All ArticlesEpisode 002: Crypto and NFTsBy NickEP 2: Cryptocurrency and NFTs w/ Ty RoneyFiretoss Marketing PodcastListen to the rest of our episodes on your favorite platform. Check them out on our podcast page.00:00What do you think, should we do a podcast? Let’s do it. Here we go, not just your average podcast. It’s the slightly above average podcast, brought to you by your favorite marketing team at Firetoss. Here it is, your true source for all things digital marketing, the Firetoss Marketing Podcast. 00:28Tony: Super excited about this today, joining us is Ty Roney, welcome. 00:33Ty Roney: Thank you, it is an honor. 00:35Tony: Now, it’s not one word, by the way, I like to say it like it’s one word Tyroney. But it’s actually Ty Roney. So, we’ve asked Ty to come on the show today to talk to us a little bit about crypto and NFTs (non-fungible tokens) and this whole new, amazing, cool, exciting world. But I want to talk a little bit about Ty’s background because I’ve said this before Ty’s kind of an early adopter and he gets into some things that are along the lines of investing marketing trends and he seems to kind of do really well in this stuff and so Ty, talk to us about the last five, six years, and what kind of things you’ve been heavy into? 01:14Ty Roney: So, I mean, I started my journey, basically, in the Amazon world. So for better or worse, Amazon has built its own world, its own ecosystem and around 2012, I believe, is when I started just selling stuff on Amazon. I was managing a brick and mortar toy store and one of the toy reps actually came up to me and said, hey, you should look into selling stuff on Amazon. I tried to convince my boss: boss was not a huge fan of it. I even said, hey, chop my salary in half, give me some of the upside I was maybe, you know, trying to hustle a little bit, get to make a little more because I knew I wasn’t going to manage, you know, one location for the rest of my life. So, they were not overly thrilled at the idea. So I just quit and started reselling toys on Amazon and figuring things out as I went. So, long story short, I’ve basically been living in Amazon’s ecosystem since then, building private label businesses and helping clients manage and market their products on Amazon. And it wasn’t up until about two years ago, that I found a new love, which I’m sure we’ll get into later, but it has sucked me into the rabbit hole like you wouldn’t believe. 02:23Tony: So awesome, I don’t know if you know this, Toby, but at the time that he was working for this toy store, starting to mess around on Amazon and sell toys, like this is when I met Ty. And this is when I absolutely fell in love with his ability to get in and understand a new ecosystem, understand new products and then the best part of it: Ty’s actually the one that introduced me to the bug assault. 02:48Ty Roney: That’s correct. I totally forgot. I was in Tony’s marketing class. I was one of his students when I quit and started my Amazon journey. I was in the middle of that and yeah, introduced him to the bug assault, sold a lot of those, sold a lot of great Rainbow Unicorn pillow pets. That was another hot seller back in the day. So yeah, that’s crazy. 03:11Tony: I can tell you I used my bug assault this weekend. I did not use a rainbow unicorn pillow Pat though. 03:15Toby: So, I can tell you in total honesty that we’ve purchased a bug assault from Smith and Edwards surplus plus. 03:23Tony: You got one just this weekend. 03:37Tony: Anyway… So, I want to talk about your new passion. I want to talk about what you’re into but I want to take it a little bit easy. I want to kind of do a two-step approach because we have talked a little bit about crypto and a little bit about NFTs and I feel like in order to really understand an NFT, you have to understand crypto. Now, this is something where either you’re into it or you’re definitely not into it and so there might be people that are listening that are like “okay, I don’t really know anything about this.” And so I want this to be an educational episode where we teach people about what crypto and NFT’s are. And I feel like the majority of people understand crypto at this point, but they just might be scared and maybe they don’t feel like they understand it well enough to jump into it. But will you talk to us a little bit about how did you get into it and like, what have you seen in crypto that’s gotten you so addicted to it? 04:38Ty Roney: Yeah. So, I started in I guess it was 2017 and the last cycle or bubble whatever you want to call it and I was purely a speculator back then. I threw a little bit of money in right near the top and like, swiftly watched it all just crash down. But I did, I held it and I just I didn’t think much about it but I also never really got involved. And then two years ago, when we, you know, right at the beginning kind of COVID, you, we, all kind of have some more time to like actually think when we’re sitting alone by ourselves in our homes. I just started thinking, okay, the people that are into crypto seem to be way into crypto, like is this something that is worth me trying to understand or figure out? So, I started with that question like, “is it worth it? Is it worth taking the time?” And I came across this podcast, it was Tim Ferriss and Navall. Raava Khan and Navall just blew my brains wide open when I was listening to that, about just the philosophies behind crypto and the potential. And so it wasn’t until I listened to that podcast and reached out to a couple friends that I knew were basically retired because of crypto and started talking to them, and that’s kind of where the journey began for me. So, you kind of need to approach it from like… you can look at it in two ways, right? Number one is: I’m just gonna throw a little bit of money in there, I barely get it. Just like, you know that you should probably put some money wherever and you say, “okay, they told me to put money in the stock market.” So, I did it but did you really research any of those companies in depth? Did you analyze their balance sheets? Did you really take a look at their financial statements? Like probably not and so you’re not really that committed but when you look at it and say, okay, from a philosophical standpoint, from “will this change the world?” or “will the world change?”. Because of this standpoint my conclusion is: yes, like, things are changing. That’s when I got really excited about it. So that would have been about a little over a year and a half ago that I really started researching and just trying to understand what this was all about. And so I kind of started off learning about Bitcoin and Ethereum and it turns out that even learning about those two things, I still feel like an infant in terms of understanding the tech and the movement behind it. 07:12Tony: Well, there’s so many different currencies too, because like you mentioned Bitcoin and Ethereum and in my mind, I don’t know if this is correct or not, but it feels like, “okay, these are the two really big established brands out there.” These are the two that everybody knows and if I was an institutional investor, if I had a lot of money and I needed to have stability over time, that’s where I’m putting it, Bitcoin and Ethereum. But you’ve got things that just popped up that are trendy, like Shiba Inu over the last few months and there’s all these people that just barely missed the window. But because they all poured their money at the same time, the thing spiked. And so in terms of crypto, are you more on the speculation side or are you looking at it as a long term investment vehicle, where you’re gonna see returns that you just feel are going to outpace the stock market? 08:05Ty Roney: Yeah, a little bit of both. So, I mean it’s interesting how things change. So, in the beginning, before I learned about anything, most of it was just speculation. Hopefully, this all goes up, right? And as you learn more about what this is all about and why it’s important; this decentralized, permissionless universe, essentially, where no one person has control, and anyone’s allowed to experiment in the space, you think about the interesting possibilities that can come from this and everyone’s love for… (I guess not everyone, right?) but a lot of people that just live most of their lives online. So, a lot of us love our online interactions just as much as the physical, as good or bad as that may seem. So, starting from that standpoint, I just got way more excited about the space and so for me, I like to call myself a professional Dejan. So, part of myself is trying to be long term and think, and that’s honestly most of my portfolio is: what do I think is going to do well, in the long run and what do I believe in and want to support? And then I always leave a little chunk to play around with because it’s just too much fun, right? 09:31Tony: Yeah, you’re gonna have a little bit you’re gonna speculate with. It’s funny because my kids, my teenagers, have gotten into crypto a little bit and they’re looking at things and they’re saying, “hey, you should do this, you should do that” and then I finally shared with them. I think everybody has like this, “oh, I could have, would have, and should have” with crypto. Like they knew about this and someone told them, “hey, you should do this now” and then they didn’t do it. So, with us being an agency we’ve dealt with people in crypto for projects multiple times where they tried to pay us in crypto and hindsight is 2020. But when you’ve got payroll to pay in an agency, in a marketing agency, you can’t really pay payroll in crypto. And so the work we’re doing, we need to be able to receive, you know, US dollars for this and so, in mid-2015, somebody offered to pay us 400 Bitcoin for a website and I quickly did the math and I was like, well, that’s like $160,000. I was like, “cool!” and I didn’t know anything about Bitcoin at the moment. I said, “where do I withdraw that, where’s the ATM?” Well, that’s how you can like there’s… Well, can I convert it to dollars? No, you can’t because in 2015, it was Bitcoin and that was it and I was looking around and I think at that moment, I don’t know for sure. I think at that moment, overstock was rumored that they were going to take Bitcoin. I’m thinking, “okay, how do I spend 400 Bitcoin on overstock?” It just didn’t make any sense and so I just didn’t know what to do with it but man, would that have been awesome. 11:06Toby: We passed and we kick ourselves. 11:10Tony: Yeah, that was a bad moment. So, I’m just curious, where do you think we are in the life cycle of crypto-currencies? And I want to preface this with something that we were talking about earlier. So, a lot of people have retirement savings in things like mutual funds and I’m not trying to give any investment advice. I mean, this is just… We’re just fascinated by this and I don’t think that nobody on this podcast is trying to actually say “here, this is what you should do with your money.” But it’s more just kind of business entertainment, to talk about these things that we’re doing and what we’re seeing. 11:47Toby: No, I also think that this is important for people to understand, even if it’s on a basic level, because it is up and coming. It is changing the dynamic of how things are done in a lot of arenas. And I’ve had more questions in the last two weeks since the Staples Center announced that they’re changing their name to crypto.com arena and people are like, “what?”. And I don’t know how to properly answer because they say.. “Well, you’re a sports guy. So, you should know this and you work in tech,” and I’m like, I have some crypto, but I don’t. 12:23Tony: So, a lot of people have their long term investments, somewhere in some type of investment vehicle related to the stock market and people feel pretty safe and secure to have an index fund or some growth type mutual fund. But I remember when I was a kid, I mean, when I was like high school age, everybody started talking about, “oh, you should be using index mutual funds” and then the no load mutual fund was being talked about a lot. And there were a lot of people that were, you know, their business was to sell different types of these securities. But, they have been around for a while and I would never tell somebody, well, first of all, I would never tell somebody what to do with their money anyway. But, if somebody said, “hey, I’m in a mutual fund,” like I would, I would never say, “well, that’s a bad idea, because they’ve been around for a long time and I feel like we’re in a very mature market.” And you know that somebody that is a huge crypto guy, the other day, told me it’s like, “well, you know, the stock market is just rich people trading money with rich people.” And like, it was a terrible, horrible mechanism because he was so anti-establishment, and you know, crypto, so much better, because we can all access it. But you know, the stock market is accessible. People can download public or Robin Hood and throw money in the stock market and in a matter of minutes and so it’s all accessible. But as you look at that, something like an app, which these apps are pretty revolutionary, that allow you to buy single stocks or even mutual funds, compare that to where we’re at in crypto. Do you think that it’s getting saturated? Do you think that we’re getting to a point that we can kind of start to see the trajectories of where crypto is gonna go or do you think that we’re still just at the starting gates and we have no idea yet? 14:19Ty Roney: Talk about a loaded question, so yeah, let me start with this. I mean, I think when it comes to crypto in general, what we’re seeing, in my view, is a lot of people my age and younger, like, we’re a little bit fed up with the normal way that things have been done and all these financial advisors. You’re all wonderful people, I’m sure, but you’re all trying to help people save their way to wealth. Which I just disagree that you have to make a lot of money to save your way to wealth quickly, you know, like you can’t do it quickly. These index funds and these mutual funds, you’d be stoked if you made 20% a year, like that would be insane, right? 15:09Tony: That gives you, I mean 20% a year, you can literally be a normal person working a normal tech job, which I’ll compare it to that, because that’s kind of our sector and who we work with a lot. You can work a tech job and make 20% a year on your portfolio and if you’re saving a decent amount, I mean, you can literally be a millionaire, a million in assets within seven or eight years. No problem. 15:33Ty Roney: Yeah, ideally, right? As long as you’re good at saving a good chunk of money, if you’re good at saving and it actually did that, which it doesn’t, then sure you can utilize an index fund and that can make you wealthy. But I kind of had this realization that an index fund isn’t going to get me there. It’s not going to be what takes me to Valhalla, you know, in a financial sense. If I want to see life changing gains, I need to go, you know, further out on the risk spectrum and that’s where crypto lies. It’s definitely much riskier, but I kind of thought, you know, what, what does it matter whether, if you’re living in middle class America? … There’s like a range you get stuck in and you need to either kind of, like make millions to break out of that and to be free of the rat race or you get kind of stuck like, right where you are and putting your money in a traditional stock index fund. It’s just not gonna, in my view, right like, this is me far out on the risk spectrum. But you’re not going to get a 10x in two years that’s just never going to happen. So those things are possible in crypto. But like I say, it’s coming at it from a philosophical standpoint and seeing “oh, look, there is an entire world that we can build online,” that doesn’t have permissions and is not gated by central authorities, that we can create. And a lot of people value their digital lives just as much as their physical, under thinking about that and it makes me feel, like, incredibly excited about the space! To get to your question of “where are we in the lifecycle?” I have no idea but I do think that Bitcoin has actually been around for a little while, right? It’s been around for, what, 8, 9 years, at least 10 years or something. And so it’s kind of like proven itself that it’s like a legitimate asset class. It’s nearly, depending on the day, it’s a trillion-dollar asset class and bitcoin is nothing more than, I mean, in my view it’s trying to be a decentralized reserve currency, right? So a version of digital gold and it’s not trying to be anything beyond that and so… 18:16Tony: It’s not trying to take the place of, you know it’s going to become the currency you use at the restaurant and at the shopping center. Because, I mean, there’s always these romantic ideas that this country is going to adopt this crypto-currency and make it their national currency but we’re a ways away from that stuff really working. 18:36Ty Roney: Yeah and the narrative changes over time. It has changed over time and who knows where it will go. I, along with most people that hold Bitcoin, I mean, most of us are not… don’t want to actually spend it on our groceries. You know, we just want to store our wealth there, our value there. My portfolio, if I’m being totally straightforward, has probably less than 10% Bitcoin in it right now and it’s only because I am very excited about what Ethereum is doing and NFT’s and everything else, in terms of what is happening in the growth that can occur there. 19:18Toby: So one of the questions I have is: as crypto becomes more and more prevalent in society, do you think that, as Tony mentioned, this idea that a company or a country may adopt a crypto-currency as their main currency; in order for that to work, wouldn’t they have to regulate it? I mean, in my mind, as I understand it, the only way you could really do that is if you brought in some type of regulatory body because it can be super volatile. You look at what Ethereum does on any given day, Bitcoin, any other crypto, it can go up and down way too much. So, do you think that they would have to come in and stabilize it through regulation? 20:08Ty Roney: Well, the thing is the beauty of crypto is that nobody, there’s no, like, master node, you know? There’s no single person that, like, the Fed that pushes the button, everybody that’s in crypto needs to recognize that like we’re not here because we love banks. You know what I mean? We’re here, because we want to be our own bank. We’re not here because we think the government can help to regulate and control the economies. We’re here because we actually think that the market will let it do what it does in a completely decentralized and free manner. So, countries coming in, I mean, look, the US is already trying to impose all sorts of regulations and quite frankly, some of them will be literally impossible to adhere to and so we’ll see where that leads. They’re not supposed to go into effect until 2024. I don’t think there are issues with regulation, I think “yes, sure. Let’s make sure that things are legal” and let’s figure out a way to move forward. But you’re right. I think as more countries adopt certain, like El Salvador adopted Bitcoin, and let them do their thing, that’s great. But a lot of us get stuck up on this idea of everything’s a currency. Whereas I think a lot of these things should be seen as assets like a crypto asset. So, like Ethereum, it happens to be what I consider to be the currency of the metaverse. But it’s also I mean, it’s this network upon which anything else can be built and a lot of these new, we’ll call them just protocols, software protocols, they’ll launch a coin. That is like a governance token, right? And maybe that coin will get a percentage of the revenue share. So I think it’s important to kind of differentiate between coins that are trying to be pure currencies and then other coins that they’re actually maybe more like assets, right? And you can look at it like, “oh, it’s almost like the next tech company,” but it’s managed by software protocol and not the there’s no human at the top of it, if that makes sense. 22:35Toby: Yeah, very interesting 22:38Tony: Well, I was gonna ask you, the last thing I wanted to really know about crypto is how do you evaluate a new coin because that’s, that’s what I find is the hardest part of this. I know Bitcoin. I understand Ethereum, but what happens the first time that you hear about Shiba Inu or Dogecoin, or whatever comes at you? Because if you’re a speculator, it’s really about finding somewhere to get early information and to get in before there’s kind of that initial bubble. How do you evaluate a coin and decide if you’re going to take a risk on it? 23:20Ty Roney: Yeah, great question. I mean, number one, there’s two you can look at, coins into it seems like basically, there’s two types, right? Like there are some that are trying to build something new and novel, and then there are some that are just pure memes, right? Like Doge and Shiba Inu, there’s all sorts of just total random meme coins, essentially, that it’s like, what’s their purpose? Who knows but Doge, interestingly enough and Shiba Inu, had enough people buy that now the market cap is what 20-30 billion. I don’t even know what it is. I don’t keep track of the meme coins very well. But once you get to that level, it kind of has this Lindy effect, where, hey, there’s, like, an ecosystem here and maybe, like, the Dallas Mavericks, except Doge is payment. Well, fun, maybe that coin has a lifecycle ahead of, it has a future. But a lot of what I’m interested in are these protocols that are being built that enable something else to happen, right? So, Ethereum is an incredible network that enables other protocols to build on top of it and everything’s on this decentralized public ledger. You can figure out, like, complete transparency and so there are some protocols that are very useful. For example, somewhere you can deposit money as collateral or crypto as collateral and you can take out a loan against it. Some say that you deposit crypto as collateral and you can take out a loan against it and that protocol will go out and try and find other means within the network of generating yield, that will then pay off your loan. So, it’s like a software controlled protocol that is a self-repaying loan. That’s interesting like, that’s something that’s novel and new. I can put my money somewhere and yeah, I have to over collateralize for now because that’s the only way to do it perfectly right or without as much risk to the protocol itself. But those are unique and so kind of understanding what has network affects, what might actually be something that’s useful in the future that people like and use. That’s kind of what I’d look at when I look at coins. And then there’s a whole ‘nother category of people that are just specialists in trying to understand the phenomena that, like, the cultural phenomena of “oh, look, all these people are aping into Shiba Inu,” because tiktokers are showing it or like “hey, this is a new coin that’s just gonna pump and dump.” I mean, that’s a whole new, crazy world. I kind of skipped right over those and went straight to NFT’s which are another, whole ‘nother topic in and of themselves, but one quote and, I forget, I think it was one of the Winklevoss twins that said basically, crypto currencies… 26:26Tony: Wait, those guys are real? 26:27Ty Roney: They’re real. 26:28Tony: I thought it was just in a movie. 26:29Ty Roney: And they’re getting their revenge by the way, on Mr. Zuck. I think that they are going to come out on top and I think one of them basically said, hey, cryptocurrency is the money of the metaverse and NFT’s it’s like the stuff in the metaverse. It’s like stuff that you’d want to own and when I say metaverse, I’m basically just talking about the online universe, everything that there is there. So, that could be Twitter, that could be you owning a digital asset, that could literally be putting on the Oculus headset and wandering around in these worlds that people are creating. But yeah, Metaverse is like the new buzzword but it kind of encompasses anything you’re doing online, we’re calling it the Metaverse now. 27:23Toby: I was gonna say so let’s shift just a little bit here because you brought up NFT’s and it was something we wanted to chat about briefly. So, I want for, just a second, for you to pretend that you’re speaking to a child and by child I mean, me. And give me a quick rundown of what an NFT is, explain that concept. 27:43Ty Roney: Yeah, so the first thing you just need to think about is a lot of people value the digital world just as much as the physical. So, if you like video games and you want to buy something in that video game, you could do that, right? Like you could buy a skin in fortnight but do you truly own that skin in fortnight, do you have complete autonomous control over that skin in fortnight? No, if the creators of fortnight wanted to shut you down, they could just press a button and turn it off. Now, there’s a world being created where you can own your character 100% free and clear, and you can own their weapons or their loot or whatever it is and you can resell it. You can own it and then you can sell it to anyone else on a completely decentralized free and open marketplace and the game itself is built on that same platform. So, nobody can take it away from you and there’s 100%, like, perfect authenticity in terms of where it came from and who owns it, and perfect provenance of whoever has owned it and the trail, right, of buyers and sellers. So, digital stuff that you can actually own is kind of the simple way I look at it. 29:09Toby: When we, when I first started hearing about NFT’s which wasn’t that long ago. So, you know, to me as an outsider, it’s a fairly new concept. I started doing a little digging online and I ran into a cartoon about cats who smoke weed all the time and the only way you can watch it is if you buy these NFT’s from them and I was like, oh, I want to look and see what this is like but there they were, like $700 or $800 and I was like, I don’t know if I can justify that but so again… 29:37Ty Roney: One example I love to talk about is the Bored Ape Yacht Club. And the Bored Ape Yacht Club is a collection of, it started anyway with 10,000 avatars. You know, just profile pictures essentially, of these cartoon apes. And it has evolved into a brand that, in my opinion, and actually might be, like financially, more valuable than supreme in what they do. So, essentially what the Bored Ape Yacht Club has become, as sure, everybody just, at its surface, they are JPEGs of digital apes, right? Just pictures. But beyond that, it’s this incredibly strong community and experience, like being in a digital country club almost but not a bunch of old people playing golf. But like a bunch of young people wanting to do, like, cool and unique things. So, for example I bought an apple over the summer and they announced, “hey, in New York, during this big NFT conference, we’re going to put on a party for all of the Apes.” So you had to have an ape to get in. So, I go to this party and I get in and it’s awesome. This giant warehouse in Brooklyn that they’ve retrofitted to look like the Bored Ape Yacht Club and they have this concert set up. That’s absolutely incredible, like Aziz Ansari gets up on stage and introduces Beck, you guys remember Beck, that’s like your generation, and they did a phenomenal performance, by the way. And then Chris Rock got on stage and introduced the strokes who are absolutely incredible live and I just, like this, such a cool, like, cultural phenomena. It’s like, all of us random humans. We’re all here because we bought these cartoon apes and we bonded as this random community and we’re watching the strokes play and little baby came on later. I’m a total loser, I go to bed at like 9:30PM. So, I left before he even got on stage, little baby. But hey, like everyone else was having a great time. And so it’s like they are providing this experience where there’s a shift occurring in brands, where Nike, no matter what they do, you’re never gonna feel like you’re part of Nike. You know what I mean? You don’t feel like you’re part of them. They are very much the brand and you are their customer. Whereas the Bored Ape Yacht Club… Oh, I’m an ape. You know what I mean? Like, I am part of this thing and now, as you guys know, I wear black every day, same uniform. I bought a white Bored Ape Yacht Club hoodie for the first time the other day. That’s how much I love the brand, and they’ve got us all, like, we want the merch! So after paying absurd amounts of money for these apes. We want the merch. 32:34Tony: What is an Ape worth today, right now? 32:37Ty Roney: 50 Eth is the four and I think I bought one when they were 18. It was a lot cheaper back then as well but still, like that’s it. I could have bought; we were talking about cars earlier. I could have just bought a car instead. But I bought a bored ape. Like, that’s how crazy I am and this world is that. For my birthday all I wanted were NFT’s. So, I bought myself two NFT’s on my birthday in the summer. 33:07Tony: I’ve got a question for you. So, in terms of trading NFT’s, how are they traded? I mean, because a lot of people, this is where the knowledge breakdown occurs. I know that I can download one of the crypto wallets that are popular. I’m not going to give them any particular love by mentioning them. We’ve already mentioned crypto.com. Anyway, so, we could download a wallet and we can buy Ethereum and we can buy bitcoin but how does that work with NFT’s? 33:41Ty Roney: Yeah, so, the first thing you need to understand is that NFT’s… They reside on a particular chain, right? So, most NFT’s like the OG NFT’s are on Ethereum. And still to this day, like the market cap of NFT’s on Ethereum versus other network is pretty big. But you need a wallet to interact directly with whichever chain you’re interested in. So, most are on Ethereum right now. So, you need a wallet compatible with that with Ethereum. And I’ll go ahead and say it, Meta mask is like the main one that most people are using. But there are other networks as well, right? There’s the Solana and they kind of have a burgeoning NFT ecosystem that’s happening. There are other chains. So, first, you need to know which chain you’re dealing with and then you need a wallet; you need to fund that wallet with the native currency of that ecosystem. So, if we’re just going to stick with Ethereum that’s where the Bored Ape Yacht Club lives, right, on that chain. So, you need some Eth (Ethereum) in your wallet and then you can go and buy that NFT, either directly… So these projects they initially start and you can mint them, they call it. Like minting a new coin, right? So, you mint them typically directly from their site, right? Like they write a contract and then you’re going to mint it directly from them and then after that there’s a giant, like reseller market, essentially and the biggest one right now is called Open Sea. And it’s essentially the eBay of NFT’s and most volume goes throughOpen Sea right now. So, you can get on there, you can go there and look right now, at the bored Ape Yacht Club. Make sure you find the verified collection with a little blue checkmark and then you can browse through any ones that you want. You click on it. Say I want to buy it and then you pay a little bit of gas fees to make that transaction happen. And it goes through and then all of a sudden, you’re the owner of that Ape. 35:45Tony: So, you kind of skipped over this, but tell us about that process of minting? How does that work because I was reading something about people that are whitelisted and how there’s kind of a strategic advantage there, how does that all work? 36:03Ty Roney: So, because this has turned into an absolute mania, there’s no line, there’s just new projects coming out all the time, right? So, when there’s an opportunity, I mean, the people that bought these bored apes, initially they were like 200 bucks or something, right? Like, and now they’re worth $200,000. So, when people saw that there was something that they could get in on and maybe win the lottery, you can see this, like the game theory mechanics behind it. And just the sheer degenerate gambling nature of our lizard brains, that “wow. People might actually buy something that could go up 100x.” So, people are getting way too excited and a lot of people are going to lose a lot of money. But the process is essentially, a new project will launch or they’ll build up a lot of hype or buzz, right? They all want to be the next Bored Ape yacht Club or try some other novel new approach. Where, like stoner cats, for example, where they say, “hey, we’re gonna create this series,” right? It’s like a TV show and you will get maybe some of the revenue from it or something, right? So, there’s all these different ways. It unlocks so many different ways of making money but back to your question. Like, how does it actually work? Well, somebody needs to write a contract. You need, like, developers to say “here’s our collection and we’re going to put it on the chain” and this is where the contract is going to live. And then you basically interact directly with that contract, in order to mint your first NFT’s when they’re released, right? The process, what’s happened is these projects, some of them, get so hyped up. That I mean, they may only be launching 10,000 of these whatever’s and there’s 100,000 people that want to get in on the collection. When you have 100,000 people trying to mint, you know, let’s say they release the drop, they call them, they’re gonna drop their collection at 3PM. Mountain Time. It’s like you’ve got 100,000 people all wanting to get on the network at the same time and there’s no getting around it. Ethereum is undergoing some growing pains, which they have some amazing solutions for in terms of scaling. But at this very moment that we’re talking, if 100,000 people are trying to interact with the same contract, you essentially… it turns into what’s called a gas war. Where in order to transact and do things on Ethereum’s network, you have to pay Ethereum. Like they call a gas, right? When the network is congested, in order to get your transaction to go through quickly, you need to pay more gas. So, this can turn into something that just becomes unreasonable and in many cases you may actually be paying more in gas at the moment than you are for the actual NFT in the beginning. But some people think, “hey, this is totally worth it, because this NFT’s gonna go bananas.” So, a lot of projects are trying to figure out new and novel ways to get people involved in the project early and whitelisting is one, right? Where you say, “Hey, we are going to whitelist these addresses,” right? So, if you want a crypto wallet, you will have an Ethereum address, right? That’s where you can send money from or deposit money to and they’ll whitelist your address ahead of time. Let’s say because you were in their discord group early or you solved some riddle or puzzle, and so they make it kind of like this voyage, this game, right? Where they’re trying to build a community beforehand and then get certain people whitelisted so that there is no gas war, right? 39:54Tony: So, the white listings, are they just per project? Like, there are not, like, just a group of elite buyers that are whitelisted for everything? 40:02Ty Roney: It’s project specific but what’s interesting is a lot of projects might say, “hey, if you own like a crypto punk or a board ape,” for example, “we’ll get you on the whitelist or we’ll maybe we’ll even give you some for free,” they call it air dropping. If you own a Bored Ape, you own some type of project, they’ll gift you something, you know? So, there’s all sorts of mechanics around what to do and I think soon we’ll reach a point where a lot of the network activity on Ethereum will move to what’s called layer two. And that’s another subject entirely, but essentially, how Ethereum is going to scale and handle all this volume. There’s competitors that have popped up, right? Like Solana, for example, and at this current moment, the fees are cheaper on Solana. Solana tends to be a little bit more centralized. It’s a little bit younger, so hasn’t quite reached capacity yet. But all these, they call, layer one networks. They’re all going to need to learn how to scale as the demand gets there, and so right now it’s all on, just a lot of activities on Ethereum. 41:16Tony: Okay, so I have one last question that I want to ask you about, because this is something that I’ve thought about so much. I’ve looked at NFT’s, but a lot of the mechanics of what’s going on right now, was really about, can we even do this thing? So for example, you take crypto punks and from what I understand, crypto punks were really like the beginning. They were my series one garbage pail kid cards from 1982. So it was, “can we even do this?” and the value isn’t necessarily that the artwork is interesting or anything other than what you were talking about with the other group. It’s more about exclusivity. It’s about scarcity. It’s about it was an early asset class, so what happens to this whole world of NFT’s when actual artists start getting involved? I saw something where a teenager recently has been selling over the last 10 months and generated $300,000 in wealth, just off of her drawings because they’re starting to get popular and she’s figured out how to take her digital art into the NFT universe. I should say Metaverse, I am learning. But what happens when real artists are getting involved and we start seeing gorgeous artwork. I mean, what happens when somebody takes the digital Mona Lisa and puts it into this world of NFT? Do you think that some of these early collections, early projects? Do you think they just get obliterated because suddenly things are visually appealing or do you think that this is dynamic enough that it’s not just about the visual? But it’s about different methodologies of attainment? I mean, where do you think that this actually goes? 43:19Ty Roney: Amazing way to frame it, you framed perfectly and there’s a few things, right? I, in a way, on several things, own collections, a piece of a collection; rather, that I think will be historic, right? Like I think crypto punks will be historic. Like, they’re the OG profile picture project. So, from a historic standpoint, if the metaverse ends up going anywhere, that’s going to be an iconic collection to own. Now, from an artist standpoint, there are… there’s lots of artists that are already doing exactly what you’ve spoken about and making great money doing what they love: creating NFT’s, creating beautiful art and it just happens to be stored on chain, right? In digital form and so, that’s already there. It’s already happening. It’s just… you’re absolutely right, though, like I think 95% -99% of what’s happening now, a lot of people are out there for a quick cash grab. And a lot of NFT’s are going to zero like there’s no getting around that. But if the metaverse unfolds in any way like we think that it will, then some of these historic OG collections, I would think, are going to be worth a lot and there’s several different ways to look at it, right? You’ve got the historic kind of idea like the crypto punk is like the original OG profile picture project, that maybe not technically the absolute first NFT’s on Ethereum, but they were the first kind of very relevant one that inspired all sorts of stuff. And so you have that and then you’ve got these NFT’s that are trying to build communities like the bored ape yacht club. How long is that sustainable? Do you like the roadmap? Do you like the team? How is the community bonding? How’s that working? And then you’ve got just art for art’s sake: photography artists, there’s a new form of art called generative art, which it’s essentially artists that are coders that will put a series of inputs. And when you actually go to mint, that contract and mint, that new NFT from them, your interaction helps dictate what the art will look like on the outcome and that is interesting. It’s an entire new form of art called generative art on chain generative art. It happens all on the chain right at the time of minting. And so some of those early collections, I tend to think “well, okay, hopefully, some of those might be valuable if the art world picks up on this or cares about this,” and a lot of these NFT’s have been sold at Christie’s and Sotheby’s, at traditional auctions. So, it could go either way but the reality is you’ve also got a million people out there hiring fiber artists just to create something because they want to take advantage of this new medium. So it’s really hard to sift through the noise and the clutter and every project has its own discord group. So, I’m like, it’s easy to get up to 50 plus discord that you’re a part of, trying to keep up with everything and it quite frankly, is overwhelming. So you have to figure out, where do you want to focus your time, you know and I haven’t even chatted much about the potential of web three gaming, which could be a big deal. 46:55Tony: Yeah, it’s fascinating, it goes and goes. I’m excited to have Ty back again and we’ll see how this progresses over the next few months, and maybe we can have a recap conversation and talk about what’s changed. Maybe four or five months from now, sound good? 47:12Ty Roney: Oh, everything will have changed by then. So it’ll be perfect. Yeah, hopefully I’m still around and still alive by then. 47:20Toby: I wonder if the next time he comes in he’s wearing a blue shirt. 47:23Tony: I doubt it, as long as I’ve known Ty, I don’t predict that. 47:28Ty Roney: We shall see. I mean, the volatility of the markets is crazy and no-knowing. That is the half of it, is this self-sovereign idea, though, right? Like, I’m okay, like accepting risk. I know what I’m doing and let me just go out and play in this world and I’ll accept the consequences if it draws down 80%. I can handle that. If it goes up 10x, I can also handle that, right? So if you’re willing to do that, then this is a world you will love to play in but yeah, I could go on and on… 48:02Tony: Well, Ty, thank you so much for joining Toby and I today. This has been hugely fascinating and you know what? Our goal today was to provide a little more information to people that are maybe not so much on the fence, but they just don’t understand it quite yet. And I think we’ve covered a lot of ground with crypto-currencies with NFTs. At least enough that somebody listening will have understood a little bit more and that was the goal and I think we nailed it. Ty, you’re awesome, thank you so much for being here, we really appreciate you. 48:31Ty Roney: Thank you. 48:37Thank you for listening to the Firetoss Marketing Podcast. Be sure to subscribe to get all the latest episodes and don’t forget to tell 10 friends or you’ll have bad luck. Check Our Latest Episodes! Ignite Your Business Today!