Tokenomics #5 Line Goes Up - What Is The Problem With NFTs Anyways?

[Music] welcome friends it is episode number five of tokenomics the line goes up what is the problem with nft's anyways edition i'm here with anton bachman principal at play ventures hello hello mishka katkov the ceo of savage game studios in the flesh and myself the this week in games punching bag ethan levy uh this week we're talking void runners we're talking sandbox we're talking champions ascension we're talking immutable and we're dissecting line goes up the two and a half hour video essay your twitter feed pretended to watch all that and more on this week's tokenomics so um this is this is where the ad break goes do we have an ad break yet

uh ethan you haven't earned it i haven't earned it yet okay the goal was that we keep this kind of like the pilot running until we get to the cruising altitude and then we're inviting advertisers in once we get the regular cadence and we are in a regular cadence and we are crossing a pretty high threshold of listeners um so right soon this could be an ad in the future you could have a uh an ad read by myself or anton whoever's voice you prefer but in in the present i'm gonna do a plug for a friend of mine uh did you know that cliffy b has an autobiography coming out this november uh the create creator of jazz jackrabbit the uh man uh creative director behind unreal and um gears of war and now an acclaimed broadway producer of all things uh you can pre-order it on audible i pre-ordered it today it's coming out in november and i'm plugging this book

because i'm hoping to uh uh goad cliffy b into doing a tokenomics podcast because i don't know what his opinions on nfts are but i think they'll be really amusing and i think our audience would enjoy them all right well on that note on that note let's do some news uh anton why don't you go first yeah so um one of the more maybe eye-popping ones during the past couple of days uh and some of the larger fundraisers in the space again was immutable uh the the layer 2 solution uh that raised raised 200 million in in a recent round led by led by temasek where their company was valued at 2.5 billion 2.5 billion that's crazy that's that that's a bit yeah that's a that's a very nice one very nice one for the team other investors include mirai asset management parify capital declaration

partners 10 cent among others uh and um i think this immutable is one that frequently comes up when i discuss with founders and and people who run studios on as a which which chain they should be building on usually these teams are looking into polygons solana immutable x some alternative ones and trying to figure out where where it would make sense to build uh and um immutable at least it seems they they wanted to position the product really closely to actually be working with game developers but um but i think there's probably still still some work to do and kind of onboard it there to my knowledge that they are working with with a bunch of studios already but i took a look a few weeks ago on immuta scan which which we scans all of the um all the transactions happening on on immutable accent and even though the volume is very similar to what's happening on

on solana or polygon uh it was quite clear that that most most of the activity that is happening on immutablex is tying into two of the in-house developed products so so the tcg gods and chained uh which has already been out there for a few years as well as the trading around the nfts and guild of guardians which is looking to be this dungeon crawler crawler rpg so very very skewed top heavy in terms of transaction volume but yeah the the uh positioning that one is a mobile first kind of diablo like i heard uh derek say they have 60 people working on that which uh it's a lot of people it kind of scares me i've been uh as a competitor it scares me i've i've been meaning to pick up a guild of guardians champion or two maybe it'll be my new hotness in the future anthem can you explain to me like what what is the decision between choosing different chains like why would somebody

go with savannah over if you like if is ethereum a chain or a coin or like like yes i think this is a whole future episode god damn it like whenever i ask the simplest question it's like it's a four hour just a bit it's a four-hour discussion you open the you open the pandora's box on any of these things and then the result you're getting is that we need a separate episode to tackle that god damn it but okay but in in short when we you probably heard us talking about layer ones and layer twos with layer ones we would refer to that sort of most bottom layer of different block chains and layer twos are usually then derivative projects of those layer ones that sort of um change some parameters to make them either more scalable or change some other attribute about them and in this case immutable uh has has been so this ethereum would be the inspiration here similar to how polygon essentially is is evm compatible and

what what that means essentially is that it runs on the same solidity code as ethereum so what what why why it would make sense to to build a layer 2 for example based on based on ethereum is that when something is deployed on ethereum that same code given that it's open source it can also be deployed uh on that layer two solution but when it comes to game developers deciding on which ones they're gonna build i think it has to do with kind of how if we look at a spectrum of what's a plug and play solution and what when where you still need a bit more kind of custom development uh but that also results in the stuff that requires more custom development let's say polygon or or solano which is then not a that's not evm compatible so that runs a completely different language being being rushed in this case uh maybe let those open up a bit more more freedom to the developers but um but then if i would compare it to ensuring a different episode

a different a different episode but yeah but there's all but but there's also a bit less freedom in in terms of yeah for example introducing uh introducing a governance token system an example of why you might want to use immutable i believe they're either low gas fee or no gas fee when you're running on immutable and so like if you were running on ethereum you as an operator would probably never price a hero at five dollars because with the gas fees that five dollar purchase would cost someone maybe twenty five dollars maybe a hundred and five dollars depending upon the time of day just to make that transaction whereas if you're on immutable where um i can't remember if it's just extremely low or no gas fees like selling a hero for a dollar makes sense because it might be a one cent gas fee service charge on that transaction so it enables much um it enables you to reach a much broader audience price wise than being on on a layer on ethereum

and this is this is evident currently we look at the transaction activity of of cards in in guides and chain where there's a huge volume of cards being traded but for smaller amounts given that the underlying infrastructure supports this low value trend or makes makes low value transactions economically feasible okay okay well i promise not to ask any more questions you can ask especially when ask ask more questions that's why you're here you represent the audience um dummy your words not mine some some some of my news items it's been a a while since we've done one of these with the three of us um so i've got a bunch but uh one one i want to say void runners is a new uh game project by uh some friends of mine they just open up their discord and they're doing something really interesting on their discord that i wanted to point out

um they announced it on twitter that you can go to their discord one of the biggest reasons to join an early community is to get on the allow list so you can make a purchase in their first minting or their first pre-sale and void runners actually has a text based rpg that you can play once a day or a text adventure game you can play once a day on discord and if you win it you get a spot on the allow list so i tried yesterday for the first time i didn't get a spot and i'm gonna play again today and i just think it's a really interesting way um to help foster some activity in your early community before the game's live um and it's something that we're doing we're doing something very similar on lhu that i'm i'm excited about so uh really well done on that that uh adventure game for the void runners team there was a games beat article about the sandbox the sandbox metaverse hits 2 million users and launches alpha season 2.

some of the highlights from this that they have 2 million registrations after a 13-month registration drive the alpha season began last week on march 3rd it's a four-week event with 35 experiences you know the sandbox is kind of a roblox minecraft like virtual world with ugc built on the blockchain and it has some eye-popping land sales a lot of business deals and i'm kind of eager to see what the actual experience for players is and how players respond um i think the highlight in the article was snoop dogg's foreplay a sneak peek at the rap legends snoop verse is one of the activities if you're an electronic music nerd like me you might know blondish where one of the uh clubs in sandbox will have new tracks from uh from blondish and then uh my i'm guessing you guys probably don't

know who richie hawton uh plastic man is but he's like a techno pioneer um and i uh the highlight of my week was i tweeted him because the uh the press release said uh the world uh outposts in the world include warner music group ubisoft the rabbids gucci adidas dead mouse steve aoki richie hot and the smurfs and care bears and some more and i was like finally a metaverse that allows me to indulge in my love of richie hawton and of the care bears at the same time so uh it's it's gonna be my life's mission now to get one of my favorite djs on on this show just because uh he's involved in the sandbox yeah it's interesting to see where where the platform itself is also going in terms of the gameplay and the engagement i mean the company i think at the end of last year they announced an almost hundred million equity raise also for the company yeah with softbank uh participating in that round so obviously they're sitting on a

big big pile of capital at the moment that they need to be deploying so i think we'll be following with with eagerness this year on what sandbox will be doing with that pile of cash we'll we'll definitely try and get someone from the sandbox team on in the future and and i want to do some deep dives before the season's over um uh one one big event uh from probably a lot of the listeners are familiar with jam city uh jam cities champions ascension which is its first blockchain based game had its prime maternal pre-sale it was a three-day event uh there was a one-day sale for allow list holders like myself where they sold 2500 champions for 0.3 eth then there was a two-day dutch auction where the price started at one eighth and dropped over two days to 0.4 each uh most of the sales happened in that last hour or two at the 0.4 eath range uh they didn't sell out they sold in

total 7622 of the 10 000 prime eternals they say prime eternals are their strongest and they're never minting them again um plug for the deconstructor fun slack if you're not in our slack you should apply and join uh in the crypto channel there was kind of live blogging about it but yeah only if you're a senior only if you see so many applications that that you have to be you know five years in the industry or or a senior position so we we get a ton and no vendors i get it you're at a high position at meta or google or any and we appreciate that but not on the constructor it's a it's a private community with really high quality conversations so if you you know like that's that's why i really enjoy participating like we were basically live blogging it in the crypto channel and it was like me and uh i apologize if i'm pronouncing your name wrong since we've never met but me and

iana doguru from mythic and lawrence from mobilityware we're basically posting all weekend about this and uh if you're an experienced uh game developer it's a great place to be um two more quick news stories i'll go real quick before i get into our topic so uh game seven down sorry game seven dao and get coin announced a hundred k open gaming initiative go over to the game seven dow twitter check it out they're doing kind of a matching grant where uh if you're going to do an open source project that benefits the crypto game community you can get matching funds of up to fifteen thousand dollars for an individual project uh deadlines march 16th if you end up applying uh reach out on linkedin let me know and uh fine go ahead no no i'm just getting ready to my piece ethan run this don't don't listen to me don't watch me yeah you're always like giving me space don't give me space

don't give me space all right final final i just wanted to congratulate my friends over at laguna games for the crypto unicorns rbw token launch uh they did a token launch on copper and raised about 14 and a half million in usdc to launch their rbw token and crypto unicorns has done a great job with really well organized land sales character pre-sales running a community this token launch like this is again i want to get them on an episode in the future because they're really from what i observe in discord it looks like doing a best-in-class job and there's a lot to learn uh from the crypto unicorns team and laguna games so yeah they should definitely come in and talk about that because it's a relatively new company i think bitcraft is invested in them right uh yeah bitcraft is an investor yeah some others um yeah i recall these guys these guys um came came in with a free to play

background yeah yes jeff witt is one of the one of the guys he's been he wrote to uh to the newsletter prior uh before it became a dof newsletter so i it is he's a yeah smart dude um hey i i don't have any news updates but i have a question for y'all now this is related to the news so i'm interested in where do you think the price of crypto and and the uh the effect of the war and sanctions will you know will lead the price of crypto as well as the web 3 gaming because the way i'm seeing it russia produces pretty much or mines 10 of all bitcoin i don't know how how it is with with other currencies but it's a relatively significant in in comparison us is 35 and i think russia is like the second or third largest in terms of uh in terms of crypto mining the second part is that there is most likely if i were a betting man i'm

not i'm an investing man uh if there is a legal form of sanctioned betting for rich people correct correct so so uh in the sense of uh energy crisis uh which is most likely to happen at least if you read any news then the prices of energy are gonna further increase they're already at an all-time high for not not all time time but almost all-time high for gas already in the u.s um gasoline and then gas prices in europe are phenomenally high there's uh there's oil barrel prices are really really high so naturally when you have energy costs going up that leads to well to the highly energy inefficient world of crypto you know being not as favorable so that means the cast gas costs as well as mining would go down now what am i correct with my assumptions and and what are the effects on the whole web 3.

so maybe i think this would be more about throwing a couple of guesses yeah there of course we're just trying to predict but i think i think some of the initial reactions to see what was happening in ukraine would be that so we would see and especially when there were threats that that sort of russia would be cut out of swift uh that this would be kind of an interesting point for bitcoin as well to potentially see a bit more adoption now as um russian equities obviously took a big hit uh among many other equities um i think we still said bitcoin is still quite bitcoin is still correct correlated what's happening in the rest of march so for most investors it's a risk asset that obviously they need to they need to get rid of when they need to cover their other losses uh but i don't think it dilutes from from the long-term vision of becoming a becoming a store of value at some point i personally i'm not

that i'm not the biggest believer in that it will become kind of a transactional asset for everyday use but but more more sort of the true the use case behind it could be it could be a new more efficient version of gold essentially when it comes to how this affects the operations uh there is a there is a good amount of mining activity happening and obviously not this concerns bitcoin mainly not really any of the other any of the other assets or any of the other crypto networks but um um likely then i i think the risk that they might be facing is kind of tied to to the rest of what might happen to to both russian companies and russia based subsidiaries i think now there might be a risk of nationalization uh in case in case putin is really mad about things uh and obviously he's not mad yet he gets even more if he gets even more insane to what's happening but um i think that

could potentially pose a risk for them i would then predict that obviously then the the share of the mining activity in other key key areas will increase and the mining pools will move will move their resources elsewhere to focus on that but um i think ultimately we'll have to see how how long of a crisis it is across across both and the whole financial system in russia as well and everything that's tied to russia but um we might see we might see it it's an interesting question posing kind of what yeah what the increased energy energy costs will yeah yeah energy crisis not even increase cost but we're talking about crisis for a short term you know there's always going to be more output because the price going up but on sure we're looking at energy crisis exactly on the other hand it's a good incentive to push proof of proof of stake forward yeah so we can get rid of energy yeah i'm not a i i'm

uh i i don't really uh be uh endorse what the bitcoin network does currently i think like actually this is one of the biggest for our main topic this is one of my biggest areas of agreement uh with the doc the video essay that we'll talk about is that there was a lot of anti-bitcoin sentiment and i found myself agreeing with all of it because i think it's really bad for the environment and i uh i'm obviously devastated by the many effects the war is having on the citizens of these two countries and and mishka you wrote really beautifully about it in in the newsletter um and everybody should check that out but like if there's an energy crisis and that makes uh reduces the amount of bitcoin mining happening in the world to me that's a positive effect because i think bitcoin mining is just like a waste of our uh planet's natural resources

and uh because currently currently it's an arms race on who gets to to win the who gets to win the block rewards yeah but there's likely also a cap on how secure it actually needs to be in order to function properly but currently obviously the incentives are driving towards increased and increased usage but but we'll get to that point later because i do think it's also worth to discuss that if also also the question about how energy is being produced and if bitcoin can move to renewables but we will we will get back to that one yeah i'd be totally happy with solar-powered bitcoin mining that's fine yeah so i have a prediction in that i think um i believe that most of the mining will move from from russia to kazakhstan i think russians can still relocate to kazakhstan the the language is the same kazakhstan is already pretty high in in uh in bitcoin mining not super high but in top 10 and i think they can buy russian energy at the uh the market value which nobody else is buying at except for kazakhstan

and chinese so i think that will be a pretty much like the the crypto capital i don't remember like this what are the uh [ __ ] what's the capital of kazakhstan almaty maybe uh so that that's the other new that's the new miami of uh of crypto so uh and regard i just remembered a joke so not not a joke i hope it's not a bruno joke i'm trying no no this is not a brutal judgment yeah this is a what happened i'm trying to make it i'm trying to make it through this without a really bad borat joke so uh it was funny thing happened today because i was uh i was supposed to do a talk uh at our building which is like a startup you know normal startup center there's a bunch of startup companies and i was invited to do a talk about raising your second round i don't i don't know why but and i don't know why i wanted to help so i said yes and i totally forgot about it especially i didn't have any deck or anything so just kind of came in you know guns blazing uh did my talk and the first question

after the talk was something about like hey um yeah thanks for the talk um what do you think is going to happen with free to play is is the blockchain game going to overtake them like crypto questions so i'd answer that all right then the next question is i talked to my friend the crypto kid who believes yes yes so the next question is like i have a game that has been launching on steam and i kind of have it like what do you think about doing a an nft version of that i'm like dude like i said zero about blockchain or crypto and all like most of the questions were about crypto so it was pretty crazy that's funny anyway let's let the line go up okay so don't ask me about crypto also yeah so uh our our headline topic today is the video essay line goes up the problem with nfts uh it's had over six million views on youtube it's by uh dan olsen who goes by foldable human on twitter he makes a lot of excellent uh video

essay content you can support him on patreon and um it's a two and a half hour video essay and i listened to it twice and uh and i did it because mishka said we have to do this an episode on this documentary all all these people i know are talking about it how many times did you watch it mishka uh so so for the research purpose and the uh the value of this podcast i decided not to watch it you decide i can be i can i can be relating to the audience of this podcast that most of like probably 85 haven't watched this amazing documentary which we have a link in the description below so i'm going to be kind of representing you guys right and i'm going to be asking the questions on your behalf while the smart anton and smart ethan will will tell their opinions did you watch it or listen to it all the way through yes yes cool yeah i listened to it twice i even had it transcribed and then i

haven't corrected the transcription yet but if i'm really ambitious i will correct the transcription and post it up on my blog so people can read it because it might be faster for you to read it um so i would say it's it's a really well done video essay and i would categorize it as an anti-capitalist takedown of nfts in the crypto industry as a whole it's not just about the gaming sector it goes through a lot of history of crypto it mentions axi it mentions ygg it mentions dows all things we've talked about and we'll continue to talk about personally i i found it a little exhausting to listen to just that the energy of it was like very intense and uh uh i'm done do you agree on that yeah i i think i think i think the the essay is sets sets the tone for the whole documentary quite early on starting with um drawing parallels to

to to to the to nba to the mortgage-backed securities also during the financial crisis by kind of foreshadowing that kind of biggest it's called the the sort of the full the whole theory we'll talk and talk about kind of going into the chronological chronological uh series of events with how how kind of bitcoin was born from that this day and so going through the negative arguments then moving on to ethereum and then moving on to the nfts but um but yeah it's um obviously it was a nuanced take yeah i i i highly recommend listening to it whether you oh i think a lot of people will actually agree with the majority of what's said or even if you're uh if you disagree with it it's it's well researched it's very smart uh you'll learn a lot i learned a lot from listening to it um but the for me personally as a listener kind of the anti-capitalism angle of it was a little tough uh it was

just challenging um yeah i think there's one important disclaimer i'd like to give that even though i also i was also actually i was also surprised in how much i found myself agreeing with with some of these points but there is i would say still a certain level of cherry-picking things to discuss and um which easily leads to kind of that one video providing a big confirmation bias for for anyone that is is listening to it but there are some very valid points and very valid point uh sort of better valid criticism uh on these things but i think it views and we'll get into it a bit later as well but it it views things very much from a snapshot point of view and maybe sort of how things are now it doesn't maybe explore too much on what this could be in the best case or what could be the best case of this yeah i think i would have liked to see a bit more parallels to the early days of the internet when when most of uh most of what was happening was related

to to to either adult content or any criminal activity yeah yeah which is also something when i speak to people so obviously i didn't relive that era the same way as many sort of older uh practitioners of of of of the craft but um but still when you get down to the weeds people remember that there was actually quite a lot of that also early on i i think you and i both have a really long-term view on the potential of this set of technologies to enable innovation in the game space and in other technology sectors and this video almost felt like if you did a two and a half i guess it would have been like if you made a self-distributed vhs tape uh takedown of bulletin board forums in the era of dial-up internet and was like all this pornography all these scams this is why this technology is going nowhere right like it that's what it feels like to me taking that long view is that it's

kind of all the criticisms are valid but it's missing the the future potential um exactly there's a number of sub-optimal things but they work really well so then the follow-up should be okay what what are the good things we could do with this but um but yeah let's dive into yeah so just to give you mishka and and the user like a flavor of what i mean when i say like he's anti-capitalist in the criticis in the analysis right there are phrases that'll be like um he argues that crypto is not dismantling corrupt systems or he says crypto enthusiasts say they're bringing the benefits of silicon valley investors to the poor and unbanked and and they're not and i think that the um i mean what what i think he does a good job of is he's taking um what the early adopters and early enthusiasts of cryptos are saying at face value and basically over and over

and again saying like you are falling short of your ideals and in fact this technique this technology doesn't do what you claimed it was going to do or why you're excited about it but here i need to here i want to chime in again and just because i i think he was discounting quite a lot in terms of also these these early promises that have been there and if we talk about the topic of kind of obviously a big pitch early on bitcoin has been and crypto in general has been about kind of banking the unbanked and the underbanked and i think he was quite dismissive to that and i think it's easy for us if i look at the nordic countries for example we have perfectly well working banking infrastructure we have our our versions of cash apps etc it's very sort of frictionless to move money around we have the neo banks who are kind of putting up a nice ui on top of obviously quite crappy infrastructure but it still it works i mean and it we can we can do all of our our things with

that but then consider that there's roughly two billion people that are either un unbanked or underbanked and don't have access to basic financial services because of the countries where they live in um then sometimes i get to that i get the counter argument that okay well they're not in control of of that big of a part of the money flows but i wouldn't see that as a as an argument that's viable enough to completely ignore that because if you're offering now fully open financial systems to them and because everyone is anyone who has internet access is able to to to get a bitcoin address which is the equivalent bank account in that world and i think we're just people in developed countries dismissed those aspects a bit too easily uh and um i think he was also dismissing it a bit in this in this essay yeah here's a a quote on that he goes he says cryptocurrency does nothing to address 99 percent of the problems with the banking industry because those problems are patterns of human behavior

their incentives their social structures and their modalities the problem is what people are doing to others not that the bill that the building they're doing it in has the word bank on the outside right and so like he's as you're saying he's taking a um the type of position on what the problems with the banking sector are based on being in the united states right and that if you um if i'm understanding part of what you're saying is that the uh even if it hasn't solved this problem yet the ability to bring financial services to someone in a rural part of southern africa that currently does not have any banking services like if crypto can solve those problems it can make a meaningful difference in real people's lives exactly uh and um it's not to say that it will do it but at least at least there's a fair shot now yeah in

kind of getting getting more independence around those things that were you where these people where these in people in these countries have traditionally had a really hard time in in kind of getting access to these services uh and that's what i think he was he was dismissing a bit uh yeah in the discussion and also i mean he he did acknowledge in the in the essay that you know people in venezuela and some other latin american countries uh are using it but he he can turn it in a way that it's been the promise that it will revolutionize everything in these countries but maybe he forgot to mention that okay but people are actually using it it doesn't mean that everybody is using it yet but people are using it i think some people are tired of stuffing dollars inside of their mattresses and um now there's something so even though uh even though it's volatile uh take a look at the local currency and see how volatile that is and um so i think it's more about kind of giving options to people

i'm i wouldn't i wouldn't personally i wouldn't see that that sort of bitcoin is there to eat fiat currencies completely but it's about offering a market-based alternative to people and allowing you to choose whether you're going to go whether you want to use and own central bank uh backed and issued currencies or whether you're gonna use or whether you wanna kind of own a currency that is that is controlled by the market you know there's there's this really great book um by jacob goldstein who is one of the original planet money podcast contributors and that was one of the things you know this video essay makes a big point about um how a lot of uh crypto was kind of born by the global financial meltdown uh caused by the housing crisis and planet money is one of those things that was born out of that as well and this book money is great i i really recommend the um the audiobook of it if you like audiobooks like i am and one of the points it makes is that whatever money

is at any one point seems natural and like it's always existed and like it's the one way and whatever money could be or used to be seems crazy and as an example like it used to be in the american west that every bank had their own currency and like you would go if you were traveling across uh the frontier i might have uh mishka coins and i would go and i would get to tell you know somewhere and i would go to anton who is the banker and he would pull out a book and like the amount of the local currency he would give me based on the currency i had for this other bank was partially what was in the book and partially the distance that other bank was away from where i was and how risky it would be to go use that currency and and at the time that seemed perfectly natural to people right and so like i i always go back to this that money

isn't real money's uh an invention it's a it's a technology and that like money is imaginary and when i tell that to people they'll say something like yeah well it is now that we're not on the gold standard i'm like yeah but gold is also useless like are you actually doing anything that requires a soft malleable metal with high electronic uh transmission no you're not you're you don't need to plate any electronics today then what value does gold have gold only has the value we ascribe to it because we believe in it or we desire it and digital assets and cryptocurrencies are are no different right it's just a new expression of this thing where we all choose to believe in something and because we believe in it it has value i'm sorry i'll i'll take my my tinfoil hat off for a second um one of the i you know i say like there's

a lot there's a lot i agree with in the video essay uh for example i'm not as i already said not the biggest fan of bitcoin and here's a quote from the criticism of bitcoin uh with the way it's technologically set up right he says uh with the mining sorry i should silence that uh critics point out that this created new problems uh adversarial adversarial validation would deliberately incur escalating processing costs which in turn generate perverse structural incentives that would quickly reward capital holders and lock out any individuals that weren't already obscenely wealthy because while the escalating proof-of-work scheme incurs heavily diminishing returns diminishing returns are still returns so more would always go to those with the resources to build the bigger rig and he also says something like blockchains he's mostly talking about bitcoin in my opinion blockchains are pretty bad at doing the things that they're supposed to be doing and i agree with fully with both of

those like there's you know even if it was you were capable of it i don't think bitcoin is a good technology or a good platform on which to build entertainment applications um and i wish that uh uh proof of work mining was uh basically legally prevented from happening i think it's a giant stupid waste of energy in the world um the criticism criticism is valid there um let's say also from the point of view as as as he mentions that the incentives are a bit twisted in that way as um obviously it gets as more and more people try to solve the equations um that bitcoin presents to them in order for them to win to win the block rewards uh it's it's it's directly correlated with how much electricity you're spending as you have more computers trying to solve solve those issues uh and um well and that then leads the centralization aspect comes from the fact that sort of for you

to not only grow basically your own operations you bring other miners also into your operation and this is the concept of mining pools i want to talk about them and and um it is a couple of global mining pools that do get most of these block rewards and and they are these are the pools that that kind of uh make sure that bitcoin is as as secure as it is because this also makes it big bitcoin the biggest bug bounty in the world yeah in a sense that if you manage to hack bitcoin you're going to be the richest person in the world most likely uh and um but given given that if you would have to be spending more computational power than all of these miners or more than 50 percent of what is being what is being used on network to to hack that so in theory it's it's it's uh it's impossible more or less impossible uh to act from that perspective in terms of kind of his point about uh blockchains are pretty bad at doing doing the things they're supposed to be doing i think that's a bit of a blanket

statement he's uh he's pulling all blockchains in the same bucket yeah whereas these are very different use cases and we don't need to spend too much i think we agree on this this topic he isn't maybe seeing seeing the forest from the trees there or not at least actively trying to and and looking at it from from from kind of very simple use cases that could be very well i mean we've all seen that people are using blockchains to to using to solving stuff that could work very well on a on a single database but um i think it's it's a different it's a different question on on you know what are the new things you can do with that with an open shared database that has a that has a coordination mechanism it doesn't need to be silo another big topic of the video essay is the scamminess and the many layers of scams that happen within um the blockchain space um and i think you

know whether we're talking about rug pull nfts uh generate like pudgy penguins i think was kind of a rug pull recently um or pixelmon which is like game projects that raise a bunch of money and then they have their reveal and someone suggested me i write about pixelmon because they raised like 70 million dollars and then their game assets were revealed and they looked uh very disappointing and it's been a big um it lit up a bunch of telegram groups that i'm in and with people being like what a disaster um and and i i agree like one i don't i believe in blockchain for its use for in-game assets and for replacing the type of digital economies that we've been building and operating in free to play it's like that's kind of the very specific use case and i personally do not buy into any or very few a generative art projects with no utility because it doesn't it doesn't make sense to me a lot of

time the art doesn't appeal to me and i think that a lot of that i agree there are so many scams out there and the scams have the ability to destroy the potential of this technology right if it turns user sentiment and regulation in the wrong way so i agree with all the scam criticism in the video yeah i would say it's obviously condemning all the scams as well and seeing it's very unfortunate there is there is a lot of these camps going on and also kind of as he was mentioning you have a lot of these profile picture projects that go on and raise everything between a few hundred k up to tens of millions with the promise of at some point delivering a fully fledged 3d mmo uh and um i think this has been commonplace also from from a play ventures perspective a lot of inbound from teams that don't have game making or don't have game making capabilities on the teams but

they have the funding right that now only only need game game developers and all they need is it's so easy mishka is you know it's so easy to make a video to be honest to be honest like when we're talking about these these games that are you know somewhat successful in the in the um in the sphere let's say games like panzerdog no offense these are not very complicated games to build and i would argue that getting even an outsourcing partner to build some of these extremely simple games with an assumption that you have your internal team that can build a platform and has a lot of blockchain and economics experience is a potential you know a potentially working solution because the game itself does not work but here again i think why someone like lucky cannon and their their approach with panzer dogs make senses is that we're still so early here and

that's always something that crypto people will tell you all the time we're still very early but yeah i can't sort of underline enough how how early this still is obviously i'm biased as well but um but that ties into kind of what products should we push to market does it now make sense to spend three to five years on development or even two to three years on development on a game before you get to test the market see what the user sentiment is are people actually playing those games so i think i find interesting to follow these more arcade-like approaches that that come from people with arcade background uh hyper-casual background casual background and putting more lighter products on the market testing with different nfts testing with different so can see what see what the users think as um and even even though if those teams wouldn't be the right ones we're going to build kind of the mid-core successes of what's going to happen hopefully going to happen in this space it serves as food for thought for all the other other developers as well that are following the space that come mostly from free to play uh and really want to get into the weeds

understand what's happening and it's it's i i think it's valuable to get products out to the market right now see what what the what the answer or basically what what the response is and then it kind of gets iterated again that the next wave of games will look very different and with with my background and your background and experience writing a design document for panzer dogs taking it to amber and having it outsourced and managing the production of it that's a fairly simple task for uri or anyone who's super experienced if i think of myself at 22 you know college student whose experience on game development was like getting taquitos and buffalo chicken wings for the team crunching bugs like i would have had no idea how to do that and so there's a thing that even what is to the listeners who are experienced game developers what is a fairly simple game if you if you're coming with no base of knowledge it's not easy to

make even a simple one um yeah yeah correct you're you're right i you know the the main thing i want to talk about so i've talked a lot about the different parts of the video essay that i agreed with or that i liked um the the one that i think uh is probably worth the most discussion is this is him saying all of crypto is a bigger fool scam the whole operates by buying worthless assets believing that you will later be able to sell them to a bigger fool the entire structure of cryptocurrencies at their basic level of operation is designed to deliver the greatest rewards to the early adopters so i've got a lot of responses to this and i'm kind of eager to hear what you guys think um i guess i'd i'd put it in in like two or three buckets uh one is is all of crypto a bigger fool scam i mean in my mind this is no different than venture investment or stock like any

form of investing requires some people to put in money at one time and some other people to put in money at another time in order for fiat currencies to come out so like if you believe that uh savage raising money from play ventures for stock and then savage going and doing a spec and raising money basically from retail investors if that is a scam which i i can see the philosophical viewpoint that it's a scam then yes crypto is also a scam but in my mind the the nature of crypto uh itself is no different than how we fund many other entrepreneurial endeavors or investments um and here and and there i think that the typical counter argument from from someone who doesn't share that view would be that

okay well tokens are not productive assets they don't represent ownership in in in product companies that have real cash flows etc but i think that's or it is it is misinformation i think it's again all about kind of bucketing everything in the same obviously there's a lot of what you would call [ __ ] coins that may tie in here into something into a blockchain that really doesn't do anything but and then again bitcoin is essentially only it's gonna it's a currency it's it's it's the the long-term picture it's a store value it doesn't bring that much more to the table but if we look at ethereum and all of and many of the key protocols that are built on ethereum that have their own tokens they actually produce a service that people are willing to pay for be it either be it either kind of obviously ethereum being being the consensus layer is it swap that provides uh provides a decentralized exchange that already on

daily basis has more trading volume that than several of the nasdaq exchanges uh spread out globally uh and um again as i'm a top disclaimer i'm a token holder in many of these key d5 protocols but if i go to an analytics platform like token terminal for example where where their analytics is very much focused on actually looking at the fundamentals of these protocols and these crypto networks um there you find a dashboard and you can see how much revenue these protocols are doing on a daily basis to their token holders so a lot of this is basically what we've gone through with with different company structures also previously uh and um in my belief a well-designed token is actually very similar to a stock or security in a company it's not about kind of creating obviously due to their liquidity profile

it's easy to look at them as currencies okay but but a well-designed token would be more representative of of of the upside within a certain crypto protocol to that point i made earlier about how whatever we consider money seems natural like let's just like stocks let's say berkshire hathaway right like i own some berkshire hathaway shares i i wouldn't be surprised if the two you do it's warren buffett's company it's one of the most famous and like okay so at some point i own i bought some berkshire hathaway and currently i could sell that to somebody else for more and in the years that i've owned it they've never paid a dividend and yes berkshire hathaway owns many companies and those companies own land and they own leases and intellectual property and all sorts of things but berkshire hathaway like unless you own enough stock to be a board of like a board of directors

level investment like if you own less than five percent of the total company let's say i i don't know what the real number is here like if you're just a joe schmo like me berkshire hathaway is under no obligation to ever give me any dividend or any financial benefit they can do whatever they want with all their assets and there's no end right like activision blizzard is going to have an end where people get a payout or at least get a conversion to microsoft but is microsoft ever going to have an end like publicly traded companies are not structured in a way that someday they go okay we're selling off microsoft now and now we're distributing everything to everybody who owns the stock like stocks operate you know when when somebody buys a stock it's it's no different than buying crypto like you're not going to get you you don't actually control that company in any meaningful way shape or form unless you

are ultra ultra wealthy sorry that's my my totally bizarre soapbox no but the similarities are there and um i'm confident that the narrative will also go into that direction in the next couple of years when people realize that it's it's essentially that a well-designed token is a stock on steroids yeah and it's programmable it's directly on the internet instead of in some shareholder registers somewhere else and and it's and obviously depending on the protocol depending on the product it's directly enforceable but if if stockholders vote for something they're dependent on on the management and the board to execute that and obviously if they don't comply then obviously there's a there is the justice system to make sure something goes through but but um i'd say we're talking about the next evolution of how companies are built right and structure i want to touch on that i know anton

you've got to go soon um so let me try and jam my early adopter thing in um this to me is one of the benefits one of the reasons i believe in the power of crypto so i've brought up this example of the 2019 network uh gamesbeat article where we said legendary's done 250 million dollars in revenue and then in the same article we say we spent 100 million dollars in ua and so to attract players to our game we've spent nearly half of all revenue on advertising and that money goes primarily to google and to facebook the people who own the advertising networks that can get our product in front of people's eyeballs so that they might um download it and play it and spend money inside of it and what i like about crypto in its use for games and i actually have like a bunch of other ideas about different businesses that it could transform is that

you can take that same marketing cost that it takes realistically to launch any new entrepreneurial adventure except one that goes super viral and you can bring those gains to the people who believe in you early as opposed to just spending them all on google and facebook right i can uh i could launch an ad network where any viewer who believes in it and wants to put their eyeballs in front of it can pre-sell their eyeballs for tokens and then an advertiser basically has to buy that time from them instead of from me as an example or i can you know build my early community by giving them tokens and nfts as a reward and like i i just look at it as a way to reward the player directly and align a player's incentives and the dev operators incentives and potentially cut out the advertising platforms right i i think it's properly executed it's a very democratic

marketing um mechanism and eventually i think the more casual the audience becomes i think at some point some some version of performance marketing will have its role as well if the market gets a bit more saturated there's more products on the market we're doing more mainstream but um but as you say you're kind of solving or there is evidence that you're solving for that kind of kick-starting the user base kick-starting the community getting them aligned getting some virality in the beginning obviously for different reasons that has to be acknowledged but at least there is activity around it and then i think it's up it's up to the developer to build something that's engaging and lasting and sustainable but um it does solve some of those early early problems with ua but but i think at some point some some version performance marketing will still came but i think we're a few a few years still away from that because um we need to get we need to get the data stack in order as well for that

all right i i go ahead miesha so summaries from from the uh like why should why should people watch this two and a half hour um youtube documentary um i think there's a lot of good history there it's it's worth it it's a really good method of understanding a certain viewpoint and criticism on crypto and there's a lot of well thought out valid argumentation um there's it's funny there's some some good jokes in it some are a little uh too far even for me um but i think it's really important you know if if you're a believer it's important to harden your understanding with opposing viewpoints so if you're a believer like me i think it was really valuable to listen to it and understand what the nature of of some of these uh anti-crypto uh arguments are um there's a bunch of history i learned and i think it i don't know

uh yeah it's good to challenge your thinking and and the good to learn and there's a lot of history in here as long as it's not the only resource you cite when you make up your mind on whether this makes sense or not yeah so also listen to also listen to the podcast yeah all right i i know anton you've got to go so let's let's close it out with new hotness um shameless plug my my eva verse nfts and their associated eva versus hoverboards which were dropped to the eva versus characters are getting an increasing amount of bids you're trying to you're trying to pump your nfts [Laughter] isn't this section for pumping our own bags all right all right the part that's funny uh mishka do you do you own any nfts yet uh no i don't own any nft but um new

hotness is the air app so this is the uh the app that was launched was it yesterday or today it's the uh the michael jordan uh six rings nft new hotness type of a thing so there's uh there's a early access limited edition nft grants collectors early access to the upcoming experiences launching on air along with other exclusive perks and benefits so according to this company it's like a digital uh platform with athletes and their fans and you can get early access with 2.3 solana's which is you know a shy over 200 bucks and you basically get the the pictures of this bowl with six rings and um i guess we're doing this i i grew up in i grew up in chicago during the three-peat era so that's uh i actually lived down the street from michael jordan for a while before he moved into his meditation when he lived in like a normal suburban home

um i've got some funny stories about that anyways uh i i bought two prime eternals uh from champions ascensions the jam city uh early pre-sale um as i said if you're an industry veteran join the deconstructor fund slack you can see our live blogging i'm hoping to actually take uh the things that i learned and i learned and hopefully turn them into a future newsletter and blog post and even get some jam city people onto the podcast to to post more than this pre-sale there's a there's a lot for us to learn uh final plug uh mishka really great work on that newsletter article and on putting yourself out there and talking about geopolitics and in your own uh history in it i think that was uh yeah so i i think i'm gonna put it out on uh on the blog like a lot of people uh liked it you re i don't think you wrote you read the final version not yet you you read the uh the pre-edit version

it was it was a harsh one luckily i have a uh i have a i have a good people to soften up my corners right so so it was uh the final one came out actually i've gotten a lot of good feedback and especially from uh from a lot of russian people in the industry um just kind of thanking for humanizing russians which is very important when you're in conflict we're talking about people we're talking about humans and it's very easy to say that those guys are evil and those guys are good we did that with serbians now we're doing it with russians um we did it with iraqis afghans so it's it's easy to bomb people who are not bomb or just attack people who are not considered as people but just evil and that's never the case yeah so look at me a man of peace this is what 40 feels like on that note that is token and one more thing check out check out the the deconstructor fun event in istanbul yeah oh yes the great folks of delphi digital

joining me to discuss discuss blockchain gaming in yeah awesome yeah so we have a full blockchain panel not it's not a panel of blockchain fireside chat hosted by beautiful anton bachman and his his trio of guests that he uh invited to istanbul so shout out to google for for arranging this and um that that's gonna not cap it off there it will it will cap off the the official portion of the event after which we go into a live twig so ethan too bad you got three kids otherwise i might try i might fly over for this uh just to get they want to get a swear dad in public it'll be fun all right goodbye friends that's tokenomics number five in the bag boom done [Music]