Transcription Episode 30

Hello everyone and welcome to another episode of Living on Blockchain. Today we are speaking to Ethan Liu. Ethan Liu has, you know, he’s been a journalist, he’s written two books.

He’s written a book, The Pandemic, and more interestingly, because that’s more relevant to this podcast, he has a new book coming out, which is called Once Bitcoin Miner, Candle and Turmoil in the Cryptocurrency Wild West. So it’s actually the premise of it, and the kind of anecdotes that Ethan has brought to the table with his experiences are very fascinating. He once visited North Korea as well as a part of a delegation to attend a crypto conference.

So I do believe that this was a real fun conversation, showing us another side to North Korea as well. So yeah, let’s dive right in. Hi Ethan, thank you so much for taking out the time to speak to me today.

How are you doing? I am well, Tarusha, how are you? I am good, thank you so much for taking out the time. Now, you know, just for our listeners, would you like to give a little bit of background about yourself? Right, so I am a journalist. I write a column in this Canadian newspaper called the Financial Post.

For that, I wrote for Reuters. I think we all contain multitudes. So I am also a bit of a crypto guy.

I invested in Bitcoin in 2013. And I wrote a book about my journey. It’s been quite a wild ride.

And that’s called Once a Bitcoin Miner. Oh, okay, that’s interesting. So could you tell me a little about this book? Is it out yet? Or is it going to be launched sometime soon? Yeah, it just came out.

Yeah, it’s basically about my adventures in this space, starting out investing. And I have met one of the co-founders of Ethereum. And I ended up in North Korea with Virgil Griffith, who pleaded guilty to helping North Korea in September.

And so it’s a narrative nonfiction. And I think lots of books, they tackle this crypto idea from the perspective of monetary policy or computer science. But here, I try to look at it from the perspective of a human condition.

Right. Well, that’s very, very interesting. So I can just go on Amazon and order your book? Is that possible? Yes.

But I would tell people that try to order it from your local independent bookstore. They all have the same distribution system. So I’m a little against this whole big tech dominance.

Yeah, that’s true. That’s true. That I can understand.

It’s available on your website as well, right? You can directly buy it from there too. Does that take you to Amazon or do you have like- Yeah, the link on my website actually takes you to Amazon. There is another link to a crypto shop.

So there’s a shop in Canada that actually accepts Bitcoin for it. Right. Oh, wow.

That’s very interesting. Okay. So you know, it’d be great if you could share that link perhaps after this recording and we could put it in the description here.

And listeners can get it through that particular link if that particular bookstore is shipping it. Otherwise, if they’re local there in Canada itself, then they can go and get it with Bitcoin. So that’d be like uber cool.

Mm-hmm. Sounds good. So tell me a little more, like how did you get into this entire, you know, crypto space that you talk about? Like, you know, you’ve covered, you’ve been to North Korea and you know, you kind of, you were a journalist.

How did the space start intriguing you? Because you’re one of the OGs, right? Like you invested really early. Like that’s the same time when I kind of got into the space, but not professionally. Like I was tinkering with the mining rigs because I was already like running a data center.

And I thought that, okay, you know, we already have a lot of hardware here. Let’s see what can we do with it. And that’s the same time around when I got into this space, but I would love to know a little bit more about your journey.

Yeah. Your story about the data center, that’s very fascinating because I think we all have different such stories. Everyone has a different journey.

And for me, it actually started on the dark web. So this one time, my friends and I, we were, it was my second year of university and we were just on the dark web and just really for no good reason. It was my first time there.

I just wanted to see what’s up with it. And I saw that, you know, what people bought and sold on the dark web, they were all using Bitcoin for that. That was the first time I heard of the name Bitcoin.

And, but it took me a while. It took me like a whole year to actually start investing in it. Okay.

Okay. And, but, you know, that, that is kind of what beat your interest and that’s how you got into crypto. This is amazing.

So, you know, a little more about your book perhaps, so that listeners can actually, perhaps you can, you know, read out the blurb or something. A little more about it. Yeah.

So in the beginning, I interviewed someone who would go on to be the co-founder of Ethereum, Anthony Di Iorio. And that was one of the factors that made me invest in Bitcoin eventually. And, but at the time that there was still no Ethereum.

And then I would go on to interview him throughout the years and I had quite a bit of Bitcoin, but then 2015, there was a big crash. Actually started in 2014, but reached the bottom in 2015. But I ended up buying more back then.

And I ended up making quite a bit of money in 2017. And I was in this. That’s the period of rock and roll, right? Yeah.

That was an absolutely crazy period, right? If you remember. Yeah. Yeah.

And I was. Go ahead. Yeah.

I was just going to say, I was in this little, this oil town in Canada that we compare this to the Texas of Canada. And it was a bit of a wild west space, all sorts of characters and wild times, wild stories. And it was there that I ended up deciding to go to North Korea because they ended up holding a conference.

Right. How was that experience? And what is North Korea’s perspective on crypto? That was a wild experience, but it was totally unexpected. So North Korea, as you know, lots of allegations of human rights abuses and the world just doesn’t like North Korea.

So it is subject to lots of sanctions. And so crypto is theoretically a way to get out of those sanctions because it’s outside the traditional financial system. So North Korea, it’s been accused of doing lots of shady stuff with crypto, lots of hacking, stealing lots of coins.

Yeah. So when North Korea announced its conference, I thought this is like a golden opportunity for me to go see for myself what everything is about. And it turns out it wasn’t the sort of conference I had in mind, but I didn’t, it ended up being quite unspectacular, although unspectacular crypto wise, but it was a very eyeopening experience in North Korea.

And afterward, completely out of the blue to me, at least someone who was with me, Virgil Griffith, he is the head of special projects at the Ethereum Foundation. He got arrested in Thanksgiving of 2019. Right.

Right. Okay. Yeah.

So it must have been like really insightful, like as you mentioned that, you know, there’s a huge cultural difference, right? And then, you know, the perspective of a country that is actually, mostly been kind of singled out in a way, and it’s very isolated. So yeah, that must have been a very, very interesting space to be in. Are there any crypto regulations like in North Korea, like just for the country itself? Oh, I don’t think so because I don’t think ordinary North Koreans, they use crypto, ordinary North Koreans, they don’t even have the internet.

But the North Korean government, it’s been accused of, because North Korean hackers, they are well known across the world. North Korea is actually very good at hacking. They rank among like China and Russia.

And so they have been accused of stealing lots of coins. And so I thought at the conference, we were going at least like taking presentations from the North Koreans. We thought we’d get to interact with their crypto people, but it turns out that they told us that we were supposed to be the presenters to present to the North Koreans.

Okay. That’s quite a turn of events. Okay.

That was the strangest thing. And so Virgil, I think he knew he was going to be a speaker. He was different from the rest of us because he’s a big shot at Ethereum.

But the rest of us, we were just thinking, well, what is going on? Why are we asked to be presenters? But I ended up declining, but some people spoke and they basically made up their stuff just a day or two beforehand. It was like a dog and pony show. I don’t think we ever interacted with the crypto people.

It was like an event put on for show, like a cultural exchange kind of thing. And what was said at the conference, it was very surface level stuff. It’s like crypto 101.

You can look up the information on Wikipedia. Okay. Very basic, basically.

They were just trying to cover the very foundational grounds. Yeah. So that was why I was very surprised to see Virgil Griffith arrested.

And he was accused of helping North Korea evade sanctions by delivering that talk. Wow. Okay.

Okay. So it kind of obviously didn’t end well there on that level, but it’s good that you got a newer perspective perhaps. But yeah, it’s unfortunate that you didn’t meet anybody who was involved in crypto because that would have been really, really interesting, right? Because again, very isolated country.

So I’m assuming that it would give a very different perspective. Oh yeah. But in retrospect, I don’t think that they would show that really highly secret crypto stuff to random foreigners like us.

But this is also why I feel, I think Virgil Griffith, he might have broken the letter of the law, but I don’t think he should have been prosecuted in this way, particularly given that I don’t think he actually benefited North Korea in any way. Right. Yeah.

Okay. There’s a lot of like opaqueness, you know, when it comes to North Korea and how people sort of perceive North Korea, like everybody loves getting that particular country. And, you know, again, there are some people who say that obviously it’s been, you know, the kind of perspective that the Western media, the spin that the Western media puts on North Korea might be a little exaggerated, but then again, you know, these are all claims, it’s all speculation, you know, hearsay from, you know, one side has a take and, you know, everybody else has another take.

You’ve written another book, right? During the pandemic, you’ve written a book called Appeal Notes from a Pandemic. How did that come about? And what is that about? Right. So that book was a complete accident.

So this current book, the Bitcoin book, it was written, it was supposed to be out last year, but at the beginning of the year, I was traveling and this was like a day before the first city was quarantined. It was a day before they sealed off Wuhan. And so, but my grandfather at the time was dying and I was on the plane and literally while I was on the plane, they sealed off the city.

And so I just arrived to a totally different world. And so, yeah, Appeal Notes from a Pandemic, my travels amid the pandemic. Wow.

Okay. That’s so scary, right? But the pandemic has kind of changed traveling entirely, I think for so long to people like us who used to travel a lot where, you know, we were kind of just stuck at home. And so, you know, your take is obviously it’s more scarier that, you know, while you were on route, the city was kind of locked up.

So then exactly what were you quarantined? How did that go? Oh, no, I didn’t go to Wuhan. I was going to like a city outside Beijing. When Wuhan was quarantined, like the, I guess the whole country was put on alarm.

And I think they were, while I was there in Beijing, they were shutting down lots of things. They were closing down schools, or at least they were closing down the school that I saw. And restaurants, they were stopping people from dining in.

But quite honestly, I would say that because I lived through SARS in Asia, and I thought this wouldn’t be worse than SARS. I definitely did not expect it to engulf the world that in the way that it did. Yeah, I think none of us saw that coming.

I think, you know, even I’ve lived through SARS in Asia, and, you know, we kind of, initially, that is the perception that was created by the media as well, right? That it’s going to be like SARS, and, you know, it’ll be contained. But then it kind of obviously got away from all of us, and it’s been really hard. So, okay, now to, you know, perhaps happier and better things.

Tell me about, you know, your opinion on all of these new things that are, you know, popping up in the crypto space, since, you know, you’ve been around for a really long time. What is your take on NFTs and the metaverse? Well, I am very optimistic about crypto’s role in this, because like we talked about earlier Amazon, I’m very wary of big tech dominance. And I think when Facebook announced that it was changing its name and going into the metaverse, I think that is something quite scary, because Facebook, it already dominates our lives in so many ways, all these tech companies, like, for example, the Financial Times had a story about how the smart assistant Alexa, how it selectively curates the news that it puts out to people and how that affects their worldviews.

And for lots of people in the global South, Facebook offers like a free internet program. So, but it’s a limited form of the internet that Facebook curates. So essentially the entire internet experience is Facebook.

And so these companies, they affect your perception of reality. So in a way, I think the metaverse is already here. And when Facebook does this, it’s really on a path to gaining more control.

And I think crypto decentralization, and I think the metaverse is inevitable, but decentralization as a way to achieve a more egalitarian metaverse. Absolutely. I think, you know, now the big tech is kind of getting into it in a big way, but that kind of comes with its own kind of concerns, like, you know, that are fed by people like us, that the entire idea of crypto and blockchain is decentralization, right? And if somebody like a Facebook is getting into the space, then you have to be a little wary.

Oh, yeah, absolutely. Yeah. So, okay.

What about like, you know, what are the promising projects that, you know, you are looking at and, you know, you think that they’re going to be doing really well and you’re rooting for them? So I would point to this thing called, I guess everyone knows what it is, Shapeshift, but what Shapeshift is doing that really piqued my interest. A while back, it said it was going to dissolve its corporate structure. It’s going to become a DAO.

And I think this will be the bellwether test, like how Shapeshift will function, whether it will endure and whether it will achieve the founder’s goals. Because the founder has publicly said that the reason it is becoming a DAO is to thwart the regulators. So, and whether this succeeds or not, I think it will either dampen enthusiasm for DAOs or spur other DAOs.

Right. Okay. Yeah.

You know, you’re right. What Shapeshift is doing and then the kind of like, the way the founders come out and said that, that kind of be a way to invite some more trouble, but they’re going out of their way to actually complete this entire cycle, like from a company to becoming a DAO. I think, you know, it’s a sign of maturity than anything else.

Yeah. But I think running a DAO is pretty challenging. You probably remember the great hack that caused Ethereum to split off into two.

Yeah. Yeah. No, that is there.

It comes with its own challenges and especially because, you know, this entire, all of these concepts are so new, right? There is no manual or handbook that people can actually go back to and go like, okay, let me follow these and you know, I’ll be safe. There is no manual and everybody’s just sort of doing the best that they can. But yes, you know, I think that what you said regarding Shapeshift, they’re definitely a platform to watch out for.

Okay. Tell me a little more about the thought leaders that you follow, like, you know, perhaps on Twitter or elsewhere, or you think that, you know, the people who are actually disseminating the right kind of information about crypto, because there is a lot of hot air in this space as well, right? Well, usually when people ask me who I follow on Twitter, I say Niraj Agrawal, because I find him very funny. Yeah, he is hilarious.

Yeah, but I generally follow the, I don’t think I follow that many like personalities, you know, I tend to follow new sources and journalists more like journalists like from CoinDesk and the block. Right. Yeah.

Those can be, you know, it’s like getting factual news. You can be absolutely sure that, you know, they’re not really trying to perhaps create formal, because the market is, at least nowadays, and it has been for a while, it’s been controlled a lot by influencers, right? Oh yeah. So I have a story to tell you.

So I read this from a crypto journalist and he said he was getting his haircut and one of the other barbers that was talking about crypto. So he asked the barber, like, what news sources do you read? And the barber said he doesn’t read anything, but he watches this YouTube channel by a guy called BitBoy. Oh, wow.

So it’s pretty dangerous. Yeah, that is dangerous. You know, that is what happens today.

That is like, you know, recently we had that, the token inspired by split game, right? And it was so obviously, you know, a rug pull and so many people kind of invested in it. I think it’s a lot about people just, you know, having FOMO and following these influencers and people, you know, perhaps the wrong kind of people, you know, and they kind of invest and with retail coming in, I guess that was kind of bound to happen. But then again, it’s like, you know, you have to do your own research.

Oh yeah. I read that there’s a guy in China, he lost his entire life savings in squid game. And because crypto trading is technically illegal in China, he couldn’t, he felt he couldn’t even go to the police or anything.

He like just no recourse. But I guess if he went to the police, he still wouldn’t have any recourse. Yeah.

Yeah, absolutely. You can’t really have a recourse here in this case, but any which way, like doing your own research is very, very important. That is why I keep telling people that, you know, if you’re going to be investing and putting your hard-earned money into something, then like any other investment, you need to be thinking, you know, and you need to be sort of doing your research, making sure that the product is sound.

And, you know, the token has like a sound base, the vision of the founders when you carry through. All of those are important points. And you know, what is strange is that people usually do a lot of due diligence when they make, they can kind of invest anywhere, but somehow, you know, with crypto, I don’t know.

I feel like people are more, they’re a little more reckless, right? Yeah. And, oh, so I have another story to tell you. So I read this on Reddit and there’s a guy who says he’s talking to a friend and the friend has bought Bitcoin from very long ago and now has one whole coin.

And everyone was very excited because that’s a lot of money. But until the friend said, oh, the Bitcoin that I bought was Ethereum. And I think lots of retail investors, people jumping to this space, they think just because two coins, they both exist as coins.

They have something deeply in common. Whereas I think one coin and another, they can be as different as a stock market index versus like a small cap company trading on an obscure exchange. Absolutely.

Absolutely. You know, it’s so important. And somehow, you know, people kind of just forget the first role while they get into crypto.

I believe it might just be because, you know, there is just so much noise around it. But I believe that it might be like a sign of, you know, markets maturing as well. People are, there’ll always be, I think, you know, conmen and scamsters in every space.

But then again, because all of this is happening, it kind of culminates into that, you know, the end user would perhaps become a little more aware of where he’s putting his money. Oh, yeah. I really hope so.

But at the same time, I also see just history just repeating itself because I remember all of this happening in 2017. If you remember the whole Bitconnect, there was this thing called iPro. I walked into one of its events once and there was this guy literally quoting Bible verses, trust in the Lord with all your heart and lead not to your own understanding.

Wow. Wow. OK.

Yeah, I know. But yeah, you’re right. You know, the kind of hype that we have seen, I think it’s basically cyclical that, you know, we keep seeing this kind of hype being created and then there is boom and then there is a bust.

But I’m still hopeful that, you know, people because now there is more retail interest. I feel that, you know, people should become more aware as well. And I can only hope that they do, because otherwise crypto gets a bad name.

Oh, yeah, absolutely. I definitely hope so. So now, Ethan, for, you know, people who are perhaps peering in from the outside and, you know, they want to perhaps get into crypto and blockchain, what would be your two, you know, two, three suggestions for them to not feel intimidated and do this right to start living on blockchain? Well, I would say that I think going into crypto, if you invest in established coins, that’s one level up, like one step into the unknown from traditional investing.

And within crypto, if you want to move into like Shiba Inu or something like that, that’s one level up from, say, Bitcoin and Ethereum. So I would always encourage people to jump one level, but you probably should never jump two at a time. That’s really sound advice.

What about the people who are, you know, intimidated by this space? They feel that it’s just for the nerds and, you know, they don’t seem to feel that they’ll find space in it. Uh huh. Well, I think I would say that I think most people, they can’t explain what SMTP is, you know, but, you know, you use that every day in your email protocol.

And so perhaps you don’t need to understand all the nuts and bolts, like what is an electron and which way does it flow in the wire? You know, I don’t know, but I use electricity. So maybe people need to see the utility rather than hear the technical explanations. Yeah, you know, you’re absolutely right.

I think that is something I say a lot as well, that, you know, you don’t necessarily need to understand all the, you know, as you said, nuts and bolts in crypto, but, you know, you can understand how much it’s sort of solving a greater problem here by creating this parallel economy. And, you know, something that you come to the traditional financial system that is already there. So I think that, you know, we would reach that point of mass adoption, perhaps when, you know, the entire experience for the end user is seamless and they don’t even know that they’re actually doing something that is using blockchain at the end.

What do you think? Oh, yeah. I wouldn’t cite this as a positive example, but this is an example of, I think, the central bank digital currency in China. And I don’t think it actually runs on a blockchain, but people are going to use it every day.

And then, you know, without necessarily knowing what’s under the hood. Absolutely, absolutely. So, you know, what do you think is going to be the next big thing in this space? Any guesses? Anything that you’ll put your money on? Well, since I just brought up China, I think, I don’t think this is something that you can put money in.

But I think central bank digital currencies are going to be a big thing because there is a geopolitical implication in that as well, because that is something that erodes dollar dominance. That’s true, I think. But, you know, CBDC is that it’s like going down a slippery road, right? I feel that kind of takes away a little from the decentralized aspect also because of certain kind of executions that we have seen, like, you know, you gave the example of China.

But interestingly, what you’re saying regarding to counter the, you know, the dollar dominance, I do believe that CBDCs are going to become really big. Oh, yeah. And I’m not saying I think it’s a positive thing.

I just think that they’re going to be big. I think China’s central bank digital currency, in particular, going to have huge ramifications on people’s privacy there. That’s, that’s true.

That’s absolutely true. Okay, so Ethan, thank you so much for, you know, taking out the time to speak to me and, you know, to give our listeners this interesting insight. I’m sure that a lot of our listeners would want to read your book, especially, you know, because, you know, you got to visit North Korea and attend one of the conferences there.

Any parting thoughts before we wrap this up? No, I think you much covered everything. It was a great pleasure appearing here. Thank you so much, Ethan.

Thank you. Bye.

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