S10 E4: Juan Galt on RarePepeWorld & Bitcoin NFTs

0:47Vlad CosteaAnd welcome to Season 10, Episode 4 of the Bitcoin Takeover Podcast. I am Vlad, and my guest today is Juan Galt, who is the creator of RarePepeWorld and PEPETHUGLIFE. And this is like the third episode, like in a row, which is about NFTs on Bitcoin. And it's about these tokens that got issued in 2015, 2016, represent a part of the Bitcoin culture and history, and right now are in demand, to say the least, and are very popular and sought after on markets. It's kind of funny to discover this and, you know, it's part of the Pepe culture.

1:30So welcome, Juan, and it's good to have you.

1:33Juan GaltHey, thanks for having me, Vlad. I'm looking forward to talking with you. I see that you're doing some very interesting stuff in the Bitcoin space, and I like that you're issuing some NFTs and stuff. So yeah, let's get into it.

1:46Vlad CosteaIt's part of my maximalist thesis. So there are maximalists who claim that, you know, we should not do anything except for transferring money. And then there's me, who thinks, it's not just me, but this is my thesis of maximalism, that we should take every interesting use case that we see in shitcoins and bring it home to Bitcoin. And what's ironic about it is that Counterparty precedes the invention of Ethereum and all of these shitcoins. So Counterparty was created in 2014. They burnt more than 2,000 bitcoins to create it and they issued the XCP token.

2:21So you can say that it was minted out of thin air, because it was not. It's backed by actual bitcoins that were withdrawn from circulation forever. And I find it interesting that every transaction on the Counterparty protocol is actually a Bitcoin transaction. Obviously, it scales just as poorly as on-chain Bitcoin transactions. But since we have such few of them and the blocks are almost empty nowadays, it just goes to show that it's an opportunity for Bitcoin art to come in and subsidize the miners.

2:56Juan GaltYeah, yeah. I mean, I think that's interesting, that there's a lot to talk about as far as scaling goes. And I think there is an opportunity to do a new analysis of scaling, given that after all the drama of the 2017 fork, 2016 fork and all that stuff, even after all that, we're at $60,000 and Bitcoin fees are, we're hitting 50-cent transaction fees. I've sent Pepes for less than a dollar for the past three months. So I think we have an impetus to analyze this again. It doesn't mean that we'll reach necessarily different conclusions.

3:45There are some pretty hard limits on how much you can scale Bitcoin on-chain. We know what those are. But yeah, I think we can also analyze, and we should analyze, Counterparty scaling potentially. And I think that they are self-aware about this and they have made efforts to make it more scalable. For example, you can do a multi-send of NFTs or assets on top of Counterparty. And that's happening on the layer two of Counterparty, which is sort of like a node that you run on top of your Bitcoin node.

4:16And that's all processed on top of the Bitcoin node. Like, you're not issuing many transactions at once. It's not a batch transaction the way you do on Bitcoin. It's all happening on the layer two. In fact, sometimes you can't even see a transaction on the layer one, but it's on the layer two because of the way that they do it. And I don't know exactly how they do that, but it works. I actually run a Counterparty node right now because of Rare Pepe Wallet. And yeah, I mean, it's interesting software.

4:46I think, again, there's a lot to talk about, but I don't think we should assume that Counterparty isn't scalable. I think we need to address that, you know, with facts and actually look at it.

5:03Vlad CosteaYeah, that's fair. And I'm actually curious, because you mentioned something very interesting, that you are running a Counterparty node. And what do you need to do that, and how do you do it?

5:14Juan GaltYeah, I mean, you just, you run... I'm not sure, actually. I have an engineer that I've been working with and he's doing a good deal of the work here. But there's a Counterparty Telegram group where J-Dog, the kind of core developer of Counterparty, kind of resides, and you can ask him questions there. And there's also like Counterparty.io, I believe, where you can get a lot of the documentation. That's probably where you can get the software and install it in a server or whatever.

5:41But yeah, I mean, it's kind of like, it's basically a database on top of Bitcoin, and it uses Bitcoin addresses and Bitcoin transactions as the sort of foundation of transfers. But then it hosts the rest. It interprets the data, right? So like, whenever you make a Counterparty transaction, there's kind of like a string of data that's put into the OP_RETURN field of Bitcoin, which is kind of like a little extra field you have to put, I think it's like 80 bytes worth of information, in every Bitcoin transaction.

6:13And I think you can do more than one OP_RETURN per transaction or something like that. I'm not exactly sure how that works, but bottom line is you can put arbitrary data on Bitcoin, and that stuff doesn't necessarily get computed by Bitcoin. As far as I understand, it's just extra arbitrary data, but Counterparty nodes can interpret and process that data. And so in that sense, it's offloading computing demands from Bitcoin and putting it on a second layer that's optional and opt-in. And that's sort of part of the scaling magic and part of what allows Counterparty to do what it does, which, you know, is kind of cool.

6:49I mean, I think we can have a conversation about, you know, what Bitcoin should and should not do, or what maximalism should or should not be. But I think it's undeniable that the amount of art that has come out of this project and the amount of culture that has been created and stored in this project is impressive, and it is very Bitcoin. You know, it has the spirit of Bitcoin in it, right? It's trolly and internet native and sort of full of memes.

7:28And it actually tells the story of Bitcoin throughout its sort of, you know, almost 2,000 Pepe memes, and more than that, because there's more than Rare Pepes, right? There's Spells of Genesis and other projects. So, you know, people that don't understand this, that are in the Bitcoin space, that are looking at this like, oh, well, I just can't find myself... I think someone said to me, like, I just can't, I haven't been able to care about Pepes, like, I don't care about Pepes, like, what am I missing here, right?

7:59It's like, well, you probably don't understand the value of art, and that's the problem. Art is very personal to the human experience. And I think, you know, art precedes language. It precedes the written word. It precedes, you know, letters, right? It's like, art is communication externalized, right? It's as close to the human experience as you can get. And we actually have a real inability to understand and even value art, right? Like people, I think Peterson has said, pointed out, that like, people will travel the world to go stare at the Mona Lisa, and they'll just stare at it, you know, and be lost in her eyes and in her, you know, expression.

8:56And like, if you looked at that as an alien, you'd wonder, like, what the hell is wrong with them? What are they doing? And well, there's something very personal going on there. There's something transformative, something important happening there, to the point that people will pay serious money to travel the world and see the Mona Lisa in real life, or will pay, you know, who knows how many, you know, hundreds of thousands of dollars to buy it if they could. You can't even buy the Mona Lisa, probably.

9:20So we would be fools and arrogant to think that art is worthless. Granted, there's also going to be a lot of shitty art out there, but well, that's probably in the eye of the beholder.

9:32Vlad CosteaYeah, I think my biggest caveat with NFTs and this type of digital art is that the incentives are kind of backwards. Artists generally create art for the sake of it and for the purpose of expressing something through their means. But when you look at, I don't know, a marketplace like OpenSea, you see cheap and fast and computer-generated stuff that was put out there for ridiculous prices just to make a quick buck. And I think that's the major difference. And there's also a major difference between Bitcoin art, which is best represented by Spells of Genesis and Rare Pepes.

10:16And these are created by individuals who put together parts, like, you can see a common theme between NFTs created on Bitcoin, like Rare Pepes. There's a recurring idea about them, but each artist has put their own fingerprint on the actual art. And you can tell which Rare Pepe was made in Japan, and you can find another version that was created by Dan Darkpill, and then you find another one that was created by JScrilla, by DJPEPE, as he calls himself nowadays. And then you look at Ethereum art and you see CryptoPunks.

10:53And those are computer-generated with random specific features. Like, that's kind of dumb. Why would anyone want to pay for something that's created by a computer? And I think that the art which was created, you know, like Rare Pepes in the beginning were getting handed... I've also received some for free myself. They were just being sent to people for the sake of spreading a meme. And as far as I could understand, also because there was some Reddit censorship at the time. So it was a way of dunking on the Reddit moderators who are censoring you and saying, you know, you can't actually censor something that's on Bitcoin.

11:34Right. So this is part of the Bitcoin culture. And also another remark, and I know I've said a lot during this statement, but another remark that I want to make is that in the beginning, Counterparty was created by businessmen for the purpose of putting stocks and commodities and all sorts of trading stuff on Bitcoin. That was kind of their big idea about what the Bitcoin blockchain should do, to secure all of these transactions. But in the end, it became like a platform for Rare Pepes.

12:09This is an interesting turn of events. That's pretty funny.

12:15Juan GaltYeah. I mean, I don't think the story of Counterparty is over. I think, on the contrary, this has actually brought life back to Counterparty. In fact, the asset was basically delisted off exchanges for like two, three years, same as Pepe Cash. Like, it was very hard to trade it, very hard to find any liquidity of it. They had very little price discovery, if any. I had given up on it. I had a little bit of it, but like 100 bucks or something like that.

12:46But now it finally has a market again. I mean, it's had a boom. And, you know, to be clear, I mean, I think the Counterparty asset itself, XCP, is kind of a problem and a distraction. I mean, yeah, it's cool that they burned Bitcoin to create it. That's important. But it's not useful in many ways. It's only useful for, like, you have to have some in order to mint an NFT, and you have to have some to do certain kind of, like, Counterparty processes, but not all of them.

13:25And again, it's a shitcoin. As a currency, it sucks. It's very illiquid. And so my goal with Rare Pepes, you know, in part, with rarepepeworld.com, was to create a website that facilitated a Bitcoin-denominated marketplace for Rare Pepes, and kind of like got people used to using Bitcoin denomination in order to value Rare Pepes. Because the... and to simplify the market. Because XCP and Pepe Cash, which is one of the Rare Pepes but also has a large enough supply that it has served as a kind of currency asset for Rare Pepe, obviously it was kind of intended to be so as well. It's called Pepe Cash.

14:16Right. But they're both shitcoins. They're both illiquid. They're both not particularly good currencies. Bitcoin is, right? And so, you know, we were talking a little bit before the podcast about maximalism. And, you know, as far as I'm concerned, Bitcoin is both digital gold and should be an internet currency. And there's more things to capitalism than currency. There's other things, right? I think, you know, obviously equity and stocks are part of our current sort of understanding of capitalism, or our sort of tools for capitalism.

14:58But art has value, and there's rich art markets. And why shouldn't we trade Bitcoin for art? And why shouldn't art be denominated in Bitcoin? And why shouldn't Bitcoin and art be kind of, you know, intertwined, to whatever degree that makes sense? Now, again, granted, I'm not saying that... you know, I think there's a lot of speculative mania in NFTs right now. I think there's a lot of, like, late-stage capitalism and sort of pre-hyperinflationary, sort of cheap money moving around that makes these markets absurd.

15:34And there's a lot of it. Like, I think most of NFTs kind of look to me like tulip manias, right? I think "your Beanie Babies," somebody said. These are bubbly kind of, you know, phenomena. But that doesn't mean there isn't a floor value. And I think some of these things will become collectibles, so they'll remain collectibles. I like Pepes in particular because they were created before any of these things had value, before the word NFT was even really popularized. They were created for themselves. They were created for the joy of expression and memetics and participating in something cool and weird and interesting.

16:24At least that's why I did it. And that's what makes them unique. And it kind of shares that similarity with Bitcoin. Bitcoin was created before you knew, or even had a reasonable expectation, that this thing could become worth something, right? It just happened to be that it did, and that it worked, and that it didn't fail, or that a major catastrophic mistake wasn't made. And so Bitcoin shares that kind of, dare I say, immaculate conception, right? That sort of intention without greed, right?

17:01That created it. And I mean, like, you can see it. Like, if you go to RarePepeWorld and you just start browsing through them, these things are funny. They're fun. They're trying to say things, right? And that's where I agree with you on a lot of the generative NFT art out there. I find it really boring, for the most part. Like, okay, the Punks are kind of cool sometimes, maybe, but not really. Like, they're kind of boring.

17:30They don't really say anything, you know? It's kind of like modern art in many ways. Unless you're a, you know, a student at a university studying the contrived sort of abstractions of modern art, art philosophy, it's not going to be meaningful to you. But Pepes are meaningful. Pepes are meaningful to, I think, a lot of people. Excuse me. And I think that's cool. I think that's worth preserving. So that's kind of what my intention was with RarePepeWorld.

18:10And yeah.

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21:57Vlad CosteaI think the biggest issue during this cycle was that there was a moment when even the biggest influencers were tweeting about how they were exchanging assets, NFTs, like they were shitcoins in 2017. And to many of us, it seemed like NFTs are the new ICOs. But while I see this as a fad, or something like the tulip mania, as you mentioned, it's also very different, because with ICOs in 2017 and 2018, when you are buying into one and you are purchasing a token, you are basically putting your trust that a group of people would accomplish something that they promised, because ICOs were basically investments and promises.

22:44Someone would come up with an idea, they would launch a website, they would deploy a smart contract, and voila, that's how you start raising money. You publish a roadmap, and most likely that never happened. But in the case of something like an NFT, and specifically something that's artistic and not created for the sake of making more money, what you see is what you get all the time. So there is no promise that something else is going to happen. Maybe there is a promise that the same asset is not going to get minted on a different chain.

23:18But at the same time, it's not really the JPEG or the GIF that has value. And that's what a lot of people don't understand. It's the asset itself, the token that got issued on that specific blockchain, that has that cryptographic hash which proves its origin. And in my understanding, no future asset which gets minted with the same JPEG can have the same value, even though the markets are kind of irrational these days and you never know what's going to happen. But something that's original and was first issued on a chain has some value, and you can't really duplicate that unless people are very stupid or want to prove something with their money.

24:06But something else which I wanted to mention, related to a claim that you made a few minutes ago, is when you said that you need the XCP token to mint assets on Counterparty, which is not true, because I've been able so far to navigate my way through Counterparty while using nothing but BTC. The drawback in this whole situation: first of all, I cannot name the assets. So when they get minted, they have a name like A111235-something. So it's not going to be... I've created a series which is called Leftist Tears, and they're like trading cards.

24:49And these are not named, so they're going to be very hard to find when somebody searches for them. But I think they're pretty cool, and I take pride in the fact that I made them by only using BTC. And the other drawback is that when you create a dispenser and somebody buys the asset from you... So dispensers, just in case you're not aware, are kind of like vending machines. You take your asset and you put it out there for sale for a certain price, and anyone and everyone who pays the price is going to get the predetermined amount of NFTs that you put there.

25:26So, for example, I can put a dispenser with 10 NFTs, and everyone who pays for one gets one. And that's kind of how it works. It's a decentralized marketplace. But if you only use BTC and not XCP, which is the Counterparty token, the asset which gets purchased is not going to get evaluated. So if somebody looks at the asset after it got purchased for BTC, you're not going to see how much it's worth. You need to actually use Counterparty and make that dispenser in XCP to be able to gain that market cap within this layer, within this protocol.

26:05Juan GaltWell, within Xchain.io, really. I mean, it's not like this valuation is stored on the blockchain. This is part of what we're trying to do with RarePepeWorld. And I would like to get to a point where we actually can start charting out price history and include data like dispenser prices and OpenSea. It just happens to be that Xchain only values XCP trades and doesn't value dispensers, or doesn't integrate that data. But this is native to Xchain. As far as the minting of NFTs, you know what? Now that you've mentioned that, I think actually that gives it artistic value.

26:48And this is part of the magic of NFTs, is that the sphere of art of an NFT is more than the JPEG. It is the decisions that you make in the minting process: how many units you issue, what name you use on it, what description you put on it, when it was created. Even what block and what addresses minted it have potential meaning in them, if you intend that to be the case. Or even without you intending it, they can have meaning for people, or the randomness can have meaning.

27:29So there's something new here, I think. And with that context, I think it makes them actually a lot cooler, and it probably makes them worth keeping that way. One thing you could do, I believe you can change the description of the asset on the blockchain. I don't know if this requires XCP, but I'm going to check real quick.

28:03But if you can change the description of the NFT, which is kind of like an extra field of data associated with each NFT, then you could put the name on there, and that'll at least make it searchable. And that would probably help people find it.

28:20Vlad CosteaYeah. And something of an issue that I encountered today when I opened my first dispenser, and this is when I figured out that if I sell for BTC, it's not going to get evaluation on Xchain. But what I have done was to set a very small fee. I told some people that I have opened a dispenser, and somebody rushed and bought it before the dispenser was open, because it did not get a confirmation.

28:47Juan GaltYeah, they do that. No, people don't understand dispensers. I had to refund somebody earlier too. I think part of it is, like, don't share the dispenser link until it has a confirmation, because XCP won't honor purchases until the dispenser has a confirmation, at least.

29:09Vlad CosteaYeah, so it's kind of counterintuitive in a way, because you don't really think about it, that everything happening on Counterparty is a Bitcoin transaction. So you have to look at the block issuance and take care to pay the right fee and wait between transactions. It's not like you can send something now and then send another one in five minutes. Not in five minutes, because there's a likelihood that a new block gets mined. But you can't do consecutive transactions from the same UTXO, because that's not how Bitcoin works.

29:46You're going to end up trying to double spend the first one, or doing something very stupid that you should not be doing. So it takes some patience. It's slow. It's not ideal, to say the least. But I think as a platform for fine art, this only gives it value. Because in the future, if we're not going to have the same small fees, and we're going to return to the same paradigm of very high on-chain fees and blocks that get filled, then we're only going to see transactions and volumes in assets that are actually valuable.

30:24So if you mint something on Counterparty today and it becomes culturally relevant in a few months or a few years, you might just end up having people who want to buy it from you and are more than willing to pay the high transaction fee. And this only means that if they pay like $100 for the transaction fee, then they're going to pay a lot more for your art.

30:50Juan GaltYeah. And I'd also like to add that a lot of the issues that you just identified with dispensers and using Bitcoin to buy XCP assets, I believe all these things are fundamentally interface, UX problems. These are not things that we can't engineer around. I think, for example, one of the things that I would like to do with the website is make it so that dispensers that are... Actually, we already do this on RarePepeWorld. Any dispenser that gets any unconfirmed transactions sent to it that would empty it, those dispensers get removed from display.

31:42If a transaction is sent to a dispenser and it would lower the supply available, or the stock available, of that dispenser, we remove that stock as if it's going to get confirmed. We assume transactions will get confirmed in order to help protect users. We believe that it'll help protect users, because they won't FOMO into something that might not be there by the time their transaction confirms. And that's just a small example of the kind of ways that user interfaces can actually fix the rough edges around this technology, which is actually very powerful.

32:24I mean, you are somewhere in Europe, not sure where you are, but you can issue a dispenser and I could go buy it right now and pay 20 bucks and have your NFT, and fund your art and fund you as a creator, and do it directly. There's no middleman. It's entirely on-chain and trustless. And that's pretty cool. That's really powerful. I'm almost to some degree speechless about it. I'm in awe at how amazing that is. And I think people that are skeptical of NFTs, many of them who are Bitcoiners, they underestimate how good that is.

33:14I think, yes, again, like, there's going to be a lot of cheap NFTs, a lot of cheap art, a lot of money grabs, a lot of corporate FOMO. That's already all over the place right now with NFTs. But at the end of the day, there's a new way for artists to monetize their audience, or monetize their art, and that's probably a good thing. I have a hard time... Like, I wouldn't want to take that away from artists, right? If you know anything about the history of art, it's like in business, right? You want artists to have a direct path to profit and sales.

33:58I think there's a lot to polish, and I think there's a lot of experimentation to be done. I think the less supply that you issue of an NFT, the better. I've been thinking about starting a series of NFTs and just making one-of-one NFTs on Counterparty. But I would like to auction them. I would like them to be auctioned over a longer period of time so that their value can be discovered. And once they're gone, they're gone, and that's that. And I think one-of-one NFTs make it particularly powerful.

34:35And I think we're yet to explore, for example, what NFTs and memes could do, and political memes and cultural memes. I think that's a very interesting area that Rare Pepe has played with, but that has been kind of, you know, it's not really discussed. Like, every NFT that's being issued on top of Ethereum right now, almost all of them are generative or are corporate, right? There's some examples of, like, film-based NFTs. I think one, gosh, I'm blanking out on this name, famous film producer just issued some film-based NFTs.

35:22Vlad CosteaWas it James Cameron?

35:23Juan GaltThat's closer to, I think, what you could do. I don't think... Well, I don't know. That's not who I'm thinking of, but sure. I mean, that works as an example.

35:32Vlad CosteaI think I saw something about James Cameron publishing stuff from The Terminator and some of his older films, but arguably it's kind of a trend.

35:43Juan GaltYeah, there's this other guy...

35:46Vlad CosteaGo ahead. I've had this scalability conversation with almost everyone with whom I have spoken about NFTs on Bitcoin, and I can agree that to some extent this is unscalable. You can't really have all the artists in the world putting their work on the Bitcoin blockchain. I mean, of course, you're going to bid for block space, which is beneficial to the miners, but that's not really, you know, productive for the artist. And you already have two alternatives on Bitcoin. On one hand, you have the sidechain, you have Liquid, which has RareToshi, which is very much a platform that tries to be like OpenSea.

36:28And it's cool. I've tried it. It's okay. And you also have RGB Spectrum, which is built on top of Lightning, layer 3. So that can also get big if it gets, you know, an easier user interface. The idea behind it is cool, because you have client-side validation. You don't have the entire network storing your transaction and blah, blah. But, you know, the point of having something on the Bitcoin blockchain is kind of that it will live forever and it will outlive you as an artist. It's going to be there for people to discover in the future.

37:06And your art is going to get studied by art students 200 years from now, just looking at it, thinking, you know, this guy must have been crazy, but at the same time, this is fascinating. So this is another aspect that you have to consider, because of course you can go on Solana or whatever. I don't even know how that works, but it seems to be popular for minting NFTs. You can go on that one, but there is no guarantee that it will be around five years, 10 years from now.

37:37And you have to ask yourself, are you just trying to sell some JPEG, or are you trying to leave a legacy? And if you care about any kind of legacy and you want to have your art existing for the longest amount of time, you've got to do that on Bitcoin. And the best way for it to not disappear is to do it on Counterparty, because it's going to be on everyone's Bitcoin node.

38:03Juan GaltYeah, I mean, it sort of will be on everybody's Bitcoin node. You do also have to, somebody actually has to run a Counterparty node as well, though, to keep some of the extra data, I believe. I'm not exactly sure how it works, but not all the data gets stored on Bitcoin. Some of it is. I'm not sure how much of it is. Enough of it that it's crucial to store it on Bitcoin. But people do also have to run Counterparty nodes. And yeah, I don't know.

38:32I mean, I agree with you on that. I think you're right that the safest place and the place with most longevity is Bitcoin.

38:45And I think, yeah, I think, you know, obviously the Liquid Network is an interesting place to put them. RGB will be interesting too. You know, I hope it works. I think that'd be great. I think I would like to see Counterparty be developed further. I think J-Dog has officially raised some money, and he's going to be quitting his main job and he's going to be working on Counterparty full-time. And hopefully he can bring it up to date and make it competitive on a scaling front.

39:18I think you could probably scale Counterparty a great deal more. I know that there's been a lot of work done on that.

39:27But yeah, I mean, I think the reality too is that a lot of these blockchains, and this is kind of off topic, but look how many shitcoins there are. And it doesn't matter how secure Bitcoin is and how insecure they are. Those shitcoins still exist, for the most part, right? Like, yeah, there'll be more double spends, there'll be more shenanigans, more corporate takeover, more politics. But there seems to be no real natural predator to all these shitcoins. And, you know, like, I guess we'll see if the natural predator comes.

40:06Maybe that natural predator will be the nation state, or the nation states, as they start to sort of attack their competition to some degree or another for record keeping and property rights management. But yeah, there's no real competition. So I mean, I guess you can mint it on Sol. I just find it boring to mint on anything other than Bitcoin. Like, Bitcoin is like... The thing that bothers me about minting another blockchain is not that it's another blockchain, it's that it's another currency. It's like, who gives a shit about Sol, the currency asset?

40:38Like, I don't want to use a low-tier, low-rate currency to denominate, or like... And maybe that's just my pet peeve, right? But I just don't want to, I just don't care to deal with another currency, right? I want it to be on Bitcoin. I think that's kind of my impetus for building on Bitcoin. And yeah, I mean, I think it is less secure and kind of gimmicky. But yeah, people are trying to escape Ethereum fees, and I can't blame them, you know?

41:08It's just totally nuts.

41:10Vlad CosteaYeah. On one hand, the Ethereum design is kind of stupid. And you can see on Counterparty a lot of stuff that ended up getting built on Ethereum later. And this is, you know, this is how all of these altcoins got started. They just took ideas from Counterparty. And it has been around since January of 2014, and it hasn't been developed too much. And this is one of the issues, because when you look at Ethereum, you don't really have, like... They brag all the time about the amount of developers that they have, but they tend to be web developers, they tend to be application makers.

41:52So they're not really cypherpunks. They don't deal much with all of these complicated issues. They don't think about how to make something efficient. They just want to create something to make a lot of money, which I guess is understandable. But, you know, the way that it was marketed and the way that they rushed it to production to have this software hosted only worked to its detriment. Whereas on Bitcoin, you have stuff that's much more cautious and much more well thought out in advance before it got launched. And I like the incentives behind Counterparty and the fact that they actually burnt Bitcoin.

42:34We're not going to have 21 million Bitcoin. We're going to have 2,000 Bitcoin less than that because of Counterparty, because it got created. And I was having this exchange with Erik Voorhees a couple of days ago on Twitter, and he thought I was trolling when I told him that there are people who trade on Counterparty. He was like, no, everything that's on Counterparty is moving into Ethereum. And I just sent him a screenshot of dispensers that were cashed in or cashed out.

43:05And he did not reply in any way. Like, I'm pretty sure that he must be an investor in OpenSea or something, and it's in his best interest for people to trade there. But there's this idea that Counterparty is like a ghost town, that there's nothing happening in there. Nobody uses it anymore. It's pointless. It's obsolete. It doesn't have the right user interface. It's not marketed. So obviously nobody's going to use it. But if you look at the data, and even if you maybe disregard the transaction data, if you look at the Telegram channel for Counterparty, you're going to be surprised how many people are active there and post messages and talk to each other.

43:52And there's organic grassroots interest for this, and there's nothing you can do about it. It will grow and happen. And as ironic as it is, these frog memes are going to end up subsidizing a lot of the Bitcoin security budget, because miners are going to cash in a lot of fees from just frogs, from Pepes getting transacted from one user to the other. Frog money.

44:23Juan GaltYeah, yeah, that's true. I mean, we are paying for it. It's not like we're cheating, right? We are paying transaction fees to move these frogs, and it's not like there's a ton of competition for the block space either, right? For better or for worse, Bitcoiners like to HODL and are very cheap with their Bitcoin, and they don't want to spend it on anything. And so there's plenty of room right now. I mean, this obviously isn't scalable necessarily. It isn't fundamentally scalable to the whole world, but I think we'll kind of have to deal with those pressures as they come.

44:58That's pretty funny. I mean, listen, I'm super grateful for the work of J-Dog and other Counterparty developers, obviously the late John Villar and many other XCP developers. But I think the critics aren't wrong in saying that a lot of this infrastructure is outdated. The wallets that we have are really, really rough. The experience of buying and trading assets on top of Counterparty is really rough. The wallet support predates BIP39. Literally, both wallets, Rare Pepe Wallet and FreeWallet.io, are not BIP39 compliant.

45:42They give you a seed, but the seed has its own dictionary, and it doesn't have master private keys or master public keys. That means you can't import that seed into Electrum, for example, which is a very robust wallet. And so it's actually kind of a nightmare to deal with the private key management of these wallets. And the markets themselves are very obscure. It is actually quite difficult to get in there. Nevertheless, there is a market, and there is some liquidity, and there's kind of like 2,000 people on the Rare Pepe trading group and a few other Telegram groups that are trading these assets.

46:22So I think it has a lot of potential, but there's a lot of work to do to bring Counterparty up to par. I mean, I can understand why Erik Voorhees would basically assume that there's no market here, because compared to the money and volume of OpenSea and Ethereum, it's nothing. It's really trivial. But I think the valuations we've seen are showing that it's not nothing, and it's not entirely trivial, right? Like, we just saw PEPENOPOULOS, a one-of-one Rare Pepe that was minted as a tribute to Andreas Antonopoulos' work.

46:59And it was, I believe, given to him. I'm guessing he resold it later on. It was just sold for $3.5 million in an auction. $3.5 million. So there's clearly high value here, even if there's low volume. But I would like to see better wallets. I'd like to see better support, more modern integration, better tooling in XCP, because a lot of people are putting a lot of money into this, and the tools are rough, man. They are really rough. So yeah, you have to kind of, like, tread carefully. And it's no wonder that most of the money is stuck in OpenSea. OpenSea and Ethereum, for all their faults and ridiculous fees, is fairly easy to use, right?

47:53It's kind of a plug-and-play system. So, you know, you've got to give them what they have, right? You've got to give them credit where it's due.

48:00Vlad CosteaYeah, but at the same time, if you use OpenSea, as far as I understand, you have to wrap your ETH, so it turns into WETH, which is like a custodial version that's issued by BitGo. And then when you withdraw it from there, you have to unwrap it, which comes with a cost of its own, and you also pay, like, a fee to the platform. And it blows my mind to realize that people have been able to figure this out and do all the wrapping and unwrapping, whereas on something like Counterparty, it's just Bitcoin.

48:39Do you just move it there?

48:41Juan GaltYeah, no, you're right. I mean, I moved a couple of Pepes of my collection to OpenSea, kind of to try it out and figure it out. A lot of the market in this sort of Rare Pepe boom has been Ethereum NFT collectors and speculators coming in, buying Rare Pepes on Counterparty and moving them to OpenSea and selling them there. And so I kind of wanted to try it for myself, and it's a fucking nightmare. It's a crypto bureaucracy. And I mean, it's been made easy, thanks to Emblem.finance, easy enough, but, like, the fees, and you have to sign multiple transactions.

49:23And yeah, no, I think you do have a point. I think you can learn Counterparty, the Counterparty system, fairly easily. I mean, I could make a one-hour video and teach you all you need to know, probably 45 minutes.

49:37But yeah, I mean, I think we have, I think there's a ton of opportunity in user interface in Counterparty. And listen, I think we should consider... Like, I think Bitcoiners should not close their minds to NFTs. I think they're immature. It's an immature asset class, but it's got pretty serious potential, I think. I don't think it's necessary... I think you pointed out, you made a good point at the beginning, that it's not like ICOs, in the sense that ICOs don't have... They're not promising to save the world. They're not promising to build a company.

50:18They're not making any promises, right? If you're speculating and FOMOing into art tokens, or NFTs, that's a collector's FOMO. That's not a security, like you would in a company. There's no promise of future development, right? The art is sold as is, and you're taking your own risk. So it's not a security, arguably, right? And I'm not a lawyer, but that seems pretty logical to me. It's not a stock, right? It's not trying to compete with Bitcoin in any way. I mean, it might be competing for block space, I guess, but it's not competing as a currency.

51:00It's art. It's digital art. Another example in defense of NFTs is that if you are a digital artist, which means that you use a computer to create art, you use Photoshop or you use whatever, right? GIMP or whatever to create your art, probably Photoshop, or CorelDRAW. What are you supposed to do to sell your art? Like, you're making a JPEG, and then what? The moment that you publish it, people are going to be able to right-click save it, and it's going to be duplicated up to infinity if it's relevant at all.

51:37And then what? Like, what are you supposed to do to monetize it? Are you supposed to print a paper copy of it and ship it to somebody via snail mail? Like, that's funny and weird, and it doesn't make any sense, I think, because that's not its native environment, right? NFTs allow you to create scarcity in the digital, and sell it for value regardless of people's ability to right-click save it. It gives you a vehicle to sell your art. And that's really powerful, and that's unique, and that's an innovation that is special.

52:26And that's regardless of how absurd the NFT markets may be right now, and they really are, I think. That innovation has a floor value, and I don't think that's going away. I think it'll just transform. I think we're going to have five to 10 years of exploration of, you know, what is and what isn't an NFT. What are you and what are you not buying? What rights does an NFT confer and which doesn't? You know, when you own the art, what does that mean, right? There is no enforcing an NFT.

52:59A lot of people think that you can use an NFT to do a kind of digital rights management, where only the people that have purchased the NFT get to consume the content. That's not true. It's trivial to duplicate the content. It's trivial to share the content. The content is free because the internet is free. But the NFT can only be owned by one person, and that monetization can only be accessed by the person that owns the asset, right? Like, I may have a copy of every Rare Pepe out there, and I actually do have a copy of all of them.

53:33But I can't access their market value. I can only access the market value of the assets that I actually own. And that's sufficiently different. I think a lot of the Bitcoiners that are rejecting NFTs as an asset class are doing it reactively, and they're not actually having an honest exploration of it. Or if they are, I'm missing that. And I think it's an interesting discussion to have. I mean, I think it should be had. I'm not saying anybody should be selling their Bitcoin for NFTs. In fact, I think everybody should be preparing for the collapse of the dollar.

54:17Owning NFTs is a luxury. But nevertheless, they are a thing, right?

54:25Vlad CosteaYeah. That's something that we should have made clear from the beginning, that the NFT market is pretty much some sort of white-collar activity with people trading art. Like, there are not many people who are going to get it. There shouldn't be many people who get it, because it's art and it's subjective. But it doesn't mean that it's necessarily a scam. I mean, I can think of ways in which you can scam with NFTs, when you mint the same asset multiple times and you promise to produce only a limited supply and you don't really take that into account.

55:05And I guess this is a great way to introduce this whole conversation, because this is how we met, and this is how we got to the idea of doing a podcast. We were in the middle of witnessing a very heated debate between Theo Goodman, who is one of the creators of Rare Pepes, and Dan Darkpill, who also created lots of Rare Pepes. And one was against...

55:30I mean, Dan Darkpill was against this idea of creating Fake Rares, which are like a new trend nowadays. Whereas Theo Goodman was trying to explain that Fake Rares are actually like remixes, or like music that's built on samples. You take something and you change something about it and turn it into something else. And someone like Dan Darkpill would argue that they are inflation and they are basically devaluing the prior work that the artists have done. So what's your stance on Fake Rares?

56:09Juan GaltYeah, I mean, I think it's a good question. One of my issues with the Fake Rares is that they issued this sort of "fake as fuck" token or something like that, that you have to have and burn in order to mint an asset that's part of the collection. That seems to me a little bit greedy. And they admitted jokingly that it's greedy. I don't intend to buy any of them. If somebody wants to contribute one to the NFTs that I've made after the fact, great. And some people have offered to.

56:39That's really my only problem with it. I think other than that, it's just a collection. I mean, it's a community creating, following in the legacy of Rare Pepe, following its trend. Like, are we supposed to never mint another Pepe meme NFT in history because Dan thinks it's inflation? That's nonsense. With all respect to Dan, or Darkpill, I mean, I think it's great, but that's total nonsense. It's not inflation, because NFTs aren't currency. It's art. It's a different thing. If you draw a dog and then you draw a cat, you didn't inflate the dog art supply.

57:21It's a different piece of art. It's a nonsensical application of the term. I think as far as the dilution, like, you could say that it's diluting the market, or it's sort of... But it is just competition. I mean, I think it's competition for Pepes, maybe, but it's not like there's a shortage of NFTs out there that people can go FOMO into. And they're pretty obviously fake. Like, I think his argument was more like, these are Fake Rares pretending to be official.

57:59It's like, they're literally called Fake Rares. They're not official. They have the word "fake." And that was my counterargument. But I don't know. I'm not worried about it. I think it's kind of like whatever now. I think the model, you know, you can try or not to join that collection of art that's being issued in the Fake Rare community. But I think the more interesting path is actually what you're doing, which is, as an independent content creator with your own audience, you're minting your own standalone pieces and then putting them out in the market, and that's going to be a vehicle for you to pay your costs and fund your content.

58:48And that's probably what it should be. I think that's a good use for NFTs. Let your fan base collect them and do whatever they want with them. And I would like to, you know, if I can justify the work and the expenses, I'd like to launch a website that actually includes all XCP assets, in a sort of fashion similar to RarePepeWorld, so that you can actually easily share and explore your own pieces of art, for example. And yours would be included, because I would just be including everything that's on XCP.

59:28But yeah, I mean, those are my thoughts on it. I think some of the art being issued, created in Fake Rares is actually really cool. And I'm happy that it's happening, because there is... I felt a hunger to make more Pepe memes, and more sort of memes that are contemporary, and NFT them, and, like, create more culture, right? And, like, how many memes have you seen throughout your internet history and saved, right? Like, I have probably, like, hundreds of megabytes worth of memes that I've saved.

1:00:01But the Rare Pepes, those stand out, right? The ones that I own stand out, because there's money at stake, right? And that gives them a stickiness and a survivability, I think, that other memes are going to lack, right? I think NFTs are a way potentially to immortalize, or infuse memes with more value, right? We're monetizing memes, and we're attaching speculative value to memes, right? Or at least some value, right? Some potential value, right? I'm not saying you should speculate on them, because, you know, most of the time they're going to be worthless.

1:00:46But yeah, no, I think it's cool. I like what they're doing. I'm not really opposed to it.

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1:04:41Vlad CosteaIt's interesting to see this kind of debate. And something about which I have been thinking is that you have this term NFT, and it tends to be kind of misleading, as in common culture it has become synonymous with the GIF or the JPEG. And people think that they're buying JPEGs and GIFs, whereas it's more like an art token. And there should be emphasis that you're buying a token. The T in NFT stands for token. That's what you're getting.

1:05:17Juan GaltYeah, totally. No, listen, most people, like, most people that are in NFTs don't understand NFTs, right? NFTs are very elusive. They are a new asset class, right? How many people understood Bitcoin when Bitcoin came out? Nobody. I mean, most people don't understand Bitcoin today. Most people that understand Bitcoin a lot don't understand Bitcoin fully today. But they're playing with it, and that's fine. They're going to play with it.

1:05:42Yeah, I think, again, I think there's a lot of exploration of what it is and what it isn't. And I think in the next 10 years, I would be surprised if we don't see a great deal of just legal cases, honestly. Like, there's going to be lawfare fought over copyright claims around NFT purchases, guaranteed. And I've seen some of it already. I've seen, like, the seeds of it. I saw a picture of somebody that bought a Punk, and then somebody right-click saved his Punk from Twitter and then pasted it underneath his post about it.

1:06:20And he's like, delete that JPEG right now, that's my JPEG. It's like, no, you don't understand what you just bought, man. So I think, you know, like, a lot of that has to happen. People have to really wrap their heads around it and play with it. Yeah. And the other thing is that it's supposed to be non-fungible, right? Non-fungible tokens was actually an Ethereum term, as far as I understand, for assets that had very little fungibility or no fungibility at all. A lot of the Rare Pepes have supplies that are greater than one.

1:06:56In fact, most of them do. Some of them have millions of supply. And so they are actually kind of fungible. If you have more than two units of accounting in your Pepe, you have a fungibility of two, which is not much, but it's better than one. But nevertheless, they fall into the category of NFTs because they're, I think, more because they're art-associated and because they're not currency assets fundamentally. So that's another fun fact.

1:07:26Vlad CosteaYeah, that's something that doesn't get too much attention. Like, if you issue two tokens of the same type and they're both represented by the same image, they're fungible, because one equals the other. The fact that you have a small fungibility is a whole different conversation, but it's not unique. That's what I'm trying to emphasize on. Anyway, do you think that this is all a fad? Obviously, we are in the middle of a bubble, so it's a bad investment if you're going to buy them now. But if you're a collector and you care about these, it's likely that there will be some limited series that maintain their value in time, right?

1:08:11Just like, I guess, 99.9% of ICOs were scams, but a couple of them are still going.

1:08:19Juan GaltYeah, I mean, I do feel like it's a fad in some ways. I do feel like... It's not that I feel it, it's that I've seen... Listen, before, six months ago, Rare Pepes were worthless. And then the Ethereum people started realizing, started pursuing the true and original NFTs, and then they stumbled upon Rare Pepes, and millions of dollars entered this obscure market. And I saw the wave, I felt the wave. I sold them the Pepes that I have. Not a lot of them, not all of them, but I sold them a lot of them.

1:08:52And I saw that wave come and pass and go. And now the market, the Rare Pepe market, is still alive. There's still collection and purchases happening, but it's definitely cooled off. And now it's sort of gone into Fake Rares, and then it's gone into, like, Namecoin NFTs and Spells of Genesis to some degree. And it's kind of like dispersing. And I don't know if it'll come back. Maybe it will, maybe it won't. I believe that Pepes will come back. I think Pepes are unique enough and rare enough and authentic enough that their value will last a long time.

1:09:31It's lasted long enough as is. But I think, yeah, I think a lot of the money that's sort of floating around, and that's moved around Ethereum, was clearly speculative, right? Like, I had moments where I sold, like, I would put a bunch of dispensers and they were gone. Like, somebody just dropped 10 grand, you know, and just bought a bunch of dispensers. Like, what? And then you go to OpenSea, and they're all on OpenSea at three, four, five times the price, right? That's not collectors looking to collect art that they enjoy on principle.

1:10:03That's speculative. That's a calculated speculative bet. It's not that there's anything wrong with that, but that's FOMO, right? And so I think if you're going to buy an NFT, buy it from an artist that you like, buy directly from them, ideally, so they get the money. I mean, if it's already on secondary markets, whatever, you really like it, buy it. If you... Even if you want to speculate on it, I fucking speculate on it. I mean, I don't know, I'm not a lawyer, but, you know, it's not investment advice, but people are going to do whatever they're going to do.

1:10:42But I think you should buy art that you actually like. One of the things that I want to do with RarePepeWorld is I want to make it so that you can put the website and your collection, like the address... Because you can put your Bitcoin address on RarePepeWorld, and it'll display all the Pepes that are on that address. So you could grab that link and then full screen it, push a button that takes it to full screen, excuse me, and then just have it cycle through like a slider.

1:11:18And you can put that on a tablet and display it in your house.

1:11:23And now you can actually enjoy your art, right? So I think we want to explore ways to actually enjoy the NFTs. And yeah, I think people should just buy it for its sake. I think people are going to integrate them with games. There's a huge gaming NFT niche, sort of submarket, that's worth a lot of money. And it's on other blockchains, but I think that's going to add even more value and make NFTs even more real than they currently are. Like, one of the reasons that the profile picture sort of NFTs are cool is because, yeah, okay, people can right-click save your JPEG all day, but you're the only one that has this one-of-one.

1:12:07And that one-of-one is known as you, and it can become an identifier of you, right? Because you're the one that has it. Yeah, if you sell it, okay, you're selling it, and, you know, that's kind of weird. But it carries some of that uniqueness, right? So yeah.

1:12:24Vlad CosteaYeah. And I was thinking, as you mentioned, that Rare Pepes had a resurgence after these Ethereum people started looking for real art. It just bugs me sometimes that it takes these shitcoiners to discover something that was created on Bitcoin for it to actually gain more value. And why is it that they have more money to spend on this kind of stuff? And why is it that you always see news about auctions? For example, there was that Banksy guy who sold for, I don't recall how many millions of dollars, in ETH.

1:13:04But somebody did that. And I suppose that the answer for this, and correct me if I'm wrong, is that they have these whales from the presale and from the premine. And they need to pump, you know, for marketing purposes. They need to attract interest into their network. And in order for them to do that, they're going to randomly pick someone and create this market and speculation, and make people migrate towards their platforms, for the simple reason that they have this hope and expectation that somebody is going to pay a ridiculous amount of money for their work.

1:13:42Is it like that?

1:13:45Juan GaltMaybe. I'm sure some of that may have happened. I think somebody had a good theory about it. They said that cheap, or like soft money, or cheap money, is more conducive to the NFT market than hard money, right? Like, Bitcoiners are, you know, really, they really do HODL. Like, they really actually really do HODL. They don't spend their Bitcoin. They stick to it. They really treasure their Bitcoin. That's a good thing. But Ethereum people, and the profits on Bitcoin, as great as they are over the long term, in the short term they're not as great.

1:14:34I mean, Ethereum swings more than Bitcoin, to the upside and to the downside. But the funny thing about that is that, you know, if you had Ethereum at $1,000 and you rode it all the way to $4,500, you just did a 4X. You feel rich. Well, that feeling of being rich is going to lead you to spend money on other stuff, right? With Bitcoin, the gains are longer term in comparison to Ethereum. And so basically, the easier the money, the more liquid the money is, and the more it moves, right?

1:15:18And I think that's kind of like the theory, right? And, you know, I think that is part of it, right? I think that there's some data to back it, right? Basically, the shittier the shitcoin, the more of it that moves around looking for better value, right? And yeah, I think that's part of what it is. I think, yeah, I think also, like, it's a different cycle class. It's a different personality type. Like, people in Ethereum are much more artists, art-oriented, they're creatives, they're, you know, they're visionaries and sort of platonic-realm sort of dreamers, right?

1:16:02I think Bitcoin people are a lot more right-brain oriented. Like, they're more like logical and economics and, like, you know, philosophically sort of... They're more interested in philosophical consistency than they are in creativity, to some degree, right? It's a different personality type. They're more orderly, probably. And so they have a fundamentally different approach to the market, and probably to the world, right? And so, you know, it might even be a different economic class, right? Like, a lot of these people that are moving money on NFTs, they're clearly rich.

1:16:40Like, if you have $600,000 to throw at a JPEG on the internet, of this new exciting asset class, like, you're loaded, right? It's no coincidence that Snoop Dogg is collecting NFTs, right? The guy is rich, right? And he's an artist, right? So I think that's also part of it.

1:17:05Yeah, I would love it if Bitcoiners, you know, appreciated Pepes more. I mean, that's part of why I made it, too. Like, I would like them to go and, like, look at the memes. You don't have to buy them, but at least look at them. There's history there. There's Bitcoin history in those Pepes. There's a lot of, like, history around the fork wars. A lot of memes that are around the Bcash wars, right? You could make a sub-collection of just those memes, of those Pepes. There's a lot of culture in those Pepes, man.

1:17:35So I would love it if Bitcoiners appreciated it more, but they probably think I'm trying to sell them shitcoins, right? Okay, well, whatever. I'm not trying to sell them to them. I just built a block explorer for them. So, anyway.

1:17:48Vlad CosteaYeah, you know, what I found interesting about this whole community of people who create frog cards and Spells of Genesis is that they are so friendly. And not only that, you know, they just sent me a few cards for free, possibly because they wanted it to gain more liquidity, hoping that if I sell it, it's only going to make them richer. But at the same time, it's interesting to see that this community is so open and just willing to exchange cards. Even, you know, even if theirs is worth like $1,000 and mine was minted yesterday, they still do it. Like, okay, let's see what happens.

1:18:28Nobody really knows. This is so ridiculous. It's like the final phase of the fiat world, where everyone wastes their money on anything, hoping that it would accrue value and beat inflation. Yeah. So in a sense, it feels kind of nihilistic to know that, for example, you receive frog cards and then you realize that they're worth more than the money that you make in one year, or you can buy a Tesla or something with them. Yeah. It feels like, you know, this is insane. Like, why do people even work anymore and produce stuff?

1:19:08Juan GaltIt is, dude. It really is. I mean, I started this year trying to take my consulting business to the next level. I was doing, you know, serious recovery work for people, like friends of friends, or people that had lost their Bitcoin. And I'm still doing that. But halfway through the year, this Pepe thing happened, and suddenly it's this whole new market that's throwing serious money at JPEGs. And it honestly distracted me. Like, it threw me off, because, like... It's way easier to make money with... Well, the fact that I had a collection of Rare Pepes is what made it easy, that I'd held for, you know, five years, right?

1:19:55But like, that was very actionable wealth. Whereas going to pursuing coins that are potentially lost forever, that's hard work. That's serious work, man. And so I, you know, it distracted me, and it makes me wonder, like, what should I focus on? What signals is the market throwing at me right now? What should I focus on? Should I focus on memes, or should I go back to doing my, you know, hard, gritty consulting and recovery work? And so I think it is sort of... This is, to some degree, a market distortion that is late-stage fiat culture.

1:20:36And it's just cheap money floating around looking for something safe to purchase. It's people trying to get rid of fiat fundamentally and not knowing it. It's people feeling rich and not realizing that this is inflation manifesting. And so my mantra has been, since I started to realize this, yeah, you know, NFTs are cool, but they're a luxury. And make sure you can survive the collapse of the dollar, because that might be what's coming, right? And especially if people think that...

1:21:17You know, you can't eat an NFT, just like you can't eat a Bitcoin. Somebody has to make the food and the goods and the technology and the things that you need to live. And if everybody's buying NFTs and trading and HODLing their Bitcoin and living off their Bitcoin, then nobody's producing anything. Nobody's working. Then there's nothing to buy, and that's going to worsen the inflation. And so I think that's the message here, I think. And part of, kind of like, the meme magic of Pepe is that it's a troll, right?

1:21:51Like, the frog is a symbol of chaos, right? It's no coincidence that there were frogs... I can't remember which story in the Bible exactly. I think it's when the Egyptian king is enslaving Jews or something like that. And then God launches his, you know, curses on this king, and part of it is a bunch of frogs, right? And then the 2016 election, frog memes everywhere, right? And now the frog memes have come back, right? I don't think that's random. I think that's meaningful to the human experience.

1:22:30This is late-stage fiat culture. The frogs are coming back. And I think we've got to take the meaning there. It's like, yeah, prepare for some shit to hit the fan. I mean, I think, you know, the weirdness is not over yet.

1:22:49Vlad CosteaIt's insane when you think about it, but this is also like the pinnacle, or the indicator, that we are in a bubble. It was the same in 2017, when you could mine any shitcoin out there, and you could use your CPU or GPU to get some shitcoins, and you would find an insane amount of money to sell them for on some sort of market. And, you know, this begs the same kind of question. What's the point of going to work when all you have to do is buy a couple of GPUs and let them mine for you?

1:23:21Obviously, it doesn't mean that all mining is worthless. This was kind of a nihilistic approach to it, which was trying to make it seem absurd: that if you mine Bitcoin and that is worth money, then why don't I create my own shitcoin and make people mine it with some different algorithm, which makes it easier for home computers to participate? And obviously, we're all going to make it. We're all going to get rich, until, you know, we don't, and someone's going to end up holding the bag. And the ones who were smart enough to buy the actually valuable asset on time are also the ones who are going to make it.

1:24:03Obviously, you know, it's always like this. And I suppose also in the case of NFTs, if you hold on to the most valuable ones, obviously you're going to make it to some extent. But if you buy the latest crap and you find value in something which is computer-generated, or something that doesn't even have, like, an issuer, and there is no story behind it, there is no human experience, it's so bland and so stupid... I don't know. It's the equivalent of that banana which got taped to a wall and sold for a lot of money.

1:24:40It's kind of nihilistic. It just says nothing makes sense in this universe. Let's just throw money at it to show people that we can basically spend a man's wage of, let's say, five years in a few seconds, and prove that nothing really makes sense and the money is meaningless. Yeah. I suppose Bitcoin is kind of the exact opposite. It's trying to create value. It's trying to create an economy that's based on actual work.

1:25:14Juan GaltYeah, and it's currently trying to preserve that value desperately. And that is the intuition of the Bitcoiners. And you know what? That's fine. That's fine. Let them preserve. That's good. That's a good thing. Somebody has to preserve the value.

1:25:29Vlad CosteaYeah. And obviously, the proof of work that goes into Bitcoin, there's a lot of infrastructure and there's a huge market. There's a lot of demand for the currency which gets produced. I was just tweeting a couple of days ago that it's more likely for me to find someone who accepts Bitcoin worldwide than my local fiat currency, or even the euro, which is the European currency. So if I go to Africa, for example, let's pick a random country and say Zimbabwe or Nigeria, it's more likely for the locals to say, yeah, give me your Bitcoin, as opposed to, yeah, give me your euro.

1:26:07And it's kind of mind-blowing to think that this was achieved, and it's going to be 13 years in January since the network got launched. I don't think it's fair to count 13, because the first year was very experimental and there was not much going on. It had no actual monetary value, but that's the beauty of it. And to take it back to Counterparty, this is also the fun behind all of these NFTs which were created before they were even called NFTs. And they were basically given away and traded between people who were having fun.

1:26:44And now they realize that it's worth a lot of money. And unfortunately, I missed that, so I'm never going to be an NFT OG. But I did create an NFT, which, if you're listening to this and if you have had the patience to listen to our conversation, then you can get by writing a DM to me, and you can post a GIF with a frog. So if you post a GIF with a frog and you send me a Counterparty address, I'm going to send you an NFT.

1:27:16And also, Juan, you're going to get 10 of those, because you're a guest and you deserve to have it. The total supply is 100. I'm not sure how it's going to get distributed, but I also want to keep, like, a bunch of them, just in case I get rich someday by, I don't know, just minting something with a Bitcoin transaction. But even if it doesn't, it's like a nice memorabilia, a collectible that you keep. And if you're going to check out your collection in a few years, you're going to be like, oh yeah, I used to be on that show, or I have actually won a prize by listening to it.

1:27:54So send me a DM on Twitter. My Twitter account is @TheVladCostea, T-H-E-V-L-A-D-C-O-S-T-E-A. So, TheVladCostea. That's what my name is. And send me a GIF with a frog. And maybe the first five people who do this are going to receive the NFT, because obviously I only have a supply of 100. And Juan, I'm not sure if I have any more questions at this point for you, or maybe you'd like to comment on what I just said.

1:28:28Juan GaltNo, I think it's great. I'm literally preparing to send you some Pepes right now, that I'd like to share with you.

1:28:33Vlad CosteaOh, that's so nice. Just so you know, I'm going to HODL them, because I bragged on Twitter that my Rare Pepes can buy me a Tesla, which is insane. And everyone was like, oh, you should sell it right now and buy Bitcoin, otherwise you're a shitcoiner. And I was like, you know, in Romania, we have this tradition where if somebody gives you a gift, you don't sell it. Like, it's a gift. You're supposed to keep it. And I don't know what this is worth. I'm pretty sure that we're in a bubble, but I'm not going to treat you like someone who helped me buy more Bitcoin.

1:29:08I'm just going to hold it and see. I don't know, maybe one day there's going to be someone who comes by my door and tries to start a $100 wrench attack, because due to inflation, the $2 wrench is going to be worth $100. And they're going to ask me, give me your Rare Pepes. And I'm going to be like, okay, but I'm going to give them my Fake Rares, and they're not going to be able to tell the difference.

1:29:33Juan GaltThere you go. Well, you know what? Also, you can tell them, point out to them what I was pointing out to you pre-podcast, is that on Xchain, on paper, these Pepes might be worth a lot of money, but they're actually so illiquid that if, like, literally, if I tried to sell my whole collection right now, which I intend to not sell probably ever, or at least for a long time, I would get a quarter of the value at best. So there's paper value, and then there's actual market value at the moment.

1:30:10So a lot of this stuff is, you know, elusive, but that's okay, right? It's fun nonetheless. So yeah, thanks, man. I sent you some Pepes, and I appreciate you having me on. It was fun. It was a good time.

1:30:28Vlad CosteaI also want to have your comments on something, and then I'm going to ask you to tell people how to follow you. But I'm trying this experiment. So I've been working on a magazine which is all about Bitcoin and has all sorts of articles. And I want to launch it in time for Christmas, which means that I only have about one month left to launch it from the time that we are recording this. And I have created a dispenser. So basically, I'm experimenting with this idea: how about instead of selling the magazine, which is kind of... I don't know, it's hard to set up a business and do all sorts of stuff.

1:31:09And instead of setting up a business to sell a magazine, I can try to create a dispenser to sell an NFT. And everyone who buys the NFT can claim a physical copy, which is going to have, like, the data about the token, with the blockchain hash written on the back cover. So that way, you know that it's not a fake one and it's tied to the NFT that you just bought. And I'm going to send that out. And I suppose this can be an interesting experiment to discover.

1:31:40Juan GaltI think that's a great idea. I think that's super cool. Here's how I might do it. So like, let's say you're going to issue 100 copies, because it's a limited-supply magazine, right? So first, you issue the NFTs. You create a scale of dispensers. I mean, you could put all of them at a fixed value, but you could also just issue in batches of 20 and increase the price upwards, so that you can have a little bit better price discovery. And then, as people buy them, in order to claim them, you ask them to sign a message with their public key to your public key and send you that message.

1:32:20And they should have the chops to be able to do that. It's not that hard. You can do it on rarepepewallet.com. You can do it with freewallet.io. You can do it on counterwallet.io, using the Counterparty protocols. Have them sign the message and send you the message signed. You can verify it. And if you verify it, then you grab their public address and embed it in the magazine and ship them... Like, you print a copy with their public address on it and ship it to them.

1:32:45And that'll make it legit unique. I think that's a great idea. Something like that would be really cool.

1:32:51Vlad CosteaYeah. I mean, I figured out along the way that the magazines that I produce are very high quality and kind of hard to sell, on one hand, because the production costs are kind of high. And I don't want to do something which is like consumer-level, something that you would find in a shop. I want to do something high-quality, which has the potential to become like a rare collectible. And I've also done it in batches, but unknowingly, because first of all, I printed 150 of the first edition.

1:33:26And then I realized that I had some typos and stuff like that, and I fixed them in a second edition, which also had a different cover. So I've changed the color of the cover, and I printed, I think, 80 of those. And then I did another batch of 60 with a different cover, and so on and so forth. I think right now I'm at the fifth edition. So I'm writing and I'm working on a different one, which is obviously not an edition of the first one and has original content.

1:33:57And I'm looking for creative ways to do this, because most magazines that I have, I haven't sold. Most of them I have given away. So I think right now the count is around 371, and I'm going to receive 50 more next week, so I'm going to reach 421 magazines that I delivered. And most of them were given away for free, and people just sent a donation if they liked it. And it was an interesting experiment. I thought people would donate, but most of them did not.

1:34:34But at the same time, those who did were more than generous. So they provided much more than what I paid for the magazine and the delivery. So I broke even. Right now I'm trying to figure out a business model for this to actually work, because there's a lot of work that people don't even think about.

1:34:54Juan GaltNo, I think that's super cool. And I think the Counterparty community will appreciate what you're doing there. I think it's actually cool. Another way you could do it, in order to make them truly non-fungible, which would add a different dynamic to the piece, would be, let's say you grab 100 of them... Let's say you grab 10, just for the sake of the example. You grab 10 of the magazines and you issue one token, one unique one-of-one asset, per magazine. So instead of creating one NFT on Counterparty that has 10 units of supply, you create 10 separate ones.

1:35:34So you mint each one individually and pay the transaction fees accordingly. And you get the asset names that you got on your other assets, for example, so it'd be like AA11, whatever. And then you grab a Sharpie, and wherever you're going to sign and autograph the magazine, with a Sharpie you write the asset name, or the asset ID, and then you just sign it and ship them that. And so now the magazine has a unique and direct relation to the asset that's on the Bitcoin blockchain, of which there's also one of one.

1:36:17And yeah, people can sell them individually if they want to, but obviously together they're going to be a bundle. And it's going to be a kind of unique bundle, a true non-fungible, right? That would be cool. And then that would allow for transferability as well, so that if the buyer wants to resell it, the association is made with the asset and not with the public address of the original buyer. So it would increase its liquidity, I think, or sellability, its resale value. That would be fucking cool.

1:36:52I would buy it, if it's the right price.

1:36:56Vlad CosteaI'm happy I asked. So you gave me a couple of good ideas that I'm going to experiment with. And thank you very much, Juan. So how can people follow you on Twitter?

1:37:06Juan GaltYeah. Juan S. Galt, J-U-A-N-S-G-A-L-T, on Twitter. Also juangalt.com. I have a blog, I write posts, and yeah, that's about it. If you want to reach out to me, I'm easily accessible. So yeah, you can go find me there.

1:37:28Vlad CosteaYeah. And don't forget about RarePepeWorld, which is the marketplace that you created in 2016.

1:37:34Juan GaltNo, I actually didn't create it in 2016. That's misleading. I should really change that tagline. I was just kind of referring to the Rare Pepe community in general. I created it... We published it like two months ago, or a month ago, RarePepeWorld. But yeah, rarepepeworld.com. Check it out.

1:37:51Vlad CosteaYeah, I'm looking at it now. It has a lot of frogs.

1:37:55Juan GaltIt does indeed.

1:37:57Vlad CosteaAnd that's insane. You know, you think of Pepe as that singular, very one-dimensional character, but there are so many creative ways in which the community has changed what Pepe means.

1:38:16Look at it. Even if you are the kind of person who right-clicks and saves, look at it, because this is Bitcoin culture in ways that you did not ever consider.

1:38:31Juan GaltYeah. I mean, the great thing about NFTs is you don't have to pay for them to enjoy them. So go look at them. Why not? You cannot lose. Take a look at these.

1:38:40Vlad CosteaSo yeah, thank you very much, Juan. I was about to call you John, for whatever reason. Juan. And we'll keep in touch.

1:38:52Juan GaltThanks, man. Yeah, appreciate it. Good to finally connect with you. I've been following you for a while, so it's good to catch up.

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