“Never buy Bitcoin”

My public introduction to crypto: going on the Colbert Report and saying nobody should buy Bitcoin

The easiest thing is to mock me.

I went on The Colbert Report on April 17, 2013, and said--quite confidently and emphatically--that nobody should ever buy Bitcoin. You can watch me say it here.

At the moment I went on, one Bitcoin was worth about $60. So, if instead of telling the world NOT to invest in Bitcoin I had bought $1,000 worth of the stuff, I’d have $1 million today.

To be fair to me, Bitcoin had been on a wild ride that week, gaining and losing massive amounts of value for people who owned it and it seemed reasonable to say: “If you do have money that you have no need to use ever again, and you want to see what happens with [Bitcoin] then that’s a reasonable investment.”

But to be fair to you, I should admit that I didn’t know what I was talking about. I was a traditional finance reporter who saw the world through traditional lenses. The main thing I saw, when I looked at blockchain-backed currencies was what they don’t have: regulators, long history, government backing.

The following days convinced me I was right to say what I had. I received a stream of angry responses from anonymous people on twitter who didn’t seem to know how to spell. The only people I saw publicly celebrating Bitcoin did so in shouting form with an enthusiasm that bordered on that of a cult leader’s most enthusiastic supporters.

If I had any doubt about what I said on Colbert, it was that I wasn’t emphatic and contemptuous enough.

I stopped thinking about crypto completely. It’s striking to me that I spent the next five years writing about the economy for the New York Times Magazine and, then, the New Yorker--hundreds of pieces about all sorts of facets of our economic and financial system, and I never once thought it was worth my time to explore cryptocurrency, the blockchain, DeFi or any of these topics. I can’t remember thinking about them at all, but I feel fairly confident that if I did, it was to dismiss them as rantings from the criminal and ideological fringe. I could not have told you one single fact about the difference between Bitcoin and Ethereum, say, or the rise of smart contracts.

I had no passion in my disinterest. I wasn’t actively thinking about crypto and then deciding not to write about it. I just didn’t give a crap.

The Misery of Companies

How Wall Street, financial regulators, and NPR showed me how disastrous entrenched bureaucracy can be

I look back on 2007 as a hinge year in modern history and, also, a defining year in my own life.

We now know that year was the peak of stupidity--even insanity--for Wall Street, the Fed, government regulators, and the entire world of serious people talking with certainty about the financial system.

It was possible through most of 2006 to ignore the trouble signs in the subprime mortgage market. But by early 2007, all the klaxons were screaming and flashing red and, still, most people ignored them (me very much included). That’s a bigger story for another day--though I’d invite you to listen to The Giant Pool of Money, which Alex Blumberg and I produced in 2008. I do think it’s a good explanation of those crazy times.

My fixation, then, was not on the impending collapse of the global financial system. No. I was focused on something that felt much more immediate to me: how frustrated so many public radio reporters were.

I was International Business and Economics Correspondent for NPR, which is a very grand title for a job I had grown to hate. Well, hate might be strong. I got to travel the world, reporting on all sorts of interesting changes in the global economic system. I got to interview the world’s leading thinkers about economics, business, and finance. But, when it came to actually writing and recording the audio stories that would go out to the public, I felt crushed. The system at NPR at the time was like so many traditional media systems. There was a large bureaucracy of middle-people--we call them editors--who served as gatekeepers, shapers, blockers, destroyers.

(I will note: the previous graph is not meant as an attack on all editors. A great editor is a miracle. I have had some amazing editors who make my work so much better. So, I definitely don’t mean to disparage the entire group of people called editors. But, I think almost anybody who worked at NPR in 2007 would agree that the editing function was disastrously broken.)

A typical experience went like this: I flew to China, visited a bunch of factories and talked to all sorts of people, from young farm kids who had moved to the city and sewed t-shirts, to the American managers who ran those textile mills, to Chinese academics who told me things, in the early 2000s, that wouldn’t become clear in the U.S. for another decade or more. I felt certain: because of China and the growth of global trade, every industry in the United States is about to change. (This counted as an interesting, fresh thought in 2007; it’s now, of course, obvious.)

I’d start working on a story, feeling aflame with these experiences and thoughts. But NPR didn’t do “aflame.” My editor would talk about my story with a bunch of other editors and show producers, in a meeting I wasn’t invited to. They’d decide I should report on something else, altogether. They wanted me to remove the interviews that I felt were funny, surprising, delightful, and replace them with conversations with talking heads--experts from Think Tanks saying long, ponderous things in a dull voice.

I think of NPR, at the time, as a pretty standard example of an inward-focused corporation. While anybody who works there would say the job is to serve our listeners, there was no usable system for truly engaging our audience and understanding what would delight them, inform them best, serve them.

NPR prides itself on not chasing ratings. One of my bosses said that if we wanted to give the listeners what they want, we’d just be a top 40 music station. I always loved that NPR was mission-driven, that we saw our job as not just juking the stats, giving whatever it was that would drive more listenership, but, instead, we focused on important stories that the public should know.

But, I also always felt we had a responsibility to make our reporting as delightful as it was rigorous. A boring story that nobody pays attention to is not serving anybody, even if the topic is important. I was not alone in feeling this. Complaining about the NPR system and how it forces passionate, curious reporters to churn out dull, middle-of-the-road lifeless stories is an obsession at the company.

I’m writing about NPR, but the same basic issues exist in many (most?) big corporations. Their purpose is to create some product or service that customers will like. But the day-to-day work is driven far more by internal politics and outmoded systems than by any information about what will most delight and engage customers. (Note to self: write about Ronald Coase’s The Nature of the Firm and Alfred Chandler’s The Visible Hand--the two masterworks that shaped how I understand the modern corporation’s strengths and weaknesses. Does anyone want to do a book club?)

The financial crisis of 2007/8 had many causes, but one that stands out is the inability of large organizations to identify and respond to existential risks, even as those risks exploded around them. Wall Street banks--and their cousins in Frankfurt, London, Paris, etc--served the needs of specific traders to move product rather than survival of the overall organization and the entire financial system. (Arguably, the banks were being rational since they suspected, and soon learned, that the government would never let them fail.) Others, pension funds, central banks, sought tiny improvements in bond yields without doing the not so difficult work of learning what risk they were actually taking on. And don’t get me started on the friggin’ ratings agencies. Regulators, too, followed their old, rigid systems and obsessively paid attention to precisely the wrong things.

Without being too absurd, I’d argue that the basic structural issues in large bureaucracies that led me to do crappy stories at NPR, that lead you to roll your eyes when your boss tells you to spend time on some useless powerpoint, are the issues that led to the financial crisis.

The Podcast Revolution

Why I would have made Planet Money a DAO if such a thing existed at the time (I’ll also explain what a DAO is)

I was podcast-pilled, to coin a phrase, around 2005. That is to say, I had a sudden and complete shift in my thinking about my industry and the nature of commerce. It all happened in one phone call.

I was talking to my old friend, Jamie, a web designer and tech obsessive who was listening to a lot of tech podcasts. Back then, long before the iPhone, the App Store, and n00b-friendly apps, podcasting was an obscure medium that was dominated by people like Jamie: sophisticated in tech and willing to spend time learning about rss feeds and xml. Jamie mentioned that he had been driving and was listening to NPR’s All Things Considered. A story came on that he found boring and he found himself reaching for the button on his radio that would let him fast forward to the next story. Of course, that button didn’t exist. He was listening to a live radio feed. Later, a story came on that he really liked, but that ended far too quickly. He reached for the button that would allow him to listen to more about the topic, but, again, that button didn’t exist. He told me that those buttons would exist. The tech isn’t all that hard.

It hit me, all at once (or, at least, that’s how I remember it now, 16 years later) that Jamie was saying something profound, something that upended the core logic of my industry and nearly all industries.

The core work of NPR was--and remains--producing Morning Edition and All Things Considered, the morning and afternoon drive-time magazine radio shows. These shows were broadcast on hundreds of radio stations around the country. The audience is massive--30 million or so. The shows are designed to engage (or, at least, not piss off) people in big, coastal cities and on Midwestern farms and in senior care centers in the South. In short, we wanted everything we did to appeal, essentially, to almost anybody.

It’s impossible, of course, to create any content that everybody loves. So, we did what a lot of broadcasters do: we focused on creating content that didn’t offend. If you listen to NPR, you know that bland NPR voice, the voice of people who never get too excited about anything, never curse or insult, never take any strong opinion.

The big NPR shows are built out of short radio segments--the typical story is between three and five minutes long. It’s a bargain NPR is implicitly making with the listener: if you find this boring, don’t worry, it’ll be over soon; over the course of a listen, you’ll hear a bunch of stuff, some interesting, some boring, but stick with us and it’ll all balance out. We were locked into a clock: we needed 4 hours of new content a day, every day. Some days--like at the start of the Iraq war or when Hurricane Katrina struck New Orleans--the shows couldn’t get to everything, there was so much compelling news. Other days--in the doldrums of August, say--when not much was happening, the shows were desperate for anything at all that could fill the time.

NPR benefited from a near-complete lack of competition. If you want to listen to the news and not have it mediated by some right-wing host, Christian broadcaster, or goofy morning zoo krew, then NPR was your only choice.

But, when Jamie told me about reaching for those buttons--the ones that would allow him, essentially, to create his own, personal radio show, I realized that this was an existential threat to the existing model and a huge opportunity for much greater content in the future.

I realized that podcasting would allow for something entirely different. Each episode could be as long as the producers thought would make sense. And, since the audience would actively choose to listen to a show, rather than passively hear whatever was on the radio, the content could be a lot more spikey, surprising, engaging.

Podcasting wouldn’t be locked into a clock. When a podcaster had a lot to say, their show could go as long as they wanted. When they had little to say, they could be short or just not post anything at all.

I had an intuition that the economics would work out. Podcasts would have smaller audiences but those audiences would be far more passionate because they were actively choosing something.

These insights led me to propose the idea that became Planet Money. I argued that there is a large audience of people who want to better understand how the economy works and who are not well-served by our generally dull and confusing, jargon-filled business reporting. I believed that a group of talented radio storytellers could make business and economic reporting exciting, fun, surprising, and that there would be a strong audience. I also believed that such a show could serve as a model that would help NPR transition to this new digital world.

While I’m going deep on NPR, here, this basic shift from focusing on an undifferentiated mass audience to a smaller but more passionate sub-segment is one of the most profound shifts in business and defines a lot of what is happening in nearly every industry. I’m so passionate about this that I wrote a book about it called, The Passion Economy.

I was lucky to have a boss (or, really, my boss’s boss’s boss) named Ellen Weiss who embraced, helped shape, and championed this vision. Most at NPR were extremely hostile. They were hostile to all of it. They thought podcasting was an irrelevant technology, since it was mostly made up of highly technical shows that could only be reached by highly technical people willing to go through a ton of hoops to access the audio. And the content was so unpredictable. Some was OK, some was truly awful, nothing, back then, was great. A lot of shows disappeared after an episode or two. Why should serious radio pros, reaching millions of listeners, take this chaotic mix of nothing seriously? (Metaphor alert: doesn’t this seem a lot like how crypto is perceived these days?)

After Ellen and I landed on the basic model of what we wanted to do, I convinced Alex Blumberg to devote a day a week to the project. He was a producer at This American Life and had no interest in building something new and wasn’t convinced podcasting was all that important (I love to tell him I told him so, since he went on to be one of the most successful podcastrepreneurs when he sold his company, Gimlet, to Spotify).

One of the key goals of Planet Money was to engage the audience and create shows that truly delight them. In my previous time at NPR, the audience was little more than an abstraction. We had, essentially, no real data about what they loved, what they hated, and what they kinda liked. Our measurement tools were crude: we could see overall listenership, broken down to the quarter-hour, for the bigger stations. But most people listen during their morning commute, so the time they listen is not correlated with the kind of content they love. Did the listeners love our arts coverage? Did they crave more or less international news? Did they long for longer stories or shorter ones? We had, pretty much, no idea.

Planet Money launched on September 15, 2008. We had picked the date because we thought most people would be paying attention to the Presidential race and wouldn’t listen to our little experimental show. But that date, which we picked arbitrarily, happened to be the day when Lehman Brothers collapsed and nearly brought down the entire civilized world. Suddenly, everybody in the world was desperate to understand arcane, complex financial issues and our scrappy band of econ storytellers jumped into action.

I saw the difference immediately. Planet Money had a few tens of thousands of listeners--a tiny pittance compared to the big NPR shows--but the response was massive. We were inundated with emails. The comment pages on our website became giddily active. In my many years reporting to millions of people on the big shows, I never heard from any listener. I think I got something like three emails and written letters in my entire pre-Planet Money career. Suddenly, I was getting more response each day--sometimes each hour--than in my previous sixteen years in the field.

But--and here’s where we’ll get to crypto and DAOs--it was still far from an ideal feedback system. Before long, the comment page was taken over by a small group of settlers. This was common in comment pages back then. A group of ten or twenty people devoted hours every day to writing on our comment pages, often using inside jokes, memes, and generally making newcomers feel confused or unwelcome. Eventually, we had to turn off the comment feature because this tiny group became unmanageable.

We would receive an ever-increasing amount of emails. And we all started to notice that we were, individually and as a group, becoming minor celebrities. People would recognize our voices at parties. Store clerks would get excited when they saw the name on our credit cards. When we did a live show at The Bell House, we felt like rock stars, performing before a group of hundreds of rabid fans (OK, hundreds is not anything like the audience of a real rock star; but try it some time, it’s pretty incredible to have even a small theater packed with people who think you’re great).

But who are these people? Are they all the same or are there differences among them? What, precisely, do they like about what we do? Do they want more newsy shows? More explanatory episodes? More fun, silly adventures? We had no idea. And we had no way of finding out. A few times, we asked listeners to fill out an online survey, but only a small fraction of the audience filled those out and were surely not representative of the overall listenership.

I saw this as a fundamentally insurmountable problem. There just is no way to take a large mass of listeners and figure out who they are with real precision.

What if we had a DAO?

A DAO--a decentralized autonomous organization--is a new model of organizing human activity, built on the blockchain. There are many explainers (I like this one) and I will write a longer explainer some time. To truly understand them, it’s helpful to have a bit of grounding in the blockchain, ethereum, and smart contracts.

For our purposes, now, here is what is important to know: a DAO allows a group of people to join together to achieve some common purpose. Typically, the DAO is launched with a token, an invented bit of digital information, that is distributed according to clear, transparent rules that are built into the token itself. This takes a minute to get your head around. If I created a token called $ADAMCOIN, I could write the rules governing the coin (or, really, hire someone who knows how to program such a thing) however I want. I could say that all $ADAMCOIN are available immediately, no new ones will ever be brought into existence, and they always sell on auction to the highest bidder. Or I could say that I am only issuing 200 of the tokens right now and that each person who gets one will vote on how future tokens are issued. I could say they are non-transferrable or easily transferrable. I could say that each token equals one vote, so if someone takes all 200 tokens, they take over the whole organization. or I could make it each person gets a vote, no matter how many tokens they have.

I would have enormous discretion in creating the rules initially. But once the tokens are issued, the rules are embedded. I can’t change them (unless I put in the rules some mechanism for changing the rules).

So, when choosing whether or not to participate in a DAO, a potential member can decide if the rules are to their liking. You might want to create a DAO that gives you a lot of power, but nobody would join it.

The first DAO was born in 2016 and then died an ignominious death a few months later. Its story is fascinating and serves as both a warning and an invitation. DAOs are having quite a moment. There are countless ones now and more springing up daily.

Here’s how I imagine a Planet Money DAO could have worked: when we launched, in 2008, we would have issued a Token, let’s call it $TOXIE (named after the toxic asset we bought at the height of the financial crisis, just to watch it die and to tell stories about it). We might have sold the token at first or simply given them away to listeners who performed some action that showed they really were invested in the show’s long-term success.

DAOs are a bit like publicly-traded corporations. Each member is like a shareholder. So, if the DAO thrives, the members can see their investment grow; if it fails, they lose. So, in the case of Planet Money, if the show grows in audience and revenue and the degree of interest continues to grow, those $TOXIE coins will be worth more and more money.

DAOs are, also, a lot like a co-op. Deliberation happens in meetings of standing member committees. Financial decisions are made through voting.

But I would never have wanted to make Planet Money a publicly-traded corporation OR a co-op. And I think I probably would have wanted to make Planet Money a DAO, if they existed at the time.

A few reasons why:

Since Planet Money is a mission-driven journalistic institution, we could write the rules of our DAO and its token to optimize for great content and the long-term trustworthiness and quality of the show. We could discourage involvement by speculators seeking fast or easy profit by rewarding those who are most active in discussions and who other members of the DAO find most valuable.

(I’m involved in Bankless DAO, which does a good job of this. I’ve been fairly involved but don’t, yet, have member status. I’m still a guest. I participate in discussions and, sometimes, other members will “tip” me with some $BANK, which is their token. When I reach 35,000 $BANK I’ll be a Level One member. It will take a long, long time for me to reach Level Two status, where I start to become a real decision-maker.)

The Planet Money DAO would not seek to maximize profit. We would want to make it fairly easy for people to get more $TOXIE tokens by adding value to the community. And we’d want to make it fairly difficult or impossible to, simply, buy a position of authority.

However, the DAO would make and amass money. This could happen in all sorts of ways. We could sell some of the tokens, with prices reflecting the degree to which people love Planet Money and think it will continue to be great. We could allocate some of the revenue of the Planet Money show to the DAO treasury (the equivalent of a bank account that the group controls, collectively). Many DAOs find themselves controlling millions of dollars--even billions in some cases--all of which is controlled by the community according to those rules that were created at the beginning.

Most DAOs use a proposal and voting system. Any member can propose a use of the DAO’s money and then members vote on which proposals to approve. In the actual Planet Money, we would have to try to get someone at NPR to approve any large expense, like traveling to Europe or Asia. If the Planet Money DAO existed, the reporters could propose to the DAO extraordinary expenses and it would be the most engaged listeners who would, collectively, decide if the DAO treasury would cover the cost.

We would never have allowed the DAO to make final editorial decisions about our content. We wouldn’t allow the community to vote on, say, what ideological stances we should take on issues or how to cover any topic; or, if the community did vote on such a thing, the editorial staff could just ignore them. However, with a bit of good planning and some luck, we could incentivize the DAO community to focus on the long-term viability of Planet Money, which would require that it remain a trusted, not-all-that-biased source of substantive reporting.

In the idealized version I have in my mind, the Planet Money DAO would have made Planet Money an even better version of itself. We would have deeper engagement with a large swath of the people who most support what we do and would now, quickly, what they most care about. We would have had access to more money that would have allowed us to achieve more great reporting. We would have served as a model that would allow others to launch their own projects--Planet Climate; Planet Art; Planet Politics; etc.

Of course, it’s not hard to think of a dystopian version. If we designed the DAO poorly, it might allow some small group of wealthy or clever people to take over the DAO and push Planet Money to slant coverage towards their own self-interest. Or, we would be overly influenced by this small group of people who took the time to learn about DAOs and tokens and all this stuff and who probably are not all that representative of the broader audience. Or, more crudely, we might build up a big treasury and see it all stolen by a clever hacker.

I’m still wary of cryptocurrency, but I’m very excited about web3, DAOs, and other blockchain models

I still think that people shouldn’t buy bitcoin with money they can’t afford to lose. I’m not putting much money in any cryptocurrency. The only money I have in my various crypto wallets is there to help me learn more about the space and I will be OK with losing it all. (In fact--as I’ll write later--I have lost a ton through my stupid response to a not-so-clever hack).

I have not come close to figuring out how a DAO would solve all the problems I faced in traditional media institutions. But there are a ton of reasons why I am very, very excited about DAOs and media; in fact, I’m excited about DAOs and almost every industry.

DAO’s have a bunch of features that make me excited:

• They are transparent. The rules are the rules are the rules. They are embedded in the DAO, itself, and anyone (who can understand some basic programming) can read them and see what they are.
• They are immutable. DAO tokens are not the equivalent of corporate prospectuses or shareholder meetings. They are not the shiny PR b.s. that executives say in public while doing something else in private. Once issues, the rules can’t change (unless the rules have a transparent process for changing the rules).
• They channel community interest into action. The joke is that a DAO is just an internet chat room with a bank account. But this is kind of true. A DAO is designed to create something that exists in the real world and it has the ability to fund those things so they happen. I like the bias towards activity and not just endless discussion.
• They fail. One DAO pioneer estimated that 90% of DAOs will fail. That is great news. There is way too little failure in the world. That is one of the reasons that entrenched bureaucracies are so, well, entrenched. They don’t face the bitter winds of failure. The 2009 bailouts are an extreme example of how institutions can fundamentally fail their audience or customers and continue on.
• They evolve. Quickly. Most DAOs are less than a year old. There are new ones every day. And they are learning, quickly, from each other. The ones that survive are going to have solved a lot of problems.

For the skeptical

I know a ton of people think this web3 is a bunch of crap; some combination of pyramid scheme and libertarian technobabble utopianism. And, you know what, a lot of it is all of that.

My take: web3 is not inherently good or inherently bad. It’s just a bunch of new ways of organizing human activity. I believe that it will be enormously consequential for nearly all forms of human interaction. But, who knows, I might be wrong.

For the interested

I am hoping to build something like the idealized version of the Planet Money DAO. I am learning a lot, talking to a lot of people, experiencing a bunch of DAOs.

I am excited to build something that achieves two things:

• Incentivizes and supports really great, thoughtful, engaging journalism. At first, about web3.
• Serves as a model of mission-driven collective action.

I’m not quite ready to launch anything. But wanted to pop my head up and let the world--at least the world of people who care about such things--know what I’m thinking about so that I can talk to you and explore this idea with you.

With support, we can attract some great journalists, writers, explainers, to explore and communicate the world of web3. If we develop a viable model, it can expand to all sorts of coverage areas.

In the spirit of web3, I’m going to do this as two NFT editions. I’ll assume that supporting this article as an NFT is a sign of real interest. It’s a mutual risk. If I’m right, and there is a huge opportunity here, the value of being an early supporter will be enormous. If I’m wrong, and this fizzles away, the value will be … nothing. The very act of issuing these two NFT editions will allow me to gauge interest right now.

This first group of people will be the folks I reach out to discuss how we build this and what we build. You’ll be first in line for any $TOKEN or DAO membership, if such a thing happens.

I’m calling both by the same name because… I want to reward early support.

Let’s change the world…or make a bunch of mistakes… or both.