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In this episode, Chelsea talks to Hank Green about NTFs, bitcoin, and the future of cryptocurrency.

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Hello, everyone, and welcome back to another episode of The Financial Confessions.

It is me, your host, Chelsea Fagan, founder and CEO of The Financial Diet, and person who loves talking about money. And I'm very excited today because I'm going to be talking about a very specific sub-genre of money with a person that I have known for many, many years in my professional life, who I'm sure most if not all of you are familiar with, and with whom I, in many ways, started my YouTube career, which is obviously now where some of you are consuming this very content.

His name is Hank Green. He and his brother, John, are very well known on YouTube as the Vlog Brothers. They also founded a company called Complexly, which produces all sorts of educational content for the internet of which TFD was initially a channel.

The first few years of TFD on YouTube was in a co-production with Complexly. We went independent several years ago, but still obviously maintain a very amicable relationship with all of the squad out in Missoula. They're all great people. 10 out of 10.

Would go out and hang out with them and go to those Missoula bars and get dollar beers again. That was a great experience. Maybe see some Buffalo in the airport.

It's a whole mood out in Missoula. Anyway, I wanted to bring on Hank today to talk about two topics that I think have been on a lot of people's minds lately, especially if you follow finance, which you hopefully do if you're watching TFD, and also politics, which is a topic that I know is a little bit less financial. But it intersects in such a huge way with finance that I do want to make sure it's something-- a lens through which we're often talking about money.

But specifically, I want to talk with Hank about how the internet, social media, and our ability to connect with each other to form alternative means of communication and even alternative means of currency and creating alternative value that exists entirely outside of our usual ways that we consider and ways that we frame currency, how the internet is really reshaping all of this stuff, how it's changing, how we even think of value, how we assign value to things. It's shaking up a lot of the traditional norms and things that we think that we used to know about how people operate in financial markets and about who has access to these markets. Obviously, a lot of you have probably been hearing a lot about cryptocurrencies-- Bitcoin, NFTs.

You're hearing probably about all of the stuff that's happening on Reddit with the WallStreetBets. Essentially, we're living in a very interesting new era of finances that have all kinds of implications from the societal to the financial to the environmental. Similarly, on the politics front, we are entering an era of social media and of consuming information on the internet that's really eroding the foundation under our feet in terms of how we interpret news and information, what we deem as facts and, as any of us who've been near a television in the past several months have realized, is starting to have serious real world impacts on the political system in which we live and the shared fabric of society in which we exist with our fellow citizens.

I think Hank is one of the most intelligent people and nuanced in his approach when it comes to the dual sword that cuts both ways of the internet. Obviously, he has built an empire online with educating people and expanding the discourse in ways that I think are very healthy around all kinds of topics. But he's also been able to see how these exact same platforms-- YouTube being one of them-- can lead to all sorts of problems.

As we enter this really interesting new world both financially and politically that is being driven by the internet we all exist on, I want to talk to Hank about what he sees as the future of this stuff, how he interprets what's happening now, and how we can all get a better grasp on it. Without further ado, I welcome Hank Green to the show. Hello, Chelsea.

Well, if that's all we're covering, then it should go quite quick. I think that we'll be fine. I think that you pitch it in a good way, that I am both enthusiastic about things but skeptical about things.

And that has always been a little bit of-- the balance that I've always tried to go for. I want to be excited about cool stuff, but I also don't want to misinterpret something that isn't actually cool as cool stuff. So that's sometimes a hard balance to make.

And I've found myself on the wrong side-- on either wrong side of that several times in my life, so. I hope that everyone sees this as a voice of someone who knows probably a good bit about these things, but also is maybe not-- most of the people who know a lot about cryptocurrency are really into cryptocurrency. And I don't know as much as they do.

But I am definitely less have drunk the Kool-Aid. So that hopefully can provide a good perspective. Absolutely.

So I actually want to start-- and just for the record, we did solicit a lot of your questions for Hank specifically on the financial side of this conversation. And we will get to them. You guys asked some very good questions that I'm very excited to get into.

But I actually want to start with the more sociopolitical part of the conversation because I think the phenomena that underpin a lot of the financial stuff, the cryptocurrency, the speculation happening on social media, the NFTs, all that kind of stuff-- I think a lot of what underpins it is a fundamental erosion of trust in systems, of trust in the very fabric of society, what it means to collectively all be a part of these systems-- financial and monetary systems being a very good example of that-- and an erosion of collective agreement on truth. Now, obviously, we see this manifest in things like alt-right radicalization, QAnon, what we saw happening at the Capitol on January 6th, what's happening with enormous parts of the population very fundamentally mistrusting all of the literature around the pandemic and the vaccines. As someone who is really familiar-- more than most-- with how people learn on the internet, how they consume content on the internet, what do you think is one of the most fundamental drivers-- or some of the most fundamental drivers around this erosion of trust and around this splintering?

And do you feel-- and I know it's a nuanced question-- but, more broadly, optimistic or pessimistic about the trends that we're seeing? Yeah. So I think that understanding the real mechanics of a filter bubble is very hard.

And so a lot of what we think is, we don't hear from the opposition, or we only hear from people who agree with us. But a huge piece of the filter bubble is only hearing the most incriminating parts of the opposition's perspective. And so what all of us will do-- and especially bad actors, but all of us to some extent-- is we will take the worst moments of-- say, I don't like Joe Biden.

I take the worst moments of a Joe Biden thing. And I'm like, ah, see. He forgot somebody's name.

And so you combine a bunch of things. And you can show a picture that is all true pictures that tell a story that is not a true story. And we can do that about our opposition in many different ways.

I can imagine that everybody who supports Donald Trump also supports people storming the Capitol, which is not true. I can imagine that everybody who supports Donald Trump does it in a way that is thoughtful rather than just like, I've got other stuff to deal with and this seems to be going fine. And also, the things that I hear on Fox News do seem like big problems because Fox News is cherry picking the opposition.

So the most insidious part of it for me and the thing that I try to look out for the most is that I don't see the careful, thoughtful, nuanced parts of the people who disagree with me. I only see their craziest bits. And so I think-- and you can do that with anything, any group.

And so when you do that with any group and when all news is bad news and when everything is news and when we are all the editor rather than some person who is trained to be an editor, then we end up in a world where we feel like we have every reason to distrust other people. And I believe really fundamentally that when we cannot trust each other, when we cannot have faith in the myth of society, which is a myth in not-- I'm not saying that it's fake. I'm saying, if we all believe in it, it is real.

And if we don't all believe in it, then things fall apart a little bit. Now, I think that, in general, we still have a lot of faith in a lot of institutions, and also things are OK. I always think like, wow, when I look at the internet people seem really terrible.

But when I go to the grocery store, they seem fine. And so I try to preference the grocery store, that the people in my neighborhood-- and this is something we all feel. The people in my neighborhood are fine.

But the people who I see online are monsters. And I think that if we can preference the real life interaction, then that can make things seem a lot less scary. But we can't really preference real life interaction for about 13 months now.

And that, I think, has a really big impact that we are going to meet. And I could be wrong about that because one of the things I think about the pandemic is like, we're all going to have a bunch of ideas about what this means. And 10 years from now, we'll know which ones were right and which ones are wrong.

And most of them will have been wrong. But I think that that's a big problem, that we have not been able to interact with strangers in a way that lets us trust other people besides ourselves. But that's not just a pandemic problem.

That's a problem that stretches back decades, where people have fewer and fewer interactions and we are more and more scared. And that fear is a self reinforcing thing. It's a positive feedback loop.

And I think that you are absolutely right that distrust in vaccines and distrust in the global financial system comes from the same place. Now, doctors who want you to get a vaccine are trustable people. And bankers who want you to take out a loan are also trustable people.

But both of them at their root do have these gross things. Wall Street did destroy a lot of value. And we didn't really do anything to them in exchange. 2008 was very bad.

And pharmaceutical companies do make you pay to not die. They take your money in exchange for letting you not die. And it's these things-- there are reasons to distrust.

There are reasons to be frustrated. And so there's these two competing things. There's people who realize that they can get power by destroying people's faith in systems and make money.

And then there are people who are using the existing system to gain their own power. And that is also eroding trust in the system. So those are two separate forces.

And I am worried about general loss of faith in systems. And in the past, this has been done in a centralized way where there is a movement that takes away people's faith in the current system, and then they become a dictatorship. And that can happen on either side of the political spectrum.

And that's how fascism happens. But this way of doing that in a decentralized way is a new human experiment. So I don't know what it means or what the outcome will be, but I think that that thing of-- taking away the faith but instead of consolidating it around a single person or idea or a government you consolidated around the idea of a kind of crypto anarchy.

That's new. So I don't know what-- I don't know what-- I don't know what it means. And in terms of the two wolves inside the internet question of on the one hand, we have a global level of access to information and education and community that is unprecedented in human history and obviously has had massively beneficial impacts around the world, but we also have the ability to create these bubbles and misinform ourselves and radicalize ourselves in ways that we've also almost never had access to.

Listen, you can throw a number on a percentile or bell curve or whatever. But where are you on the optimistic versus pessimistic between those two wolves? I'm super certain that it's going to get worse before it gets better.

I do not see any signs that we are-- well, I do. I see signs that we are getting better at this. But the signs are localized, and they are overwhelmed by the number of people who are still getting worse at it.

I think that the moment when people realize-- the reality is that this is always the case. Let's take another step back. Always, the biggest shifts in society are not the development of new weapons, and they're not even the development of new political systems.

That's what we tend to talk about in history class. The biggest shifts in society are around the development of new systems for communication. Money is a system for communication.

It is a system-- that's all it is. And the printing press was a system for communication. And trade is a system for communication.

And the developments of those new things have always been sources of huge upheaval and near term catastrophe oftentimes. The printing press resulted in a lot of war. We think of this schism in the Catholic church as being something that was caused by the corruption of the Catholic church and of the audacity of Martin Luther.

But it was caused by Martin Luther's ability to print a lot of pamphlets and distribute them and an infrastructure for the distribution of those pamphlets, and also the reliance of Martin Luther on language that people could understand and the Catholic Church's insistence on only using Latin. And so they couldn't even communicate with people well. So this is an upheaval in our ability to communicate that we have not seen anything like.

And the only way we got out-- we got into a-- and I hate to say this. We got into like a sense of stability after the creation of the printing press-- was ridiculous levels of censorship that were slowly relaxed over centuries. So basically, the church and kings decided what books could be printed for a long time.

Now, there was a great and robust black market in printed materials, but people went to prison for that stuff. So that's obviously not a solution that we want to undertake. We can evolve faster as societies now.

We do evolve faster. And so I think that what we need to develop and what we did eventually develop with printed materials was a bunch of norms and taboos, stuff you don't do, and stuff that you notice when someone else does that they're a bad actor and that they're not acting in good faith and that you can ignore them and that their stuff isn't going to do well because they're using a bunch of tricks that are hackneyed and boring and only gullible people fall for them now. So I think that that's what we have to develop.

And I've started to-- I've seen a lot of signs that we're getting better at developing those things as the internet at knowing when people are out there just to get attention by being shits. But it's not like those people aren't still getting lots of attention, lots of views, lots of money right now. Yeah, it's true.

And the correlation or the-- relating it in a sense to the printing press I think is probably got to be one of the most accurate comparisons that we have in terms of revolutionizing how humans even consume and share information. And obviously, the printing press-- we're talking hundreds of years out that you really started to be able to parse out the effects. And part of that also was a question of the problem of communication.

I do think we will be able to analyze and understand a lot of these things not in real time, but in a lot closer to real time because we also have much more sophisticated means of collecting sociological data, collecting even brain scans of people who are consuming information on the internet. If they were able to see an MRI of someone reading Martin Luther's stuff for the first time, I'm sure it was like fireworks in their brain. They were like, what is this?

If only. But the thing about it that makes me-- and I do feel like if I had to tilt slightly one way or the other, I think ultimately optimistic. But I do agree with you that I think there will be another several years at minimum, probably a decade or more, that we are still burning ourselves on the hot stove of using the internet in this way before we're like, we probably should turn the stove off before we touch it.

And the thing about it that makes me most cynical is what you touched on earlier, which is that you have a large contingent of people who-- and I will totally concede that this exists on all sides of the political spectrum. But I do think if we're being honest about the society we live in today, the greatest problems with misinformation and that leading to serious real world consequences tends to be concentrated on the far right right now. And when you look at things like what happened on January 6th and what was driving that, when you look at things like QAnon and how it's in such real ways destroying families and-- if you don't have anyone in your life who is down any of these rabbit holes or really understanding or able to give you a glimpse into how that works, for a lot of these people, we're really talking about a complete separation with a lot of reality and a complete separation with a lot of what we can all agree on is the fabric that underpins the world that we live in.

But as you mentioned earlier, there is a small contingent of people at the top-- and I'm sure this isn't new, but it's so effective-- who clearly don't believe the stuff that they're leading people to believe and are even saying in court-- we saw it yesterday and the day before in court. People are actually testifying-- the people who were banging the drums about election fraud are now testifying openly, that could not have been taken seriously by a reasonable person. I'm essentially acting.

I'm a clown on a stage. And if they take it seriously, it's like taking an actor seriously. It's like thinking Tom Cruise is actually-- whatever-- Ethan hunt?

Is that the character in Mission: Impossible? - You got me. I do not know. - OK. Well, Tom Cruise in one of his many beloved roles.

We'll say that. So when you see that level of bad faith and see how effective it is and how people are able to-- how that train gets run away-- and you can tell, obviously, that when the chips are down, all of the people who are manipulating this are like, oh, I'm just kidding. This isn't real.

How do we address those people? Because addressing all of the people who actually believe a lot of this stuff seems beyond the capacity of an average person. Yeah.

Well, I have come to the belief that if content will succeed, then content will be created. And that's a sad sentence. That's a really sad sentence for me to think that if there is a thing that you can do that will be successful, that people will do it, even if it's morally reprehensible, even if you don't believe in it, even if you know that it's doing harm.

But if you are-- but a lot of people-- and ultimately, I think that there's a broken thing. And we're all broken in different ways. But there's a broken thing that believes, if I can get attention for doing this, then it is an objective good, then I am doing the thing.

I'm succeeding. And so the only way-- since that's always going to be a thing, the only way to combat those people is to have their thing not succeed. And the only way to have their thing not succeed is to build strong societal immunities against those kinds of things succeeding, which means the individuals who are now, many of them not too far gone-- but getting them back is a long and difficult process.

Oftentimes, it's a bit of like, you are in a cult, and you must be shown the reality of that, which is really hard because when you've built your entire identity on something, it's really hard to build a new one and to recognize the break in your identity. And then it also means that platforms need to realize that their algorithms are not some magical thing in the sky that just decides it's just a bunch of-- we just are giving people what they want. That's all.

No, your algorithm is content. It is making decisions. Every time you recommend something-- this is the thing that has always upset me about platforms being like, we're not media companies.

We just are a platform. And we have laws against like, you can't hold us responsible for the stuff that's on our platform. And I'm like, I can't hold you responsible for what somebody uploads.

But I can hold you responsible for what you recommend. That is content. That's an editorial decision.

Editorial decisions are content. And they are making trillions of editorial decisions a day about what to recommend to people. And I think that they really didn't take that seriously for about five years that were really harmful.

And now, some of them are taking it more seriously. Some of them are taking it not seriously at all, I think. But you do have to understand-- so that is a big one to me, that the editorial decision of what to recommend is a decision that can be made by me, a human being.

And I should be held responsible. If I'm like, check out this great video, and people are like, that's garbage, man. That's a garbage ideology.

It's a bunch of wrong stuff. And then people can come at me. And they should.

And they have. I've shared stuff that it turned out to be wrong before. But we don't do that-- we just think that, if YouTube does that, oh, that's fine.

That's not an editorial decision. That's just a computer making a decision. And so I think that some platforms are taking that stuff more seriously now.

It's a little bit too late in some ways. But newer platforms are taking that responsibility so seriously that it's actually borderline a problem. TikTok is this way, where people are like, why did my video get shadow banned?

It contained nothing of note. But TikTok is just so careful about that. And it wants to, I believe-- I obviously do not run TikTok or am not close with anyone who does, but I believe that they want this to be a place with fewer bummers.

And honestly, though, I want social media platforms that have fewer bummers. I think that Twitter needs fewer bummers. I would like to have a button I could push to be like, can you just-- like just today, show me fewer bummers.

I want to know about the big bummers that we all need to know about. But this everyday onslaught of-- there wasn't a bad thing that happened, and so we dredged up something from the shitty people on the internet that they did. And it's like, that's not news.

That doesn't matter. There are people being crappy in places always. There have always been guys sitting around in their living rooms telling terrible racist jokes.

But I don't know. We are aware of that. We are aware of that problem.

And so I think that it makes sense. And if we are only raising those things to attention, then we are fraying at the fabric of society because we are spending so much time thinking about the small percentage of people who suck and no time thinking about the-- and not that I want Twitter to be like, here's a bunch of great people. No.

The great people are just people I know. And that's the thing that I'm worried about, that we are spending more time thinking about awful people we don't know and less time thinking about the good people who we do know. Because if we actually spend some time having relationships outside of-- or inside of the internet too, just real relationships.

Then a lot of this fraying of society mends itself. But we spend more and more time focusing on bad people we don't know. Anyway.

So I think that platforms need to take it seriously. And I think that they're taking it more seriously. And I think that there's a spectrum of who's taking it-- who is being the most serious about controlling the vibe of their platform and who is being released.

So if platform moderation of a lot of these bad actors who are driving so much of this problem, which we now know statistically on a lot of these platforms is the case-- it's a small number of people, many of whom, if not most, are acting in absolute bad faith because it's profitable to do so. If moderation is one of the primary ingredients, and therefore censorship or de-platforming have to be part of that mix, in your opinion, was it the right thing to do for Twitter to remove President Trump? Oh, yeah.

Yes. I think that there are two things here that are very different things. One, de-platforming and taking content down is a very different step from not recommending that content.

Platforms got high as fuck off of this algorithmic content thing. And we all did too. They were fucking flying.

They were so excited. This was amazing. They were like, if we do this, suddenly people spend so much more time on our websites.

And everybody agrees that that's good, right? So there's that. But then there's straight de-platforming, which also is completely necessary, but obviously a much more significant step, where they're making a-- instead of deciding what to do with the content that is there, they're deciding what content is there.

But Donald Trump's way of using Twitter was just to lie all the time. And ultimately, there is a really important and tough question about this. I think that it was the right call.

But I can't just say the thing that I want to say, which is, Twitter is a private company and they can make whatever decision they want. That's true, legally. But I do think that it's necessary to engage with the reality that this is how speech happens.

And we need to be careful about how we decide who is capable of speech. Donald Trump is the least of my worries because he can fucking call Tucker Carlson anytime he wants to. I almost just confused Tucker Carlson and Anderson Cooper.

So just-- Poor Anderson. --string me up for that one. He could call into Fox News any time he wants and talk to as many people as will watch. I'm not worried about Donald Trump's ability to speak.

But I do think-- I do think it's a thing to be wary of and aware of, that these platforms are where we live a lot now. And to be in a space where I am living that is not democratically controlled, I don't like-- there's no way for me to make any decisions or impact except to whine. That's a real thing to be considered, that we now exist in corporate spaces that are controlled not by city councils and mayors and legislatures, but they're controlled by a CEO and a few C-suite people and a board of directors.

I actually think, to a large extent, disagree that it was the right call. Well, what I know is the right call is that it's been a better place since then. Oh, that was going to be my point is like, on a personal level, not having to wake up in the morning and hear what that monster said every day and having to then dominate the news cycle-- clearly, my life is massively better as a result.

Just the mental load we'd all been taking on for five years of just having to respond to that man's every whim and have a realistic fear that it was going to lead to nuclear war or something-- Yeah. Just, wow. What a load off.

However, I do think-- and this is a broader criticism of that I have with the left and with progressives, liberals, wherever you kind of fall in that spectrum-- is that I think when it comes to things like tech, censorship, de-platforming, people losing their jobs, often, I think we're making unholy alliances because for example, to use the example first of when someone does something reprehensible at a job-- or not even reprehensible, something that a lot of people might disagree with or think was inappropriate or out of touch, whatever-- and the responses that they get fired immediately, there's often a celebration and a like, hell, yeah. That person got fried. And to me, the bigger question is, well, are we sure we want to be living in a society where every contract is at will and labor laws allow people to just get thrown out the door for what they happen to say on, let's say, a social platform?

Because it could be something terrible, but it could also just be something that, let's say, a really religious employer doesn't agree with because a woman posted a picture of herself in a bikini. So I do think often it's like, OK, maybe that person was an asshole and deserved to get fried. But what is the broader implication of that?

Similarly, with big tech, the fact that Jack Dorsey is effectively able to decide what global leaders do and don't get a platform when that motherfucker doesn't even eat-- he's so clearly not even part of normal human-- It's very weird. He's so weird. He looks like Rasputin.

I don't want him being the decider of-- and I actually think that for a lot of these platforms, I agree with you that I believe that they are the new public square in how people communicate. But I actually believe that the only solution, then, is making them essentially utilities, nationalizing them, and removing profit motive. Because as long as they remain something that is a private company's domain for which the ultimate interest will be profit to their shareholders, all of these decisions will be to some extent arbitrary, and all of them will be motivated more by profit than by actual societal good.

Right. And I think that ultimately, Donald Trump repeatedly violated the terms of service of Twitter. And so it wasn't like Jack Dorsey decided to-- it was, though.

It was. He repeatedly violated the terms of service of Twitter for a long time before he got banned from the platform. Ultimately, I agree with it because there is a TOS.

And part of the goal of the TOS is to uphold the interests of one of their stakeholders. And that stakeholder is society. And if Twitter was being used in a way that violates their terms of service to degrade the fabric of society, of democracy itself-- which it was-- then it makes sense to me to take that person off of the platform.

But I also agree with you that there is a thing where a lot of people are obsessed with the power of using the language of social justice to just have something get done. And that feels good, and it feels big, and it feels like we did something together. When actually, those wins are very small and probably also do a lot of damage to the movement because it's like, oh, look.

Look at this. It makes it much easier to tell a story about a new kind of mob rule that is about convicting people in a court of public opinion rather than a court of a court. So I think those are two separate things.

And I absolutely think it has gone over the line sometimes from my perspective. But where is the line is a hard question. And the other thing that I-- the other thing that I believe is that if you are a person like me who's a CEO, who has a big following on the internet, you have a greater responsibility to not screw up than some person who doesn't feel like their tweet is meant to reach a large audience.

And that goes for how I treat people in the real world as well as the things that I tweet. And even just yesterday I posted something on TikTok that I ended up taking down because I was like, actually, this could be interpreted and seen as being too mean to a person who has less power than me. And so I think that that is an important dynamic that a lot of people really disagree with me on.

They think, just because I have a bunch of followers on Twitter doesn't mean I should be any different than I would be otherwise. But I think that coming for a person who didn't have any anticipation that they would have a large audience on something is very strange to me and is broken. But you're also a decent human being who has some sense of a moral compass about what it means to have the kind of platform that you have, which most people probably don't.

And in practice-- Especially in the early days. I didn't early on either. It takes a long time to realize that you're a powerful person.

You get stronger faster than you realize your strength. Yeah. And also to further drill down on the concept of Trump specifically being banned because obviously that's such a big inflection point in terms of these platforms taking seriously that responsibility you were addressing-- if Trump were to be banned-- because obviously, as you said, that man violated the terms of service for years.

He got thrown off the platform either when it became too big of a business risk for them, which probably was the leading factor, or because they saw what happened on January 6th and they're like, oh no. Even we in our incredibly privileged, isolated, executive bubbles might actually be affected by this. Let's take it seriously.

But either way, the driving force of the timing and what led to that decision was clearly not what was either inappropriate for the platform or bad for society because we crossed that rubicon years ago. And when you look at people like some of these freshmen congresspeople-- you look at people like Marjorie Taylor Greene who has been an open QAnon spreader and all these things that you could argue are even more detrimental to society. She has not been deemed a business risk.

She has not been deemed someone it's fair to take to task on the terms of service. So I think the bigger question is, does doing these big, flashy movements that, like you said, give people that feeling of, hell yeah, we got rid of them. And yes, it felt great to see that man shut the fuck up.

Does that almost give cover to not actually applying these principles in any kind of consistent or productive way? I hear what you're saying. And the question of-- that leads me straight to the question of, what would a nationalized Twitter look like?

And who would be making those decisions then? And that is also really tough. Or no one makes the decisions because it's a utility and everybody gets to say whatever they want on the platform unless it's illegal, like literally illegal, which is what Parler purports to do.

I listened to a podcast where Jack Dorsey was interviewed. And it was so-- it was infuriating because he was like, I don't see myself as a very powerful person, Jack Dorsey says. And the interviewer said-- and the interviewer said, next question.

They just asked the next question. And I was like, how the fuck do you leave that on the table? We have to accept that Susan Wojcicki and Jack Dorsey and Mark Zuckerberg are some of the-- are the kings of now.

That's the reality. I'm sorry. It's where we are.

And they can pretend that they are just following their-- obviously, you just made the case. It's very clear they're not just following the terms of service. It can be a-- they can if they want to.

And at least they shouldn't kick people off the platform if they don't violate the terms of service. So it's more like, once you have, we can. We may not.

And whether we decide to or not is entirely up to us, entirely up to a small group of people. And I think we have to sort of-- I think that we a little bit have to accept-- once we internalize the reality that we live in a new digital feudalism, which certainly I don't want to compare to actual feudalism which is much worse than the thing that we have now, where there are despots in control of the spaces where that we occupy and inhabit and live inside of, then we have to-- we a bit have to just accept it. I don't see a way out.

I can see ways of-- it was not like kings ever had ultimate power. There were always ways that they could be dethroned. And good rulers were always safer than bad rulers.

And so there are still ways to twist their arm. And the biggest one is their staff. So it's hard to hire a bunch of skilled engineers.

It's getting easier, but it is still hard. And it's also hard to find people who you can trust and who understand the goals of the company and you don't have to indoctrinate them into the new thing. Onboarding is hard.

Anybody who knows a business knows that that's one of the hardest parts, is like hiring up. And so those people have a lot of power. Also, people who have a lot of power, the people who create on the platforms enough that it's the reason that people spend time there-- now, in a place like Twitter, that's a little less power because there's so many people and it's so decentralized.

In a place like YouTube, it's more people-- it's more power there because the viewership is more centralized in a place like YouTube. So there are ways to twist the arms, but it is not-- it is not a democracy. And it will not be.

So I think we might need to focus more on, how do we leverage the powers that we do have, than how do we actually nationalize these things and turn them into-- because I don't even know that-- I could eat in my words here because it might be the case that it would be good, but I don't know that it would be good. I don't know that I would trust Congress to do it any better than I trust with Marjorie Taylor Greene in there to do it any better than Jack Dorsey does. The thing is-- and this is why the things that give me the most hope these days are things like the unionization effort in that Amazon warehouse because ultimately, you-- I think a long term goal of nationalization of some of these things and a real recognition of them as public utilities-- I do feel that that should be the long term goal.

And we have seen throughout human history that recognizing certain things as utilities has been beneficial to society. It has been beneficial to that greater good and making sure that society is generally lifting all boats on various axes. That being said, I'm realistic.

I'm not stupid. I know that that is-- we're talking like a 20-plus year timeline, probably, on something like that. However, what I do think in the meantime could probably in the most powerful way bring some of that leadership to account and chip away at that really skewed profit motive would be things like collective bargaining from the workers of these institutions and a redistribution of how those profits are allocated, how the company even makes money in the first place, and also what is considered even the basic, fundamental operating methods of these organizations because, like you were saying, the terms of service that Twitter has come to-- that's just a couple of people in the room.

And as we all know from these big tech people, like you said, they're so lizardy and decoupled from the material impacts of their decisions that they can go on an interview for the public and say that they don't have a lot of power. These people are not anyone we need to be looking to make these decisions. But these terms of service that these companies came to in the first place-- that was a couple of those fuckers in a room.

If those terms of-- And they could change it anytime. Exactly, any time. And if we were in a model that was closer to whether it's a co-op or a major amount of collective bargaining from the workers, at minimum you would have a wider spectrum of people at different levels of the economic chain, a different backgrounds at least somewhat making these decisions and not just Jack Dorsey and Mark Zuckerberg.

Yeah. I don't think that-- I don't think that-- my feeling right now is that nationalization isn't a good solution because nationalizing media is always bad. You don't want to nationalize media.

Is it? Public-private partnerships-- could we say that about the BBC or PBS or things like that? Exactly.

So what you want is you want a nationalized alternative. So you want something that is there that is controlled and that can function well. But I don't like the idea of all of the social media companies being controlled by Donald Trump, for example.

Well, no. But we have to be clear on our terms. There's almost nothing that exists in America that is purely state owned and run.

All of these are combinations of public-private partnerships. And in any situation where these things were being treated as a utility, like any other utility, those are all public-private. But there's a very blurry line between enough regulation that these people are not above the law, as they currently are, and being totally owned and operated by fucking Ron Johnson or whoever.

Yeah. I think the regulation of that is very tricky because, of course, what we see is, as soon as we start saying we're going to try and have-- if you actual government regulation instead of just guys in a room deciding something, then what the right says is, oh, so you're trying to silence the right. And it's like, no.

We're trying to like decrease lying. It's just that the right wants to lie more. And we're trying to decrease hate speech and cruelty.

Yeah. I do not know. I think that power lines and water pipes are a very different thing from speech.

My guess is that Europe will probably be better at this than us and hopefully will show us away. Well, they already are in some ways. Yeah, showing us a path and showing us digital privacy being more seriously taken care of.

And also, it'd be great if these platforms didn't own us in the way that they do, if there was something that was akin to private property. But I also do not know how that would-- how that would function. Well, yes.

I agree that speech is not like water or electricity. But I think that the platforms that allow speech to be distributed at this level is closer to water or electricity than I think a lot of us-- Right. It is the public square.

And having a non nationalized public square is a-- or having a privately owned public square is bad. Exactly. So we want to get into how this all translates into monetary systems and finances and how we exchange currency for goods and services, that system we all know and love.

So as I mentioned at the top of this episode, we have seen massive shifts in the past five years especially around how social media and the internet are really impacting how we think of currency, how we think of value, and how we participate in the pre-existing, old school financial markets. I want to talk first with you, Hank, about cryptocurrency and NFTs. We have some questions from our audience I'd like to go through on those.

My first question for you is, can you share what you perceive to be as your understanding of them? And I'm not going to make you go like Roman emperor, thumbs up, thumbs down. But again, a generalized notion-- are these a good thing, or are these a bad thing?

So cryptocurrency and NFTs-- they're obviously related. Do you want me to explain what they are? I would love for you to explain for the audience because you'll probably be better at summarizing this than I will.

OK. So a cryptocurrency is basically a decentralized currency. It is decentralized because a bunch of people have what's called a ledger.

And that ledger has a record of every transaction that has ever occurred. So for Bitcoin, for example, it's a file. It's about 300 gigabytes, which is surprisingly small considering that it's every transaction that's ever occurred with Bitcoin.

And part of the-- Bitcoins are created. And there are a limited number that can be created. And they are created by servicing the ledger, basically.

So by doing stuff that holds onto the ledger and then doing fun math with it-- a lot of complicated math at this point because-- it's always been complicated, but a lot of math at this point because it's harder and harder to mine Bitcoins as there are fewer and fewer left. And so you service the ledger. You have to store the ledger.

You have to do a lot of checks on the ledger. And that's called Bitcoin mining. And if you do that enough, you might get a-- you get, basically, new Bitcoin that didn't exist before.

And so you're getting paid for doing that work. So that is basically how Bitcoin works. It is a limited-- there are a limited number that will ever exist.

And in order to create new ones, you have to do a bunch of math. And that math is expensive to do because you have to have computer chips that consume a lot of energy to do the math. And that is a model that's called proof of work.

So you've proved that you did a bunch of work. And the ledger knows that you did that work. And that's where you got new money.

You basically got money for doing the work. And then that asset can then be-- once it exists, can be traded and sold and exchanged for goods and services or just held onto and hope that the value of it will increase. An NFT is basically-- so instead of creating a transaction-- instead of creating a token that is a coin that you-- if I have a coin, I don't care which quarter I have.

I can give you my quarter. You can give me your quarter. And nothing will have happened.

And NFT is, instead of creating a coin, you create a coin that is fucking wild and weird, and there's only one of them in the world. And it is a very specifically-- it is its own thing and cannot be exchanged for one thing or another. And you can track that individual coin as it travels around rather than it being a coin.

And once it's in my wallet, I don't really know which one is which. So that's why it's non-fungible. Fungible means it's a non-fungible token.

So fungible means that it can be swapped. Non-fungible means that it is unique. And then you tie that through a contract-- tie that non-fungible token to something that exists, I guess.

And so you can tie that non-fungible token to anything in a way that is, to be clear, entirely a human construction and not a computer thing. Now, the contracts can be stored as smart contracts in the blockchain. But they are only being upheld by human relationships.

And so there's this idea that it's all inside computers and it's distributed and no one's in control of it, and so it's real. This thing doesn't really hold up for me because it is just a-- it is just a contract like any other. If society collapses, you don't own that digital art anymore.

Because that's the main use right now. The most exciting use is digital art is really beautiful and can be real, substantial, important art. But because we consider it to be infinitely reproducible, because it's digital, then you can't value it the way that a normal artist can value their painting where I buy it.

You can't buy it now. And so there's this system that basically has elements of but is not completely less reliant on just cards in a catalog somewhere or a spreadsheet somewhere because anyone who has access to the Ethereum blockchain-- because Ethereum is the blockchain, not Bitcoin, that that NFTs are mostly based on. Anybody who has access to the Ethereum ledger can look it up and to know not only who owns this NFT now but everyone who's ever owned it, what the transactions were, and how much was paid for it.

And so there's all this history is in the ledger. And that ledger is distributed among many, many computers all over the world because people are out there minting Ethereum. And part of what you get from minting Ethereum is more-- or part of the process of minting Ethereum is taking care of the ledger.

We have several questions from our audience specifically around the concept that NFTs in particular are helping to or are a possible answer to reinstating a kind of real world value to digital art that is increasingly devalued because it's so easy to steal, to reproduce, to edit, to manipulate. I had a long conversation about this recently with a friend of mine who is on that-- I think he's more neutral, but he was raising that issue. And my feeling of it, as someone who obviously, like you, makes a living producing content for the internet-- that a fundamental shift that needs to be made as we understand the digital world is that the value systems created around having physical pieces of artwork where there's only one of them-- you can only buy one van Gogh.

And that's why it's $25 million. That fundamentally does not and cannot translate to the digital world and probably shouldn't. And our paradigms around how we value and distribute art or how we monetize it, quantify it, and regulate it need to be based on entirely new paradigms that are not meant to recreate the old concept of art.

And more importantly, when we were using the example, in this conversation of, OK, well, the NFT of an original JPEG that some artist designed is worth $2 million because it's the original. It's what they really did. But when you think about what makes a van Gogh incredibly valuable that makes a perfect replica-- because there are many-- not valuable is because you're talking about the actual brushstrokes he painted.

He touched the canvas. He was physically a part of it, which is something that is inherently unrecognizable in the digital space. If anything, if you wanted to recreate that level of value, you'd be like, let me buy the iPad that you drew the sketch on because you touched it.

It's more about the medium than it is about the actual product because anyone can recreate a van Gogh, and many people do very successfully, enough to trick investors and auctioneers. So my question to you then becomes, do you think that NFTs are a valuable or an important means to ascribe value to digital artwork and therefore important to creators? And secondly, do you think that's even something we should be trying to do?

So I disagree with your friend that the thing that I'm getting when I buy a van Gogh is the-- No, I said that. Oh, that was you ? That was my point, so disagree with me.

OK. I disagree with Chelsea Fagan that the thing that you're buying when you get a van Gogh is the brush strokes and knowing that van Gogh touched this. I think that that's part of it, but I think that the thing you're really getting is this not laudable human nature feeling of, I own a van Gogh.

I own this original van Gogh. And it has value. And you're also buying the knowledge that this artwork will likely increase in value.

And so there are lots of different things bundled up in the value of what the value of Van Gogh is. But I definitely think that-- for example, I have a first edition of Kim Stanley Robinson's Red Mars. And he didn't touch it.

He didn't sign it. It's a first edition, but I attach value to that because that book didn't sell very many copies. But it has since.

And it's become really influential in the space of science fiction and fantasy. And I am really interested in Stan Robinson's understanding of the world and the things that inform it. And so owning that is important to me.

And so there is value there. But I don't know that this is something that I should feel good about ultimately, that this collector instinct doesn't actually create value in society. And so whenever I'm thinking about whether a monetary system is good or not I tend to ask, OK, what's the value it creates?

But I do think that NFTs do create value for artists. And so that's the question I have. In general, I think there should be more people who get to be creative for a living.

And I think there is-- and I think there is value for artists here, and potentially even more value than what the current system provides. So if I am a digital artist, I tie an NFT to my work through a contract. I say owning this NFT is the same as owning this art.

Now, other people can download it. Other people can look at it. It's a very strange concept.

But this is a collector instinct of humans. It's a status symbol. It's a value store.

It's all these things is the idea. Then, I can sell an artwork in a way that I couldn't before. And if that's a way for more artists-- I'm not talking about people making $69 million because nobody needs $69 million.

But for a lot of artists, being able to sell a digital artwork for $500 or $1,000 could be the thing that starts to make it possible for them to do that as a living and to make more beautiful things and to add to creative legacies, which I think is important. And then also, with an NFT, unlike with real art-- so if I go to a gallery and I buy art from some artist in Montana and I put it on my wall and then he blows up and 10 years from now that art went from being worth $500 to worth $5,000, I could sell it. And I make $4,500.

And that artist makes nothing. But with an NFT, usually, there is a provision in the contract that the artist will make 10% of any future sales. So there is an opportunity for them to continue to profit from the thing that they did instead of it just being becoming this thing that runs away and rich people toss around.

Now, that's still going to be a thing that runs away and rich people toss around. But an artist might then at least make a little bit of a piece of that ridiculous speculative trading. Yeah.

I think I hear where you're coming from. And I do think it's probably got some benefits. I think I'm a little bit more old fashioned than you in the sense that I do think a lot of even what you value about that first edition book is the physical history, the people who have read it, the world that it lived in when it was printed.

I do think the physicality of an object is a huge part of what drives the collector impulse. And I think it maybe is the wrong impulse to want to recreate that collector and that historian relationship with something that is fundamentally not in our physical world. But I could be on the wrong side of that.

Yeah. There is also a really compelling argument to be made that we need to re-understand how to support artists. And instead of creating an old system that wasn't great and that does end up usually rewarding a select few artists with great financial success-- and most of them with just bare minimum living standards-- we don't want to recreate that system.

It would be better if there was some other way to do it. The other thing that I think it's important to note is that this is mostly-- you will notice that most of the people who are buying NFTs for art are people who have a bunch of money in Ethereum already that maybe they don't want to keep in Ethereum. So there's all these weird perversions of the system.

And also, there's a piece of it that is just people who are excited about blockchain in general. And blockchain has lots of fans. It's a thing.

People stan the blockchain. And I am not one of them. And so it's easier for me to kind of see that they are looking at this and they're excited about it in part because it's based on the blockchain.

And the thing that they are convincing themselves of is that this exists outside of society. So for example, a big thing that they will say is, OK, there are already digital assets, like a Fortnite skin. I can buy some clothes in Fortnite.

It's going to cost me a pretty penny. And then I'm going to have that. But I don't actually own that because Fortnite, the company, is over there, and they could like take it away at any time.

Or Epic Games could stop existing. They could go bankrupt, and then my asset would disappear. But that would also be the-- so first, what's the incentive for Fortnite taking it away?

Epic Games would not take away your skin because that would ruin their economy. So they have an economy inside their game. They don't want to ruin that economy.

So they're not going to take it away. They could go bankrupt and Fortnite wouldn't exist anymore. And then your skin would go away.

But if you had that as a non-fungible token, then if Fortnite stopped existing, you still wouldn't have a Fortnite skin because you can't play Fortnite. So all of these things are different levels of society. And it's just that they like the kind of society that they feel is cool and that they feel they are a part of and they feel they have control of.

They don't really, though. One of the things that people in of Bitcoin world will say is like-- or one of the reasons why people have bought a lot of Bitcoin in the last year is like, well, we have less faith and faith in the dollar because the dollar can be controlled by the US government and it can be used irresponsibly and then the value of the dollar can change. But the value of a Bitcoin is much more that way.

Elon Musk, a individual human, can make a decision right now that will lower or raise the value of Bitcoin dramatically. He could do that any time he wants. And I don't even think that it would be illegal.

And so when one person has that kind of power, you are still in that situation where the price of the asset is controlled. It is controlled by a different system, and it's controlled by people that you vibe with better, and it's like you're all enjoying it together. But it is still a human construction.

It is still a method of communication between humans. So I want to, with our last 15, do some justice to these questions. So let's see if we can get some really zesty answers out of you.

OK. I'm bad at that. I would also like to say as my last thought on this entire topic is that-- and this is happening all across the political, social, economic spectrum on the internet.

People are like, this system is very flawed, and we're increasingly seeing diminishing returns for the effort and productivity we're putting into it. Yes. And the answer is to completely go outside of that system and create a new one that causes more problems instead of attempting to fix the actual system.

No. So that's my opinion. So one of the things that people are asking the most about are the environmental implications of cryptocurrency, which obviously is a subject that you really care about.

So a summarization of these questions is, what do you feel about the environmental impact? Does it outweigh the potential benefits of cryptocurrency? Yeah.

Well, first of all, I'm unsold on the potential benefits of cryptocurrency. I feel like it's just a value store. And storing value is not a good thing.

We should be using value to create more value, not just having it sit there and then suddenly having more money for some reason. That's just a pyramid scheme. So I'm not sold on its overall value anyway.

The environmental impact decreases that further. As I was saying, it takes a lot of math using a lot of energy and a lot of computer chips to do this. Both the computer chips and the energy have negative impacts on the environment.

There are two ways to decrease the environmental impact of cryptocurrency and NFTs. One is to be using more green energy. So this would be just the case with all energy consumption.

Now, you can say like, we're only going to build our NFT factories by places where there's lots of hydropower or something, but you're still consuming power that someone else would be consuming. And so you're increasing coal production somewhere else. So at this point, if the overall energy mix gets better, or if you are in a country where it's very renewable, there are ways to mint NFTs that have a lower environmental impact.

So you can do that. Second, you can switch from proof of work, where you're proving that you're doing all of these calculations-- basically, proof of work is basically saying, I am turning energy into money. I'm turning electricity into money.

And that's just like, ugh! Instead of that, you have something called proof of stake, where the thing that you are proving isn't that you've done a lot of math with expensive computers and energy. It's that you are basically benefiting from having the asset.

So you're proving that you have more Ethereum than other people. And that consumes significantly less energy. But it also means that-- but this is also the case for mining.

It means that only the people who have money can make money. But that's always been the case. It's always been true that only people who have money can make money.

And we should talk about that more. But anyway, that's my answer. We have someone asking-- and I did want to also touch on the gamification of investing, which is another big way in which the internet is changing our financial systems.

What do you think are the longer and medium term impacts of this gamification of investing on the market? I think that it makes it more volatile. I think that day traders lose money, especially day traders who are new to the game.

But even day traders who aren't new to the game lose money. And so it's a terrible thing to do. Do not to do it unless you are just doing it like you're having fun the way you would at a casino and it's less than 1% of your net worth kind of thing.

But yeah. Don't do it. It's terrible.

And platforms that encourage it are extremely irresponsible. I agree. My official advice is if you're tempted to day trade, go to a casino because poker is more fun, and you get free drinks.

So if Chelsea and Hank agree on that, then you should listen to us. Yes. Let's all go meet up in Atlantic City, baby.

I'm serious. OK. Post-COVID, my ass is going to be planted in a casino, I swear to God.

There's so many things I miss. And sadly, a casino is one of them. OK.

Oh, this one is really-- this is zesty as hell, Frank. Frank? My brother-in-law is Frank.

I was just talking about him this morning. Oh my God, guys. I'm losing it.

This one is a little zesty, Hank. But I'm actually curious myself. As someone who redistributes a lot of your earnings into social products that you-- projects that you believe in, how do you decide how much of that to do and how to keep-- and how much to keep for yourself?

How do you determine, in other words, your own personal wealth limits? I think it is really important to listen to that instinct. Never stifle your generosity.

And more than that-- and this is annoying because the biggest perk of having enough money is not having to think about money, but-- have a budget. Have a budget. Know how much you would like to have-- how much you're going to spend, and how much you'd like to have for just in casies.

It's nice to be wealthy, and I'm going to enjoy that. And actually project that out, both in terms of how much money you expect that you are worth and will continue making, and in terms of how much money you have. And decide now how much you want your lifestyle to increase, how much you want that the amount of money that you spend a year to inflate.

Because if you don't think about that, it will get out of hand. So think about that, and project for it. And then look at how much money is left over and start giving that much away because then you will-- and I mean not giving away the money that you're-- like the excess money, but spend down your net worth.

Because otherwise, your lifestyle will inflate to fill up whatever amount of money you have. So you have to start spending down your net worth, or else you will just be finding ways to feel like you don't have enough and then buying things that make you temporarily feel like you do and indulging in that cycle more. And the thing you need to do is get yourself out of that cycle.

And I find that giving away money is the only way to do it. And so I have not only done that with existing money but with future money. So I've decided that money that I will make in the future-- I know how much of that money I'm going to donate.

And in fact, I've taken one of my companies and made it so that all of the money that would normally be profit distributions for me-- all of that money gets donated to charity. And I've projected that money out and promised it to a charity so that they know that I will be giving it to them. And if I don't, then I'll feel bad.

So as a last question from our audience that I think gets into all of this and summarizes what we've been talking about, I want to-- I'm sorry, guys. I'm trying to ask individual ones, but so many people are asking similar things that I'm also trying to amalgamate them. In general, whether it's people having access to these alternative forms of currency, to greater financial education, et cetera, do you believe that the financial transparency and literacy being taught online, these discussions that we're having-- all of which is happening for free-- will eventually lead to greater income/net worth equality over time?

No. If it was just The Financial Diet, yes. I know.

But it's not. The majority of the stuff that I see in the financial content space is-- you know what it is. It's people who are displaying and it's a-- there's all of this get rich and know the tricks and the secrets, when really, there are tricks, but they aren't secret.

And mostly, if you want to get wealthy, you have to make money, save a lot, and find the ways in which you can add a lot of value to society, and then find ways to turn that value into income. And that might be inside of the corporate world. It might be in entrepreneurship.

I don't know. It may be that the good kinds of financial literacy out there will-- because there is more of it, that that will have a positive impact. But I am also worried that that other kind will outweigh it in terms of people ending up making bad decisions by following paths that worked for one person, but that person, it turned out, was just extremely lucky, not actually clever.

Absolutely. I totally agree. And whether it's a lot of the financial advice out there, all of these alternative currencies, all of this rethinking these systems-- if it doesn't fundamentally involve increasing dramatically the marginal tax rates on the super wealthy to cap how wealthy people can be, bringing that back down to where it was in the 50s, none of this is getting better.

And it makes me think of yesterday on Twitter I saw there was this news story going around that was some quote from Bill Gates. It was like, Bill Gates says you'll need to get used to doing strange things to combat climate change. And someone quote tweets it and they go, just so you guys know, it's eating bugs, not taxing him more.

And so I do feel like any of this that doesn't involve addressing wealth inequality from a regulatory place-- it's a losing game. Yeah. And in general, the audience we're talking to is people who-- in general, again, who have the opportunity to save more and to add more value to society through their-- through more unique labor sets.

We're not going to educate our way to a more equitable society. We have to tax our way and we have to increase minimum wage our way into a more equitable society. And we need to not have a special tax rate for capital gains.

I don't understand. And I can't believe that it's still happening. And I can't believe anyone defends it.

It's the worst, Hank. Well, as I expected would be the case, we are at our 90 minute. And I could go another 90 just on how fucked up the capital gains shit is.

Yeah. So as always, thank you so much for gracing our community with your almost ethereally, optimistic and bouncy yet measured presence. You're like a little benevolent internet sprite just moving around trying to make things better, TikToking with the youths.

We love to see it. Please tell everyone where to find more of you and all of the great educational content you make. You can find me at Hankgreen1 on TikTok because I couldn't get Hank Green.

But then I'm Hank Green everywhere else. And I make content on Vlog Brothers, SciShow, and Crash Course. And I have a podcast, if you want to listen to it, where it's like a science game show that's very fun called Sideshow Tangents, where you can join us where we try and get points, basically, for impressing each other with science facts.

So that's very fun. And I like doing it. I want more people to listen.

Hank, it's been a pleasure. You guys, it's been a pleasure. I will see you back here next Monday on the next episode of The Financial Confessions.