41 – Why Tesla Sold Their Bitcoin & Ethereum is Going Bananas

Tracey: [00:00:19] Welcome to the Crypto Curious podcast designed to help you navigate the dynamic world of cryptocurrency. We're here for anyone who's interested in crypto at all. Maybe you've already dip your toe in the water, or maybe you don't know anything about it. And this is the very beginning. But we recommend heading back to the early episodes to get your footing. However, if you think you're ready to dive in headfirst, then let's do it. Today we're chatting about the eagerly awaited merge. We'll spend some time in the metaverse with Zuckerberg. A GameStop development is in the works and an ambitious plot to recover $175 million worth of Bitcoin from landfill. But first, we're going to talk about the guy who's always in the news, Elon Musk and Tesla. But let's start with introductions. I'm Tracey. And today, I'm joined by my colleague from the Bamboo app Craig just the two of us today make as Blake is taking the long flight home to Australia from the US, he's finally coming home. 

Craig: [00:01:16] Yes, he is. He's got about 40 hours of travel, so I don't envy him right now. But let's just hope he doesn't get held up with any delays. But yeah, let's crack on to the alien news. What's he done now? 

Tracey: [00:01:28] Yeah. So this was hot news late last week when we recorded, so it's worth mentioning again. But he did a bit of a market spook last week when this story broke. Tesla's Quarter two report came out and it turns out that they sold 75% of their bitcoin. So tell us, why should we care about this? And you know, what did Elon say about this, Craig? 

Craig: [00:01:51] Well, firstly there is an infamous tweet when bitcoin had a little sharp rebound and Alan tweeted, Tesla has diamond hands with dominance emoji. Turns out he's a fibber. He doesn't have diamond hands. They've sold, but they did sell the profits. And the reasons that they quoted was the fact that they're worried about lockdowns in China. And as we spoke about previously, they stopped accepting Bitcoin because of the environmental impact concerns which we have debunked in the past. But a lot of the experts that are much smarter than you and I trace, they think it's because they didn't convert to cash. It would have been a negative cash flow quarter and they did actually result in a profit on this Bitcoin trade. So either that or they've lost faith in Bitcoin as a Treasury reserve asset. But I suspect it's probably the cash flow reason because I can probably see Elon getting amongst that once again. 

Tracey: [00:02:52] Yeah, I think you're right there. I think that's a little bit in between there. We'll move on. And next is the Atcc conference which happened last week. And this is a big one because the ETH conference is a little bit like Coachella for all the Etherium nerds out there. Instead of your Jay-Z headlining, you've got Vitalik as the headliner. And here is what we found out at this conference. The merge, which we've been hearing a lot about, is just the tip of the iceberg for this upgrade. We know Etherium will move from proof of work to proof of stake during this phase, which we spoke about a lot in last week's episode. But Vitalik is saying that this roadmap is only 55% done after this merge and there's actually four more stages from here on in. In total there are five key phases that need to be completed before Etherium is a completed beast and as it's intended to be. So after the merge, which we've spoken about a fair bit, there is to be the surge, the verge, the purge and the splurge. Okay, so these are the next phases. And I have been walking around saying these all week. I know they sound a bit silly, but these are the next ones to come and they are really intriguing. And I've been reading a lot about these this week. Craig, you've been doing a little bit of research, too. Do you want to give us the abridged version? So we all understand a little bit and I'm sure we're all going to talk about these a lot over the next couple of years because it's going to take a long time for these to be rolled out. But let's give the abridged version of what these kind of mean over the next few years. [00:04:32][100.2]

Craig: [00:04:33] Yeah, for sure. So a bit of a tongue twister there. Surge, verge, splurge, purge. But the three main ones is what Vitalik was talking about. Was the surge, the verge and the purge. Now, I won't go into every single one specifically, but for Etherium to get to 100,000 transactions per second, Vitalik says that they need to increase the network scalability which. To be the surge they need to reduce node sizes, which will be the verge optimising storage and the need to reduce network congestion, which will be the purge. So that is in summary, what, how I'm taking it. And the last one is the splurge which is making smaller upgrades and tweaks to the final product. Now, when those four things are done, Etherium, as you said, will be 100% finished based. But a theorem is renowned for taking a bit longer than everyone wants them to because it's probably the most ambitious, decentralised blockchain. [00:05:40][66.8]

Tracey: [00:05:40] Exactly. [00:05:40][0.0]

Craig: [00:05:41] In history. [00:05:42][0.3]

Tracey: [00:05:43] This will take a long time. [00:05:43][0.9]

Craig: [00:05:44] Yes, yes, it will take a long time. And I don't even think he's talking about a final date yet, because one of the big criticisms of Vitalik and Etherium is, well, they mentioned dates and they never seem to hit them. So even then when he said September for the merge, everyone still sort of like really like fibbing. But yeah, let's see how they go. [00:06:04][20.0]

Tracey: [00:06:05] So we're talking years for this. But again, everyone's excited because like you said, we've got scalability here, you know, reducing congestion and, you know, getting the network to run smoothly and, you know, one platform to kind of rule them all. But we're talking five, ten years away. But everyone was very excited. And if we can if we can pull this off, then it's it's huge. So, again, could be why we're seeing some extra price action in Ethereum as we have been the last couple of days again. [00:06:33][28.7]

Craig: [00:06:34] Yeah, definitely a cool thing as well as that. He's mentioned that they want to cut the power usage by 99%. So the environmentalists in crypto are pretty happy about that. [00:06:43][9.7]

Tracey: [00:06:44] And again, like we spoke about in last week's episode, pushes towards a deflationary asset similar to Bitcoin. So all of those things pointing in in the right direction, I think. Moving on to our next story, which happened overnight, a new crypto bill has just been introduced into the US Senate. It was introduced by the Virtual Currency Tax Fairness Act and the goal is to cut taxes on small crypto payments up to $50. Why is this big news, Craig? [00:07:15][31.0]

Craig: [00:07:15] This is big news because right now governments treat crypto assets as an investment rather than payments. Obviously, you know, you and I work at Bamboo. We have employees from around the world. Some of them do get paid in crypto and so we pay our rata in South Africa. Crypto and bitcoin goes up. He's enough to pay tax when he sells back into fiat money, which has always been a massive roadblock for introducing crypto as a true borderless payment system. One of the big concerns I've got is that it's only $50 and, you know, people that make new charges would rather say that they upped a lot. But I think it's a move in the right direction. [00:07:53][38.2]

Tracey: [00:07:54] Yeah, definitely. I think you're right. I think crypto has the potential to become a part of our everyday lives. And I think the current tax code, as it stands in the US and here in Australia stands in the way a little bit. So I'm really glad that this has happened and once we 81 puts this as part of law, it's really hard to take that back. So it's a definite move in the right direction for sure. [00:08:16][22.1]

Craig: [00:08:16] Trice I've got an interesting story for you. I'm sure you remember GameStop last year. The Reddit traders pumped them with the short squeeze. Remember that one? [00:08:24][7.9]

Tracey: [00:08:25] Certainly do. [00:08:25][0.6]

Craig: [00:08:26] Did you get on it? [00:08:26][0.5]

Tracey: [00:08:27] I did not get on that one, unfortunately. [00:08:28][1.6]

Craig: [00:08:29] One of the trades you missed so well turns out GameStop have completely doubled down, tripled down on crypto in the past few months. They've released a GameStop wallet where you can hold end of TI's whole digital assets. They hooked up with Immutable and they're launching a gaming fund with Immutable, and now they've just launched their own NFT marketplace. So they shot out of the gates with seven and a half million USD in the first week of sales volume, which has already taken coinbase's NFT volume historically. So Coinbase is NFT has been around since May, the Coinbase NFT platform and they've only generated two and a half million. So already in the first week GameStop has a three exit their volume. So what do you think about this choice? I think there's a very loyal community that have rallied behind GameStop. But do you think this could be a possible rival to Opensea? [00:09:24][55.2]

Tracey: [00:09:25] I don't think they'll come anywhere near open seas, but they will stamp themselves, as you know, coming somewhere from obscurity and giving it a go with their name and their brand. And I think that, like you said, there's a lot of people that'll be pushing them to go somewhere. I like the fact that they're trying to do something a bit different and, you know, they're getting people vetted. Is that is that what they're saying? You have to apply to be a seller on there? Yeah. I'm not quite sure that it's going to take a lot of people power for them to vet every single person that's selling on there. So I don't know how they'll do that. Seems like a lot of work. [00:09:58][32.4]

Craig: [00:09:58] Yeah, that's right. But. Also, this reminds me of a little bit like Blockbuster. So Blockbuster had thousands of stores around the world with hardware, video and GameStop as similar games to have thousands of stores in America where you can hire video games. Now, obviously, video games are going into a phase. They're going online. So they're really trying to get ahead of everyone and become you know, they might look some close to open, see, but they might end up being the home of gaming nfts, which is a huge market share in itself. [00:10:29][30.7]

Tracey: [00:10:29] So so they're just changing. They're pivoting and moving. [00:10:32][2.7]

Craig: [00:10:33] Exactly. So good on them for having a crack, I'd say. [00:10:35][2.3]

Tracey: [00:10:36] And with that, we'll move on to our next story, which Craig wasn't so fast on me putting into the episode today, folks. So if you like this story, give us a bit of love and tell me that it was worth putting in here. But Mark Zuckerberg and Neil deGrasse Tyson got together and explored some images from deep space in the metaverse together. I saw this story and it kind of bothered me a little bit because I'm not a big Zuckerberg fan, but I'm a massive Neil deGrasse Tyson fan when I saw him when he was here in Perth a few years ago. So deGrasse Tyson is obviously world renowned astrophysicist for those who don't know, and Zuckerberg's will, he's Zack's. But the two of them got together to look at the images that were released a few weeks ago by NASA, and they did this through a VR headset and sat down to discuss these. It didn't go as planned. And there's a lot of blowback on the Web because it just looked really awkward. It wasn't such a mismatch of lines between the two of them, but also just it looked really weird, the encounter itself. Craig, you watched this, but it was half way there. The people were half people with no legs and it just for what you're expecting of the metaverse. It was really weird. There was one of the Twitter people that posted it said, I love how we keep pumping billions into this shit. And it still looks like Taiwanese news animations from 15 years ago, so it wasn't loved. What did you think of it? [00:11:58][82.8]

Craig: [00:11:58] Craig I tried to watch it and I did watch it, but I was cringing the whole time. And this compared to the other side, metaverse preview is worlds apart, like the metaverse of the other side, the graphics, you know, the gameplay. This we just watched to it look like Nintendo. We remember Nintendo where you play and you picture player. [00:12:20][21.2]

Tracey: [00:12:20] Yes. They had no legs. They have no legs. [00:12:23][2.4]

Craig: [00:12:23] Yeah, they look like them. And they were just talking about I was just thinking like, what's the point of this? [00:12:28][5.0]

Tracey: [00:12:29] What is the point of this? [00:12:30][0.7]

Craig: [00:12:31] So, yeah, there's going to be winners and losers out of this. And the other side bought I built cloud, you know, I'm a fanboy. [00:12:36][5.5]

Tracey: [00:12:37] Yeah. So I guess so because we keep talking about, you know, the metaverse and web3 and where it's all going. And you're right, I'm there's reasons I don't particularly love board eight yacht club at the moment, but that metaverse that they showed us a few weeks ago did look pretty cool. It looked where it should be. And then when you look at things like Decentraland and I was at a Los Beauties event in there a few weeks ago, and that was a little bit stilted, weird, decentraland didn't look quite as it should, but this thing that we looked at with Zuckerberg, you know, during the week was just wrong. It just didn't look right and feel right. They kind of tried to do a fist bump together and it was just awkward and weird. And anyway, we'll maybe put a link. [00:13:19][42.1]

Craig: [00:13:19] We'll put a link in there. But in saying that it's really good now we're actually starting to see previews of what people have promised in the bull market, like projects like Alluvium, like Bodega Yacht Club. I know I mentioned them before, but they've all raise off the back of these really awesome experiences. People have bought into it and now obviously the market isn't as enthusiastic as it was, but we're now actually going to see gameplay preview, which we will keep you up to date with, because I'd love to see Alluvium and some other projects that are starting to come out. Star Atlas is one as well when they all start to actually show videos, well, we'll keep you guys updated. [00:13:55][36.4]

Tracey: [00:13:56] And you make a good point, Craig. It's where all that money's gone, too. And we'll see. We'll see where they've spent it. [00:14:01][4.9]

Craig: [00:14:01] Exactly. [00:14:01][0.0]

Tracey: [00:14:02] Yeah. Yeah. It's a very good point. Well, we'll leave you with those thoughts. And when we get back from the break, we'll talk about some robot dogs. Welcome back. You're listening to the Crypto Curious podcast. If you're a regular listener, thank you for coming back each week and joining us. It means the world. If you're a new listener, then welcome aboard. We'd love for you to take a little time out and spread the word and share the show. It's the best thing to help us grow. So copy and paste this episode or share the link with a mate right onto these robo dogs. [00:14:33][31.0]

Craig: [00:14:33] I love this story. It's a story about true desperation and ingenuity, and it sounds like a plot of a Hollywood movie if it comes off. So give us the headline, Chase. [00:14:43][9.3]

Tracey: [00:14:43] Yeah. Look, James House has been in crypto for a while, mining bitcoin early as 2009, but one day he was doing some cleaning and accidentally threw away his hard drive, which happened to have 8000 BTC on it. Now this would be around $175 million today. James now has a plan to find this hard drive and he's raising $11 million to do it. The plan includes robo dogs, human sorters and an AI powered machine trained to look for hard drives. Craig, can you tell us a bit more about this master plan? [00:15:22][38.5]

Craig: [00:15:22] Yeah. So he's raising off the back of, you know, getting these assets together, but pretty much these two robot dogs, they'll be sweeping the landfill for anything that looks like a hard drive at night. They function as mobile CCTV patrols to make sure no one tries to search for his harddrive. So he's making sure no one's just copy trading him, essentially. He's got human sorters, about eight experts that specialise in everything from landfill to waste management. And one of them even helped recover a famous black box from a space shuttle. So he's got some good pedigree on his team here, Chase. He's also got AI powered machines that have been trained to spot hard drives that look like the one that he lost. And this mechanical arm will pick out any contenders for the humans to sort through. So, yeah, pretty solid plan. [00:16:10][48.0]

Tracey: [00:16:11] It is it is a pretty solid plan. Look, I feel for him here. He this is the guy who has been knocked back by the council, you know, a few times to do this and other various ways. But good on him. I think this is he's got a full plan together here. He cannot get this out of him. I can imagine him every night. This would be all he's dreaming about, all he's thinking about. He can set himself up, his family up, everybody up. He just he cannot let this go. And I can understand why. So but he's got a plan about what he's going to do with the money. What he. What's he doing with that? [00:16:42][30.7]

Craig: [00:16:42] Yeah. So he's going 30% with him, 30% to the recovery team and 30% to the investors, and the rest will go to his locals. So he lives in a pretty small town in Wales, 150,000 people. But the lesson here is keep a backup of your seed phrases as and a Bitcoin documentary probably found on YouTube. The Winklevoss twins, they've saved phrases in like ten different countries in like eight different banks. Of course, at the time he didn't know that he was sitting on potentially $1,000,000,000, you know, at all times higher prices. So lesson learnt, keep a back up and never give up because if he fails, they can always make a movie about it. [00:17:23][41.5]

Tracey: [00:17:24] There you go. And now on to my favourite part of the show, which is our short, sharp news bites, which never end up very short because we always end up talking for quite a long time. [00:17:32][8.6]

Craig: [00:17:33] Yeah. [00:17:33][0.0]

Tracey: [00:17:35] Craig, do you want to do you want to start us off with your short, sharp piece of news? [00:17:38][3.6]

Craig: [00:17:39] Yeah, I'll kick it off. So, chipotle American Fast Food Joint, they even do a 200 K in free crypto with an online game called Buy the Dip. And I had this campaign idea for Bambu. [00:17:50][10.9]

Tracey: [00:17:50] I knew you were going to say this. I knew it. I had this idea. [00:17:53][2.8]

Craig: [00:17:53] So they've clearly stolen it. Someone's told them that we're going to do it. Yeah, it's pretty simple. Plays are presented with a crypto trading card and they watch as prices rise and fall. They need to hit stop whenever they believe the market is bottoming out. As every other trader that tries to trade this market, the probably going to get wrecked. So we'll see how it goes for them. I love these crypto campaign ideas, but it's so weird that it's chipotle and not an exchange. But anyway. [00:18:23][29.9]

Tracey: [00:18:24] Well, it kind of goes by the Chipotle. I like it. Next bit of news. Minecraft has just dropped an announcement which I think is very odd, stating that blockchain technologies will be banned from the platform until further notice. So floor prices have plummeted on NFT worlds, lamb escapes, critters and other projects planning to build on the Minecraft platform. Do you know why they're doing this, Craig? Do you understand this news? Because I don't know. [00:18:50][26.1]

Craig: [00:18:51] I don't. What did they what do they say? [00:18:52][1.4]

Tracey: [00:18:52] That's exactly what they stated, that blockchain technologies will be banned from the platform. If anyone else understands this news, perhaps you can choose an email and help us understand what their place here, because I certainly don't understand it. And there's got to be some method to their madness. So an odd one from Minecraft. [00:19:10][17.4]

Craig: [00:19:11] Moving on. So Voyager Digital, we spoke about them a few weeks ago, another insolvent exchange that are in big trouble. Another exchange has paused withdrawals. They've rejected an offer from Alameda Ventures, which is SBF Sam Banquet from Sam Bankman-Fried venture arm. Do always tend to win out like they if you copy tried them. They always just know when to fold them. Know when to hold them. Not financial advice. Not financial advice or financial advice. Alameda has offered to buy out all of Voyager's assets and outstanding loans except for the defaulted loan to 3 hours capital, which was about 665 million USD. [00:19:52][41.1]

Tracey: [00:19:53] Bu wow. [00:19:54][0.9]

Craig: [00:19:54] Bull. Just a little bit of a loan there. Voyager claims that the deal could potentially harm customers by subverting a coordinated, confidential and competitive bidding process, whatever that means. It also claims that the proposal is essentially just a liquidation of Voyager's assets. The word on the street is that this offer is a law, is a lowball from the previous offer that they've got and they do not want to take it. Regardless, this bankruptcy saga is going to take years to solve, and it isn't a good result for Voyager users who are looking for their assets in the short term. [00:20:27][32.7]

Tracey: [00:20:27] So, no, this is not good news. [00:20:29][1.8]

Craig: [00:20:29] Yeah, but Alameda, they certainly come to the party with a couple of offers. Chase. [00:20:33][3.4]

Tracey: [00:20:33] Yeah, it is. I hope this one works out for the Voyager users. Otherwise it could be if it does go into bankruptcy proceedings, you know, that could take a long time and it's not good. So fingers crossed that one gets worked out. On to the next bit of news. There's a chain analysis, 109 page State of Web3 report, which neither Craig or I read that came out recently. And the report covers institutional investments in Web3 Defi usage and DAO statistics. But someone else did read through this, someone on Twitter, and they've given a really good thread and they summarised the findings from this report and will give a link in the show notes below. But as a brief summary, it says that Web3 is far more established now than in past cycles. You know, crypto is still a little risky, but it's not going to tank or go away overnight. It will still likely take some time before the market will bounce back. So just basically common sense and everything we've been saying, but again, jump on that thread as it is a good one. 

Craig: [00:21:34] I also read the thread and did skim through the report, but one of the things that stood out for me is the decentralised exchange trading numbers. So, you know, we remember Traci when Uniswap and all that first started and now the DEX transactions were two and a half times that of centralised exchange transactions in the peak. So that is an interesting trend that people are coming over to the dexs and they're finding the little gems that you might not be able to find on the centralised exchanges. 

Tracey: [00:22:03] I think people maybe trust them a bit more than they used to before, as well as a bit more trust with the Dex than they were before. Yeah. Well understanding on how to use them and clicking metamask in and do all those type of things. Yeah, I think the education's a bit more prevalent definitely. And that was it for our short, sharp bursts of news and for the episode today. So thanks again for listening to us. We love hearing from you guys. Get your emails across to podcast at Get Bamboo Dot IO and jump into that Facebook group that we've been mentioning. It's going strong. Thanks for listening to us guys. Join us again for next week's episode. Bye for now. 

Craig: [00:22:39] See you guys.