S10 E10: Joe Looney & Shawn Leary on Rare Pepes & The History of Counterparty

0:47Vlad CosteaAnd welcome to Season 10, Episode 10 of the Bitcoin Takeover Podcast. I am Vlad. It's 4 a.m. where I am right now, so I cannot raise my voice to do the usual intro. But this is going to be another episode about Counterparty, Rare Pepes, and all of that unorthodox and quote unquote degenerate stuff that happens on the Bitcoin blockchain, which nowadays seems to secure the network and pay for the security budget of the Bitcoin network. And it looks kind of promising with this burgeoning field of tokens that people call NFTs.

1:23And the guys that I've invited today for the episode are Shawn Leary and Joe. Joe, I'm really sorry, I missed your last name, so I messed up, sorry.

1:39Joe LooneyDo you need my last name? Looney. There you go.

1:42Vlad CosteaI was thinking of George Clooney. Joe Looney, George Clooney, close enough. Yeah, so it's 4 a.m. once again, sorry. And we need to talk about this and we need to address what's going on and why you guys call each other scientists and how this all started. It's a microcosm that's worth exploring. And that's why I wanted you guys to get on the show.

2:09Shawn LearyDefinitely. Happy to be here. Vlad, did you stay up all night for this? Were you that excited about it? That's awesome.

2:18Vlad CosteaIt's like Christmas Eve, like literally. Tomorrow is Christmas Eve, so I'm preparing for that.

2:24Shawn LearyGood. Yeah, I can start off, I guess. Maybe I saw Rare Pepe about five minutes before Joe did, just sitting in the Counterparty chat, and there were about 150 people in the chat at the time, maybe 200. And a guy named Mike came in the chat and said, "I'm putting Rare Pepes on the blockchain. Come into my new chat that I've formed. I'm using Counterparty. And if you come, if you're the first 15 or 20 people, I'm going to give you a free SHITCOINCARD." And I'm like, well, what the hell is this?

2:55So I click in the chat, I go in there, he gives me my free SHITCOINCARD, and then he says he's got the Rare Pepes listed, the first card. And I go on to the DEX using Counterwallet, and I see the RAREPEPE has got 300 for sale. The first 150 are like 1 XCP and the next 150 are like 3 XCP, just all listed, ready to go. And I bought one and I immediately thought, man, I just scammed myself. This is corny and stupid, right? And then everyone started pouring into this chat and I went back into FOMO mode and bought a bunch more, and it kind of took off from there.

3:32Theo made card four of the collection. You had RAREPEPE, you had GOXPEPE, SHITCOINCARD, and then Theo made his Pepe Nation, the fourth card, and I made DANKPEPE, fifth card. And then Joe quickly joined and built the wallet, and really, without Joe this whole thing wouldn't have happened. I mean, it would have just been a chat room thing. So Joe really is the godfather of NFTs. Without that website, easy to use, simple, it still works today. We love it. And so thank you again, Joe. So take it away from there, man.

4:11Joe LooneyThanks, Shawn. Yeah, I had been in the Counterparty community basically since it released, in the beginning of 2014, kind of just messing around with creating assets, which are what tokens are called on Counterparty. Everyone calls them tokens now, but it's Counterparty assets. So yeah, I had actually built a couple of wallets, and I had recently finished building a web-based wallet. It's a client-side wallet, so you hold your own keys, but it functions kind of like a web app.

4:56So yeah, I just basically reskinned it for Rare Pepes. I had built it to be able to trade Spells of Genesis cards and Force of Will cards, which are other Counterparty assets, Bitcoin NFTs, that were around prior to Rare Pepes. So I just kind of reskinned it for Rare Pepes and created a way for new ones to be added to the list of the directory. So that was something that Mike had put together.

5:35So yeah, I mean, Rare Pepes, really, they're just a fun way to use Counterparty assets that people hadn't done before, which is: you can make your own art and create an asset for it, or token for it, and then sell that token and say, hey, this token looks like this piece of art, it is this piece of art. And that's kind of what got everybody excited, and all the Rare Pepe artists kind of spilled in. But I mean, anybody could be a Rare Pepe artist, and you can see that through the quality, the detail of the different Rare Pepes.

6:21Yeah, I mean, some are really simple, some are more artistic, but anybody could participate. So yeah, it's funny because Counterparty was, it's a protocol on Bitcoin, so everybody involved with it at that time were mostly Bitcoiners. And we kind of stumbled into the use case, seeing what Spells of Genesis did, having these game assets, and Force of Will and the other kind of card games. Nobody really had had the idea to just make their own token and say, this is what it looks like.

7:02Until Mike came along and did it. It was like a watershed moment in the chat. And I think that's kind of what got everybody really excited that jumped into the Rare Pepe community early. It was like this aha moment for a lot of people, because Spells of Genesis cards had been around for well over a year at that point, and nobody had really just thought to do it themselves. So yeah, I mean, that's how we got to the Rare Pepes.

7:34And I think why it took off so quick is there were a lot of people into Counterparty assets, but they'd never found a great use case for them. So this was one of those use cases. So yeah, it was an interesting time, looking back on it now, at what's happened with Bitcoin and what's happened with NFTs since then. It's kind of funny to look back at how simple things were only five years ago.

8:08Vlad CosteaYeah. And it's interesting, and it would be useful to backtrack a bit and go back to what Counterparty is and why it was created, because in its time it was very ambitious. People wanted to put stocks, wanted to put commodities and trade them on the Bitcoin blockchain. And they wanted to use the security of the Bitcoin blockchain to do all of that trading. And it seems like this whole chapter of Bitcoin history has been erased. Like, they burned more than 2,000 Bitcoins just to be able to mint the XCP token, the Counterparty one.

8:43And it's a very Bitcoin-y experiment that they conducted. It was abandoned most likely because the network could not scale to the demand or the expectations that they initially had. As it turns out, it became useful for trading token art. But I'm looking right now at the book of Andreas Antonopoulos, Mastering Bitcoin. He has a chapter which is called Alternative Chains, Currencies, and Applications. He mentions Counterparty, but it's for less than one page. It seems like nobody really wants to tell the story of Counterparty.

9:22Shawn LearyWell, I think it's good for crowdfunding. I think it's good for kind of a one-direction raising of funds, but to really have long-term ownership and dividend payouts in a non-centralized... I mean, what if, basically, if Apple went public on Counterparty and someone hacked the wallet, so hackers could own part of Apple? It just doesn't really, it wasn't really scaling for Counterparty. I think that's kind of, that was part of the chain wars, the block wars.

9:55Joe LooneyWell, I mean, you know, that was why the Counterparty founders left Counterparty, right? Because they created a company called Symbiont, which was basically like enterprise Counterparty, like private blockchain. And I think if the application is financial assets, it makes a lot of sense to do that on a, I guess, free... I mean, there was concern about transaction costs even at that time. I mean, that's why we see Dogeparty, which is just Counterparty on top of Dogecoin, came out in the summer of 2014.

10:35So six months after Counterparty was launched, because there was a concern over fees and fees being too high. I mean, at the time it was a couple dollars, but that was high compared to a couple cents. So even then there was that kind of fee concern. But yeah, I appreciate Vlad's kind of description of saying nobody wants to tell the story of Counterparty, and kind of like Bitcoiners who have been around for a long time almost don't want to admit that it exists.

11:13It's like a really weird kind of thing. I mean, you see it like, MikeInSpace will almost daily send me tweets of people asking if we can do NFTs on Bitcoin, and when can we do NFTs on Bitcoin? And it's interesting. It's kind of weird to me in a lot of ways, because I mean, in 2013, 2014, the idea of being able to create tokens on top of Bitcoin was kind of ubiquitous among Bitcoiners as a good idea.

11:48It was Mastercoin that launched first. There were colored coins even before Mastercoin. There was never really a great UI with colored coins, so I think that was a limiting factor there. You had to be really technical to be able to interact with them. But when Mastercoin released, they had a graphic user interface, and then Counterparty had Counterwallet, which is a web-based interface that's easy to work with. And it's a similar function, similar to Rare Pepe Wallet, where it's client-side.

12:34So all your signing and keys and stuff never leave your device. But yeah, at the time, if you were a Bitcoiner, you were kind of interested in this stuff and you were trying it out and you were seeing the positives and negatives, and there wasn't a lot of, oh, we're going to make a ton of money on this right away. It was more like, what are the cool applications we can come up with? Because at that time, the idea of an app coin was really popular.

13:11So kind of what led to the ICO craze in 2017 was this idea of utility tokens or app coins. And that was really one of the first ideas for Counterparty. Let's Talk Bitcoin had a coin, LTBcoin, that was to do special functions within their website and stuff. And that was really the idea behind these. I know on Mastercoin there was like a MaidSafeCoin, which was just like new internet or something. It's so funny, because a lot of the memes today with a lot of this stuff, they were around then too.

13:57It was just different people behind them. But yeah, tokens on Bitcoin was a thing that everybody kind of accepted. And then I think what happened was the fees started to get higher, we were in a prolonged bear market, and I think when ICOs came... So Rare Pepes really came out right before the ICO storm, but I think there were a few ICOs that happened before it, because I'm trying to think of the Series 1 Rare Pepes, and I feel like there's one making fun of an ICO.

14:42I can't remember. But it was kind of before ICOs became this big thing. And then 2017 rolls around, the ability to create tokens on Ethereum kind of turned Bitcoiners away from tokens in general, and then all the ICO stuff and everything. The whole idea of a token was just like, it was like blasphemy. You couldn't say it. And that was like the age of the whole Saifedean and all that kind of, I like to call it the ultra-orthodox Bitcoiner, where you protect at all costs the core meaning of Bitcoin, right?

15:31So yeah, Michael Saylor kind of comes out of that camp. And so Rare Pepes and Counterparty in general kind of found itself in this weird spot, I think, and it's never really gotten out of that spot. It's kind of like the bastard child of Bitcoiners. And then everybody else that's into Ethereum or other chains, they don't like Bitcoin anyway, so there's no reason to like this thing, Counterparty. And then you've got the ultra-orthodox Bitcoiners that are like, well, any use of Bitcoin that's not sound money is a scam.

16:16So yeah, it's always just this community of people that use Counterparty, it's always just stayed relatively small. But the interesting thing is there's a lot of us that have been around for a long time. And I think because it stayed small, there hasn't been this jump-the-shark moment where it's like, okay, this isn't cool anymore, because Counterparty never really got big enough for that to happen. So even with Rare Pepes fetching millions of dollars at a Sotheby's auction, it does nothing to turn attention towards Counterparty.

17:00When that happened, when the PEPENOPOULOS, the Andreas one-of-one Rare Pepe, sold at Sotheby's for 3.6 million, I was like, okay, people are now going to be like, oh, what's this thing, Counterparty, and come take a look. And literally no, the next day it was like nothing happened. So it's like, I don't know, maybe it will always just be this smaller community of people that are a little curious, but also see the value of Bitcoin as the keystone holding the crypto ecosystem together.

17:47You know, so yeah, Counterpartyism is kind of a weird, weird space.

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21:40Vlad CosteaYeah, I think that tokens on Bitcoin are making a comeback, mostly because some of the same people who were ultra-orthodox and were policing you for even mentioning something that remotely looks like a token have started doing tokens themselves. So we have had moments where, for example, there was Giacomo Zucco. He was on the previous episode, Episode 9 of this season. And for a while, he was like the face of toxic maximalism. But two years ago, I interviewed him and he was working on RGB Spectrum, which is something built on top of the Lightning Network.

22:18And basically, it would be something like Counterparty, but built with client-side validation and not the blockchain. And I think that's pretty cool. But at the same time, he was saying, yeah, we can put Rare Pepes on it. So he opened the floodgates for this to happen. Plus, there was Samson Mow, right? And he was selling toxic maximalist hats to people. But at the same time, he was doing tokens on Ethereum. And he also did an ICO on the Liquid sidechain on Bitcoin. He sold tokens to finance a video game.

22:51Like, okay. So it makes you wonder at one point, you know, whether or not tokens are as useless as they say and Bitcoin is supposed to be only used as sound money, or they're just trying to limit this kind of activity for themselves, for whatever reason. But at the same time, I tend to think that, you know, part of the sovereignty of Bitcoin is that you do whatever you want with it, and you can't let anyone tell you what to do. The arguments against Counterparty transactions can be that you're canceling out, by paying a larger fee,

23:30you're canceling out somebody else's transaction who might need it to get into the next block. But then again, this is what the fee market is supposed to be about. It's a free market. So you're bidding for block space and you're securing the Bitcoin network while you're doing it. So I don't see why this is malevolent in any way.

23:53Joe LooneyYeah, I mean, certainly the fact that Bitcoin is an open public network that, as long as you play by the rules, you get your transactions included. So yeah, I don't think there's any moral argument against Counterparty that's rooted in any sort of logic. But yeah, I mean, it's definitely frustrated me over the last couple of years, with the kind of Bitcoiners coming out and saying, hey, we've solved tokens on Bitcoin, because that was RGB and then that was Liquid tokens. And it's pretty disingenuous to just completely ignore the fact that tokens have successfully been on Bitcoin since 2013.

24:44I try to point to Tether on Omni. There's over a billion dollars in Tether on Omni, which is a metaprotocol like Counterparty. And that's real. So to say that, oh, we now invented tokens on Bitcoin, is completely disingenuous, because there's literally over a billion dollars worth of tokens on Bitcoin as we speak. So yeah, I think a lot of it's kind of like pump your own bags, whether it's a company you invested in or it's selling your own tokens. I think they're marketed in a way that they're okay with kind of telling half-truths in order to sell their thing as being, I don't know, first or the best.

25:33But yeah, it all comes back to what do you want to do as the user of the network. And to me, Counterparty, and the architecture of Counterparty and systems like it, lend themselves to being just very censorship resistant, in the way that it's up to the users to decide what protocol is valid, in the same way you decide the rules of your own Bitcoin node. So I think in a lot of ways it's future-proof, because as long as there's enough knowledgeable users, you can kind of run your own version of future code, which is kind of what we hope for with crypto in the future.

26:33It's like, there's got to be enough operators and developers to be able to keep it going that agree with whatever the optimal rule set is, right? So yeah, I think that's why you see Rare Pepes reappearing this year with the NFT mania, because the system works, and it's been working just fine. Counterparty has been up and running for seven years, and it'll be eight years in January. And Rare Pepes have been around for over five years at this point. And the uptime is incredible if you think about it.

27:16And it's a fairly straightforward and kind of simple architecture, having tokens on mainnet Bitcoin. Really, the fact that you can run a Bitcoin node, run a Counterparty node and rebuild the entire database is pretty much what you want as a Bitcoiner. And so if you're into collectible tokens, which is what Rare Pepe is and the NFTs are, then why not? Like, why wouldn't you want to use that system? So I see a lot of the newer Bitcoin-based systems that kind of get hyped up because they're on Lightning, whatever that means.

28:02Because you still have to issue your asset on mainnet and then it's just kind of sending it around. But at the same time, NFTs aren't high volume. So does it really matter if I have to pay like a dollar or $20 to send an NFT? Like, I don't think it matters. And it's more secure in that you don't have to, with a lot of this client-side validation stuff, you have to keep a lot of data. It's not just 12 words you have to hold on to.

28:36It's like the entire history of whatever is not on chain currently. So I don't know, we've had colored coins and they came and went. I don't think it's necessarily a bad idea. I just don't see the people clamoring to build this stuff. It's like, who are you building it for? It's like any Bitcoiner that wants to use NFTs is probably on Counterparty at this point. So it's funny to watch, to me. I don't understand why you would just ignore this thing that exists that has a lot of users in the area you're trying to build. So yeah, it's been kind of funny to see that evolve.

29:29I feel like Mugatu in Zoolander, I'm taking crazy pills, watching the same thing happen over and over and over again.

29:38Vlad CosteaI think the Omni Layer is making a comeback today. There was this launch by John Carvalho, who works with the Tether people, and he's going to use the Omni Layer for settling transactions. And he got maybe some backlash for that. He wasn't happy about the reception, he was expecting something better. But I think this whole initiative of his company, which is called Synonym, is going to normalize the fact that we issue tokens on Bitcoin that get settled on Bitcoin. And as Giacomo Zucco mentioned in the previous episode, if you're going to issue a token on Bitcoin, the safest and the most honest way is on Counterparty, because it's a pure protocol which was built by real Bitcoiners who actually burned their BTC to create that currency on Counterparty that you don't even need to use.

30:34So that's also a misconception that people present. You can just use Bitcoin on Counterparty and you're fine.

30:43Shawn LearyI think what it is, is they're looking long term. And what happens when Bitcoin fees are higher than the cost of the token? So I think, yeah, that's down the road, and you're kind of missing out on it here. But I think that's what they're probably, you know, counting on, right?

31:03Joe LooneyWell, who expected fees to be less than a dollar in the end of 2021?

31:10Shawn LearyWell, yeah, it's all because the Chinese guys are gone, and they were spamming, and it was all block wars and the gamification of it. But yeah, it's gone. But eventually, right, eventually, when Bitcoin's 5 million, it'll just be, the fees will be too high and only the dankest memes will be traded, which is good.

31:29Joe LooneyYeah, and I think one of the interesting things that's been seen with Ethereum is that fees can get pretty high before it matters. I mean, people are regularly spending hundreds of dollars on Ethereum transactions.

31:47So, I mean, how long are we talking about with Bitcoin, right? I mean, are you going to plan for something that's 10 years out, 15 years out? I mean, why not just deal with it then? Because we're now five years out from when Rare Pepe started, and fees are lower now than five years ago. Because I remember paying about a dollar a transaction. Now I pay probably close to 20 cents.

32:12Shawn LearyIn terms of Bitcoin users, aren't we up like multiples since 2016?

32:17Joe LooneyYeah, I think it's great for Bitcoin. But I think it kind of proves anyone that's looking at these systems and saying they're not, the long-term viability isn't there... Like, it kind of puts a wrench in that and says, hey, if you would have stuck around, you'd be paying lower fees five years later for a network that has X amount more users, right? So yeah, I think it's just interesting.

32:47Shawn LearyIt's the technology, that there's 10x users and the fees are so low. SegWit worked, and yeah, Lightning's probably helping as well. So yeah.

32:58Vlad CosteaYeah, at the same time, we have to admit that NFTs are not for everyone. And the fact that you collect them and you trade them and you buy them or whatever is sort of an activity for the wealthier side of Bitcoin users, not everyone. So I can't imagine people who need to transact Bitcoin in El Salvador, for example, doing it for the purpose of getting some frog meme.

33:26Joe LooneyYeah, I mean, and that's fine. I think use Bitcoin how you want to use it. And if they're using it for Lightning to pay for their groceries, go right ahead and do that.

33:39Shawn LearyI don't know about that example, though, because look at what happened in Venezuela. I mean, how many people were basically feeding their families by selling Pepes back then? So you just never know what use case can help people, you know?

33:53Joe LooneyYeah, I mean, that's totally true. I mean, we had a lot of Rare Pepe artists that were in lower income countries, and they were making a living, they were making Rare Pepes. And even now, I mean, there's other stuff going on, there's Fake Rares and then Dank Rares. And then there's all these other funny Counterparty projects that have kind of spun out of Rare Pepes, and then there's Bitcorns. And yeah, so there's a lot of opportunity for anyone that's interested to kind of make NFTs within these projects. And it's not expensive.

34:39I mean, fees are relatively low in Bitcoin now, and you can create these and you could put up a dispenser and sell them for 50 bucks apiece or something. I mean, if you're an artist selling anything, that's well within that price range, right? I think Twitter is kind of one of the big culprits of it, because you get kind of siloed into these kind of teams within Twitter and within Bitcoin Twitter itself. I think a lot of people are getting scared away from doing NFT art or collectibles on Bitcoin, because they see them get attacked by these orthodox Bitcoiners saying, no, that's a scam, and it's sound money or whatever.

35:37So I think that's certainly not helpful to anybody that wants to learn about Bitcoin NFTs, and kind of goes to the fact that Counterparty isn't more well known. But yeah, no, I think it's just another application. It's not currency, it's not money. So I always thought it was funny when people would be like, Bitcoiners, the sound money Bitcoiners, are so against it. It's not competing with their sound money, right? It's something else that people like to collect and trade and all sorts of things. It's funny, it's like getting mad at somebody for collecting stamps or something.

36:35Why would you get mad at them? They like to do that and they enjoy doing that.

36:40Shawn LearySo they're just baseball card maximalists, is what I call them.

36:46Joe LooneyYou can only... yeah, like, why would you spend all your time telling people that collect baseball cards that their hobby is stupid and it's a scam, and they shouldn't ever sell their baseball cards to anybody because they're just scamming anybody that they sell their baseball cards to? Like, killing trees. It's just ridiculous. If you're not into baseball cards, just don't do that.

37:08Shawn LearyLike, there's children starving, man. Come on.

37:11Joe LooneyYeah, it's funny. You get some of the worst... it's almost like Bitcoiners have turned into the no-coiners of NFTs. You get the worst takes, as far as, you're not even buying the image, you're buying a link to it. It's like, yeah, no shit. There's no fucking image on the blockchain. Get out of here with that. Anybody that's buying it knows that. It's funny. It's been funny to watch the evolution of just crypto in general and with Bitcoin.

37:52It's funny too, because Shawn and I were both at the conference in Miami in June, and I met and talked to so many Bitcoiners that loved Rare Pepes and thought it was great. It's like this microcosm on Twitter that you think is the world, like the whole community or the whole world of Bitcoin, but it's really not. It's just a handful of loud voices that drown everything else out.

38:28Vlad CosteaAren't you the people behind the website thetokenistheart.com?

38:34Joe LooneyOh, so I registered that as a joke and just put it on my Twitter profile. And all it does is it links to every time I've said "the token is the art" on Twitter, so it just runs a stupid search query. But that's my go-to line that I like to say whenever people challenge, you're just buying a JPEG, or you're not really buying a JPEG, or something like that. So clearly, you're not buying a JPEG. You're buying this token that has a JPEG that shows you what it looks like, in the same way that if you go on CoinMarketCap right now and you look down the left column, you get to see what the picture of each cryptocurrency is.

39:26In my opinion, there's no difference with an NFT and the orange B that represents Bitcoin. It's just an image that represents the token. The token is what you're buying.

39:38Shawn LearyI think another good example is you're buying a signed, autographed digital print from the artist. When they do a print of an oil canvas, they sign the bottom, one of 300, and you pay a lot of money for it, even though it's just a high quality scan and you put it on your wall. But it has value because it's a signed piece from the artist, and that's what it is. That's what all this is, in my mind.

40:08Vlad CosteaSomething interesting that happens with Counterparty is the fact that you can name the assets. And I don't think you get that. You definitely don't get that on the Liquid sidechain with RareToshi. It only generates a string of numbers and whatever. And I don't think you get that on Ethereum either. It's just a random token which got generated. So you get this vanity way of presenting your token. And along the way, I saw that you can even change the image that's associated with the token. You can make this change if you want to.

40:47And of course, people don't really buy the JPEG. The JPEG can get taken down from CoinDaddy or from Imgur, and then you can upload it somewhere else and change the address to which the token links. So it's going to be the same JPEG, but from somewhere else. That's only fair. But people need to understand this.

41:12Shawn LearyYeah. I think Joe maybe could speak to this, but the founders issued a token, XCP, and that was like the Bitcoin maxi beef with it: well, you don't need a token. Well, someone would take all the vanity addresses if there wasn't some kind of spam metering there with the XCP token. So I don't know, Joe, have you ever heard the founders comment on that? Was that the reason for that?

41:37Joe LooneyI would disagree with that take. And I would say that you're already paying an anti-spam fee when you create a Counterparty transaction, because you're creating a Bitcoin transaction and you're paying a Bitcoin fee. So there's already an anti-spam mechanism, in my opinion.

41:58Shawn LearyBut wouldn't someone take all the domain, like the cool names, right off the bat for free?

42:03Joe LooneyNot for free. Not for free. You're paying a fee each time. Yeah, so I mean, you could write Counterparty in a way that you pay a Bitcoin fee of X amount for each registered asset. You could say each registered asset, you have to burn 0.001 Bitcoin. You could easily do that. So I think XCP is interesting.

42:36Shawn LearyBecause they personally, you know, it's weird.

42:39Joe LooneyYeah, so it's like this immaculate, it's like a one-way section of this new... Yeah, I like one-way peg. I think that's a great description, right? It's a one-way peg.

42:53And since there is no two-way, you can't go back, it has to have its own floating exchange rate. And because the burn period ended, now that floating rate can go above whatever the burn rate was. Whereas if you had a continuous burn, let's say, that floating rate would be somewhat below whatever the cost of burn is.

43:18Shawn LearyDoes having XCP make it easier to interact with the tokens, though? I know that we can set up dispensers and someone can send Bitcoin to that and it jettisons out. Does it create more of a market, like an easier way to have a market, a decentralized exchange, with the XCP token, or having some base token to exchange with?

43:39Joe LooneyI think that's probably one of the thoughts that went into, like, why have a token, right? Like, Mastercoin came out a few months before Counterparty did, and that was an ICO. I mean, the first ICO was Mastercoin, in fall of 2013.

44:02Shawn LearyYeah, I didn't get into... I saw DeRose at Coins in the Kingdom in October 2014. He had a Counterparty hat on and he gave a talk, and I'm like, what is this Counterparty? This sounds like all my shitcoins, like NXT and all these other ones, Feathercoin, Primecoin. I'm like, this sounds like I could get into this thing. So I came kind of later than most of you guys, so I always like to hear about the early times.

44:27Joe LooneyYeah, I mean, I think as far as Mastercoin, it made sense to have a token, because they were doing a crowdfund and you're giving the people that are funding your project something back in return, which was this coin, this app token. So yeah, I think Mastercoin was probably the first utility token, and that made sense, right? So I think Counterparty having a token, because you're burning your Bitcoin and it's not going to anyone... I don't know. Maybe it was to give people an incentive to be...

45:15Shawn LearyTake ownership, basically.

45:17Joe LooneyYeah. To be part of this network and to want to see it succeed, because now they're invested, because they got this token that they burned Bitcoin for. They could have done it any way. I mean, it didn't have to be done that way. So I don't know, you'd have to talk to Adam and Robby and Evan, the guys that launched Counterparty. Like, why have a token? Why do a burn at all? Why do any of that?

45:48Shawn LearyYeah, a graph of the two prices, like the burnt Bitcoin versus the market cap of XCP, like how it's deviated and stayed together. It'd be kind of cool to see.

45:58Joe LooneyYeah, I've never personally been a strong believer in XCP as an investment. I know a lot of people don't like when I say that, that do think that it is. And I would have been wrong, I would have been wrong the last year or so. So, I mean, you certainly did well in XCP if you owned it a year ago or a year and a half ago, to now even.

46:31Shawn LearyThat could be the same for Ripple, right? We don't want to go there, but I mean, it is a utility token, right?

46:37Joe LooneyLike it's, yeah. And there's certainly now, it has this kind of lore behind it, because there were 2,000 Bitcoins burned for it. So it's kind of like an NFT, like it's this token that has this story behind it. My kind of qualm with XCP early on was that Counterparty would be like the easiest network in the world to fork. There's nothing preventing anybody from creating a fork of Counterparty and just running it on Bitcoin and just calling it Counterparty 2. There's really nothing. Anybody that is a knowledgeable enough developer could do that and just start over and have their own token, have no token, do it just Bitcoin-based.

47:34And so that was always kind of my concern early on: why would I invest in this token when anybody else could just fork it? And there's nothing, because the network is Bitcoin. Counterparty nodes are federated, they don't talk to each other, so you don't have to replicate this network of nodes. You really just have to replicate the software and then run some interfaces, like a block explorer and a wallet, for people to use. I do think, though, that it would be much more difficult to do that now, like every day that goes by and you haven't done that.

48:24Because at this point, all the mindshare is in Counterparty. Anybody that's interested in this type of protocol and NFTs on Bitcoin that use the main chain is already in Counterparty. So there wouldn't be... But there was a time, I mean, Shawn, you remember, there was a time where there was a camp of developers that were not happy with another camp of developers within Counterparty. And I think we could have had a split at that time, but I think it takes a lot for that to happen.

49:04And then we all saw what happened with Bitcoin and Bitcoin Cash, and how the minority chain loses pretty quickly, right? So if you don't want to be on that, you don't want to be on the minority chain. So it's interesting, the social ties that hold Counterparty, the system, together, because there's not a lot of technical ties that prevent someone from forking it. So yeah, I don't even know where I was going with that. What were we even talking about?

49:50Shawn LearyWith XCP, it kind of keeps them together, kind of keeps a degenerate heart.

49:55Joe LooneyI think XCP gets more and more valuable because now, because you need XCP to create names within Counterparty, and Counterparty now is the birthplace of NFTs and crypto art. I mean, there's the Namecoin NFT people that would disagree with that, but I think most people see Rare Pepes as the beginning of crypto art, the movement.

50:24Shawn LearyGive props to Shaban and all those guys. I mean, none of this would have happened without them.

50:29Joe LooneyYeah, well, they had the first game tokens. I mean, I think there's a lot of history just on Counterparty in general. So yeah, I mean, to be able to create your own, as an artist or anybody that wants to create an NFT, to create that on the same system that birthed so many ideas, and basically the idea of NFTs in general, I think is valuable. So I do think there's value now, and more so as time goes on, in the XCP token.

51:15Shawn LearyI feel like I'm taking over for Vlad, I apologize. But is Pepe Cash XCP in a way? Don't they serve the same functions? It's kind of the same utility. In terms of registering, when people wanted to submit their Pepes, they had to burn so much Pepe Cash. That's kind of the same thing in some ways as the XCP token is for the network of Counterparty. Pepe Cash was for Rare Pepes.

51:42Vlad CosteaYeah, but isn't one native and the other one was created?

51:50Joe LooneySure. I mean, I don't know where Shawn's going with his analogy.

51:53Shawn LearyNo, it's an analogy. I'm not trying to pump my bags. I have very little Counterparty. I believe, like Adam Back said, you know, a utility token you only buy when you need to utilize it. Same with Ethereum. You shouldn't be stockpiling unless you need it. Same thing with XCP: have a little bit to make some names and move on. Same thing I was talking about with Pepe Cash. It was kind of the lube for the gears of the market itself. And also, we required folks to burn Pepe Cash to get their Pepes in. It's kind of similar to what XCP serves for Counterparty.

52:29Joe LooneyYeah, I think some of that was with Rare Pepes, because in the beginning it was being built out in a bear market. I don't think there was much of a, like, this is going to be worth so much money. We joked about that, but I wasn't serious. Every time I'd see a Pepe sell for hundreds of dollars, I was shocked. But yeah, I think Pepe Cash was more just like, here's this funny thing we can do and make this circular economy. We can sell Rare Pepes for Pepe Cash and not have to use XCP.

53:16Because what's XCP in the Rare Pepe world? We were only using it at the time because XCP was on ShapeShift, so it was super liquid. You could get in and out of XCP from Bitcoin in a transaction using ShapeShift. Everybody used ShapeShift. That was really the quick exchange of choice. I think that's why it made sense to use XCP as a trading pair. But yeah, you need those. If you want to use the DEX and you want to be able to take advantage of having an order book with the buy and sell orders in it, then yeah, you need that liquid token to be a native token to the system.

54:11So whether it's XCP or Pepe Cash or Bitcorns or Mafia Cash or BitCrystals or gems, there's a lot of...

54:23Shawn LearyI forgot about gems, man.

54:25Joe LooneyYeah, sure. There's a lot of options, right? A lot of it, too, is how easy is it to use that and how many other people are using it. So yeah, you don't want to be the only person that wants to trade your Rare Pepes for gems. Then it's not going to be very valuable to you. So yeah, XCP is an interesting thing.

54:52And maybe it does turn some people off coming from Bitcoin, that don't like that there's some other token. But it's a stupid reason to dismiss the entire system, which I see. Agreed. That was one of the things that was funny to see John do when he announced Synonym and somebody brought up Counterparty, and he dismissed it for having a shitcoin, which is pretty funny, because Omni is like the original ICO, right? It's a shitcoin. And one of the funny things too with Omni, I think a lot of people don't remember, is that there was a hack.

55:36I forget, it might have been on Bitfinex, that caused like 26 million Tether to be stolen, and Omni forked to return the 28 million Tether or something like that. You can look it up, I don't know, the numbers might be off. But I remember that because, being in the Counterparty community, saying, hey, look what can happen to this type of protocol. Basically, if the economic players in the system are big enough and they control the code, they can facilitate a kind of clawback of funds, a reverse of a transaction, which is what we saw Ethereum do with the DAO.

56:29So it was a similar type of effect with Omni. So it was funny to see John kind of shit on Counterparty when, like, I mean, look at the system you're building on. So yeah, Counterparty is one of those kind of things that's not run by a company. It's run by just developers that want to see it succeed. There's a small group of us that want to see it succeed, so it continues to live on. So yeah, it's very much in the spirit of Bitcoin. So I feel like if Bitcoiners really looked into Counterparty, they'd see the ethos there really is the Bitcoiner ethos.

57:15And to dismiss it for these company-driven protocols like Liquid, or like Omni at this point, or any of the other Bitcoin-based ones that have come out, it's kind of ridiculous, because that company goes away, who's supporting your wallet? Who's maintaining all that stuff? The worst thing you can have is a single company behind something, because they're the only ones that want to see it succeed. And you need developers and stuff to want to continue on with this thing if the company goes away.

58:01So there used to be a lot more of that years ago in Bitcoin, and a lot more attention paid to the system as a whole. And what does decentralization mean? And why is it important? And what does it mean in the context of this system? Because it is important. And there have been digital art, kind of NFT-style projects that have just disappeared because the company disappeared. There was one called Ascribe, and they moved. They were on Bitcoin and they moved to a custom BigchainDB.

58:46Like, it was like a hyper... What was that? It was like a Bitcoin Uncensored running joke that every failed blockchain just got picked up by R3, and it was like part of Hyperledger. Everything was just a new add-on to Hyperledger. It's like where blockchains go to die. And this company, Ascribe, actually built like a hyper thing on Hyperledger. And so they went away and then their blockchain went away. And now if you owned anything on it, it's gone.

59:23So that's one of the funny things. I mean, we're getting a little off topic, but I do think that's one of the funny things with Liquid. It's like, who's going to... if the company, if Blockstream goes away, who's running that? Who's maintaining that system? And how can you so freely just say, oh, it's just a sidechain of Bitcoin, it's just like Bitcoin? It's like, no, it's not. We hope it continues to run and function, but it's not this community-driven thing.

59:58It's a company-driven thing. And if that fails, or it's not making the money, or they pivot or something, then they could just shut down. And what happens if you released your NFT on Liquid? Are you just shit out of luck? So you've got to really consider those things. If you're making NFTs and you're serious, you aren't trying to scam, and you are serious about wanting to put your artwork out and have a token that your artwork represents...

1:00:33I think you need to be a little... You don't want to, like, imagine creating prints that self-destruct after five years. If you don't realize that's what you're doing, you might not be happy with that result. So yeah, I don't know, it can be really frustrating. And at the same time, it's whatever. I mean, do what you want. A lot of these are open systems, and I just feel like a lot of people are disingenuous when they're selling this stuff.

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1:04:57Vlad CosteaYeah, I mean, the defense for the Liquid sidechain right now would be that they are a federation, which means that every member of this federation has an incentive for the network to function. Which means that if Blockstream goes away, there is going to be an extra reason basically for everyone to jump in and say, let's maintain this so that we don't lose all the transaction history, all the assets, all the tokens that we generated. And this can be legit, but at the same time, it's hard to replace some of the Blockstream developers.

1:05:32And I think that this is an ongoing issue, as I'm not sure how many people around the world are competent enough and also ideologically driven to work on this. And it's the same conversation with Bitcoin Core developers. You see them go and then you realize how hard they are to replace. Not because you don't find developers around the world or people who understand cryptography, but because you don't find people with the right mindset to work on a project like Bitcoin and get it. And in regards to what you said about the network disappearing, I mean, I can see that happening very soon with stuff like Solana.

1:06:15People put a lot of money into that, but it got turned off like a couple of times already. The writing's on the wall. It's not like it's going to be around for too long. And I think also Ethereum is going to die at some point. It did not scale to do anything of what it promised. But I have a very positive feeling about Bitcoin outliving all of us in this conversation. And I don't know, it's going to be around. It's the project that works and has proven to work for a long time.

1:06:50Even the second layers have worked. Everyone is honest when they develop something. I feel like... so you can call me a shitcoin or whatever, but I feel like Counterparty is very much in the spirit of Bitcoin, because its native token was created by burning actual Bitcoins that are never going to be retrieved. 2,000 Bitcoins were taken permanently out of circulation to create Counterparty. And each transaction on Counterparty, even if you create a shitcoin, pays a fee to the Bitcoin miners, so it cannot be spammed. I feel like there's a lot going on.

1:07:31It's going to get very aristocratic at some point. If the fees rise, the NFTs that were created, like the Pepes, in order to move them, you're going to have to pay a lot of money, which only raises the price of the token itself. It means that, just like in the case of Ethereum right now, it makes no sense to sell anything below the price of the transaction cost. So I presume that this is going to happen. But you know, once this Pandora's box of digital art that's being tokenized has been opened, there are so many artists who are working on this, there is legitimate market demand for this.

1:08:12It's not like the ICOs. So we might be in a bubble in terms of prices, but ICOs were basically attempts to monetize something by raising funds and promising to deliver something, which most of the times did not happen for various reasons, most likely a conflict of incentives. People just saw that they had enough money, so they got lazy and never built anything. Plus the bear market came and they got wrecked. But in the case of NFTs, what you see is what you get. There is no promise in the future that it's going to be more valuable.

1:08:49It's not a security. It's not anything other than something that you look at and enjoy. And when you got it, you know that you supported the artist. Or you can also speculate on it, as other people do. But you know, that's your responsibility. It's up to you. There is no promise with NFTs that you're going to get something else in the future.

1:09:13Joe LooneyI think you are starting to see that creep into NFTs, though, and it has been, especially on the Ethereum side. What utility does my NFT have, right? What's your roadmap? Yeah, what's your roadmap? The roadmap is the new white paper. So you do see that mindset creeping into the NFT space, which is unfortunate, because I think that really was the innovation with Rare Pepes specifically. Because prior to Rare Pepes, stuff like Spells of Genesis and Force of Will and those card games, they had a function. They were game tokens.

1:09:58So they had a function within a game. When Rare Pepes came out, there was no promise of a game. And I know that John Villar within a month was like, I'm going to create a game. But I was always pretty loud, and Mike also, we were pretty vocal to say, this is not a Rare Pepe official thing. This is not a necessary thing for Rare Pepes to have value. They just exist as these collectible cards. They don't have to have a function. I think that this idea of having these roadmaps and all this stuff with NFTs, it's just a way to pump the price.

1:10:51And I think that is probably... I mean, if you're a Bitcoiner and you see that, you're like, yeah, these things are just scams. Yeah, a lot of them are.

1:10:59Shawn LearyAre you trying to say gambling apes are not going to build a casino in the metaverse?

1:11:04Joe LooneyThey might. I mean, who knows? Maybe. But how much is that worth? I don't know. Yeah, I do think that there, I mean, scams abound in crypto. That is the world we live in. So you've got to look, you've got to find that signal in the noise and see what are the cool things that are happening that aren't promising me the moon, right? So yeah, it's frustrating to see the utility stuff come back with NFTs. But I do think there is this application now that's kind of got this mindshare in it, of creating crypto art and collectible tokens.

1:12:00And I don't think that's going away. I mean, it's already been through two bear markets and now two bull markets. And if we're in a third bear market, that would be the third bear market. So Rare Pepe has seen this cycle repeat a couple times. So I don't think they're going to disappear. I certainly don't think that's going to happen. So yeah.

1:12:29Shawn LearyI think roadmaps try to make up for poor art, or lack of art, in my opinion.

1:12:36Joe LooneyNo, it's just trying to hype. It's just pumping bags. They're just pumping the bags. I mean, that's pretty classic crypto behavior. So you promise stuff to get people to buy your shit. It's that kind of shady crypto that we're all used to seeing over the years. But yeah, I do think it was a crazy year, I mean, certainly a crazy year for NFTs. I think they're vastly inflated values and stuff, especially over the summer. Who knows? I mean, it seems that there's an ebb and flow of that with the price of Bitcoin and the rest of the market.

1:13:20And I don't see any reason why it wouldn't happen all over again. I mean, it's happened a few times at this point. But who knows? Maybe it won't. Maybe they'll never reach the prices that they did over the summer. I think that's okay, too. I think it's just this interesting use case, living in a digital world, being able to have scarce digital things. I definitely don't see that going away. So it's unfortunate that it seems like Bitcoiners aren't as curious as they used to be, at least when there wasn't as much craziness as there is now.

1:14:11Vlad CosteaYeah, also something that I want to address before we end this episode is my experience with Counterparty, how it all started. I first became interested because I saw what MikeInSpace was doing every day, and I was just curious and asked him which wallet should I get. And he advised this application which is called Freeport, which, to its credit, is kind of easy to use. But at the same time, it's so limited, like there isn't much going on. You can only look at your collection, you can mint new tokens.

1:14:46I transferred $50 worth of Bitcoin to the Freeport app. And then I realized that I'm not really happy with the fact that I tried to create trading cards and they are named A-something instead of the name that I wanted to give them. So I was wondering, what am I doing wrong? So I asked Theo Goodman, and he told me to use Counterwallet. And I tried to use Counterwallet, and it's like a ghost town, something that I don't think was maintained since 2014 or 2015 or something.

1:15:19There's not much, at least in the Mac version, which I got. And then I discovered FreeWallet, which is the one that's actually being maintained, but not on mobile. For some reason, the one on mobile has some connection errors with the Counterparty node. I think it's CoinDaddy, whereas the one on desktop is actually connected to a node that's operational. Anyway, there are all of these quirks, and it all feels very rough around the edges. You know that there's a lot of value in this. You know that the tokens, the NFTs, the assets, all of the art is worth something, is worth a lot, actually.

1:16:03But when you discover what the interfaces are like, it's easy for you to understand why people flock towards stuff like OpenSea, which, you know, does very complicated stuff with wrapping and whatever, but at the same time, it's all hidden beneath a very basic user interface. And there's also, on Liquid, RareToshi, which is a lot easier to use than any Counterparty wallet. And it all comes down in the end to the UI and to the fact that it's intimidating at first. There isn't, you know, any kind of financing.

1:16:43There is no company behind this to finance some developers to maybe improve the wallets, do something nice about them. And I know that you're into Rare Pepe Wallet and you are the developer, creator, maintainer, but I didn't get to that one. I stopped at FreeWallet because...

1:17:02Joe LooneyI also built Freeport, so that's also mine.

1:17:06Vlad CosteaOkay, sorry. It has this label for selling your tokens which says it's coming soon. I'm not sure for how long that's been there.

1:17:16Joe LooneyYeah, that's what I put when I plan to build something, and sometimes it just never happens. So Freeport actually, I built it as a proof of concept before a talk that I gave at an NFT event in early 2019. And the reason for it was I wanted to show that you could create NFTs on Bitcoin with just Bitcoin. And so I built Freeport to basically do that. And kind of the other point I was making too is that you don't need to use IPFS, and you don't have to use these kind of fancy methods for linking your image with a token.

1:18:12You could just use something like Imgur, because in my opinion, it's an image delivery system. Because you just need to be able to get the image somehow if you own the token. But really, it's up to you, if you own a token, to hold a copy of the image so that you don't lose it. It's not up to the cloud to maintain this image or media or whatever it is that you have paired with this token. So yeah, that's why I built Freeport, and I keep it maintained, but I don't even work full-time as a developer.

1:18:55I have a full-time career outside of crypto. It's really just a hobby for me. It's fun to build wallets and build these applications. But it's kind of interesting if you look at what a handful of developers that do this stuff in their spare time have built, and then hundreds of millions of dollars in venture capital, and what have they built? And it's just a little bit easier to use interface. So you don't need a lot, and you can build these things out.

1:19:33And in a lot of ways, I think it's kind of part of the experience with Counterparty, learning how to wade through the different applications and how to interact with it. Would I like to see more developers building on it? Absolutely. I think that would be great. I would love to see developers come in and build something on it. Maybe a company come in and build something. There was IndieSquare for a while. They're based in Japan, and they had IndieSquare Wallet, which is a mobile wallet. That was the Counterparty mobile wallet that everybody used, and that was pretty good.

1:20:15They ended up shifting to like an Ethereum Counterparty thing. And then I don't really know what happened with them, because I don't see them really too much in the Ethereum space. But yeah, it's a protocol. So you build on it if you're an individual, or if you're a company, you can build on it. I agree with you. I think it's not a clean interface. Download MetaMask and use OpenSea. But there's no reason somebody couldn't build a MetaMask. I had actually built a Counterparty Chrome extension wallet in 2015 called Tokenly Pockets.

1:21:10And at the time, it was hard to get people to download a Chrome extension. They didn't want to. It would show you that warning that, hey, this thing can read all the websites that you go to, and nobody wanted to continue with the install. And then MetaMask comes around and nobody cares, and everybody clicks and downloads it. So I think in a lot of ways, the timing wasn't quite there for that. But personally, I build stuff that's a little difficult to use. And the purpose for that being, it's going to turn off people that aren't technically inclined, and they just won't even bother.

1:21:52And then people that are a little technically inclined will figure it out. And that really limits the customer support questions that I get. And because I do this as a hobby and it's kind of a side project for me, I don't like playing... I mean, certainly I'll help people out if they have questions, but I don't want to be playing customer support all day. And I'm sure OpenSea fields a lot of customer support calls. So yeah, there's a method to the madness with that a little bit.

1:22:28But yeah, I mean, there's no reason it couldn't be better. I mean, any developer could come in and build their own wallet site or whatever. I mean, we've seen it. There's other kind of little Counterparty projects here and there. I think there's a couple of people I've talked to that have worked on different wallets and stuff. I think it's hard to, it can be a little, I don't know, if you're not totally sure on how the structure of your software works,

1:23:04it's kind of a little ominous to be releasing something like that out into the world. So I'm confident, for whatever reason, that the structure of my stuff is fairly good and kind of hits the right kind of security considerations. But yeah, I mean, I get it. There's not a lot of developers that want to kind of run these apps, like host these applications and build applications. They want to kind of build off of the stacks that are there and the tools that are there with something like Ethereum,

1:23:51where it's just like you get the instructions for how to access the APIs, and everything's all just kind of laid out for you, and you can build off that. So I totally understand. It is what it is. But yeah, I think most people that finally find their way into Counterparty and start using the applications that are there find that you can figure out a way to do everything you need to do. It just might not be kind of laid out for you in a step-by-step kind of procedure of how to do it.

1:24:27It's kind of just going down the different paths and seeing what's possible with each application.

1:24:35Vlad CosteaYeah, also my first experience with dispensers. And just in case people listening have no idea what a dispenser is on Counterparty, the dispenser is your way to sell a token, and it's kind of like a vending machine. You put your money there and you get what you paid for. It's like a programmed way of... I think the correct way to describe it would be like an escrow of sorts. Anyway, my first experience with this was that I paid a very low fee on purpose, and the dispenser got emptied by somebody else.

1:25:15And I paid my Bitcoin to that address, but I never got my XCP back, and I realized, okay, this can actually happen. It was a terrible idea on my behalf to do that. I had no idea that can happen. I've learned my lesson here, but, you know, there should be like a warning about the consequences.

1:25:41Joe LooneyYeah, that's certainly a danger. That's why it's good to buy from dispensers where you know who created them, because then you can ask for your Bitcoin back. Yeah, I mean, people are pretty good about, for the most part, if you can identify who owns a dispenser, they'll send you your Bitcoin back. Yeah, I mean, the interface around that definitely could use a lot of, I guess, smoothing of the edges, so that kind of thing doesn't happen. But yeah, it's kind of like a raw protocol that you interact with.

1:26:23So if you don't know kind of where the bounds are of it, yeah, you can have stuff like that happen to you. But I mean, that was the experience with Bitcoin back in the day. I mean, sometimes it's better to learn that way. I mean, I don't want to see anybody lose money or get scammed or anything like that. But sometimes those are the types of lessons you don't forget, and it helps you kind of appreciate the system itself.

1:26:57Shawn LearyIs it really decentralized when you need tech support and a bank of phones? And it's almost like a barrier to entry on purpose, right? Did you guys see that tweet the other day? I don't know if it was real, but it seemed like a chat where someone missed their NFT from Adidas, and Adidas said to just call the Ethereum tech support to find out why they didn't get their NFT. Did you guys see that at all? It was kind of funny. I think it was real, but who knows? It was on Twitter, so it had to be true.

1:27:33Joe LooneyYeah, I mean, I think tech support is a necessary thing. Not everybody is highly savvy. So, I mean, any Bitcoin companies do have to offer tech support, right? But it's hard as an independent developer that's kind of creating open source stuff. Tech support is just you using your free time to answer these questions for free. So it's something to avoid if you can, if you're not a business doing it.

1:28:14Shawn LearySo what you're saying is you're willing to accept some large VC funds to make something like CryptoPunks or CryptoKitties, maybe?

1:28:25Joe LooneyProbably not me, but...

1:28:28Shawn LearyIt could happen on Counterparty, though, right? The protocol is not the hindrance.

1:28:32Joe LooneyYeah, absolutely. I mean, you could build this stuff on Counterparty. Yeah, I think it would be cool to see just more kind of eyes on Counterparty, and as far as developers too. I mean, that would probably be my... if I had to wish for one thing with Counterparty, it would be that more developers become interested in it and want to build on it. That would be number one, and it would help strengthen the protocol itself too, just having more people knowledgeable about it.

1:29:16Vlad CosteaI think Counterparty is too Bitcoin-y, in the sense that it's voluntary, it's created by a community, not a company. Everyone is part of this community when they participate, and there's this Telegram chat where everyone seems to know everyone else. So you get this feeling that you're part of something, but there is nobody who's really in control. Like, there is J-Dog, right? And he right now maintains some wallets, and he had to ask for community support to be able to quit his day job and do this full-time, just because there seemed to be a lot of demand.

1:29:56And the software was like five or six years old, just like a ghost town. He had to take it from there. So it's always this situation in Bitcoin. But on the other hand, you can see that something which was built almost eight years ago finds utility today. And it just goes to show that the stuff that Bitcoiners build is sturdy and is here to stay. And if it doesn't work out at one point, or when they expect it to work out, it's going to pick up sometime later.

1:30:30Joe LooneyYeah, I think that's one of the most fascinating things with Counterparty, is that it's died so many times. But it's like, so has Bitcoin. It's very analogous to Bitcoin, in the way that the community of people have kind of formed around it, and how that's evolved over time too. Yeah, there's a lot of that ethos there. And one of the interesting things that had happened, and really helped get the Rare Pepes kind of on the map among Ethereum NFT collectors, was the ability to vault your Pepes in an Emblem Vault, which is essentially an Ethereum NFT wallet that you can put a Pepe in.

1:31:30It's kind of like a digital Opendime. So what that did is it actually brought a lot of attention to Counterparty from Ethereum NFT collectors. And they kind of looked at Counterparty through these kind of new eyes, where they got into Ethereum because they liked NFTs. They weren't these diehard Ethereum people. So they had no problem saying, oh, what's this Counterparty thing on Bitcoin? I'll learn about that. And pretty quickly, there was this discovery of a big arbitrage opportunity between buying and selling Pepes on the Counterparty DEX and through dispensers with Bitcoin, and vaulting them and selling them on OpenSea,

1:32:27using Ethereum. So it was like this economic incentive that this group of NFT collectors and traders had to learn about Counterparty. And it was a lot of fun to kind of witness all these new people learning how to use Counterparty and how it operates. And one of the funniest things was they were amazed at how low the fees were using Bitcoin instead of Ethereum. And that actually could be an interesting phenomenon in the near future, because Emblem has some plans to create Counterparty asset vaults, where you could essentially vault an Ethereum NFT on Counterparty and sell it through a dispenser with Bitcoin or on the DEX.

1:33:35And the fees are much lower. So there might be an interesting kind of thing that happens around that. I mean, who knows? If we're in a bear market, it might not have much uptake. But it might be an interesting phenomenon if it turns out that it's Ethereum users that support the fee market for Bitcoin, and people that want to use Lightning and not pay on-chain fees. Could be a really funny kind of dynamic there. But yeah, I think the way crypto goes, it's like everyone has these ideas, and it always just ends up being some weird, funky thing that nobody really thought of that becomes popular, or the use case that gets borne out.

1:34:25So I think Counterparty certainly has an interesting future, at least in the next year or two. But I really do think it's a protocol that, as long as Bitcoin is around, there's no reason Counterparty wouldn't also be around too. So all the declarations of Counterparty as a protocol that died are vastly overstated, because as long as Bitcoin is around, Counterparty is around.

1:34:57Vlad CosteaYes. And, you know, I feel very proud of this very technical discussion that we have just had. But we have to go to the memes right now. And I have a question from Vake, who wants to know what makes a meme dank. And the way in which I want to complete this question concerns the fact that since Counterparty came out, there have been so many good memes. So I can think of, maybe it's not the best example, but there is Bad Luck Brian, right? There is the Overly Attached Girlfriend, if you remember that.

1:35:33Oh, yeah, there are lots of good memes that circulate around the internet, Grumpy Cat. And yet the one that reigns supreme, and the one that ended up getting sold for millions of dollars, is Pepe. What's going on? What's so special about the green frog?

1:35:52Shawn LearyWow, yeah. The green frog, man. Pepe has been, I mean, for me, it's through Telegram. I was a big Redditor. I lost at least three years of my life to the subreddit AdviceAnimals, making all kinds of memes, and most of them sucked, but occasionally one or two would be good. But really, the Telegram chats, the different sticker kits people would make... It's just an endearing character, and I think it just kind of took off in the crypto space. So it made sense that Mike kind of chose that one and loved it enough to put it on the blockchain.

1:36:29So what do you think, Joe?

1:36:33Joe LooneyYeah, I think there's something to be said with it being a frog. And I think the relationship of frogs, the idea of the frog, with people through the years and over time... And that's the meme of Kek, was this ancient frog statue. I think it's kind of this symbol that it's this ever-changing thing, like being an amphibian, and the frog kind of representing change. So I think there's some kind of innate reason that Pepe can just be anything. You can have Pepe just be whatever you want it to be.

1:37:31And then rare, too. I think that's just kind of ingrained in us as humans. And so I think just the fact that that kind of emerged as the most popular meme of the internet, I think it's not that surprising, I guess, in hindsight. And then yeah, obviously the whole idea of Rare Pepes existed before Rare Pepes the project on Bitcoin existed. And they weren't rare as in having tokens, but they were rare in the sense that people would make these memes and not show them to other people, or they would watermark them, or just kind of funny things like that.

1:38:20And this whole idea of the Rare Pepe market was a running joke on 4chan at least a year or two before Mike created Rare Pepe. So I think it was just kind of primed. It was primed and ready to go for Mike to come and create the Nakamoto card, the first Rare Pepe.

1:38:45Shawn LearyI remember, Joe, you shared the video of that young, kind of adolescent boy, and he's like, "I will now draw the most Rare Pepe." And then his eyes are closed. "I have not seen this Rare Pepe. And now I am forced to eat this Rare Pepe." And he rips the paper up and he chews on it and swallows it. "This is the most Rare Pepe, because no one's ever seen it, and it's gone." It was like that.

1:39:13Joe LooneyI don't know if I've seen that.

1:39:16Shawn LearyIt's hilarious. I thought you shared it. When I saw that, I'm like, this is freaking hilarious. I love it. I'll send it to you. This is the most Rare Pepe.

1:39:28Vlad CosteaYeah. So anyway, Juan Galt, I think, had this idea that frogs are associated with times of crisis in human history, and how there's this story, I think it's from the Old Testament, where there was this frog invasion with the Egyptians. And now that, you know, the fiat system might be collapsing, we also see the frog coming back as a symbol of change. And, you know, maybe it symbolizes how Bitcoin is going to take over the dollar or something.

1:40:06Joe LooneyYeah. I mean, it's really that, I mean, Pepe is really the symbol of the internet, right? And so I think the more overarching thing is, how does the internet become the thing that changes society and the world, and the kind of world we're in, if that's the fiat system world? And I mean, Bitcoin is just part of the greater internet discussion. So yeah, I do think that's interesting. I see the change being important with frogs, and how it being the amphibian, representing change in this kind of pivotal, shifting-paradigm, shifting change.

1:40:57I think, yeah, I'm sure that plays into that story with the plague of frogs. But yeah, I do think there's a lot of symbolism there, certainly.

1:41:16Vlad CosteaAlso, I'm not sure if you saw that film about the creator of Pepe the Frog, and how he feels disappointed about the fact that it turned into some sort of quote unquote alt-right symbol. And, you know, Vice is going to say that Bitcoiners who trade Pepes are Nazis or whatever. And the creator of the Pepe is trying today to turn it into some sort of positive character who spreads inclusiveness and whatever. But, you know, he's only contributing to the popularization of the Pepe being anything that we can possibly imagine.

1:41:54Joe LooneyYeah, one of the interesting... did you watch that documentary?

1:42:01Vlad CosteaHonestly, I've only watched the trailer and read some reviews, and I was like, no, I'm not going to waste 90 minutes of my life.

1:42:08Joe LooneyIt's worth it. It's worth a watch, because it really does give the internet history of Pepe and the Rare Pepe project. There's one...

1:42:21Shawn LearyA little bit. Not the best... Yeah, it's not the best framing of us, but...

1:42:26Joe LooneyCompletely. Yeah, it is funny how Rare Pepes are mentioned in that, because it could easily have been cut from the movie and nobody would have noticed. But yeah, no, it's pretty interesting. And one of the things that I thought was interesting was there was a scene where Matt Furie, he's the creator of Pepe the Frog, is in this meeting with these guys that, I guess, they're like white hat hackers or data scientists that study the use of memes as hate symbols or something like that.

1:43:09And one of the comments that the data scientist guy made was that Pepe is one of, if not the only, meme that exists in nearly every internet subculture to some extent. Every internet subculture to some extent has a version of Pepe that they use. And that's unique across all internet subcultures. So you can see it just in that, that it's this symbol that is so easy to gravitate towards and make it your own. So yeah, I think Pepe and the frog,

1:44:01it really is this manifestation, this visual manifestation of the internet, and what the internet is and represents.

1:44:14Vlad CosteaIt's definitely interesting, but at the same time, I think that the portrayal of anyone dealing with Pepes as being some sort of white supremacist is just unfair.

1:44:27Joe LooneyYeah, I think that's just a gotcha headline. That's easy for lazy writers to put in there, like the title of their story, to get clicks. And if you watch, I think the movie does a pretty good job of that, too. And then just looking at Rare Pepes and stuff over time, it's clear that it's so much more than that. And I guess this white supremacist subculture on the internet is just another internet subculture that uses the Pepe meme, just like literally every other subculture does.

1:45:10So yeah, I certainly think that's unfair. But I think it's just par for the course. I mean, it was an easy thing for writers and people to gravitate towards. And yeah, there's not much substance there.

1:45:33Vlad CosteaYeah, it's also, it's like the lowest hanging fruit that they pick up each time they have to write a headline. And it's the same with Bitcoin. They're going to see that it's being used by terrorists or by drug dealers and whatever. I suppose that due to all of this venture capital that went into it and all of these companies adding BTC reserves, it has a cleaner name today than it had, say, five years ago. But still, if you want to create some sort of sensationalist headline, you're going to use that.

1:46:09What I want to remark also about the Pepes is that I'm blown away by all of these creative ideas that emerged. Like, I can look all day at the directory of Rare Pepes. I suppose that one is closed, and that's why they do fakes today. But you have Beatles Pepe, you have all sorts of cultural phenomena that have become a Pepe. And it's mind-blowing, you know, it's just anything that you can think of has been turned into a Pepe at some point. It's actually very hard for me right now to think of something original for anything concerning a Pepe, because most likely, if I can conceive it, it has already been done.

1:46:55And it's also part of the reason why, when I create stuff... So I have two series. One is called Leftist Tears, and that one basically goes back to the purpose of memes: to be offensive, to get the worst part of you out of it and just make fun of people in the most offensive way, and put it, you know, create a token on Bitcoin, because it will not get censored. And the other one is Bitcoin Heads. And that one basically is like, have you watched Futurama?

1:47:30They have the Museum of Heads. So I came up with this idea: why don't I take heads of Bitcoiners and create cards out of them with, you know, stats and facts about them? I did a couple of those. I have a few more coming on the way. I can send you some for free.

1:47:50Shawn LearySounds good. That's why we closed the directory, right, Joe? There wasn't much more to do, other than just new art, which is amazing. And that's why I think these other projects have spun off. But like what you're doing, that's great. I mean, you're being creative and you're putting it out there. I mean, that's all part of it. Like, I'm not an artist, and here I am making DANKPEPE, trying to, you know, make the card and put some different weed patch behind it.

1:48:16And it's just exciting, and it's fun to be part of something like that.

1:48:20Joe LooneyYeah, there's a lot of creativity happening on Counterparty right now, probably some of the most since the prime Rare Pepe days, like the Fake Rares and then Dank Rares, and just people creating, like what Vlad's doing, and just kind of doing it themselves and creating it. Yeah, I mean, Scarce.City has been great. They saw this market, and there's a whole community of people that want an easier way to kind of buy and sell Pepes.

1:49:02So they leveraged their system that they built to do auctions on Lightning for Bitcoin art, physical art, and leveraged that to help people and create a market for selling Counterparty assets. I think right now it's just Rare Pepes and Fake Rares. But yeah, there's certainly a market there. So if there's Bitcoin companies that are interested in leveraging this community of people that are already building on this protocol, it might make sense to look at it and say, hey, yeah, we can build something on this too.

1:49:49Certainly the ecosystem, it would be fun to see it built out, because there's a lot of creative people and there's a lot of people using it. So I think the longer people are working on it and building stuff around it, I think it makes more sense for stuff to get built on there. And I do think we'll see more projects. I mean, we've already seen a few things being built out, and Scarce.City being involved.

1:50:29So yeah, it's a shame we can't, as Bitcoiners, say, hey, look, here's this cool protocol. It's been around for almost eight years, and it works, and you can make Bitcoin NFTs. And then anytime somebody brings up Bitcoin NFTs, say, oh yeah, you should check out Counterparty. It would be nice to have a kind of unifying voice there. But instead what you get is these camps within Bitcoin that have their own companies and their own investments, and they say, oh no, we're doing it,

1:51:02we created a new way to do it. And it's completely just like, now there's no market, because it's just completely fractured amongst anybody that would be interested that doesn't find their way to Counterparty. But a lot of people have found their way to Counterparty, and it's this nice, vibrant, somewhat small community, but still very active: Telegram chats of like hundreds of people, some are just over a thousand people.

1:51:27So there is this buzz going on with Bitcoin NFTs on Counterparty. So I think it's just hard to find. I think it's hard for people to find. And most of the time, once people find their way in, they're surprised that it exists and is as vibrant as it is. So I don't know how we kind of spread the word and get people interested, but yeah, it's fun.

1:52:08It's stayed fun. I mean, I've been interested, I've been building stuff on Counterparty since early 2014. And it's a hobby, right? So if it's boring, you find another hobby. So it hasn't bored me yet. So yeah, I love it. I think it's great. And in some ways it's great that it stayed small, and maybe that's what's helped it to stay fun. And if it did grow and became more of a, well, not like an Omni, but like Adidas making their NFTs on it,

1:52:51maybe it wouldn't be as interesting anymore, and fun. But who knows? Who knows what the future holds?

1:53:03Vlad CosteaYeah. Something else that I want to remark before we close this discussion concerns some comments that I have seen from Dan Darkpill. And he was very upset, like angry at the fact that, first of all, he missed out on this whole NFT craze, and some of the stuff that he created and he no longer owned was getting sold for a lot of money. And he was also pissed that people were working on Fake Rares, and he blocked people like Theo Goodman and JScrilla and everyone else who started this. Like, what is wrong with Fake Rares?

1:53:41Is it inflation to the original ideas of the rares?

1:53:46Joe LooneyWell, I think if you're, I mean, you can look at... I mean, Dan is a big personality, I mean, Darkpill, and just in Bitcoin Twitter. And so he's got his own opinions, which I respect. And yeah, definitely, I'd be pissed too if I didn't have my passphrase to a wallet that had millions of dollars of NFTs in it. Yeah, certainly I would be pissed about that too. But yeah, I think he's not the only one with Fake Rares

1:54:29that's not really super on board with it. And I think it's just, you get a lot of strong opinions in Bitcoin, and then when you get into Counterparty, you get, in a lot of ways, even stronger opinions about the way things should be and how things are. And personally, I like how Fake Rares started, because Shawn muted Scrilla in the Rare Pepe chat for shilling his Fake Rares. So he went and actually created Fake Rares.

1:55:10And it's just been a fun way for new artists, for anyone that missed out on the Rare Pepe directory. There's a new directory that they can kind of create art for. It's somewhat exclusive, and they can get into that directory and kind of get that experience of Rare Pepe, but not Rare Pepe, since we closed the directory and they never had a chance.

1:55:40Shawn LearySo Fake Rares goes way back. That meme itself goes right from the beginning. I mean, people were shilling Rare Pepe coin and Silk Road Pepe. There was, yeah, I mean, it was like a turf war, right? Right from the beginning.

1:55:49Joe LooneyRight from the beginning. We had to defend Rare Pepes from people trying to come in and steal it from us. Like Tommy.

1:56:04Shawn LearyIt's like Bloods and Crips, man.

1:56:05Joe LooneyWe had to, like... Yeah. And then we kind of shamed the first NFTs on Ethereum. I mean, there was Etheria, which was like a metaverse thing prior to that, but the first crypto art or crypto collectible-style NFTs on Ethereum were going to be this project called Peperium, which was like taking Rare Pepes and just putting them on Ethereum.

1:56:35And I think we just criticized them so much, they just gave up on their project. And then CryptoPunks came and released something in like 2017. But yeah, it was funny, in the early days of Rare Pepes we really did, it was like a turf war, where we had to defend Rare Pepes. And I think that's probably where the scientist meme evolved from, because it's like, well, your project doesn't have scientists, and we do.

1:57:05But yeah, it is funny how that stuff, especially with NFTs, and how derivative projects are so easy to create, how any successful project starts having massive amounts of derivative projects created around it. It's kind of this interesting phenomenon with collectible tokens and stuff in general. So yeah, I think Fake Rares is just the evolution. Yeah, it's just kind of the evolution of Rare Pepes. I mean, it is a derivative project.

1:57:46They are not Rare Pepes, but it's derivative in the way that, like, CryptoPhunks are derivative of CryptoPunks. And it's just this kind of ongoing thing. I mean, the whole style of doing a directory and stuff, that's very Rare Pepe-esque. So yeah, I don't have a problem with Fake Rares. I think it's funny. I don't think they're trying to say that they're Rare Pepes.

1:58:19So as long as they're not doing that, I don't have an issue with it.

1:58:25Vlad CosteaYeah. I think that in the beginning, the Fake Rares were more like remixes of Pepe cards, but lots of artists from all around the world have started creating something very unique. Like, I've seen some GIFs that blew my mind. And I would have never thought about that, but you know, there are people who actually draw, and they're artists, and they do something very beautiful, and it leaves you impressed when you look at it. I'm not that kind of guy. I do cards that have a very specific style. And yeah, I appreciate when I see beautiful stuff that comes around. Because you have mentioned CryptoPunks,

1:59:06I suppose that they are the ones that have been generated by a computer. Like, let's think of, you know, the character creation part of The Sims, for example, but they were 8-bit. So they just took all of the specifics and all of the features that one character could have, from skin color to hair color to hairstyle to whatever, and they generated all of these cards, and they ended up selling for a lot of money. Whereas I feel like the Counterparty art is man-made, human-made.

1:59:45Joe LooneyYeah, but I do think one of the fun things with just NFTs in general, whether on Counterparty or wherever, is there's no barrier to entry. So if you're just a meme artist and you're not a great, classically trained artist, I guess, or really good at, like, where someone would look at it and say, oh, that's good art, a very, very skilled artist created this, you could just make funny memes, and you can still make NFTs and stuff.

2:00:17So it's a very low barrier for people to get involved and draw stuff. And Rare Pepes were like that too. I mean, that was one of the... I mean, I'm not an artist, and I made a handful of Pepes. Anybody could be involved. I mean, anybody could make a Rare Pepe. And it didn't matter if it was great art, because sometimes some of the funniest ones are not great art objectively, but they're funny memes.

2:00:55So yeah, I think one of the things that Rare Pepes kind of showed is that you don't have to be an artist to create these fun digital collectible things.

2:01:10Vlad CosteaRight. So my last question for you guys concerns how people can follow you. Obviously, you have a lot of expertise in the field of Rare Pepes and how Counterparty works. You don't want to do tech support, so I suppose it should be mentioned that if people contact you with their wallet issues, they might be looking in the wrong place. But how can they follow you, get into contact with you, and, I don't know, look at the stuff that you created?

2:01:41Shawn LearyI'll help with tech support, Joe.

2:01:44Joe LooneyYeah, go to Shawn for tech support.

2:01:46Shawn LearyAt Shawn Leary, S-H-A-W-N-L-E-A-R-Y. And I'll plug my big party in Vegas next month, which is pretty much for Counterparty folks. So anyone who's into this, Bitcoin NFTs, please come out to Vegas. So hit me up on Telegram, at Shawn Leary on Telegram as well.

2:02:05Joe LooneyAnd my Twitter handle is wasthatawolf. So you could follow me there. And yeah, I mean, I spend most of my days just shitposting on Twitter. So yeah, I don't have any kind of projects or anything I'm working on now, but I have my kind of comments on the space in general and stuff. And I'm somewhat active in Telegram chats, although not so much anymore. But Twitter is probably the best place to reach me.

2:02:52Vlad CosteaAll right. So thank you, guys. This has been the season finale, but at the same time, there's going to be a bonus, which I'm going to record next month, and that's going to be with Chris DeRose. So I suppose even you are going to want to listen to that. The format is going to be different, because I've interviewed him twice before, and this time I just proposed to him: how about I let you be the host and I'll be the guest, and we see where we get.

2:03:20So yeah, thank you very much, and I'll talk to you guys later.

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