as a sanity check being like, I saw you bought this fourth round that went up.

Can you please send me a scan of it? So it becomes this kind of distributed verification moment where you have multiple owners, multiple scans, just looking for these. patterns and seeing where they repeat and where they differ. He also realizes that he's implicated, not implicated in the fraud, but, like, now that this new machine, this MIC dot thing seems to work, if you'd reply to everything, how many of his cards are fake? Like, at what point do you stop being the detached whistleblower and find you're like, oh, I'm

bleeding? Yeah, sure. I'm half of my collection is garbage too. Right. January 2025 Part of the reason we're talking about this because it was when I was reading about it Master Mateo hits publish

The community reads the evidence Goes public on E4 That leaks out and gets broader coverage Which is how I found about it Goes out over the holiday break And buyers all get this horrible Like pit in their stomach moment going like This seems really really damning

For the integrity of this new prototype card market I just want to I just want to cross cut back Because any of the actual cards Like the prototype cards that are printed on regular printer stock in a home printer, you know, something that would be abnormal for like the actual production cards. You got it. Because I'm assuming the production cards are printed on massive Heidelberg offsets. They're not going to have the little pips all over them to tell you what date they were printed and what printer they were printed on.

On a card stock that is probably kept under lock and key given the multi-billion dollar size of this industry. You've got it. These prototype cards are uniquely valuable and uniquely vulnerable. Yeah, totally. So Master of Mateo's reporting goes live. It ripples throughout the community. And then the final twist, which we alluded to earlier, is that some of those earliest buys from the original Akaban collection seem like they might actually have been real.

Jason, one of the first buyers, I think he was the 500K guy, drives to another's collector's place. They do a high-res scan on like a good flatbed and sends them off. and they're able to verify that Jason's three early cards from I think that original A Cobain collection show MIC dots consistent with 1990

1990s printing meaning he probably got lucky buying early before the flood. Other earlier owners are checking a few people are responding with high-risk scans and seeing that some of those very, very first wave

prototype cards do seem compatible with 1990s era printing. And the likely scenario emerges that a small number of authentic originals existed, enough to establish credibility, and then malicious actors use that legitimacy, like burst to manufacture a much larger supply and ride through the grading and authentication machine. Which raises the really big question at the heart of all this, which is how did the CGC miss

this? And this is where it becomes like a really interesting institutional problem versus just how do you make clever fakes? Like that's fascinating and I think why I got into this. But like what happened with the CGC here? Well, before we get to libelous, because I assume that's where we're going, the, it's shocking to me that they did miss it because like I knew about it. Yeah.

You know, like I foreshadowed a lot of the things happen. I hadn't read the story towards. No, yeah. No, no. No, no. You responding. Yes. It's like I knew that you could do this.

I knew that you could check print dates, device IDs based on things. How does a company whose job, is it, in its entirety, is to spot duplications? Not. It's a really, really good question. And the thing that's weird is that machine encode dot, like, MIC decoding is not obscure in digital forensics. It was the first thing you guessed. It comes up a lot. EFF documented Xerox decoding years ago for a reason.

And that is a really big question in the middle of all this, not liable, just a question, which is why did the CGC not test for MIC at all? Or were they just testing inconsistently? Or maybe most damning did the chain of custody implications of Acombein coming out publicly saying that this type of card does exist like override those warning signals? And I just don't know the answer to that. It seems like it has to be one of those, but I don't know which one. See, to me, having a credible actor come out and say these do exist and I have some and peer, please grade them is the perfect setup to the fabrication behind, the lie behind, the malicious intent behind. That, to me, anything that wasn't hand delivered by credible person A should have went through even more rigorous scrutiny. Because it was printed on like home printers.

Like, it seems kind of obvious. But the practical reality of all of this, if you look at the numbers, is that these grading companies are authenticating at like an industrial speed. A lot of people are getting Pokemon cards graded at any one time. And like I said earlier, the fraudsters only have to get it through that process some really small percentage of the time for this all to be extremely lucrative. Reports are about 1,500 cards have been recalled and are eligible for review in connection with this investigation. like seven to eight figure public sales of these things as of right now. They've issued a formal statement of the CGC acknowledging the reports

and that they're setting up like a review path for, the phrase was impacted certification numbers. It's basically they're receptive to people saying like, I need you to check this again. And money, please, for if it's fake. So that's all still unfolding. We're going to have to see where that goes with the CGC. But I would say, Carrie, like how much an error is in a

Amissions Insurance you have to carry for this. Because that's what's going to get hit. If they don't have a $100 million in errors and emissions insurance, it's going to be a real painful stretch for them. I mean, and the refunds come with a material cost. Like the reporting again indicates that they are refunding submiters who return cards for review and came back as not being fake. But like the trust is the bigger issue here.

Like you sent me a photograph of a man coming out in a giant. leather outfit with a slab around his neck as though it was gold bullion because a slab was a rock solid guarantee it was as good as money it's worth more than gold bullion literally by mass sure it's cards yeah yeah totally he could have he could have that entire slab could be solid gold and it would not be worth and gold is worth tons right now yeah yeah yeah that entire thing could be a slab of gold and it would be worth less yeah than that pokemaid card is currently being valued at auction and still has 17 days like it could go for 10 to 12 million Yeah.

And it's $12 million in gold he wouldn't be able to walk out with. And that rapper matters. And it used to be that you could trust it like one to one. And now there's a sense of like, well, the slab is good, but it hasn't been verified. Like there's doubt. A little bit of doubt can grow and fester. And the irony of all this is that let's say it becomes more secure because people start saying, show me the dots. Right?

People come all the way around and they go, there's this new way, but now we know about it. Show me the dots. You've just created a new attack surface. Like, in theory, a sophisticated counterfeiter could try and spoof or manipulate or just buy a really old printer. And yeah, the market for old printers gets more expensive, but clearly the return is there. So this report that this whole story really was kind of about is this really fascinating, code-breaking, puzzle-solving, sleuthing expose, and also functions as a great blueprint for the next round of forgeries. I like it.

I like this story. It's like the right blend of like puzzle hacking. You know, you've got a hero who's solved it. It's a great little narrative, make a great little movie. Because the reality is this one person with nothing but digital scans on probably consumer grade scanners. Like we're talking 600 PPI scanners, not something that's insane. With consumer grade scanners, you know, 600 PPI scanners and a little bit of reference materials from the E. FF was able to disprove, he didn't, they didn't have physical access to the actual source material.

All scans. From what I can tell. So that's a, that's a, that's a bad look for the grading company, I'm going to say. Yeah. It's interesting because you get to watch in this one story, the birth and death of a like fraud opportunity. Takumi Akabane comes out publicly and says, I have some early prototypes of Pokemon. which I was a developer of. Everyone knows this.

This is publicly documented. I'm going to be selling them. And independent of that, a bunch of people went, a bunch of card stock just became worth hundreds of thousands of dollars that is distinct from all of the anti-forgery systems that exist for verifying normal run Pokemon cards.

It was like this moment was born. And then not that long later, this other forum admin master of Mateo goes i figured out a way to to end it so you get the birth and the death of a little fraud ecosystem that reveals a vulnerability in a much larger ecosystem of billions of dollars i can't help but just take that model of someone of credibility comes forward with something it's given a pass by society because of credibility and then other people latch on like Every time you go on social media, there'll be some popular post that's trending for a reason. And then there's a bunch of people latched on in the comments, just pushing their own agenda.

And it's the same kind of idea. You know, as a fraudster, it's probably a system to look for, you know, wait for this situation to occur. It's very similar to like in stock trading. You look for technical patterns. Like, oh, there's a head and shoulders here. Maybe I'll get out of my position or short the stock. history has shown us that, you know, seven out of ten times the stock's going to come down now. Same thing goes here.

You know, let's look for this technical pattern of setup to occur, and then that's when we strike. That's when we strike. It's an interesting story. It is. Good story. I like it. Nice. Do you want to kick it on over to a little ad oasis and then I don't even know what we're calling?

Add water slide because it's quick. It's quick. Let's rip on over to the ad water slide. I'm going to come back and do a little chaty chat. That's it. Think about the last time you heard a breach story on this show. It always starts the same way. Someone somewhere saw something too late.

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Ever feel like cyber threats are evolving faster than anyone can keep up? Last year, 2025 was nothing short of a record-breaking year. year for major breaches, from sophisticated ransomware operators to AI-enabled attacks that turned defenses on their head. Organizations around the world saw headlines they never expected and cybersecurity teams were tested like never before. But here's the thing. These incidents aren't just news headlines. They're learning opportunities. And that's why Arctic Wolf is hosting a live webinar on February 5th diving the most impactful breaches of 2025. Their field CTO and security leaders are going to unpack not just what happened, but why these attacks succeeded. And most

importantly, what businesses can do to fortify their defenses for it's too late. You're going to walk away with real insights into how threat actors are evolving, how defenders are responding, and what strategies can help you stay ahead of the next big breach. It's not fear mongering. It's practical, actionable, intelligence from experts in the trenches. Register now at arcticwolf.com slash hacked. I got to say I'm pretty shocked that this wasn't about Logan Paul, the second I was like, we're talking about Logan Paul today. We're talking about Logan Paul today. I don't need that heat, man. Liquid marketplace.

I don't need that heat. Fractional ownership. Weird commodities and alternative investments. You know, a little bit of fraud and nonpayment to the fractional owners. Now we got this card up for auction. I was like, there's no way we're not talking about Logan Paul. Yeah. I just think about the defamation suits between Coffee Zill and Logan Paul.

And I think about them. That is a fascinating story. If you haven't read about that, go read it. about CoffeeZillow's coverage of Paul's, I think I could say, ill-fated CryptoZoo NFT project, it's worth. Yeah, we have an episode about it. You can listen to our episode about it. But I will say anything to do with Logan Paul, there's a reason why I mentioned

Coffee Zill all the time. And it's because I want you to go watch the Coffee Zill version of it rather than have us talk about it and get countersued. It's extremely good. It's very good coverage. You should go give it a look. Oh, chatty chat. Kay, very, very brief.

This isn't a whole story, and it might just be a dead end where you go, oh, that's interesting. But a YouTuber who I like named Ben Jordan did this video. And it was just like a fun little tech thing that I thought was really, really neat. And it was as a fellow audio aficionado, I think you will find this fascinating. Spectrograms, which are basically images, like a spectrogram was a way of visualizing audio. this YouTuber converted a ping image into a spectrogram. Like he basically took a little drawing of a bird, converted into a spectrogram so it's a sound,

played that sound to a bird, a starling, which is a bird known for mimicking sounds, and then recorded that bird later when it started making its own noises, mimicking what it had heard earlier. And when he looked at that audio, it had reproduced the original ping

that he had played to the bird. meaning that he was able to store an image in a bird. Does that make sense? You follow me? So really what they've done is come up with a new form of cryptography. Yes. Bird. That is then mobile and it could be sent through starling birds.

And are there better ways to attach a message to a bird? I'm picturing a pigeon with a little piece of paper on his ankle. Yes. But did you play an image? as sound to a bird and then record the bird and reproduce the image later, which is just really freaking cool to me. No. And that's great.

So anyway, go look up Ben Jordan's video about encoding images in birds. That was a fun one over the break. I wonder how many people, like the hidden message thing. I've always been fascinated with like how do you pass a hidden message. You know, it's a fun game. Like you could almost have an entire hackathon around like come up with a unique way. to pass a hidden message. And that's a pretty cool one.

Like, take words on a transparent background and codify them into spectrograms. You could even add like a basic, you know, transformation to it where say you fill it out and rotate pixels. And then on the other side, you take the audio track, take it back into a spectrogram, undo the transformation. And then you've got an image. Yeah, the hackathon, I'd have to think about how you would actually structure this, but a hackathon that's about transmitting a message, and you can use digital means, but there has to be one link of it that is non-digital. There has to be one.

Oh, yeah. Do you know what I'm saying? Like one thing that, and it could be whatever, you could do it with a bird, you could do it with water, you could do it with weight, you could do it with light, you could do with all sort of, light would make it too easy. But basically one link of the transmission has to be. analog or non-digital. That could be, that's fascinating.

Or even like non-electronic. Like it has to be, yeah, that's cool. In uni, we used to codify messages into bitmaps, like images. Because it's every pixel is a binary essentially or is a number value for the color and the gradient, the brightness, the rest of the gist. So you could just replace pixels or add an alpha value or reduce a color intensity by a certain amount. And then on the other side, the person who received the image could run it through a reverse processor that would pull the encoded message out. Putting it through an analog channel. Yeah, I don't know how you do that.

Like, okay, we're going to print the message and we're going to feed it to the bird. Yeah, we're going to print the message and like put it in one of those pneumatic tubes that shoots it. We're going to put the message in it and make a paper airplane out of it and the launcher shoots it. But the idea of like getting a gift of a bird and then recording the bird's chirp and then. turning that into a message would be like the craziest. It'd be something for a spy movie. Like a great plot line. Yeah, there's like a cool puzzle there of you just start with a bird.

Like the clue to the puzzle is the bird. And you're like looking at the bird and you're trying to think of it. And you notice the bird is making a noise. And like the jump to I'm going to record that and look at the spectrogram. And then you notice like a triangle or something. You're like, oh shit. It's very satisfying. Some little part of my brain really, really liked that story.

One of these days when we have more time, I would love to do an online puzzle hunt. We've talked about it for a year. We've talked about it. Yeah, I would love to do something like that. This is one of those things that we should earmark for the war chest of like different puzzles. Yeah, yeah. Even though now we've talked about it to the audience, they will crack that quite easily. Well, the bird.

Hey, if in a year we're talking about a puzzle and there's a bird involved, you know where to look. chatty chat. Okay, other stuff that happened over the break. Barely anything happened, right? Yeah, it's been real chill and normal and cool in the world. On our hopefully more fun beat of interesting weird tech stuff, CES happened, Consumer Electronic Show. The only thing anyone's really talking about added is Legos,

and that's really fun to me. Did you follow this, Scott? I did not, please. You had followed the Lego smart brick of it all? I have been chasing my own rabbit holes. I did see a lot of news show up about smart bricks, and they look like literally just a brick with an LED in it. So I'm sure that there's something much more complicated about them,

but they did not grab my attention. No, not really. Like, I think what's fun about this, this is not urgent or relevant for us to talk about. But Lego came out with like, they announced these little new interactive smart bricks that have basically a series of sensors in them, a little microscope,

some microphone and some lights, so that when you, like, put a figure down, when you put Palpatine down in the seat of, like, his little seat, it makes a spooky Palpatine noise. Or when you put two, I'm just going to use Star Wars figures, two characters with lightsabers together, it makes Star, like, lightsaber battle noises.

But the thing that I loved about this, as a person who really enjoys Legos, is that they didn't go introducing the new Lego smart build system and we're changing Legos forever and they're different now and smart and there's a million parts. They just rolled out one little brick. And I think that hackery, tinkery people are going to have a ball with this. This seems like the kind of thing that people just like futs with and make weird new stuff out of. So anyway, I thought it was pretty neat. I actually like for somebody that typically follows CES and some of those from personal

hobby side. I did very little this year on CS. And maybe it was because I was in Japan. And then when I got back from Japan, I was more jet-legged than I have ever been in my entire life. Yeah, you got that got this time. For somebody who, you know, has traveled quite a bit. Sure. And I have a pharmaceutical regiment to fight jet lag that has worked and has done me well for for decades. This time, I have no idea what happened. Like, I'm still, I'm still feeling the effects and we're like eight days later. Like, I'm still not sleeping on a good schedule. I'm still messed up from it.

It's not, not what I'm typically used to. No. It's tough. That's a tough flight. Yeah, it seemed like CES was mostly weird gadgets versus, like, there's no big announcements. I think most of the big companies aren't even really participating. It's more odd stuff. Like there's like the weirdest little phones you've ever seen.

There's that little Blackberry phone. There's a little square Android phones. Like just odd little devices and cool Legos. One of the things I did see was tie back to one of my favorite topics to talk about, which is hacking in video games. Hackers in the game Apex Legends figured out a way to take control of other players. Do go on. Yes.

do go on. That's mostly it gone on. But there was about there where remote hackers were controlling players in the game. They just had lost control of their character. So they had hijacked the sessions or I'm not sure exactly the technical details on it. And hopefully those come to light because that would be something fun to talk about. But I think that might be a first. Like I know that they had an apex issue where hackers were able to put cheats onto sessions, like during the world, like, uh, world series of apex or a camera exact. Yeah, I remember this. We talked about that. Yeah. Where hackers were able to essentially make someone's game session act like it had cheats and function as though it had certain cheats, uh, wall hacks, A and bots, stuff like that.

This is the first time I've ever heard about remote control of a session. Huh. So. I wonder how you, oh, I a lot of questions. come out of that. Is Apex Legends, I wonder what Apex Legends anti-cheed is. And if they're in that, we won't run it inside of Steam or any of those others because we have like root level access to prevent anti-cheating.

Yeah, Apex has a pretty serious anti-cheat, I think. Interesting. Given the speed running and the competitive gaming landscape and the role that Apex Legends plays in that, that is not surprising. It is surprising that you would be able to, this level. of compromise is pretty surprising because when I think of really high level intense compromises, it's typically stuff for allowing the player themselves to cheat and to get signals into the game that the game doesn't know are compromised in some way, and basically in the form of like controller

inputs going around the anti-cheat at that level. To get in on the game so that it applies to other players is like that remote sessions. That is a shocking level of compromise for something that has that level of anti-cheat. There was a... Huh. A recent busting of a Thai esports player playing Realm of Valor,

Tokyo Girl, was busted, essentially pretending to play. So on her, it's a mobile game, and essentially, I think it's a mobile game. Yeah.

She should pull the deeds on it. But on their screen during this contest, she was essentially fake playing. And somebody remotely, She was streaming a session of somebody playing remotely. So they were busted and disqualified from the tournament. And they were a massive e-sports influencer, mostly a personality in the game. But they were using team viewer essentially to remote watch somebody playing for them in this tournament.

That's so interesting. That's an interesting one that caught me. The other thing that I saw Andre Carpathie, one of the, one of the, one of the, the brilliant minds behind the transformer architecture and chat GPT and all of the AI that we currently do. I think he's Canadian. I think he went to Waterloo. I might be making all this up, as I do. He put out a tweet, I don't know if it was Christmas-y, I think it was around Christmas, where he essentially just said, like, I'm starting to feel like my entire life I've been known is a very gifted, sophisticated software developer and engineer.

And I'm not keeping up to the way AI is changing our ecosystem fast enough that I feel like I'm falling behind. Oh, interesting. Yeah. So like some of the developments that have happened, like we've talked about AI software development a decent amount on the show. Yeah. But the new Claude Code set up where you can have 10 different agents, all.

working on feature sets inside of the same application and you're kind of jumping around guiding them. You can remotely control the agents from like your mobile device when you're not at home. Like the way that software development is going is crazy and it's moving and changing so fast. Hmm. And your sense is that for him, he's saying that it's disorienting to him. Yeah. And yeah. Yeah, yeah. One of the inventors of Chad GBT.

that yeah like I feel like I've been writing code since I was like seven I feel like software engineering I speak code as well as I speak I probably speak code better than I speak English and I feel that way like every two weeks that I don't keep up on what's going on in AI software development I come back in being like I'm new here like what do I do yeah right and it's like oh you're not running like 13 you know cloud code age and like I haven't written code in months. It came out that the lead programmer and creator of Claude code hadn't written a line of code in six months. Claude code is literally writing itself at this point with a human like Q&A and check and balance. There's this fork emerging and I'm going to articulate this poorly because I'm thinking about this for the first time.

And I just think of it because Carpathie was I think one of, he's the guy I associate with Open AI and I think coining the term. If he didn't coin the term vibe coding, he was an early. That's what I thought. And when I hear about, when you hear vibe coding, you think of normal person using these tools to make something kind of small and trivial, but very personalized. And that's kind of useful. The vibe is sort of a synonym for a prompt. And it's like prompt coding.

Totally. But there's this other branch of for the power user, the person like you that speaks code as well, if not better than they speak English. your words not mine it was more of the more of the sass you put on that statement when you spoke it back to me that I laughed at no no I didn't even mean it sassily like I'm thinking genuinely about those people

using these tools and how what they're doing is a level of like crazy like no I have like seven instances of this thing running and I've got one writing over here and one writing over here and this one's checking what this one is doing I'm like that doesn't sound like a vibe at all that sounds like a weird like hyper accelerant

on, I don't, I'm reticent to say accelerant on productivity because there's such well documented stuff about like, and then fix all of the shit it broke. But it's this, it's creating this like for the professional very different way of working that is somehow both held of a kind with vibe coding when I do it, but clearly so much its own thing. Yeah. There's a fork. Yeah, I think they're, yes, very much so. Vibe coding to me. And they, they, they, they, and they, The concept of it is like the replica crowd, you know, even some of the people who are like, I don't really know how to code, but I'm on like, I'm on this site and I've created a mobile application. Like you're seeing way more SaaS products and, you know, creators build their

own solutions to problems they have rather than building enterprise software. Like senior engineers building products, not like personal products and small, you know, startups. Products. But people, products. I got you. There's definitely, yeah, there is a, there is definitely a fork occurring and, and a launch pad of productivity. Like, the reality is, we used to go into interview applications and tests where they would challenge you with a bunch of thought puzzles and code challenges and things like that. The reality is, is that in,

it's, we're closer than ever to those challenges being also AI. Like, how good you at leveraging these tools to get the most efficacy out of the money that we're going to pay you. Because if we're going to give you X hundred thousand dollars to be a senior engineer here, you know, the baseline used to be this many commits, this much change, this many feature overviews, etc. But now we've 10x that. So will you be able to meet our expectation? Yeah. The language that we used to describe it is lagging behind the practice of it. because what you're doing when you're working on like neural nets and stuff with cursor open is so materially different than when you vibe code a little HTML website.

And we don't really have a good way of talking about it because they're both like technically coding with an LLM at your side, but they're so clearly different things. I think that there's this understanding that started to emerge, which is that if you're really, really good at something, LLMs are an accelerant. And if you're really, really bad at something or new at something, call it, LLMs are kind of false confidence. They make you feel like you're a little bit better at something than you are. If anyone's familiar with Dunning Kruger, the idea that when you first start learning something, there's this value, valley where you overestimate your ability. They're like Dunning Krueger accelerant. Whereas if you're good, they're just accelerant.

It's really that understanding is starting to get a little bit better. Absolutely. And if you're good at something, if you were good at something that LLMs are now getting good at, and then you watch someone who isn't good at it, try and use the LLM, you watch it just sort of send them off down crazy roads. But if you know the path, they're pretty useful. It's an interesting dichotomy. Yeah, I had lunch last Friday with a colleague, and we were chatting about the use of AI and what space is it's disrupting. and how much it's disrupting them.

And maybe it's biased because of my closeness to it, but software engineering feels like the number one case study for disruption. Like, if you think about what made a good software engineer, the closer that they were to a purely rational computer, the better they were as a software engineer, now we just have purely rational computers doing that task. Where when we talk about things like creative arts, and outputs, lots of the things that you and I work on. It's not that great at. It's,

it's really great at like, hey, make me this thing. But it's conceptually, like, I find copywriting by LLMs to be, meh. I find any kind of artistic output by them to be, it lacks that human touch. But code doesn't need a human touch. It's actually better when the humans don't touch it. Yeah, I can't speak to the code side of things. I see the memes of people talking about the time they spend fixing the stuff that they output, but obviously they're in use in software development, so they do have a lot of utility. And then on the creative side of things, it's just the, if it's, if it could only produce based on that, which it was trained on, it cannot by definition produce something new. And that's, that's just a

whole, that's a whole world. But there is an announcement that came out that I think is relevant, because we were talking about it right before the break, which is, so Apple, Siri, the boondoggle, the will it ever be good? An official announcement that happened, I think just a couple of days ago is the time of recording, which is that Apple is going to be using Google's Gemini AI model to power. Siri. I'm going to call it Good Siri, which is supposed to be coming later this year.

New Siri. Actually. Oh, no. Yeah, good Siri. My series listening to me. Mine is too. Sorry, everybody. That happened last night, and now I'm going to pass it on.

Yeah, I think that that was fascinating because we were, We were talking about this in the same way that Apple very famously, famously has the deal with Google for search. It seems to be coming for the model. And what's interesting about this is that, so it's going to be a multi-year partnership. Apple's going to be using Google's Gemini as the companies like cloud technology for future models. The quote in the press release that I think is very telling is these models will help power future Apple intelligence features, including a more personalized Siri coming this year. The important thing here is that they're still saying Apple intelligence is going to run in private cloud compute, which would suggest that we're going to have instances of Gemini running on Apple servers, which Apple will probably modify and call their own foundational model.

But they're using Gemini as kind of a foundation for their foundation. Where is that marketing? Where is that distinction actually real? We're going to find out. But it is official. Siri will have a lot of Google gas in the tank. Yeah, the new Apple foundational models will just be IP licensing agreements with Google. And you know what?

I'm here for it. Yeah. Yeah, honestly, do it. A year ago, we were talking about how far behind they were and they're about to get, you know, they're about to get all of the freebies. And good for them. Great business move. They didn't have to spend the trisillion dollars on Nvidia GPUs that everybody else has.

And they're about to leaprog over and do some stuff. Great business. Smart. They're going to still control the surface, in the sense that the end customer is still theirs. They still own that. They've eliminated the threat of people saying, I love my iPhone, but at this point, pixels are so similar.

And I get all these cool, useful, like, image editing, like all the objectively useful features that are inside of that. It's like, okay, you've built a little bit, you've kind of removed a bit of that moat for Android users. It's like, yeah, you get some of that over here, you get some of this over there. It all kind of becomes a lot more of the same thing. I'm not an Android user, and I probably shouldn't speak to it, but I would go as far as to say from a user experience functionality perspective, Apple is losing to Android right now.

In terms of AI specifically or in terms of UI and like UX? No. is as far as feature set go, I think Apple is the UIUX company, and they have proven that time and time again. And the thing that I'm most excited about is Apple will think of ways to integrate useful AI into things way faster than Google will.

So I think that Apple will, is now and should be considering it as a massive fundamental project for their company to become the company that knows how to integrate AI into people's workflows and use like use cases. Yeah. And I think that they are the best people positioned to do it. The Apple ecosystems succeeded largely because of their UIUX savvy.

And I think this is another case for them to showcase that. And I hope they do. When you look at, I would bet that Apple is sitting on a pile of data. And a pile of money. And a pile of money that shows just how often people actually talk to voice assistants. Now, there's a chicken and egg question of how often you talk to a good voice assistant versus a trash one. I bet they have some access to maybe how often Android users talk to it because they have unlimited funds and can probably just get that information.

And at a certain point, you start going. It's part of their licensing agreement. At a certain point, they go, 98 to 99% of your computing on this device is just looking at the screen and touching stuff. That is not need to be mediated by an LLM. But we have a voice assistant, and it is, by all accounts, trash. So how much control are we really giving up when we put someone else's model inside of this feature that doesn't get used that often? Because yes, the LLM is going to exist inside of the software. I'm sure Apple notes, I'll be able to have it auto-write something for me.

But that's kind of an edge case in a lot of situations. I'm not having it write my texts for me. If I use a note, I'm just making a note of something, no LLM required. Basically, all this is doing is going series really bad. Useless even. We can make it better. It's useless. It's keyword based in 2026, which is wild.

It's like trigger words. So let's get this in here. Maybe they can solve the issue that a lot of voice assistants seem to still be encountering, which is that while the LLLL. LM is great for open form conversation and inquiry. It's really bad for setting timers and stuff that the old system could do. Maybe they can go, all we're going to do is we're going to solve that one pain point. We're going to leverage all of the utility that Google Gemini or Claude or OpenI

already had to make Siri more conversational. And then we're going to go, this is 1% of your time spent using this device. Hands off. Let someone else deal with the LLM back end. Seems like kind of maybe the choice they've made. Yeah, the thing that I'm more excited for is the whole Apple intelligence, I don't know. Yeah, yeah. That's how it makes me feel too.

Yeah, exactly. Great, you're killing my battery for zero productivity output. Great, thanks. Yeah, killer. Not just the Siri changes. Like Siri, obviously is a joke at this point. 2026. Series is, yeah, it's a, it's a joke for tech pundance.

like you and I. Yes. 100%. But I think once they have, like Gemini 3 is quite good at many, many, many things. I think once Apple has the ability to touch real good AI, utilize it and look at ways to integrate it into their operating systems, I'm quite intrigued to see what they do with it. Just given that they are such a UX first company that I have very high expectations for them. Yeah. So don't let me down.

No, don't let us down. We've talked about this before of Finder on the Mac. The key commander's right there. It's useful for finding files. Marquez Brownlee published a video where he was, or maybe he was in a podcast of theirs. I can't remember. But that team was talking about Raycast,

which is a Mac Finder alternative that just bakes a ton more functionality into it. It builds in a lot of features that are weirdly in Google, like auto translate and auto like puts a calculator into it, lets you index files, lets you move stuff around, kind of turns it into a little finder window. Like it just makes that little box that you type into on a Mac a lot more useful. And I think that this speaks to me. We've talked about this on the show before of maybe where Apple goes is those inputs where

you're already typing into your computer. how do we make those more powerful? Rather than saying the whole computer is going to be a chat bot everybody, it's clippy again. It's hooray. They're just going to go, you're already typing here, here and here.

How do we add just a little smear of AI to make that a nicer, more human experience? That I think would be smart for them. Also, because they're the king of the mountain and they couldn't have more to lose. If they whiff it, like, if they liquid glass,

the user experience, not just the aesthetic and the skin, but if they do something that people don't like to how the computer operates, that's a catastrophe for them. And you can tell that they're moving slow as a result. Yes, that would be where my mind goes to. Like, my expectation on them is very high. Yeah. And if they fail to meet that expectation, it's going to be, like,

they've been mucking around with Siri and a number of these things for so long and have nothing to prove, nothing to show for it. Yeah. This time they can. can't mess it up. Yeah, sure. You know, this is, this is, this is, things are moving so quickly. Companies, new companies are showing up.

New applications are being developed so fast. The market is moving at such a pace that I can't, like Google has got a one year head start on them. This is true. So they just need to move quick, respond well, and do a good job. We, um, we've never gone. down the road of trying to get invites to any of these events. We've never, we've never done the request to get to go to dub-dub. I don't know, I don't know if they're open for 2026,

but I like it as like a flexicle at some point to just go and, I guess you just watch a video with other people because they don't even really do the presentations live anymore. So that's less interesting, would still go. I'm fascinated by this one. I think it's going to be an interesting year for them. Totally. I think it's going to be an interesting year for everybody, honestly. I think it's just going to be a real just given everything that's everything that's up right now and everything that's down. Yeah, sure. Polymarket will be baked into the OS by the end of the year. Everything is going to be upside down.

Yeah, literally. You're going to be able to bet on other people's weight loss through Siri. It's just going to be trash. Will Scott and Jordan go to Dubbub? Will Scott George go to Do you? Yeah, let's just bring the stakes away back down. 5%. You bet yes.

It's like, would you like to bet money on this? It's like, yes, I would. So. Okay. Logan Paul, Pokemon cards, dub, like those smart bricks. Is there anything else we should talk about before we wrap it up? I feel like something we talked about every year that we should just end with is the approximate value of all cryptography fraud from last year. Cryptocurrency fraud?

And stuff. Well, not even just the fraud. But we've kind of talked about it. I feel like it's a running theme that every year we're like, oh, yeah, last year there was, last year there was $6.75 billion approximately stolen from cryptocurrencies, which is a 51% increase from 2024. Wait, you plowed right into it. That was the number for 2025? Yeah.

The article that I'm looking at on coin paper, it is $6.75 billion. A substantial amount linked to North Korea. So North Korea is that they're stealing your money or your, you're, digital tokens. I was thinking about this. We kind of took a year off of crypto. We did. We went AI.

Yeah, it just seemed relevant and seemed kind of urgent. It seemed certainly more interesting because there's at least the push and pull of the utility versus the scam of it all. It's like clearly there's some economic stuff going on in that space that's not great. But there's at least some software that does some cool new stuff. Whereas crypto kind of got boring of being like, it's just fraud tip to toe. So it's nice to know that. while we weren't on the beat, it kept going.

You know? You know, I will say that crypto this year, my 2025 crypto learnings is that crypto is actually very functional at enabling crime. And that's it. Stable coins. Then I'm going to talk a Bitcoin. I'm going to talk in ether. I'm going to talk in any of this, the garbage tokens.

Straight up USDT and some of the, I think Coinbase has a stable coin link to the USD. Anything that has a USDA digital token makes just an amazing way to move money around in circles where you don't want and don't want to have to deal with moving physical cash. Yeah. That is largely a criminal underworld and 2025 seemed like that was the one big thing that I took away last year is like, okay, digital currencies actually do have a great use case. And it's all around crime. Yeah. I feel like we've known that for a while. I remember the Zeke Fox interview.

Like it's very useful. It's especially like a U.S. dollar tethered token. But just to go back, and I know you said fraud, so that probably already makes this distinction, but I feel like there's a really necessary distinction that needs to be made between, how do I put this? Crypto use for crimes where both participants know they're doing crimes.

You know what I'm saying? Versus ones where only one of them know there's doing crimes. Like the person who thinks they're paying their taxes because someone called them doesn't know the other ones doing crimes versus the person buying a brick of cocaine from a guy selling a brick of cocaine. They both know they're doing crimes. And I want to see the breakdown of that. What is the economics of crypto as divided by both people no crimes versus whoopsie doodle? A crime happened to me. Yes.

The $6.7 billion number that I threw out was around theft. Heist. Okay, fraud. I didn't know a crime was happening. Oh, no. A crime happened happening. Somebody stole my money. Someone stole my money.

Yeah, someone stole my money. I don't have your breakdown on like the, that's the fun number. How much crime was enabled by crypto? Yeah. Because the North Korean, no, because the North Korean bucket of fraud would be in a 6.7. Yeah. That's theft versus like, I want to buy some heroin. You want to buy some, sell some heroin.

Let's do it. It's a good thing we don't put this up on video yet because that would be the part that got clipped. A quick Google search has landed me on TRM Labs.com. Take this for what it is. I don't know what to be true. Blog thing, 26, Crypto Crime Report. The 26 Crypto Crime Report, Key Insight, identifies a record of $158 billion in illicit crypto flows in 2025. So that, I assume, is the two people knowing that they're doing crime, moving money around.

That's, and again, we're just talking about a number on a blog, but that is such an order of magnitude greater than the $6 billion that is fraud. Stolen, yeah. It's like, oh, it's crime. It's crime money. Crime money. It's for crimes. Like, put it on the poster. Sanctions related to all activity in 2025 were overwhelmingly driven by Russia.

linked flows largely due to the rapid growth of the ruble peg stable coin A7A5, which processed more than 72 billion U.S. dollars in total volume. Gnarly. Oh, it got sanctioned that token. So sanctions now extend into the digital crypto markets. Interesting. I was unaware of that as well. Okay.

There you go. $160 billion in crime has been enabled by crypto. Kind of makes Pokemon cards seem like small potatoes. Well, we'll see what the illustrator Charzard sells for, or Pokemon, or Pikachu or whatever it is. Maybe I should get a graded. Maybe you should. Get a slab of it and find out. You should.

Send it away. Yeah, totally. Okay. Well, we're happy to be back for the year. We're going to have got a fun one lined up, assuming the interview goes, got a fun one lined up for the next one. I think you really enjoy it. In the meantime, I hope you all stay well. Thank you so much for listening.

We'll catch you in the next one. Take care.