Search Engine - The Bidding War

Episode Date: July 12, 2024

A story about a strange auction for perhaps the most valuable piece of paper in America. This summer we’re publishing some of our favorite episodes from our previous series, Crypto Island. Support the show over at searchengine.show! To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

Hi, search engine listeners. This is PJ Vote. I hope you're having a cool summer. Over the next four weeks, I want to take you back in time to a very strange moment in our very recent history. The year was 2022. The prices of various cryptocurrencies had smashed through the ozone layer. And if you were trying to figure out what was going on and you went online, you'd encounter two kinds of people. either a person claiming to have gotten rich off crypto, telling you to buy now before it was too late, or one of the people who overnight had amassed large online followings by relentlessly explaining how all of this was a farce,

a bunch of planet-burning scammers trying to separate you from your money with useless Ponzi technology. As a person who just wanted to understand what was happening and why, I found the Internet even less useful than usual. So we decided to do our own research. I didn't want to know if crypto was good or bad. I mean, it was internet money. What I wanted to know was why this was happening.

What, if anything, it meant for a society to suddenly both worship and feud over internet money? The result was a nine-part series called Crypto Island. That mini-series was also the precursor to search engine, where we found the voice for this show. We tried to strengthen our capacity to be curious and open-minded in the face of a polarizing topic. And in the process, we found some great stories. Classic internet capers in a licurgic new chapter of life online. We investigated NFT kidnappings, met apocalyptic crypto believers preparing for the next world war. We wound up at one point on a melting glacier in Greenland.

More adventures, honestly, than I'd planned for. So this month, while we work on Season 2 of Search Engine, we're going to play you our favorite four episodes of Crypto Island. I love these stories. I'm so happy to share them with you. please enjoy this first one, which takes place fully inside a Sotheby's auction, where two parties are fighting to own this nation's founding document. That's after some ads. This episode of Search Engine is brought to you in part by Square.

Square, the easy way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, detailing cars, or running a design studio, Square helps you run your business without running yourself into the ground. I like seeing Square in action at my local coffee shop, They use Square for payments, and it just makes everything feel effortless. Quick checkout, digital receipts, sometimes even loyalty points.

It really enhances the experience and lets the team focus on serving great coffee, not fumbling with the register. Square works wherever your customers are. You can manage inventory, track sales, and access reports in real time. With Square, you get all the tools to run your business with none of the contracts or complexity. And why wait? Right now, you can get up to $200 off Square hardware at square.com slash go slash engine. That's S-Q-U-A-R-E dot com slash G-O-S-E-E-O-S-E-E-R-E-R-E-R-E-W-E-E-R-E-R-E-A-R-B-E-E-E-N-E-E-L-E-E-E-R-E-E-R-E-E-E-R-E-E-A-R-E-L-E-E-E-E-S-E-E-E-E-E-S-E-E-E-E-R-E-E-S-E. The first-S-E-E-I-E-E-E-E-E-S-E-E-E-E-E-E-E-E-E-E-E-E-S-E. This was the scene-E- last November in Manhattan. Sotheby's, the auction house, was selling an actual printed copy

of the U.S. Constitution. By the end of the night, it would be the most expensive document ever auctioned, beating out the Magna Carta and Leonardo da Vinci's Journal. Needing a little introduction on its importance, the United States Constitution is the longest continuing charter of government in the world, and the product of a revolution in political thought, at least as important and far-reaching as a fight for American independence. Two hundred thirty-five years ago, when the Constitution was originally written, it was penned by an engrosser in Philly named Jacob Chalice. He printed on animal skin, either calf, sheep, or goat, and he was paid the equivalent of about $30 in Pennsylvania continental currency. Afterwards, 500 typeset copies were made, printed for $420. That means original copies of

the Constitution went for a buck 19. At the time, there's no evidence that these 500 copies were considered especially valuable as artifacts. They were about as disposable as the pamphlet a salesman presses into your hand, that you take home to your family to decide whether or not you're going to buy a new fridge. Important, informational, not yet historic. And so the copies were mostly not preserved. Of the original 500, a handful remain, most are in libraries. Two are in private hands. And this was one of them. It was a very, very rare piece of paper for sale. With only 13 copies known to exist today in this first printing and only one other available for private ownership, the printing of the Constitution

is one of the most significant historical documents ever offered at auction. So in 1787, someone killed an animal, someone else lettered words onto its skin, copies were made, and at the time, those physical artifacts hadn't been considered especially valuable. But later that year, a country had been born,

five years after that, that country had invented the dollar, and then a lot of other things happened, some of which you've been alive for. And now, a piece of paper was for sale in an auction house in a place called, Manhattan being broadcast live on a website called YouTube and two mysterious bidders representing two different ideas about what should happen next in our very strange country. We're about to fight over a scrap of paper they both decided was valuable.

This is a story about one of those bidders. Sotheby's auctioning off a copy of the U.S. Constitution on Thursday and a group of crypto investors won in. The organization called Constitution Dow is raising money using a digital crypto wallet in hopes to securing the winning bid. Joining us is Constitution... Crypto investors? Buying the Constitution?

I'll be honest with you. When I first heard about all this, my reaction was, come on, guys. Like, I felt the same way I did when I visited L.A. and saw that the basketball stadium there had been renamed the Crypto.com arena.

Did these guys really have to put their names on everything? So far, they've raised more than 800,000 ether, which is roughly the equivalent of $3.7 million. The way I imagined this constant... thing had happened was a couple of dudes who got rich off Bitcoin. Maybe they were 23. Probably they were 23. We're just stamping their name on one more thing. It really annoyed me. That's how I felt then. But now, I think what was happening was much more complicated, much more

interesting. But at the time, annoyed by the intrusion of crypto into one more sphere of my life, I ignored it. I didn't even see who won. And I didn't bother to learn what it meant that these mystery bidders had organized themselves into something called a Dow. but that would prove to be important. In case you are now where I was then, let me just give you a quick explanation of what DAOs are. Dow stands for decentralized, autonomous organization. What you need to know is that a DAO is like two different things

that you're familiar with that have been Frankenstein together. So a Dow starts out as a crowdfunding campaign. Like, say I wanted to start a podcast company. I really don't. But say I did. I'd go online, I'd tell strangers I wanted to raise a bunch of their crypto, they'd hand it over, we'd have a big podcast, and since this is a podcast company, we'd call it Podcast Dow. But then part two of what makes a Dow a Dow is that if you had given me crypto to start

podcast Dow, you'd get a digital coin in exchange, podcoin. And Podcoin would represent your share in podcast Dow. So this is sort of like a stock. You could sell it on an exchange. You could buy more of it. Except Podcoin would also give you very real voting rights and how podcast Dow was run. In theory, and sometimes in practice, these DAOs do not have a president, they don't have a board of directors, they're run democratically by the people who have funded them. It is a very weird fusion of some populist, collectivist, almost communist ideas mixed with very late stage internet hyper-capitalism.

My curiosity about Daos only grew this winter, as a series of new ones appeared, striking seemingly at random with new absurd acts of commerce. The next really good one was Spice Dow. Maybe you've heard of Spice Dow. This was the one that took place at a Christie's auction instead of Sotheby's, and instead of trying to buy the Constitution, this Dow wanted to buy storyboards for an unmade version of the film Dune from the 1970s. The plan, use the storyboards as inspiration for a Web 3 native animated television series. Christie's estimated value for these storyboards, $38,000 max.

The Dow spent $3 million acquiring. them, even though, obviously, owning physical storyboards does not give anyone the right to make content based off of them. What was going on here? The internet seemed to leave these DAOs were just run by people who were hilariously incompetent. Others assumed this was fraud. I sort of wondered if it was maybe something closer to a new religion, but I didn't know, and I wanted to. I wanted to get closer to one of these things. All right, awesome. All right, so just briefly talking about what Fries Dow is, obviously, we're all here because we're keen to do a little acquisition of a franchise, most likely a fast food franchise that...

So recently, I found myself embedded in the Discord server for a Dow who had not yet really announced themselves to the world, Fries Dow. This is a tape from an AMA where they're pitching themselves to potential investors, internet randos, crypto degenerates. They wanted $9.69 million, so they could start buying individual fast food franchises across America. You know, the four of us here, where it's not like we're going to just pick a subway

and be like, this is it, this is it, guys. We're going to buy the subway in the middle of nowhere. We're probably going to have candidate choices and run those considerations with the governance votes from the community. So the guy who's talking is part of the Dow's core team. There's always a core team. These are the people who actually set up the back end of the Dow. And crypto, being a very pseudonym-friendly space,

they don't have to use their real names. In this meeting, the fries out guys are going by names like slippery grease, mustard and ketchup. They take a little over a half hour laying out their spiel. All right. If, for example, Popeyes is the main goal. But realistically, we're not going to be able to do that for somewhere between five to seven months. We need to acquire businesses that go faster. So at Jimmy Johns, you can get in there within 45 to 60 days, Baskin Robbins, things like that. It's somewhere between a business plan and invasion orders,

like how they're going to go about converting internet cryptocurrency into ownership of a bunch of different fast food franchises. When they're done, they open the floor for questions, and people have some. Okay. Flipping burgers? Yeah. So, can you guys hear me?

Yep. Okay, good. All right, so I'm kind of new to the whole, Dow thing. I've just been like kind of looking into it. Like, so what did exactly the Dow itself take care of that the team isn't? You know what I mean? Like supposedly these Dow runs run the business or run a lot of aspects of the business. Well, what exactly is the Dow doing? And how does that trickle down to us? You know, how do we benefit from that? Like, what does it even mean to run a Baskin-Rompens via internet democracy? What level of decision are we actually going to be able to

vote on? Say we acquire one of these franchises. You said, obviously, hire a cashier isn't going to be like something we put up for a governance vote. But what about like a general manager? Once we take over one of these places, you know, we're going to have to have somebody that's actually in charge and competent. You know what I mean? I totally know what he means. My favorite question came from this guy named Andy. Like all truly chaotic questions that have ever been lobbed into an open Q&A, it wasn't really a question. More of a suggestion. Andy?

Hey, what's up? You? Hey, okay. There you go. What other plans do you guys got for the future? What about some wild stuff, like, making it free or hiring, like, ex-felons and such? You know, just to do, like, a one-sentence shill, my idea is for a free restaurant via some art that's going to have, like, crazy models in it and illustrations and stuff. So I'd like to help you all and continually subtly and appropriately show for mine, too, as we go. Thank you. I've thought about Andy's suggestion a lot. I think this is what he's saying.

They should have a restaurant where the food is free. The employees are either formerly incarcerated or perhaps currently incarcerated people on a work or release program, which is cool, but that it should be funded by art on the walls of models. I don't know. What I know is I've never felt stoned off a conference call before, and I find this all very delightful.

Sure, there are some people in the room asking pedestrian questions about profit, but the overriding feeling, it's more just like we are playing a joke on and with capitalism. By this point, 3,000, I was absolutely fascinated by the show I was watching, and I started looking for guides who could just start to explain to me what I was seeing, which was difficult. Cryptos is this space where if you're outside of it, there just aren't a lot of people who feel like they straddle between the worlds, who speak both languages, at least who aren't trying to sell you on their new dog coin or whatever. But I did find someone.

The person who'd end up being my first guide through this. My name is Paki McCormick. I write a newsletter called Not Boring and run a venture fund called Not Boring Capital. And what is Not Boring Capital invest in? Not Boring Capital invests in early stage companies across the spectrum in tech. So it's kind of the biggest categories that I messed in are Web 3 in crypto companies, FinTech, a little bit of consumer SaaS,

and a long tail of companies. That was a terrible answer. I'm already fucking this up. I was like, those are a bunch of terms that sound smart and like they have to do with money. Not for in capital, invests in tech companies, both kind of Web 2 and Web 3. So one of my big questions has just been,

who are the brained behind these doubts? who's actually on these core teams. And I'd been reading a lot of stuff. Crypto, Twitter, different newsletters. Paggy's newsletter stood out. He was just one of those rare writers who really was deep in the material but didn't seem completely entranced by it.

I didn't realize this until we talked, but I think part of the reason I may be vived with it was just he was also kind of a newcomer. I really got back into crypto earlier in 2021 after being away from the space for eight years because I was mad at myself for selling Bitcoin in 2013, like a life-changing amount of Bitcoin.

A life-changing amount? I bought 38 Bitcoin in 2013 and 100 each and sold them for 150 each and at the peak before this recent crash. I think it was like $2.5 million worth of Bitcoin or something that I sold. Oh, I would call that a life-changing. Yeah, because I... I'm so sorry.

So it meant that I kind of stayed away from the space, And so I think I came into it with kind of a fresh perspective, writing more about other tech companies and business strategy and all of that type of stuff and having operated in a very difficult business. I worked for a company called Brewer before. So I think I came into it trying to say like, all right, cool, crypto seems really interesting and Web3 seems very, very interesting. And, like, what are the kind of fundamentals here?

And like, how does this actually help you build a better product for customers and all of that as opposed to approaching it like a religion? The way Packy feels about Web 3, it sort of reminds me of how I felt at the beginning of the big podcast boom in 2014. Like this new world was being created. And while it wasn't that hard to see its pitfalls, I was just way more excited about charting the possibilities. He explained to me that the DAOs I was paying attention to, the ones that really hit the mainstream. Those were the big splashy DAWS. But Packy's excitement was about what the DAO structure itself might represent.

A new kind of corporation, meaningfully controlled by the people who funded it. And he told me that even now there are DAOs trying to solve actual problems, like how to verify carbon offsets in remote locations or DAOs that allow people with rare diseases to fund research into their own treatments. So instead of it going just VC investing in a potential drug to ultimately going public and having a public biotech stock, there's this in-between point where by having the patient community involved, one, you can actually get the trials filled more quickly. it also helps with regulators to have the patient immediate themselves behind it. Packy thinks that whatever Dow's end up evolving into, say, 20 years from now, that'll be a way that businesses in the future are run and funded, which, who knows? But the real reason I wanted to talk to Packy is that Packy had been centrally involved in Constitution Dow, the Dow that was trying to buy the Constitution.

And through Packy, I started meeting other people on the core team. My name is Nicole Ruiz. I was one of the core team members at Constitution Dow. What else? I'm an investor as my day job, but I like going down internet rabbit holes and Constitution Dow was one of them. What was your week like in Constitution Dowland? What were you working on?

Yeah, I think on Friday morning I was at work and I saw the Reuters article that the Constitution was for sale on Twitter. And I saw some of my friends tweeting about it. And I think I dunked on them because they were like, we're going to make a Dow to buy the Constitution. And I was like, this is so, like, why do you need a Dow to do that? This seems really silly. And then somebody very kindly replied to me and was like, here's the reasons you think it's cool.

And I'm like, wait, that is kind of cool within the hour. And I was like, wait, I want to be part of this. And then I jumped in the Discord. Do you remember what they said that you were like, oh, okay. I think they were like being able to fundraise super quickly and be able to do that publicly will lead to greater trust. And because it's in such a short timeline, like the auction is in like eight days. this is truly a really good test of what a DAO can do quickly. By the end of the weekend, a group of about 30 people had formed the core team of the DAO.

Nicole was probably an ideal person for something like this. She's a VC, but her path there is pretty unusual. She went to community college outside D.C. for a minute, but dropped out. Then she said she just started attending open talks about tech, meeting industry people on Twitter, and out of pure hustle, parlayed that into a job as an investor. She's a force of nature, and she brought that energy to the Dow. I was like, okay, pull up Discord, get ready to figure out what I can do, and who's a part of this and who they need really. I think I'm good at finding people to solve problems.

And so I was like, who will make this project even better? And then try to find sort of like gaps in operation where people needed to help either just like answering an existential question about getting set up because we're trying to figure out like, what legal entity do we need? What amount of money do we actually need to fundraise reasonably? Like what does a fundraiser for something like Sotheby's even look like? There were people who were actually kind of building and talking to museums and writing code and figuring out the legal structure and setting up the wallets and the partnerships and doing all of these things in a very short amount of time. At some point, I was writing a different piece that week and I was just like, you know what, screw it. I'm going all in on this, kind of an outsider on the inside, kind of explaining what was going on. You were like a participant observer.

Participant observer is a great way of putting it. Over the course of that week, the core team managed to sell something. this idea of Constitution Dow to almost 20,000 people, including Grimes, although she would join Spice Dow too. Each person who donated crypto had gotten a digital coin in exchange. In this case, they were called people tokens. Remember, this is like stock. The tokens had financial value. You could trade them, but more interestingly, they granted all these people voting rights, the ability to decide what should happen to the Constitution if they all want it. A third of these people were new wallets, which meant in many cases people who apparently had never joined a crypto project before.

Together, they'd contributed $47 million. More than twice what Sotheby's had estimated the Constitution should go for. The Dow was ready to bid. More story after some minutes. This episode of Search Engine is brought to you in part by Vanguard. To all the financial advisors out there whose job is to help your clients keep more of what they earn, Vanguard is here to help you with that. Vanguard is slashing fees again, this time for more than 50.

of its funds. That's on top of big fee cuts they gave last year to investors in 87 of their funds. In an increasingly high-priced world, Vanguard is staying true to excellence without expense. With Vanguard, your clients get access to sophisticated, active, and index bond funds at industry-leading low costs, backed by a fixed-income team that's truly obsessed with consistent outperformance. Lower fees don't just mean savings. They give Vanguard's skilled bond managers more freedom to maneuver as they pursue strong results. and they give you more flexibility to deliver measurable value to your clients because top performance shouldn't come at higher cost.

Go see the record for yourself at vanguard.com slash impact. That's vanguard.com slash impact. All investing is subject to risk, Vanguard Marketing Corporation distributor. No one goes to Hank's for his spreadsheets. They go for a darn good pizza. Lately though, the shop's been quiet. So Hank decides to bring back the $1 slice.

He asks co-pilot in Microsoft Excel to look at his sales and costs to help him see if you can afford it. Co-pilot shows Hank where the money's going and which little extras make the dollar-slice work. Now, Hank says, line out the door. Hank makes the pizza. Co-Pilot handles the spreadsheets. Learn more at M365, copilot.com slash work.

Welcome back to the show. Good evening from Suffabies, New York. I'm quick bruning, and tonight I'll be your auctioneer for a very special evening sale. For the first time... Chapter 2, The Bidding War. Sotheby's head of jewelry, Quig Brunig, is standing in a fairly nondescript room on a dais in front of what looks like a Lichtenstein. And now, let's begin the auction, lot 1787, the Constitution of the United States of America. I'll start with bidding here at $10 million, at $10 million, $11 million, $12 million.

At $13 million, now $14 million. I'm watching this on YouTube, and in the small box of the frame, you see the room, with its reverential audience, wealthy, hushed. We glimps the backs of their respectful heads. But just beneath that box, there's the comment section, where thousands of additional viewers live. The Dow. They are anything but hushed. They're ecstatic. Their comments was by a mile a minute.

Someone's spamming an emoji of a scroll like the Constitution. Someone else is typing W-A-G-B-T-C. We're all going to buy the Constitution over and over. Someone makes an NFT joke. The Constitution's a copy, right? You just right-click, save as. At 13 million, now 14 million, it's here with me at $14 million. At $30 million with Brooke Lampley, $30 million now has been.

People across the country, across the world, were watching this auction from various computers. But a bunch of the core team had gathered in one place. They'd found a space with a projector in Midtown Manhattan, near Grand Central Station. So everybody was sitting in there and sort of lining up. We started projecting the YouTube and everybody was getting in the comments, obviously. and like everybody, all these like spammers were going off with the emojis and like, we're all going to make it and like getting

extraordinarily hype like an hour in advance. So that was, it was very good energy. Yeah, people are excited. Like people were, somebody was wearing a tricorner hat. People were excited. People were getting into it. I wear a red, white, and blue hat. I didn't have any just straight up America gear.

People were, I think, a little bit in shock that they had pulled this all together and the fact that we were even bidding and had a person at Subbies bidding on our behalf in the course of six days. I think that was wild. $30 million with Brooke Lampley. 30 million dollars now has bid with Brooke.

It's Brooke's bid at 30. At $30 million with Brooke Lampley? Brooke, the bid is yours at 30. If you say 31. So in the room at Sotheby's, the actual bidding was being done by two Sotheby's employees, acting on behalf of the real bidders. One thing the Dow audience was not clear on

was actually a pretty fundamental question. Of the two Sotheby's employees in the room, which one was actually representing them? There's never consensus, but a lot of people lean towards Brooke Lampley, which just seemed right. Brooke was this young, striking woman. She kind of had the Michaela Maroney smirk the whole time. With Brooke Lampley at 31. David Schrader at $31 million at $31 at $31.

Plus the other proxy, the other Sotheby's employee in the room, just so perfectly seemed to represent everything Constitutioned out was fighting against. This guy was so perfectly cast. His name was David Schrader. He had a neatly shaved bald head, an expensive, well-cut suit. He looked like a stylish villain from a movie about bankers who hide the vaccine for money. At 31 with David at 31. David Schrader now has a bid at $31 million.

Brooks, we say 32. And whoever Schrader was bidding on behalf of, they had a lot of money. The bids with David at $31 million. Brooke, any more? It's with David Schrader at $31 million. In the world where Brooke Lampley represented the Dow, who did David Trader represent? Like Brooke, David also had a telephone to his ear, taking bids from someone, some mystery bidder. Sotheby's estimate for the Constitution's price had been $15 to $20 million.

But the mystery bidder, like the Dow, seemed willing to spend way more than that, which was becoming a problem. Because while the Dow had $47 million, the maximum they could bid was a little over $41. The core team had figured out they had to set some money aside for auction fees, transportation, storage, taxes. So the closer the number got to $41 million, the closer they were to losing this thing. Back at the core team's layer, Nicole Ruiz was actually sitting next to the guy who was placing their bids, who was on the phone with the Sotheby's rep they were seeing on the screen. He had his phone out, and so you just hear on the phone, like, him counting numbers, like $40 million. Like setting out numbers and sort of prompting him and like, can you go higher?

Can you go higher? Do you want to go higher? How are you feeling? Feeling good? So you could hear both sides. You could hear the other side as well. Yeah, yeah, yeah, yeah. That's so great. And then what he was just saying like, yes, go up, yes, go up. What was he saying? Yeah, pretty much. He wasn't saying a whole lot. He'd be like, yeah, yeah, do it. Oh, we had one other guy from the company that he worked at, who was his childhood friend. And so he was sort of calming him down in the minutes up to it. They're talking about how they made pasta as kids together and all that type of stuff. which was really funny.

Like, he was just trying to give him a memory, like a calm memory to, where he could, like, hide out instead of in his own anxiety. Yeah, exactly. I could not relate to anything more. It's so funny. It was really good. David, the bit is yours at 31. Brooke, anymore?

David, that might have done it. David Schrader. Looks like the bit is yours at $31 million then. It's fair warning, Selby? Fair warning, Brooke, at $31 million. $32. In time at $32 million. Brooke, if it is yours at $32.

If somebody just stopped to have been like Packy, like why is everyone in this room doing this thing? Like, what does this room decide it is important? Like, what would you say? That's a really question. One, it was the fact that, you know, everybody's talking about Web 3 is this democratizing force and, you know, it's for the people and blah, blah, blah, blah.

And then this document that represents democracy and we the people and all of that comes up for auction. And so you can get a group of what ended up being almost 20,000 internet strangers to come together to buy this document together. It was too much to pass up on and too kind of a beautiful of a symbol to miss out on. It's like, it's funny.

People just get excited online about being part of a large group that is doing something powerful, especially if it's like powerful and a little bit dumb. 100%. It's like once people see that's happening, they just want to be a part of that thing. Which feels like I know that for you, the long-term

meaningfulness of Tao's is about, can be about stuff like climate change and rare diseases, but like the short term feels like some of it's just like, holy shit, look what we could put on the jumbotron today. Totally, and I'm not dismissing that. I think the magic is that you could have fun

doing dumb shit short term. And also as a byproduct of that, it also gives, you know, like, it tests models that could be used for less dumb things and more impactful things over time. But I don't know, like, yeah, it's a copy of the Constitution. But it's buying this thing together with a group of people that represents democracy

and all the things that you love about this country. And, like, I don't know, everything's kind of made up anyway. I think I do actually agree with Paki that democracy was being represented here. I just, I'm not always sure. It's not that I... I guess, is there any idea as beautiful in theory,

but a stomach lurchingly rickety in practice as actual democracy? Back at the auction, while the bidders battled it out in increments of tens of millions of dollars, the video's live comments box showcased, the anarchic crazed part of democracy as it is actually practiced. The commenters were not coolly discussing America's grand tradition as a republic. They were screaming their heads off. It was an endless scroll of cheering, jeering, paranoid screeds, and truly lunatic plans for the country's founding document. One person commanded

Nicholas Cage should be nominated as the primary guardian of this document. Another person said, let's burn the Constitution and turn it into an NFT. Someone else agreed, let's smoke it. Someone asked, why not burn it? A calmer voice chimed in, anyone want to not burn it? And the compromise solution was proposed. Let's not burn the Constitution and turn it into an NFT. These were the people that the core team had been essentially wrangling for the past six days. The raucous voice of real democracy, with the core team functioning almost like a Congress. Certainly the ability to have democracy without total chaos is one of the interesting things about DOWS. I mean, this part of what stresses me out about DOWS is like groups of people stress me out.

Group projects stress me out a lot. Totally. They can go badly. Do you feel that when you're looking at these doubts? Do you ever feel a sense of panic? Oh my God. Yeah. I mean, you know, the difference between being kind of like the core contributor

channels in the Discord and then the general channel in the Discord was night and day. And this is why you progressively decentralize and you don't. just open it up immediately because it was like peaceful and like the most kind of well-run startup you've seen in the background like everyone just like having a daily stand in getting their task and like going and doing those tasks and then checking in and getting help when needed in the core contributor group and then the main discord was like when token like you know all the things that that dows get get shit on for was happening in that main group and it was like total chaos and there's no way that you could possibly keep up with it and people are guessing like

the bad intentions of the organizers and all of that kind of stuff. And like those bad intentions didn't exist, but just groups can kind of take on a mind of their own. Yeah. Which is why I do think it like makes sense to really figure out kind of like what the structures are before fully decentralizing like Constitution doubted, which was an intentional decision because had we just said like, all right, everybody has like a vote now, what are we going to do?

Like, you know, we would have had someone wearing like a 69 man costume. go to subbies and like replace Brooke as are bitter it can get out of control if you don't have the right kind of framework in place from the beginning the point is not that it's like fully democratic and everything it's that people have more of a say and more ownership

particularly over time as the product is more mature and doesn't rely on that kind of like either coordination or product vision from one person or a small group of people I find Constitutional confusing the way I find crypto confusing. Which, I mean, not just the jargon or the technology or the math of it all, but also just how to feel about it. It's confounding. Crypto is a populist movement opposed to big banks and central power, but some of its ringleaders and most excited cheerleaders are VCs.

It doesn't really fit into the arguments or alignments that I'm used to seeing. I understand why someone like Packy can look at Constitution Dow and see a new, form of joyfully absurd populism asserting itself. I also understand why someone would just see a bunch of internet gamblers buying our country's founding document to entice more people into a Borgesian online casino where everyone gambles on increasingly abstract concepts, and the house is actually just other gamblers who got there first. I don't know which opinion is, right? Or really, if there's any right opinion at all. The only thing I know for sure is that making any big pronouncements or predictions about what this is or where it's going, seems like a great way to look stupid when it all

changes again in five minutes. So instead, how about I just tell you the identity of the person who is bidding so aggressively against the Dow? Why don't I just tell you about the mystery bidder? I have become more involved in politics over the years because I'm trying to protect the American dream. I'm trying to protect the opportunity that everyone in this country should have to have a great life, a great education, and to have a life well lived. That is multi-billionaire Ken Griffin, 45th richest person in America, second richest person in Illinois, hater of internet populism. The guy who bailed out Wall Street when Redditors were beating them up with GameStop stock,

you just heard him speaking at an event a month before the auction, where, conveniently, someone asked him the question I've learned derails every dinner in 2022. Ken, what do you think about cryptocurrency? Do you believe in crypto? And even if you don't, Ken, should your businesses be active investors or traders in crypto anyway? That is a great question. So first and foremost, I wish all this passion and energy that went to crypto was directed towards making the United States stronger.

I mean, let's face it, it's a jihadist call that we don't believe in the dollar. A jihadist call that we don't believe in the dollar. That is mystery bitter Ken Griffin. Griffin was a person motivated not just by a desire to own the Constitution, but by an understanding of what it was Constitution Dow was trying to say. He disagreed with them. And he was disagreeing with them in one of the oldest, clearest languages America has. Money.

It is with David at 40 million. Nice round number. Brooke, it is not yours with David Strader at 4. In this moment in the auction, the Dow does not know that they are bidding against Ken Griffin. He was simply the mystery bidder. All they know is that somehow, six minutes into the auction, the cost of an old scrap of paper had reached $40 million. The Dow doesn't have much money left. All eyes are unproclaimly, the person bidding on behalf of the Dow, we think.

Waiting for you if you'd like it, at $40 million with David. Again, 41 to be next. 40 million. Brooke? Quig Brunig, hands folded on the podium, looks at Brooke. So we're still thinking about it, but maybe that might have done it. David, the bit is yours at 40 million. It is not yours, Brooke. We can bring the hammer up again. Brooke's on the phone. She gestures with her hand to hold. Increase the drama one more time at $40 million. David, the bit is yours. $41 million. With Brooke at $41 million. She has it.

just in time at $41 million $1.4 million, the bid is yours at $41. Sir Schrader, what shall we say? At $41 million, it is Brooke's bid at $41. It's ahead of your phone. It's with Brooke at $41 million. Just watching this is nerve-wracking. Quigg looks at David. David's hand is on the phone. He does not look up.

This historic document with Brooke Lampley's bid at $41 million viewed around the country at $41. No, Are we sure? David finally looks up and shakes his head side to side. No. At $41 million, Brooke, looks like congratulations are in order to your bidder. David, you're out. Anyone else is welcome to jump in, but Brooke Lampley, the bid is yours for the United States Constitution at $41 million. Sold $41 million. Rattled $411. Congratulations.

It was over. Brooke Lampley still holding the phone to her ear now smiling like a cat who ate a canary In the YouTube comments box People are still arguing about whether or not they've won Whether Brooke had indeed represented them Someone says, yes, yes, we did it Followed immediately by someone who says

Oh no, no, no, no, no, no, no no no. The most important thing and the funniest thing About Dow's is that they are decentralized. No CEO, no gods, no masters. So what happened next? A couple Dowell members, not the core team, started celebrating. They opened up an audio chat room on Twitter to members of the press, a reporter from Motherboard recorded it.

I like to welcome all the media outlets that are in the space brand. I see TV, I see CNN. I see you Fortune magazine. I see all the different media outlets. You are in the right spaces right now, ladies, I mean, you are in the history. Imagine this is 10 years ago when you heard about Bitcoin. This is right now with what is happening with the Constitution Dow, it is history. He said he'd just gotten a text from one of his friends who was higher up in the Dow, they'd won.

I literally want to cry. We fucking did it. We won it. We're going to make it. She said, We did it. I confirmed from the team. We won the auction, ladies and gentlemen, congratulations.

We're going to make it. Let's just take a quick pause for a second. Just soak it in for one second. History was made. Another Dow member said, maybe it was time to consider the next auction. Maybe we do the declaration next. I don't know. They were giddy.

They were taking questions. These random Dow members. who had appointed themselves revolutionary spokespeople, but they'd made a mistake. Their assumption had been that Brooke was their proxy. She seemed like their proxy, but nobody really confirmed it. And then another text came in.

I've been texting my friend who's on the multi-sick, and she says that they didn't get it. I just got reconfirmed. We did not win this, ladies, gentlemen, but it still history in the action because we really opened up to Pandora's box. I want you guys to think about, we pulled enough money to actually get close to winning.

We were really close to winning. Now, imagine what we do is we pulled the money together for next project. Maybe what, NBA team? That's right. Yeah. Right? Yeah, this is just the start. I don't know if you caught what he said there.

Maybe next time we buy an NBA team. This is just a start. What did it feel like when the auction was over? It felt, it still felt good. I don't really know if it was like a lead down. Like it was just such a crazy thing that we did. It felt special for sure. I don't know if it felt historic.

I mean, at the end of the day, we lost an auction to buy the Constitution. And so it's not like the world change. I do think it was a good opportunity to show that this other structure is kind of out there and people are going to do some wild things with it. It felt very uncertain because we didn't know what was next. I think deep down maybe we all knew. But, yeah, just kind of writing the adrenaline high. After the break, chapter three.

This episode is brought to you by Nordstrom. Spring calls for a wardrobe refresh, and Nordstrom has the best styles of the season. From dresses and denim to standout tops and accessories, find the trends and essentials that feel right for you. Discover new arrivals from brands you love, like Waif, Princess Polly, mango, Adidas, and free people. Plus, free shipping and returns and freestyling appointments make everything so easy.

Shop in stores at Nordstrom.com or download the Nordstrom app. Hey, business owners, the NFL season is a big revenue driver. Now there's a smarter way to get ready. Everpass is the only authorized commercial platform for NFL Sunday ticket, delivering every live out-of-market-market-market-season Sunday afternoon game. Locking the best offer now with up to 40% off saving up to $2,500. For the first time, you can pay over nine months. Get up to six free devices and a free break.

bar kit sign up by april 27th visit everpass dot com limited time offer terms apply ambition comes in all shapes and sizes at first citizens bank we roll with your goals because we're built for what you're building fit for your ambition for citizens bank chapter three after the revolution people like to complain about them but the truth is deadlines can in the right circumstances great miracles like really There's something about a good deadline that can draw a team together like a school of fish. No real boss necessary. The deadline is the boss. There's this almost ecstatic clarity of purpose that can take hold.

Up until the moment the deadline is over, at which point the whole thing falls apart like a dream. Or so I've heard. Anyway, something like that seemed to happen post-oction for Constitution Dow. Not that the team became particularly fractious, more like general miscommunication and mild disorder flourished post-oction. Part of this, I think, was related to something I actually didn't understand until pretty late in my reporting. I started to get a sense of it when I asked Nicole Ruiz, this very basic question.

How old are you? I'm 24. Everything that she's done, 24 years old. And what was like the age range of people on the core team? Was it a lot of people in their mid-early 20s, older, younger? Yeah, I think the youngest person might have been 16 and the oldest person might have been 35. I could have that wrong by one or two years, but I think that's about it. But so pretty young.

Like young to be, I don't know at what age this isn't true, but young to be controlling a wallet with over $40 million in it. Totally, totally. Yeah, I mean, technically, I think six people were on the multi-sig. So technically they weren't, the 16-year-old, I don't think, was one of the people who could have run away with the money. You know, the multi-sig prevents that in general. But yes, yes, in general, you know, a cool age. range. I don't mention the ages of the core team here as a dig.

Young people are capable of the same successes and failures as anybody else. I'm trying to get at something else here, which is that what stood out to me meeting the core team was just the motleyness of the crew. Finance people, coders, medium-tier meme lords, a motley crew of people, many of whom were doing jobs that either were not their expertise or were perhaps several promotions passed where they would have been at a regular organization. And what had kept this school of fish together was velocity itself, the speed they had to work at. But now that velocity was gone, and what remained was a group of young, exhausted people with a delicate and thorny problem to solve.

The money. What was to be done about all the money? $47 million of donated Ethereum collected from just under 20,000 people, medium contribution, $200. It all had to be refunded to that raucous crowd of Dow contributors. The core team had promised to do it. But in the days after the auction, there were conflicting messages about how exactly that refund process would work.

By the end of the week, what they said was, yes, there would be refunds, but the Dow would not cover the Ethereum gas fees, which are expensive. It meant that there were people who had donated 20 or 50 bucks who were now understanding that the fees on their refunds

would exceed the refunds themselves. And they were angry. Angry about the money, angry about the communication around it. I asked Brian Wagner, another core team member, about this. I mean, I think they're both reasonable criticisms. Like, communication, like, certainly could have been better in the days after we lost the auction. But we also, like, we were basically telling people, like, we're figuring out what we're capable of doing next just as people.

And we need a minute. And we didn't know. And I spent a Saturday with like one or two other folks on the team, like trying to estimate the costs of different ways that we could refund this money. And it was just, it's expensive. And there was no getting around that. And so we were kind of like, well, we got to make this available like as soon as we can. We can't just like hold on to these people's money. Like that's not okay.

And we probably should have done a better job of educating people about this. And here we are. Do you feel like you learned that it's more fun to start a lot? revolution than to govern? Yeah, 100%. It is like pretty much like there was certainly an element of like

like the like dog chasing the car situation. Yeah, like you caught the bumper right now. What do you do? Yeah, like we're on it like oh, like it's really hard to like manage all these viewpoints. Frustration with the Dow seemed to reach its peak the Sunday after the auction and crested through the following week.

But over Thanksgiving weekend, it disappeared in the face of something unexpected and deeply hilarious. On December 1st, the headline in Forbes read, crypto investors wanted to buy the Constitution. Instead, they birthed another hyped-up meme coin. That coin was the people token. The coin that Constitution Dow had given its contributors as a share in the Dow should have been nearly worthless,

since the group had failed to acquire the asset that would have backed it, the United States Constitution. But now, for reasons no one was entirely clear on, a bunch of traders suddenly wanted to buy that coin. A lot of this interest was coming from crypto traders in China. The best rumor I heard explaining this was that crypto in China is considered anti-Chinese government. These investors may have liked a coin whose symbolic value was tied to democratic revolution. Who knows? But whatever the cause, the price of the people token shot up.

Way up. at its height a 3,700% increase, which meant that the small investors in Constitution Dow, the people who had not been able to get their refunds, they had now won a minor lottery. Here's Packy. And then, lo and behold, those people were the lucky ones because I, like an idiot, took my Eth back

and missed out on the pop. But the people who had to keep their $50 in because it didn't make sense to take it out, all of a sudden their $50 was worth $2,000 within a week. It's so dumb. It's so dumb. I mean, I know people who made like a couple hundred thousand dollars by accidentally leaving.

I would have made, I put five Ethan. I would have made, I think at the peak, something like $900,000 had I just, like, waited a day to refund my money. Oh, my God. Yeah. It doesn't bother you. There's so many of these things here. In the end, Paki left Constitutioned out the way he entered it.

A crypto enthusiast with a good story about the fortune that he'd almost won. That is our story on Crypto Island this week. A disclaimer, if I have accidentally given you the impression that you should run out and start investing in a weird crypto project, please do not do that. This is a very hard to navigate space. I am puzzling it out one story at a time. And if you're along with me on this series, if you're learning from me, just don't.

Nothing here makes sense. Nothing is fixed. On that note, mystery bitter Ken Griffin, the billionaire who won the Constitution, announced this month that his firm will now start investing in cryptocurrency. That old jihadist call against the dollar.

Everything changes, man. We first aired that story in 2022. Since then, Ken Griffin still owns the Constitution. He's loaned it to the Crystal Bridges Museum in Bentonville, Arkansas. You could go see it there. Nicole Ruiz is not working on any crypto projects now. She's a stay-at-home mom trying to build a big homeschooling community in Brooklyn. Paki McCormick, still in crypto.

His newsletter, Not Boring, is going strong. This episode of Crypto Island was produced and edited by Shruti Pinnaminani. fact-checking by Elizabeth Moss, sound design and mixing from Stephen Jackson and Phil Demahofsky at the Audio Non-Visual Company. Theme song by Christine Andrews. See you next week. Bridgeberries by plan.

If you contract and exclusions at Endurance Warranty.com. Do you own a 2005 or newer vehicle with a manufacturer's warranty about to expire or no warranty coverage at all? With the cost of living on the rise, Endurance is now offering a low-cost vehicle coverage plan designed to save you thousands off costly vehicle repairs. Get your vehicle protected under this coverage.

and have all future covered auto repairs paid directly to the repair shop for you. Roadside service, towing, and rental coverage are included. Visit endurancewarranty.com. Endurancewarranty.com.