To trade money is one thing. But to actually create money, then trade it, well, that’s a whole ‘nother thing. And being the equal opportunity lover of trading stories that I am, I gotta say something about crypto.
So… Money is old as fuck. In 5000 BC people started using metal for trade and by 700 BC our ancestors were minting coins. It took another thousand plus years for paper money to catch on, first in Tang Dynasty China (whatever the fuck that is), as private bills of sale (whatever the fuck those are), and then another thousand years for governments to guarantee the value of a printed piece of paper. But when this happened, it became known as cash money.
And for a long-ass time, if you did some work, you wanted cash money for your efforts. And when everyone wanted cash money, cash money was the only game in town.
Meanwhile, shit progressed. We go from flint to matches to steam engines to power grids, and along the way, say about 1952, some smart ass motherfuckers figure out a way to alchemize sand into silicon and render human logic on semiconductors. Thus begins the computer era. And by the late 80s, the shit starts to really take off amongst the Dungeons and Dragons crowd and once these dudes had the cheap hardware in their basements and started plugging all their shit together across phone lines, they realized that the hardware wasn’t where the action is. The real action is in the software and they decide, software should be free.
And so they start writing the shit themselves, co-coding operating systems and protocols and checksums and shit, and in so doing, they form digital communities with their own rules and their own values, sharing their secrets in foreign tongues and surfacing only occasionally at Burning Man and the Sapphire Club. So begins open source.
In 2008, one or more of these open source motherfuckers gets to thinking, fuck, we’ve built this whole parallel digital universe. That’s some godly shit. So fuck it, let’s make our own money. And in 2009, someone (or someones), operating under the pseudonym Satoshi Nakamoto, writes a whitepaper and introduces the source code for bitcoin.
In no time, bitcoin goes viral and crypto becomes a craze. Enter Charlie Lee. Lee was born of Chinese decent on the Ivory Coast of Africa. He moved to the US at 13 and graduated from MIT in 2000. After gigging a few years at Google, Lee learns about bitcoin while reading an article about silkroad, and he gets interested in crypto. Being smart and all, he starts thinking he can help solve some of the scale problems with bitcoin (it’s slow as fuck) and so he decides to make his own digital money. His first attempt gets hacked and fails, but on October, 2011, Lee introduces litecoin, a faster and more liquid version of bitcoin, and the shit takes off. By 2017 Ellen is talking about the shit and a whole ecosystem forms to make it easy for anyone with a credit card to mortgage their kids college tuition on shit they didn’t understand. And by late 2017, the market for crypto currencies goes ape-shit.
Now, everyone knows a bubble is easy to spot in hindsight. But our monkey brains evolved to gorge on a kill, getting fat when the going is good so that we have the calories to survive the lean times. And abundance shuts down the rational parts of our brains. But that’s the part of the brain that sees the bubble, and it’s hard as fuck to think rationally when the shit is going really fucking good,
But in early December, 2017, Lee sees shit is out of control, no matter how good it seems. And despite the fact that he invented litecoin, and has basically committing his career to it at that point, on December 11th, he tweets: “Ok, sorry to spoil the party” and sells pretty much his entire crypto stash.
We all know what happens next, but here is what is cool about this trade. Litecoin peaks around December 12th, 2017. Bitcoin peaks shortly thereafter but it’s not until early to mid January, 2018, that ripple and etherium crash, starting “multi-year bear market”. It was a perfect call.
So how much did he make? This is really fucking hard to figure out. Unlike a lot of the shysters who jumped on the crypto bandwagon, staging initial coin offerings (ICO) right after pre-sales where insiders scooped the shit up at pre-market prices, litecoin never had an ICO. Someone way smarter than me can comment on this, but it appears that whatever he owned, he mined, and so who knows how much he had (I have not seen it disclosed). Litecoin trading volume goes crazy after his tweet, and read what you will into that, but it was a bubble so who the fuck knows.
But fuck, it’s fun to speculate. By way of comparison, Vitalik Buterin, founder of Ether, lamented in a tweet on Oct 10th, 2018, that he has never owned more than .9% of all ETH (poor guy). If the initial volume of ether released was 72m, that would equal 6.48m ETH. If he sold at the Jan 2018 ETH peak of $1,354, his return would have been roughly $8.7B. By contrast, it is said that Satoshi Nakamoto, the anonymous person or people who created bitcoin, had mined roughly 980,000 bitcoin by 2009. If Satoshi were to have called the top and sold about the same time (bitcoin peaked at $19,450), that dude or those dudes would be sitting on $19B.
Lee seems like a decent enough dude, but what fuck do i know. It is said that he donated much of his profits to foundations and shit. If true, that’s cool. And I have tremendous respect for the open source community working on this shit. Just as the fiber optic and telcom bubble of the 90’s funded the communications infrastructure of the 2000’s, the crypto bubble has led to some spectacular innovation.
But this is wsb. The story is in the trade, and that was one fuck of a trade.
Edit: I moved this one to the top given the recent crypto action. Hope a few of you mothefuckers enjoy.
Peace!
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