Pressure on Facebook ramps up as Senate Judiciary Committee demands answers

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Pressure is growing on Facebook to explain its failure to protect customers against misuse of their data by a firm of political consultants.

Both US and UK governments have demanded that CEO Mark Zuckerberg personally appear before them to give testimony. But in the case of the UK, Zuckerberg has already refused …

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Full transcript: Recode’s Kurt Wagner answers Facebook-Cambridge Analytica questions on Too Embarrassed to Ask

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The data privacy scandal has Facebook scrambling.

On this episode of Too Embarrassed to Ask, Recode’s Kurt Wagner talks with Kara Swisher and Lauren Goode about the Facebook-Cambridge Analytica scandal. Wagner says reports of a political data firm exploiting a loophole in Facebook’s old data platform has severely undermined public trust in Facebook.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Too Embarrassed to Ask on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.


KS: Hi, I’m Kara Swisher, executive editor of Recode.

LG: I’m Lauren Goode, senior tech editor at The Verge.

KS: You’re listening to Too Embarrassed To Ask, coming to you from the Vox Media podcast network. This is a show where we answer all of your embarrassing questions about consumer tech.

LG: It could be anything at all, like should Kara Swisher delete her Facebook?

KS: I have to use it first, I don’t use it all. I never use it.

LG: Do you have two Facebooks? Do you have a personal and professional?

KS: I have several. Yeah, I’ve got that. I have a lot, I have like 750,000 fans or whatever the hell you call them.

LG: Likes, followers.

KS: I don’t know. I never go there.

LG: You don’t use them?

KS: I use Instagram and I use WhatsApp.

LG: Oh, therefore you’re not using Facebook.

KS: Yeah, I know, but I use their properties. I use Facebook properties.

LG: No, I’m joking.

KS: Who owns Waze? Is that Google or Facebook?

LG: Google.

KS: All right, anyway, no, I don’t use main Facebook, it’s too heavy-handed for me. Anyway, so send us your questions, we’ll talk about that more. Find us on Twitter and tweet them to @Recode or to myself or to Lauren with a hashtag #TooEmbarrassed.

LG: We also have an email address, TooEmbarrassed@Recode.net, and a friendly reminder, there are two Rs and two Ss in embarrassed.

KS: As always, Lauren.

LG: As always.

KS: So, the reason we’re talking about Facebook, Lauren, what’s the reason? They’re in a bit of hot water, wouldn’t you say?

LG: As we tape this podcast right now, it’s Wednesday, you’re going to hear this on Friday, but it’s Wednesday about six pm Pacific, and Mark Zuckerberg is doing an interview live on television with CNN right now, but he also spoke to some media outlets, including you.

KS: Yes.

LG: Including Recode and Kurt Wagner.

KS: Right. Just a few precious ones.

LG: Just a few.

KS: Yeah.

LG: About the Cambridge Analytica Story, which has really blown up over the past week. So, we’re delighted to bring in Kurt Wagner, Recode’s social media editor, who’s going to join us. I think The Verge’s Casey Newton may pop in in a moment.

KS: Pop in, he’s trying to catch up to our scoop.

LG: He’s filing furiously right now, as are a lot of the news media. Yeah, this is a really … It’s interesting because Facebook sharing your data, Facebook is a free service sharing your data, is not a new story, it’s not a new theme, we all sort of implicitly understand the exchange that goes on when we sign up for a service and we use a service like Facebook. This story in particular has really captivated people. Kurt, why is this happening?

Kurt Wagner: I think it’s a transparency issue. A lot of people do know what Facebook does with your data. I think what caught people off guard here is that, one, some 50 million users found their data in the hands of someone that they did not give permission to have it. Two, we find out that Facebook actually knew about this three years ago and never said anything publicly. So I think there’s this betrayal of trust right now. Not so much that, “Hey, we didn’t know Facebook …”

KS: Mark called it a breach of trust.

A breach of trust.

KS: Yeah.

We didn’t know … It’s not so much, “Hey, we didn’t know Facebook had our data,” it’s more, “We gave it to you thinking one thing, and now all of the sudden we’re learning another.”

KS: More importantly, they didn’t protect it. They weren’t monitoring … What happened is, in 2007 — and I was at the 2008 F8 where he announced this — they did something called Facebook Connect. One of the ways it grew the platform, and the thing that made it big, was bringing all these developers onto the platform to do all kinds of things. There was one called Super Wall from RockYou, where you could put pictures. So they were bringing in lots of apps to get activity going on, which was …

LG: Those app makers were tapping into Facebook’s API to get the data.

KS: Well, in exchange, to bring them, they gave them precious data. They didn’t have a lot of rules, they had rules around it, but they didn’t monitor the rules. So, they had laws, but they didn’t enforce the laws, or they didn’t know what people were doing. So, all this enormous data went out for seven years. Wasn’t that right, Kurt?

More than that. I mean, if it would have been 2007, that’s 10 years, right?

KS: Well, no, they sort of slowed it down in 2014.

I’m sorry. Well, in 2014, they stopped what they allowed. So, let’s pretend you signed up for Words With Friends back in 2013, they would have also had access to all of your friends’ data.

KS: Right.

In 2014, they said, “No,” if you give them permission, Kara, they can take your data, they can’t take all of your friend data.

KS: Right.

Yeah. So for about seven years or so, they were not only giving away data of the people who agreed to it, but also everyone in their network was kind of losing their data, as well, without their permission.

LG: So, where does Cambridge Analytica come into the picture? Talk about that, and how they were mining the data, and how they weren’t exactly transparent about what it was being used for.

Yeah. They got ahold of all their data actually from a researcher, a professor from Cambridge, who created a personality app, I guess, and some 270,000 people used it, 300,000 people is what Mark Zuckerberg said today. So they all signed up to take this personality quiz, and as a result, all of their friends handed over their data unknowingly, as well. Then that professor gave the data to Cambridge Analytica, which is a data firm. That is where the issue happened.

KS: Right, so it’s pass-along, it’s like a virus.

Exactly.

KS: They passed it along and they didn’t have … Facebook was just not monitoring. Look, what Cambridge Analytica did was just suspect and misuse, and they said they were going to do something and they did something else. They said they were going to destroy data, they didn’t. They’re just liars, right?

LG: Mm-hmm. They said, just for background for people who are listening, they ultimately used the data in a way that influenced the … This is a U.K. based firm …

KS: Yes, then they used it for …

LG: … that ultimately used the data to influence in some … Well, the fact of whether they actually did influence people is questionable, it depends on how you feel about psychographics, but they used it with the intent to influence the U.S. election. Then when Facebook did become aware of it, they insisted that Cambridge Analytica basically would certify that they’d cleaned everything up.

KS: Right.

They said, “We deleted it,” and now we’re finding out they didn’t actually …

KS: Also, they shouldn’t have had it in the first place. The whole question is how Facebook didn’t monitor the data it gave out. It was handing out data like candy to get these developers on its platform and then it wasn’t monitoring the data. It’s not just Cambridge Analytica, it’s like who did they give it out to? There’s tons of companies they gave data out to that don’t exist anymore, tons and tons of those. Who knows where the data has gone?

LG: Where does that go?

Right.

KS: It goes into the great data … Data sets are critical to marketers and everyone else, and Facebook handed these out for free, essentially, for getting people on their platform for benefit to Facebook. Essentially, you, the user, are the product, you are the product they’re selling. It wasn’t that you didn’t know, it was so confusing, it went from person … Especially the friend graph. If Kurt gave it out, I didn’t agree for Kurt to give out.

Right.

KS: So that’s the problem with this, they just did no monitoring. We did an interview with Mark tonight where he said, “Yeah, we didn’t.”

Yeah, and we asked him, we said, “Is it even possible to go out and get it back?” Can you go out and find some app from 2012 that had 100,000 users and therefore the data of maybe 20 million users, could you go out and get all that back? He said, “Not always,” right?

KS: Yeah.

It’s kind of like what we wrote today, it’s like putting the genie back in the bottle. The data’s out there. Once it’s off of Facebook’s servers and onto someone else’s servers, you don’t have much control over it.

KS: They’re not the police, they can’t go in and get it. People could hide it, it could go into dark parts of the web. When he was asked if he could recover some of the data, he admitted not always, and I think it’s more than not always. Not at all, like, really, pretty much.

Again, once it’s out there, it’s out there, and they used it to build their business to what it is today. The responsible use of that data brings up lots of regulatory problems, there’s all sorts of violations of possible agreements they had made with the government before …

Yeah, the FTC might be investigating now, after all this Cambridge Analytica stuff, to see if they violated a consent decree that they signed in 2011. There could be a financial fine, which I don’t think is that big of a deal for someone like Facebook, they have so much money, but I think more concerning would be if Congress comes in and says, “Hey, we’re going to start regulating the data that you take in, because we no longer trust you to do this on your own,” all of a sudden.

Facebook’s whole business is based on that data, that targeting, specific hyper-targeting of ads that requires that data. If Congress says, “You can’t collect it,” or, “You have to collect it in a certain way,” that could change the whole advertising landscape that Facebook is built on.

KS: It’s a rolling controversy, it just keeps going. First it was fake news, then it was the Russian bots, then it was the fake advertising … it’s all the same thing.

LG: Yeah, there’s a convergence of issues that are happening right now, and they’re all contributing to this distrust with Facebook. When you look at … there’s fake news, like literally fake news websites that are having this presence on Facebook, there is the Russian propaganda and Russian influence in the U.S. election-

KS: Advertising lies.

LG: Right. In general, it just seems like there’s this …

KS: It’s the same story, lack of control of its platform, lack of monitoring, lack of responsibility around the data that it’s supposed to protect.

LG: Then on top of it, just as sort of a meta-theme, is people right now wondering if Facebook is good for them in general.

Right.

KS: Well, that’s a whole nother thing.

Is it good for your health, on top of all of this.

LG: Right. Right.

Are they stealing your data? Oh, by the way, is it making you depressed?

LG: Oh, by the way, does it make me sad?

Right.

LG: So, we’re …

KS: Can I just say, in the middle of this there was also this idea of remaining a neutral platform, which Mark would not go there. We’ve all tried to press him saying, “You have to have values and rules and things like that,” and he said … He keeps in this line, it’s a very Silicon Valley line, that they don’t want to have their personal ideology influencing Facebook rules or regulations. I’m like, “Why not?” It’s your company, kind of thing.

He really controls it because he’s got that special stock, this is the quote, “A lot of the most sensitive issues we face, there are conflicts between real values, right? Freedom of speech and hate speech or offensive conduct, where is the line?” Sounding more like an ethics student than the billionaire CEO of the one of the world’s most valuable companies. “What I’d really like to do is find a way to get our policies set in a way that reflects the values of the community, so I’m not the one making those decisions. I fundamentally feel uncomfortable sitting here in California in an office making content policy decisions for people around the world.” Well, he has to, it’s his company. That, I don’t agree with.

The end of that quote, actually, was the best part.

KS: Yeah.

Which is him basically saying, and I’m reading over your shoulder now, “Who chose me to be the person that basically makes these decisions? I guess I have to because of where we are now, but I’d rather not.”

KS: Yeah.

So it’s kind of that first, almost his first admission I’ve ever heard, of him kind of being like, “I really want to be a neutral platform, it’s not really working, and now, I guess, it falls on me to have to make these tough decisions.” He’s never really said that before.

KS: Which, I’m sorry, I’ve always thought that was just bullshit. Not from him, he’s a very earnest and thoughtful person. Let’s be clear, this is not Travis Kalanick at Uber talking, this guy really does think about it. The fact of the matter is, he has a responsibility and he’s got to start making choices, and they just don’t want to. They keep saying, “We’d rather have the community do it,” but the community has nine different opinions.

LG: That’s also a very data-driven approach. It’s like, how do you actually take the temperature of entire communities of 2.2 billion people around the world?

KS: And too easy to game.

LG: You do it using data and you say, “What do you …”

KS: It’s too easy to game.

LG: It’s kind of like, you vote for the most reputable publishers, you vote for what you want, and I think they’ve been hiding behind that idea that if they just had enough data, then it’s the user base that’s deciding, but that’s not … Kara, I think you kind of pushed this idea of, how did you not anticipate these bad actors though, as you’re building this massive platform.

KS: Yeah. They never do. Facebook Live, they … They have to take responsibility, that’s what adults do. This is their company, they’ve made billions of dollars off of it, they’ve decimated industries, like they really control the online advertising market. They need to be responsible and make choices. Making choices means you piss people off, making choices means you have to give up some things, they can’t have everything. They can’t have the world’s biggest platform and not be responsible for it. I just don’t … I don’t know why we’re even arguing over this situation. If they don’t want to do it, get out of the way and let someone else.

LG: Just to backtrack a little bit, we’re speaking right now, literally on the heels of this mini media blitz that went on this evening, on Wednesday evening. Prior to this, Zuckerberg was silent for about five days after the story broke last Friday night. So, where was he?

KS: Kurt, where was he?

Yeah. He was working. It was so bad that they came out with a statement that said he was working, he was working around the clock is what they had to say.

KS: Apparently around the clock. That’s what you do, you work around the clock.

You work around the clock. I think this was an example of …

KS: Kurt was working around the clock, by the way.

Yeah. What day? I don’t even know what day it is right now, yeah.

LG: Lucky Facebook reporters.

Yeah, this is great. No, I think this was an example of something that they learned from the really big scandal they had 18 months ago, right after the election when he comes out like a few days after and he says it’s crazy that fake news could have influenced the election. Do you know how many times people pointed to that interview and said, “Hey, remember that time Mark Zuckerberg said it was crazy and now look, he looks super naïve, he looked like he had no idea what he was talking about.”

In this scenario, I think that they remembered that interview, or that statement, and they said, “Well, before we get all the facts, the last thing we want is to put Mark out there in front of the press to say something that we’re going to have to backtrack later on when we know more details.” That is my hunch. They have not really come out and said specifically. He said in our interview, he was like, “Oh, one of the reasons it took me so long is I was going through this … I wanted to unveil a plan for all this.”

KS: Yeah, he’s like that.

“Before I say something,” but he could have said something a few days ago.

KS: Right.

I think they just didn’t know enough and they didn’t want him to say something they were going to have to walk back.

KS: They badly handled this in the beginning, when he first said, “We had no impact on the election,” then, “Maybe a little bit,” and then, “Okay, maybe more.” “Oh no, there’s more Russians.” It’s like cockroaches.

LG: Right, right.

KS: If there’s one Russian, there’s hundreds.

LG: Then it became a personal …

KS: By the way, not all Russians are bad, just these Russians.

LG: Then it became a personal resolution of his in the new year to essentially fix Facebook. It went from, “No, this is not a problem, no problems here, nothing to see here,” to, “I need to fix something.”

KS: Right.

LG: That was an acknowledgement.

KS: Yeah.

LG: So what do you think happens from here?

KS: Kurt?

I do think that, as we reported today, there’s a real chance that he could testify in front of Congress now and I think that …

KS: He’s open to it.

He’s “open to it.”

KS: That’s not a yes.

No, it’s not, but I guarantee that they’re all going to ask him now, right?

KS: Yeah.

If he’s open to it.

KS: He doesn’t have a choice if he gets subpoenaed, FYI, he has to.

I think that could happen, I think that’d be a really big deal. I think this FTC investigation could be a big deal. I don’t fully know how realistic it is at this point that they would be regulated more severely, the way we were kind of talking about earlier, but hell, I’m afraid to say that anything is off the table at this point, I think that it’s possible.

I think if you look what’s going to happen in the next week, you’re going to see a lot more about their policy stuff and changes. I think that that’s the immediate plan for them is probably going to be, “Here are all of the things we’re doing to protect your data right now.” It’ll be things like, “We’re going to put News Feed alerts so that you remember to go check and make sure that you’re sharing with the right people, and that you’re severing ties with apps that you maybe used five years ago that you no longer have a relationship with.” I think big picture is that this is not …

KS: It’s not good.

This is far from over.

KS: The stock has gotten really hit because people do intuitively understand this goes to the heart of their business, that’s one of the parts.

Right.

KS: The second part is, again, I really like … You like Mark, I like Mark.

I do. I do.

KS: But the slow rolling. I like Sheryl …

LG: Where is Sheryl in all of this?

That’s a better question.

KS: She’s working around the clock.

Yeah. I think that’s a better …

KS: Yeah.

When you think about Sheryl, she built Google’s ad business, or was a huge part in building it, she built Facebook’s ad business, for sure, she’s been there 10 years. What are the two companies right now that are in the middle of this entire ad dilemma? It’s Google and Facebook, right?

KS: Yeah.

She’s very visible on Facebook, but it’s a lot of her “Lean In” stuff, it’s a lot of her philanthropy, and I think there’s a lot of people who would love to hear more from her on this topic.

KS: The only thing I would say, I’m going to push back because today, when I was on CNBC, they were talking about, “Well, why doesn’t Sheryl talk about this?” Mark’s the CEO of this company and he is the founder, he’s the CEO, he’s the technical founder, Sheryl’s not technical, these are technical, highly technical issues. He’s the one that has to talk.

I know they want to bring in Adult Lady, but he’s an adult. He’s an adult man with children, he’s married, he’s been running it for a long time, he’s a very smart man. I talked about this earlier, you’re juvenilizing these Silicon Valley men, “Let’s bring Sheryl to clean up.” She’s absolutely responsible, I a hundred percent agree, but he has to be the face. Just because she’s smoother and talks better, he’s the one, he has the controlling stock, he’s the one responsible, he’s the one that should talk, he’s the one that should take responsibility. It’s fine to have Sheryl, or Chris Cox, who’s head of the platform, or Dan Rose, any of these executives, or the CTO should probably speak, too, but really, it falls to Mark. Mark Zuckerberg wants to be the CEO of Facebook, he has to … Years ago, when he wasn’t being as adult as he was, he had a card that said, “I’m the CEO, bitch,” on his card, which I thought was funny, everyone didn’t like it, I thought it was so funny. But he’s the CEO, bitch.

LG: Right.

KS: Okay.

LG: You want that business card.

KS: Yes, you do.

LG: Has this inspired either of you to reconsider your own Facebook accounts?

KS: I always monitor my security preferences.

No. Yeah, I did actually go through my settings and kind of just poke around since it had been a while, but no. As you pointed out at the very beginning, I kind of know what I got into when I signed up on Facebook. I think I’m also a little bit different in the sense that I write about it all the time. I don’t think it’d be possible for me to do that and not be on Facebook.

LG: You can’t just check out.

Yeah.

LG: Yeah.

I rode from the airport here today and my Lyft driver told me he deleted Facebook.

KS: Oh, wow.

LG: Interesting. Did you ask or did the Lyft driver volunteer that?

No, we were … I’m trying to think. He was asking me what I did and I told him that I wrote about Facebook, and then we started talking about this data scandal, and he was like, “Oh, you know, a few weeks ago I actually deleted my Facebook so I don’t have to deal with any of that anymore.”

KS: Yeah.

LG: That’s really interesting.

KS: I just don’t use it that much. There’s just …

Yeah, I don’t really either, to be honest. I’m much more about … I spend much more time on Instagram than I do Facebook.

KS: Which is a Facebook property.

Correct, but way more time on Twitter, as I’m sure you guys are, given our jobs.

LG: Yeah. I have a professional Facebook page, so I’m not inclined to delete that. My personal one, I think I am using it less, I haven’t done a very sophisticated analysis of my own usage, but I think I am using it a lot less. Yeah, there is an element of it that feels a little bit like “Hotel California,” it’s just very difficult to check out. Some people have brought up …

KS: Can you sing that please?

LG: Yeah. I know, I’m singing on the other podcast, right?

KS: Yeah, you did.

LG: A couple people, reporters, and I don’t want to give credit to the wrong person, but have brought this idea, too, that just to say, “Oh, well, just delete your Facebook,” in some markets or in some countries, that seems almost impossible.

KS: It’s ridiculous. You should just responsibly run it.

LG: It’s the way people … It’s like the primary way people connect with certain people. It is synonymous with the internet for some people in certain markets.

KS: They also Instagram and WhatsApp, and WhatsApp is an enormous property.

LG: Exactly.

KS: So they’ve got … The overall leadership of this company has to take this privacy seriously. One thing Mark said, I think, that was super interesting was around the mistakes were made section of our interview, which he said, “I made a mistake,” so I appreciated that. The idea that it was built incorrectly at the beginning, which is back in 2007, and especially around privacy. He said he came to realize people did not want their privacy violated, and he just came to realize that.

“Frankly, I think I got it wrong,” he said, in a sentiment that most Silicon Valley moguls are loath to admit. “There was this values tension playing out between the value of data portability, being able to take your data and some social data, the ability to create new experiences on one hand, and privacy on the other hand. I was maybe too idealistic on the side of data portability that would create more good experiences and created some, but I think the clear feedback from our community was that people value privacy a lot more.”

LG: What does that say about the mentality of the people who made Facebook and continue to build Facebook?

KS: Data portability, it means money for them.

LG: Do they just really value this idea of …

KS: No, they don’t.

LG: … openness and data moves freely and things like that.

KS: That’s their word, but you know what? It makes money for them. That’s why. Privacy does not make money for them. Right, Kurt?

Yeah, I think that’s a huge part of it.

KS: Come on.

At that point, a venture-backed business that’s trying to rapidly scale and trying to add as many new users as possible, if you’re the profile, if I’m downloading 10 new apps a month and I’m using my Facebook identity to log into all 10 of those, I’m probably not leaving Facebook. There’s a huge value to them in doing that. I do, though, having spoken — and Kara has talked to more Facebook executives for longer than I have — I do believe that they are drinking the Kool-aid in terms of that mission, though. They truly believe the whole … You don’t think?

KS: No, I think it’s such bullshit. I think they’re lying to themselves.

I think they believe it.

LG: I would say that lying to themselves …

KS: Of course they believe it, they became billionaires.

LG: … and drinking the Kool-aid are kind of the same thing.

KS: Yeah, it is, but I think they believe it because they made money on it.

Sure.

KS: I think, ultimately they pretend they don’t care about money and then they have giant houses and planes. So, I don’t know. I just feel like …

I’m not trying to say it’s not … I guess what I’m saying is, I think that it can be both. I think that it can be a good business and that they can believe in this broader mission of everyone connecting.

KS: Yes, libertarianism. Yes, it’s in that thematic …

It’s that idealistic idea of, “Oh, well, why would anyone ever use Facebook Live to murder somebody?” right?

KS: Right.

The rest of the world is like, “Yo, the internet sucks, people do stupid stuff on the internet all the time.”

KS: Well, to me, that’s willful ignorance then.

Sure.

KS: It’s absolute willful ignorance, pretending the inventions do not have consequences in the real world. You know what? Adults know about consequences.

Right.

KS: Maybe my 15 year old doesn’t know about consequences, but certainly, Mark Zuckerberg should.

Right. They don’t foresee a lot of them.

KS: Ultimately, after 10 times of this, it’s like, listen, you don’t have kids, but if my kid did it 10 times, I’d be like, “Okay, he means it,” kind of thing. Anyway, I’m giving a little parenting advice to Kurt.

I know, thank you.

KS: I’m such a scold. I am a scold.

LG: Too embarrassed to ask.

KS: Am I too much of a scold?

No.

LG: No.

KS: I don’t think I … I’ve been banging on this drum for a while. With great power comes great responsibility, which was actually written by Voltaire, even though all of the geeks think it’s Spider-man, but no.

LG: I know, you told Sundar Pichai that during your interview with him.

KS: Yeah. He argued and …

LG: Yeah.

KS: Inaccurate.

LG: You were like, “Google that.”

KS: All right, we’re here with Recode’s Kurt Wagner and in a minute, we’re going to get through some questions from our readers and listeners about Facebook. But first, we’re going to take a quick break, a word from our sponsors. Lauren?

LG: Hashtag #Money, that thing that’s driving all of this scandal.

KS: Yeah. Kurt, do you want to say it?

Yeah, sure. What am I saying? #Money.

KS: No, that’s not … Come on.

LG: My stomach is growling.

KS: Do it like a sports tag.

#Money.

KS: Very nice. I think I’ve found my new #Money person. Anyway, we’ll get back to you.

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KS: We’re back with Recode reporter Kurt Wagner, talking about what else Facebook … Kurt has done an astonishing job this week because there’s so much news coming out of Facebook. He’s doing tons of stories, kudos all around, but we’re going to answer some of the questions that our readers and listeners have been asking. Lauren, would you read the first question?

LG: Absolutely. The first question is from Two Lamb Fam, who asks via Twitter, “Why does Facebook even give other apps access to all of that user data? Their targeted ads product doesn’t require other companies to own the data. Advertisers just tell Facebook who they want to reach and Facebook serves ads to that, no need to hand over any data. #TooEmbarrassed.” Kurt, is that true? If so, why the access?

Yeah. Well, this is what we’ve kind of been riffing on this whole conversation so far, is that it was a huge way for Facebook to grow in the early days. If they’re …

KS: Enticements.

Yeah. If they’re bringing in other apps, and Facebook benefited in the way that if I’m logging in through Spotify, maybe I’m posting back to Facebook and saying, “Hey, here’s the song that I’m currently listening to,” right?

KS: It was done to create users.

Create users, create content, create a dependency on Facebook, I’m not going to delete my Facebook account if it’s my login information for every app on my phone. So there’s a lot of different reasons that Facebook saw value in this. I think it’s been more recently, obviously, that they’ve realized, “Oh, maybe this isn’t always the best approach.”

KS: I would agree with that. I think they don’t need to. They needed to grow the company and now, of course, they’ve pulled back because they don’t need them anymore, and so they should control all their data, and then they should protect it. Let’s hope they don’t have a hacking after this.

Right. The question is, how much is already out there, right?

KS: It’s out there. Come on.

Yeah.

KS: Come on. That’s the thing, he was close to saying that.

I know it is out there, I’m saying how much? How many developers have your information, Kara?

KS: I don’t use Facebook that much. What “Likes” do you have? I never “Liked” anything, I hardly put my school in there.

I bet I’d laugh, I haven’t looked at my “Likes” in a long time. I’m pretty sure Rascal Flatts, I “Liked.”

KS: All right.

The show “Friends,” I liked.

KS: That’ll get you fired here at Recode. All right, next question.

LG: Why did the show “Friends” go off the air?

I don’t know, I’m a huge fan.

KS: Such a good show.

LG: Oh my goodness, which “Friends” character do you identify with the most?

Everyone thinks I’m Ross, which is a bummer, because he’s like the worst.

LG: Yeah, but you’re not a Joey.

KS: You’re not a Joey.

LG: Maybe a Chandler.

KS: No, you’re not really a Chandler.

LG: I don’t know. You know what this sounds like? A personality quiz.

Let’s get a BuzzFeed quiz on this, right?

KS: I’m trying to think.

LG: You know what happens with personality quizzes.

KS: You’re not any friend.

LG: Were you going to say he’s a Phoebe?

KS: No, you’re a Phoebe, obviously.

LG: I am a little “Whoo.”

KS: Whatever. I’m sorry, I’m really tired, it’s been a long day, we did a long interview with Mark Zuckerberg, who did a very good job, I thought. This only talks about Facebook, the social network, I wonder what Facebook the company does with intimate and more personal details from Instagram and WhatsApp. I agree, they have other things you may not know they own. Kurt?

Well, they don’t sell it, or they claim they don’t sell it, and I believe them only because I think it’d be very bad business for them to sell your data. They use it, though, to show you targeted ads. Right?

KS: Yeah.

That is the whole point of all of this data that they collect, is that they know that you’re male or female, and you’re in this age group, and you live in this city, and you like “Friends,” or you don’t like “Friends,” or you’re a Joey more than a Chandler. They know that stuff about you, which is why their ad business is so good.

LG: What’s the one ad that you both see consistently on your Instagram?

KS: I don’t go on Facebook.

LG: On your Instagram.

I get a ton of those ads that follow you around the internet. Right now, I’m getting a lot of golf club ads. I like to golf.

KS: Of course you are. I could guess that about you.

LG: But you already own them, right?

Actually, fun fact, and what a waste of ad money, I looked them up online, I went and bought them in a physical retail store, brick and mortar, and there was no way apparently for the online advertiser to know that I’d already made the purchase. So for the last six weeks I’ve been getting golf club ads, and I just laugh every time because I’m like, “I already made this purchase, man, you’re wasting your dollars on me.” Yes, I do like to golf.

LG: Yes. I get followed by …

Most people at Recode make fun of me for that.

LG: The funny thing is that I don’t even like to … I don’t really like to decorate that much, and I’ve been followed by this Parachute Home ad on Instagram for months now, and everything is the same sort of very, I don’t know, southern California aesthetic.

KS: It’s sheets. Brooke Linen is our sponsor, but okay.

LG: Oh.

KS: Anyway.

LG: Is that the same company?

KS: No, they’re not the same.

LG: I don’t know, I just get followed by home décor ads a lot. I must have “Liked” accounts at some point.

KS: You know what I get? I’ll tell you what I get. I read the New York Times every day and I had to finally literally complain to Twitter, and they took it down, I think they went and added a special Kara Swisher squad. I complained to the New York Times CEO, too. It was a shirt company that had a rainbow sort of painted shirt, so that it was like a … It was a really ugly white shirt with gay rainbow splatter, and I was like, “I’m never buying that shirt, stop.”

LG: That was on the New York Times?

KS: Every day. Every five scrolls.

LG: So you think it targeted you?

KS: Some gay thing. Why would I want a rainbow paint-splattered shirt? It was crazy.

So what we’ve learned is you just go complain to Jack Dorsey at Twitter.

KS: I did that, yeah.

Everyone out there, just call up Mark Zuckerberg like Kara would, and tell him that you don’t like the ads you see.

KS: I might go to Sheryl for that.

Okay, call Sheryl.

KS: Yeah. Okay. I’m just saying, they’re irritating. Okay, next one.

LG: Next one is from Fernanda Beltrao, who wrote via email, “My first question is, should we really call it a data breach? No one stole …”

KS: No one calls it that, Fernanda.

LG: She said, “No one stole the data, right? Facebook sold it. Also, is there any way that Facebook can keep control of the data they sell and make sure it’s not used in an ethical way? Or, I don’t know, don’t sell it at all.”

KS: Yes.

LG: Well, we’re kind of talking about this one.

Yeah, there’s a few things here.

KS: Go ahead, Kurt, just take this one. The answer is yes and yes.

Let’s unpack this question.

LG: Yeah.

One, Facebook doesn’t sell your data, we just talked about that. This was not an issue of Facebook selling data. It was also not a breach because, as Fernanda pointed out, there was no technical hacking, there was no breaking through the firewall into the back systems. Facebook gave this data away to a partner that had used its API, that was all above board, by the books. That partner then gave that data away, which was a violation of the rules. So, as we’ve talked about before, Facebook doesn’t sell your data, it gives it away to certain partners.

KS: That’s even worse.

Yeah. Really, there’s no way for them to kind of keep tabs on where it goes after the partner has it, and that’s really what the problem is here.

KS: It’s like the clap. Not that I …

Oh God.

KS: Sorry. Oh Kurt, I’m sorry.

No, that’s good. That just caught me … You know. I was in Facebook data mindset.

KS: It just goes. It’s like if you opened a pillow up and spread the feathers, they’re gone.

Okay, yeah.

KS: You can’t get them back, or not all of them.

It’d be a pain.

KS: You can’t, it’s gone. It’s gone. All right, feather pillow was a much better thing than the clap.

All right, Mike Stehle via email, “Does a Facebook user/account holder essentially have access to all their friends’ data? In other words, if I have a lot of friends or followers, can I access their data? Can I voluntarily pass that data to others such as Cambridge Analytica? Couldn’t any Facebook user with lots of friends who is sympathetic to Trump simply consent to Cambridge Analytica accessing the data for their friends?” I don’t know that. Kurt?

LG: That’s interesting.

Yeah. I read this before and I went and tried to do a little looking. Obviously, if you are friends with someone you have certain information that they share with their friends, right?

KS: Yeah.

I would probably share my location, name, school, all of that stuff, with the people I’ve agreed to be friends with. I guess there’s nothing stopping you from going to all of your friend profiles individually, tracking all of that information …

KS: That’s crazy.

Collecting it and then sending it to someone. It seems like a huge hassle and I don’t think any …

KS: You can.

It’s not scalable in the way that any advertiser would want it.

KS: It’s an interesting question. Then, “We know from the recent indictments that 13 Russian individuals/companies set up Facebook accounts, posing as U.S. citizens or groups. Did that give the Russians access to the data of those individuals that followed or friended those fake individuals/groups?” Yeah, I suppose they did. “If so, is there a way for FB to trace to see if those people — the unwitting friends of the Russians — were then targeted in the manner described by Cambridge Analytica?” By the way, I did see a New York Times piece about when they found out they were going to Russian events, they were like, “Yeah, that’s okay.” Like they went to some of the people who got duped-

LG: Who went?

KS: New York Times went to some of the people that got duped into going to events the Russians put together. They’re like, “Well, so what? I still agree.”

LG: Oh geez.

KS: Yeah, exactly. All right, were targeted in the manner … So, what about that?

This question is basically asking, if you’re a page or a publisher, can you get all of the data from the people who follow your page or “Like” your page, in the way that you would get friends’ data. I have a professional Facebook page, Lauren, you do as well, I read this question, so I went onto my professional Facebook page and I tried to see, can I get all the data from my followers?

What I was able to do was see aggregated data. So I could see, for example, that I had 10 followers from Seattle, Washington, or I could see that I had 20 followers in the 18-to-24 age bracket, but I wasn’t able, unless I just missed it, which is possible, but I wasn’t able to go in and look at individual profiles, or collect all of that personal granular data. All I could get was big-picture stuff.

LG: Yeah, but even aggregate data sets have been shown through data science, you could work into it backwards and find out, at least who people are.

The value of that is, if we’re Recode, which we are, and we go to an advertiser and we say, “Hey, we want to give you a …” What is the kind of ad now? “Native ad, native content, or whatever. Here’s the demographics of our followers.”

LG: Yeah, I have 10 followers in Seattle.

Yeah, they might say, “Oh great, just the person we wanted to reach, we’re going to pay you money for something.” So there is value to it, but I don’t think it’s the same as having the individual granular data of all these users, which is what we’re talking about here with the Cambridge Analytica situation.

KS: Yeah, 100 percent. Just to be clear, we’re here at Vox tonight and we have … I tweeted out the other day Vox sells data, too, but it keeps it anonymized, it’s quite conservative, and we don’t give it out to third parties in the same way. Anyway, you can go read it. I tweeted it out, I’ll retweet it again. All publishers do this, but not in this massive amount and with this much information. We don’t have people’s “Likes,” we don’t have people’s behaviors, we don’t have … Just read the story, essentially.

LG: It’d be a good if 2.2 billion people were subscribed to Vox content.

KS: Yeah, that would be great. I sure would have a lot more value … Everybody must wear pink or something like that, I declare it. Okay, so we’re going to take a quick break, one more word from our sponsors, more questions after this. Lauren?

LG: I thought it was Kurt’s turn.

KS: No.

LG: #Money.

KS: Part?

LG: Part two.

KS: Kurt, do that again, please?

#Money.

LG: Oh my God, you little …

Is that good? That was different. That was part two.

LG: Move over, [Michael] Buble.

That was more country music than I intended.

KS: I liked it. I like it, Kurt, you’re hired. When we get back we’ll ask more questions.

[ad]

KS: We’re back with Kurt Wagner of Recode who covers Facebook. We just finished a 20-minute interview with Mark Zuckerberg about mistakes were made. Would you call it that, mistakes were made?

Mistakes were made.

KS: Uh-oh, uh-oh, a little bit of uh-oh.

I’m sorry, whoops.

KS: So sorry. Whoops.

My responsibility.

KS: Yeah, that kind of stuff. Yeah. He was very thoughtful about a lot of stuff.

I thought he was. He actually answered all the questions.

KS: He did.

And I thought he didn’t really dodge.

KS: He didn’t.

I know he didn’t fully say yes to the …

KS: He didn’t agree with me on every issue.

He didn’t agree, but I thought he actually answered the questions pretty appropriately.

KS: He did. We’re going to put the whole transcript up. I have a different thought about it, he doesn’t agree with everything …

Right. Right.

KS: … and us, but that’s okay, he made his case.

LG: Did you ask him about what the possible fallout would be from all of this?

KS: Yes.

LG: What did he say?

KS: Not good. Right?

Yeah. That was at the very end, he was running to an all-hands meeting with staff. Which was kind of cool, he was literally on the cellphone as he was walking to the all-hands meeting.

KS: Yeah, he could have hung up on us.

You kind of said, “Hey, is this a big deal for Facebook’s legacy?”

KS: How bad?

He was pretty much like, “Uh, yeah, people seem pretty upset about it.”

KS: He gets it.

He wasn’t being naïve about the fact that this is a big story.

KS: Yeah, exactly. He was good. Look, people are still furious. Right now, on Twitter, I’m looking at people just really hating Facebook right now.

LG: What are they saying?

KS: That they stole our stuff, how dare he, he should be in jail, a lot of stuff. A lot of stuff that’s not nice. I feel your pain. I feel your pain, I agree.

LG: Well, yeah, and those are the users. They matter.

KS: They did not responsibly run that platform the way they should have. There’s no two ways about it.

All right, next question, EF something: “What’s the difference between how prior campaigns used Facebook data, especially Obama, and what Cambridge Analytica did?” Kurt?

This is a really good question, so I tried to … I wasn’t actually covering Facebook back when Obama was having his 2012 campaign, but what I gathered, because it’s now been brought back up to the surface in the last couple days, is that they also did something very similar. The difference is that they claim they used their own app. So, whereas Cambridge Analytica got a lot of this information from that professor that we talked about at the very beginning, which violated Facebook’s rules, the Obama campaign is saying, “Well, we actually just created our own app, people opted in, and as a result we were able to gather the information about them and their friend networks to do targeting.”

LG: Was this in 2008 or 2012? I would imagine 2012?

2012 is my understanding, which would have still been before they made the changes, so it makes sense. It doesn’t sound like there was a huge difference in terms of the data that each group had, it just was how the data was collected. So, not saying that Cambridge Analytica necessarily did anything different than Obama did, but they got their data in a different way.

LG: So what you’re saying is that the Obama campaign also knew you “Liked” “Friends.”

They knew I “Liked” “Friends” and Red Robin and Rascal Flatts.

KS: What? What is Red Robin?

These are the things I probably “Liked” on my Facebook profile.

LG: Are the days of innocent … You know what? I don’t even know if campaigns were ever innocent.

KS: We’ve been using data forever.

LG: I was just going to say, data’s been used and manipulated in elections for as long as …

KS: They went to Facebook because it was like, “Why do you rob banks?” “Because that’s where the money is.” Facebook’s where the people are.

LG: I guess my question is, does this really change anything now that we …

KS: It gets worse and worse. It gets worse and worse, as long as these companies don’t take this seriously. There may be a point where they just can’t sell the political … Again, they’ll find a way to get at this data. This is a treasure trove. AI, for example, needs huge data sets to be effective and they have the biggest data sets, them, Google, Amazon, these data sets are valuable beyond their … They’re just money in the bank, so to say.

KS: All right, next question, Lauren, why don’t you read it.

LG: Next question is from Swaroop Satheesh.

KS: Oh, that’s a great name.

LG: “With Facebook scandal and Uber autonomous car getting into a fatal accident” — it was a terrible story — “do you think we’re going to see a paradigm shift in the way tech companies treat data?”

KS: I don’t know if they have anything to do with each other?

LG: Yeah. Data and …

KS: Look, autonomous cars are going to … This is a tragic event, but you’re going to see this happening, hundreds of people die in car accidents every day, they’re all tragic, every one of them. So you’re going to see this as autonomous cars roll out, it’s going to be a lot of … Over the years, any technology has its price. In this case, it was tragic. I don’t know if it has to do with data. That had to do with sensors and the pedestrian.

I think it’s more to do with responsibility, right?

KS: Yeah. Yeah. Good point, Kurt.

It’s less specific to data, more about how we hold these companies accountable. Clearly, Facebook’s going through that now. I haven’t, believe it or not, even been following the Uber thing as much, just because Facebook has been so crazy the last couple days, but I’m sure that Uber will have to hold itself accountable and people will hold it accountable.

KS: Yep, a hundred percent. All right, next question is from Diego Siles, “The president of Bolivia is going for unconstitutional reelection”— that’s his opinion, I don’t know much about Bolivia and politics — “next year and plans to have a social media team.” I’m surprised he doesn’t have one already. “Will Facebook be controlling this for things outside the U.S. considering it’s a market not particularly interesting to them?” That’s an issue, because Facebook has a lot of impact in countries in Indonesia and others, they’ve affected things by fake news.

LG: The Philippines.

KS: They have impact everywhere, and the massive impact they have in these other countries where people rely on them is really … They’ve got a business that’s super complex and super prone to controversy, I think.

LG: Right.

KS: That’s a nice way of putting it.

LG: It’s not only about people in certain markets getting their news entirely from Facebook, but it’s the way that certain governments are able to manipulate Facebook data and the messages that are being shown to people in a very undemocratic way. It’s of concern.

I only have one point on this, which is that — I believe it was almost a year ago, right before the French presidential election, Facebook came out and said they banned like 30,000 fake accounts or bot accounts, that they were afraid could try and sway that election. I realize that France is perhaps different than Bolivia, but at the same time, I think Facebook does not want to be a manipulative service in any country or for any election. Obviously, we’ve talked primarily about the U.S. presidential election for the last 18 months or so, but I can guarantee that they’re focused and thinking about stuff that’s happening in other parts of the world, as well.

KS: Right. Absolutely. Next question, Lauren?

LG: Michael Pacholik, “How do I become …”

KS: These names are so good today.

LG: Everyone, Kara likes your name. “How do I become a ghost on Facebook without deactivating my account? Convincing my friends to abandon it with me is a losing battle and we as a group use it to organize events.” So he wants to ghost, but he still kind of wants to use it.

It’s actually not that hard.

KS: It’s not.

You have your account and you don’t post.

LG: And you don’t “Like” things.

Yeah. You can participate in a group conversation without posting publicly. Even if you do want to post, you can change … I think there’s just so many little details about Facebook in terms of privacy that people just aren’t aware of. So, every time you post you can set who can see that post, you can show it to everybody on Facebook, you could show it just to your friends, you could actually eliminate your ex-girlfriend or boyfriend from seeing it. There’s a ton of controls that you have, it’s just a matter of understanding them, knowing where to find them.

If you want to be on Facebook but you don’t want people to really know you’re on Facebook, you can create an account, give them the bare minimum information they would need from you, which is probably just the name and an email, and participate in things like private groups and that’s about it.

KS: Yeah.

LG: There you go.

KS: Yep. Question from Alan Hui? Okay. “What’s the chances of Mark become POTUS now that this storm happened?” I’m not so sure he was going to be POTUS. I never went with that one, I don’t think even Kurt …

Yeah. I wasn’t a believer.

KS: It’s not good, but here we have Trump, so …

Yeah, I was going to say, people seem to forget things pretty quickly.

LG: Yeah, especially when it comes to business deals and interactions.

KS: Yeah.

Yeah.

KS: I don’t know, we’ve got a porn star and a former Playboy model suing the president, so I don’t know. I feel like the data breach should be …

Yeah, I wouldn’t say there’s anything that disqualifies you from being president now.

KS: The data was still …

Yeah.

KS: I don’t know, that’s a good question. I don’t think he’s running. It’s not good. It’s not good. It’s not good for him. He did point this out, he said he’s made mistakes before and he’s going to make them again.

Oh yeah. Honestly, five days ago, six days ago, when this first broke, I was like, “Well, you know, this is certainly a notable story …”

LG: Another Facebook scandal.

“But you know, this’ll be over in 48 hours.” I’ve been pretty blown away by the reaction. You can just tell people are fed up.

KS: The timing. People are tired.

Yeah, people are fed up.

KS: People are fed up, and because of the election, the political part of it, even the idea that they may have even slightly impacted the election — and people will debate how much or how little — that’s really disturbing.

LG: Yeah.

KS: If you need to focus on someone, rather than the Russians, you focus on Facebook.

LG: Well, a lot of times, in any relationship, whether that’s with a product or service or in real life, it’s not the thing that seems to … What’s the saying? The straw that broke the camel’s back?

KS: Yeah.

LG: It might not be the biggest thing, but it might be a buildup of things that have betrayed people’s trust.

KS: You know I’ve been hammering on this, it’s people are getting a very lizard sense that technology might not be for the good. Like self-driving cars, automation, robotics, all these things, AI, I think people understand very clearly in the back of their minds that these things are going to have real consequences.

LG: What you’re describing, too, are also very … Those are technology, and I think what’s happening here is there’s this confluence of events where the culture of technology is meeting with the products and services in a way that people aren’t comfortable with.

KS: It’s the political part.

LG: It’s not just whatever’s going on with Uber, it’s the Uber culture that we’ve heard a lot about, and the evasiveness, and that whole “move fast and break things, and ask for forgiveness later” kind of ethos. When that starts to butt up against the actual … It starts to feel very real to people, when they’re not just reading about those stories in the newspaper, but when it actually impacts the products and services they use every day. When they can see that and it’s a very tangible thing, I think that’s when you have this perfect storm of events.

I would say the last point is that this is a very personal thing for potentially every Facebook user, right?

KS: Yeah.

All the dilemmas and drama and issues we’ve dealt with so far have been pretty big-picture, honestly. Like, fake news, was it used by the Russians to whatever? A lot of that, first of all, apparently half the people don’t care or don’t believe about it, a lot of people aren’t in the U.S. so they don’t care, they don’t believe about it. This is like every single Facebook user has data within Facebook.

LG: Right, or has connected to some third-party app.

Exactly.

LG: Yeah.

So, this is a problem that does not just affect people who are disgruntled about the 2016 presidential election.

KS: No.

This is something that could theoretically impact two billion people who use the service, so I think that’s why we’re seeing even more …

KS: And it’s the political …

I think there’s a political spin, too.

LG: Do you remember when there were websites you could click on where it would tell you if you had read something that was made by some type of fake news/Russian bot, if you went and clicked on it, it would say, “No.” Like in my case, it said, “No, don’t worry, you didn’t read anything that actually came from one of those sources.” You kind of feel like, “It’s okay, I think have sense on the platform.”

Right.

LG: When it comes to … I, at one point, you mentioned Words With Friends earlier.

Sure.

LG: I connected my account with something that does this data scraping. It really does open it up to so many people.

Right. Well, and not just if you did it, but now we know …

LG: And my friends.

… friends do it.

LG: Right, prior to 2014.

Words with Friends probably got my data.

KS: Yep, a hundred percent. All right, last question, Lauren?

LG: This is via email from Liz Weeks, one of our most loyal listeners, who sent a lot more questions than this, but we’re going to read a couple. “First and foremost, I have a rudimentary understanding of what it means to ‘delete’ data, I just assume even if it’s deleted by me or even a company, it’s still out there somewhere in the ether.” Good point, Liz. “When Facebook promises to delete data once and for all, what precisely do they mean?”

It’s an amazing question because I don’t know if anyone has a super, super strong answer for that. Basically, traditionally, it means if you’re deleting it, you’re wiping it off of a company’s servers. They have these servers where they store messages and posts and videos, so that when you open the app and you say, “Oh, I want to look at that vacation photo I haven’t looked at for two years,” it’s stored somewhere on their server so that you’re able to look it up. If it’s deleted, that means it’s wiped completely off that.

I think the issue here that Liz is getting at is that once the data leaves Facebook’s servers, and once they share it with Words With Friends or Spotify or with Airbnb or whoever it may be, it’s now living in two places. Facebook can only delete it on the servers that it controls. It has to rely on these third parties to also treat it responsibly, take care of it, protect it, and that’s where we’re running into the issue: How many tens of thousands of developers that created an app that was cool for three weeks and then disappeared, how do we know that they were practicing safe user privacy regulation?

LG: Yeah, that’s the issue.

KS: That’s the issue, they didn’t monitor it. It’s monitoring, monitoring, monitoring.

So you should assume that perhaps most of the things you’ve given Facebook probably do exist somewhere out there, even if they’ve deleted it.

LG: Fun. Another question from Liz, “What role does Joseph Chancellor play? I would like to understand if he’s a psychiatrist for Facebook or if he was simply given access to Facebook data. What checks does Facebook have on researchers using that data for non-academic purposes and B) do they have any conflicts of interest provisions?”

I tried to look into this a little bit. Joseph Chancellor is the former Cambridge Analytica employee who is now employed by Facebook. I do not know much. My understanding from what I’ve read is that Facebook is now exploring … He’s still there, he’s still employed there, I believe, and Facebook’s now looking into whether there was any wrongdoing from him, was there a connection of some kind, was he helping?

I think it’s very much an innocent-until-proven-guilty kind of thing, because I think this guy could very well have just been an employee there and he’s now an employee at Facebook. That’s pretty much what I know. I assume, especially given the gravity of the situation, that Facebook is looking into that very closely.

KS: Yeah, absolutely. Overall, this is the last question, Kurt, what’s the next story?

I think the big, big story that’s going to be important and also might not happen right away, is what impact all of this has on Facebook’s executive team.

KS: Right. The cohesive team, they always brag about their cohesion.

Yeah. Kara and I have talked about this a ton. Facebook’s executive team is very close, they’ve almost all been there for 10 years or more, a lot of them were the original crew that helped build Facebook from Palo Alto.

KS: You’d say OG.

LG: Who are some of those people?

OG? Yeah.

KS: Not these people.

Yeah, I wouldn’t call them OG.

KS: Original geeks.

What? Say what?

LG: Who are some of these people?

Like Andrew Bosworth, who goes by Bos, Naomi Gleit.

KS: Shrep.

Mike Schroepfer, Sheryl Sandberg.

KS: Dan Rose.

Dan Rose is a good one. I think he’s been there 12 years.

KS: Chris Cox.

Chris Cox.

KS: It’s more than a dozen years.

Chris Cox is head of product at Facebook, he’s literally like Zuckerberg’s best friend, they travel together, there was like paparazzi photos of them in Hawaii.

KS: It’s a very cohesive … Elliot Schrage is there.

I think the issue is, we just found out this week that their chief security officer is leaving over some disagreements about how to handle all of this stuff.

KS: He wanted more transparency.

I can’t believe he’s …

LG: The whole team, Nicole Perlroth reported that

KS: Great job on that, New York Times.

LG: Yeah.

Yes, awesome story. I can’t imagine he’s the only one who’s had a disagreement about this internally. I can’t imagine that there aren’t people who … Obviously, Mark is responsible, Sheryl is responsible, but there have got to be other people who have been there a long time who are responsible for what’s going on here.

So, are there going to be more exits? Are there going to be people who are asked to leave because, “Thank you for your service but you’ve screwed up”? Then are there going to be people like Alex Stamos, who say, “Well, we disagree with how things have gone,” or, “This is just too much for us and we’re going to leave.”

LG: How’s the board reacting?

The board gave a statement in support of Mark and Sheryl just a few hours ago, and I actually thought that was really interesting because Mark and Sheryl are both on the board and Mark basically controls the whole …

KS: Controls the board. It’s like a Russian election.

People were making a big deal, they were like, “Oh, the board came out with a statement in support,” and I was like …

KS: Well, he’s won by 76 percent.

Yeah.

KS: What a surprise.

LG: I call a board meeting.

Yeah.

KS: Mark is not like that, but the fact of the matter is, he controls the board, period.

Right.

KS: Period, period, period, end of story. If he didn’t … By the way, boards are like … Come on, look at what the Uber board did. This guy practically killed a puppy in front of them, he would have had to do that, I don’t know what he could have done and … He didn’t kill a puppy.

Facebook in particular has been around for a long time. Marc Andreessen is not going to come out and publicly chastise Mark Zuckerberg.

KS: Marc Andreessen is not going to slap around Mark Zuckerberg. Never. Then Peter Thiel, this is not a group of people that are going to object, they’re going to stick together. That’s the issue is the wagon, whatever you do with wagons.

LG: No, what do you do with wagons?

KS: You circle them.

LG: That’s right, okay.

KS: You circle them. So, circling wagons is what Silicon Valley does.

LG: I didn’t know if you were going to say like, the wheels are coming off. I was really wondering where you were going with that.

KS: No, the wheels are coming off some of the wagons, and wobbly wheels, but they’re never going to do this, not Mark Zuckerberg, not. He’s like, no, he’s the top top, do you know what I mean?

LG: Mm-hmm.

KS: Nobody’s going to mess with him. The question is, are they going to do their job? These boards, none of these boards in Silicon Valley — and by the way, across the country, really, come on — I just don’t expect any kind of courage from any of them. As it’s shown over and over again, the Yahoo board, the … Just every … It’s just not going to happen, right?

Yeah, I agree.

KS: They’re going to support him.

I saw the statement and I thought, “Of course.”

KS: I’d like to see one board member saying, “This sucks.”

It would have been way, way, way, way more interesting if they had not shown support for Mark and Sheryl.

KS: Yeah. Getting to what Kurt was talking about, and we will finish on this, is this cohesion. I had a back and forth with Elliot Schrage, who’s the head of policy and comms essentially, he came from Google with Sheryl. I put my hand up, and he’s like, “Oh no.” And I said, “You guys brag about your cohesion, that you all get along.” I said, “Is that a problem? Because there’s nobody, an irritant, in the room.”

LG: Right, it’s a bunch of yes people. Well, not …

KS: Not yes people, that’s too easy. It’s a very different kind of thing, it’s a cohesive mentality of these people that agree …

They believe in their mission you were talking about earlier.

KS: They’re in agreement. They’re in violent agreement. They don’t want to get angry at each other, they’re very cohesive, they’re incredibly smart and everything else. So, there’s nobody like … I was joking with Marc Andreessen and I was texting with him, and I was like, “Put me on the board, that’ll be …” He didn’t respond, but it was really interesting. It’s like, you need irritants in these companies to say, “No,” and that doesn’t happen. Anyway, we’ll see. There’s lots to come, right Kurt?

A lot more.

KS: Get some sleep, Kurt.

I would like to.

KS: Get up early.

I’m doing CNN International at 10 pm tonight.

KS: Fantastic. I’m going to pass you a lot more.

Great.

KS: Okay. All right. Thank you, Kurt.

Thanks for having me, guys.

LG: Thank you Kurt. It was really good chatting with you.

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Full transcript: Chain CEO Adam Ludwin answers cryptocurrency questions on Too Embarrassed to Ask

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“It’s this sort of tug-of-war between FUD and FOMO that drives the [bitcoin] price in the short run.”

On this episode of Too Embarrassed to Ask, Kara Swisher and Lauren Goode tackle the blockchain, ICOs and cryptocurrencies with the help of Chain CEO Adam Ludwin. He explains what all of those terms mean and the differences among blockchain-related products and assets, including bitcoin, ethereum, lytecoin and filecoin.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Too Embarrassed to Ask on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.


Kara Swisher: Hi. I’m Kara Swisher, executive editor of Recode.

Lauren Goode: And I’m Lauren Goode, senior tech editor at The Verge.

KS: And you’re listening to Too Embarrassed to Ask, coming at you from the Vox Media podcast network. This is a show where we answer all of your embarrassing questions about consumer tech.

LG: It could be anything at all, like, “Kara, what are we going to name our cryptocurrency when we start something to finance the future of this show?”

KS: Karacoin. Karacoin.

LG: Oh, I like that.

KS: Yeah.

LG: I like Goode … No, Goodebit? Goodebit might be good.

KS: That’s nice. That’s good, too.

LG: Goodethereum.

KS: No. So send us your questions. Find us on Twitter or tweet them to @Recode or myself or to Lauren with the hashtag #TooEmbarrassed.

LG: We also have an email address. It’s tooembarrassed@recode.net, and a friendly reminder, there are two Rs and two Ss in “embarrassed.”

KS: There’s been a lot of interest in bitcoin and cryptocurrency, so a lot of people have a lot of questions and don’t know about it. They’re very interested in learning a lot more about it. There’s a lot of crazy people involved. There’s a lot of hype. There’s a lot of all kinds of stuff, and so we wanted to bring in someone to get some answers. Today on Too Embarrassed to Ask, we’re delighted to have Adam Ludwin in the studio. He’s the CEO of Chain, of course that’s the name, a private blockchain company. He’s going to explain what that means.

LG: I guess that means Chain is taken. We can’t do, like, Karachain.

KS: No, we’re not going to do that.

LG: We could, but … Yeah, we’re going to be answering all of your questions about blockchain, cryptocurrencies, ICOs that we’ve been hearing a lot about lately. Not quite sure I fully understand. Then, surprisingly, you sent in a lot of questions, so we’re very happy to have Adam here. Adam, welcome to the show.

Adam Ludwin: Thank you. Great to be here.

KS: Let’s just … Explain what Chain does, and then we’ll get into the basics of bitcoin. Nothing is too stupid for us, let’s just keep that in mind. You know what I mean? I think most people are confused by all the variety of things. It’s probably like the beginning of the internet, which sort of sorted itself out. So what does Chain do? And then we have lots of different questions.

Sure. Chain helps financial institutions take advantage of this new technology, basically to do two things. One, to transform their infrastructure. You can think of a blockchain as kind of like a new type of database. It’s helpful even if you’re just tracking existing financial instruments, like securities or loyalty points. But many financial institutions are also looking ahead at connecting into these public networks, like these cryptocurrency networks that you mentioned at the top of the show, which we can talk more about. We also help them to connect into that, and we hope over time bring the assets that they’re dealing with onto these new rails.

KS: Onto the new rails, all right. How did you get started in that? What was the … You were a lot of places. You were at RRE, so you were a venture capitalist, essentially.

That’s right. I was a …

KS: Consultant. All kinds of stuff.

Yeah. All sorts of jobs I actually don’t recommend many people try to do.

KS: Okay. How come blockchain?

I was working as a VC, and I was working at a fintech-oriented VC firm called RRE in New York City. I was working for the former CEO of American Express, Jim Robinson. Because of that, even though my job was kind of to do the non-fintech stuff, friends would always send me fintech ideas. I had a friend send me the bitcoin white paper in 2011 and basically say, “What do you think of this startup?” Of course, I quickly learned bitcoin wasn’t a startup, but I was completely captivated by what I was reading.

KS: Why?

Simply because all the fintech that I was looking at and investing in at RRE companies like Venmo and Square and Stripe, these were companies that were sitting at the top of the existing financial stack, the stack being governments …

KS: Underneath, right.

… central banks, regular commercial banks …

KS: Compliance.

… credit card networks, all the compliances. This big fat stack that equals financial services, and fintech … including today, when you think fintech, you’re really talking about these thin layers of user interface …

KS: Or apps, yeah.

… and apps that make it easier to use. Bitcoin was like a huge red reset button that said, “That stack isn’t relevant anymore. We already have the internet. What’s the least we can add to the internet to get back to money?” The answer was a few thousand lines of code, basically. That was conceptually very exciting.

It also struck me that it would take a very long time, if this thing ever became a meaningful part of the economy and the way financial services would work, it would take a very long time to get there. Nonetheless, I started meeting entrepreneurs, meeting startups that were trying to do something with bitcoin. It led me down the rabbit hole. Eventually, I decided I needed to spend all my time on this. RRE very graciously gave me a little bit of seed capital to get me started and that’s when Chain got off the ground.

KS: And you focused on financial firms because it was the lowest-hanging fruit, presumably?

Yeah, our original business plan was, “Let’s make it easy to build with blockchain technology.” We started with developers. We kind of then graduated into larger enterprises. Even to this day, the entire crypto and blockchain space I think is still characterized best as a frontier technology. It’s sort of like VR and AI and robots and drones. There’s definitely some clear value that people have identified, but generally, it’s still largely exploratory. That’s what’s exciting about it, but can also be frustrating if you’re an entrepreneur in this space. It’s nothing like building an iPhone app, for example.

KS: Right, right, and it’s … Go ahead, Lauren.

LG: That was actually going to be my next question. I want to get to bitcoin more, but one question I’ve been too embarrassed to ask is, when you start to consult with companies and tell them, “Here’s your blockchain strategy and here’s what you need,” does that actually translate into them hiring a bunch of people who are expert or knowledgeable in this area, and then they sit in cubes all day and they maintain their database for this company? How does that actually work?

The question we often get in the very first meeting with a traditional financial company is, “Hey, we’d love to do something with blockchain. Can you help us?” Then I’ll usually say, “Well, what’s your problem exactly that you’re trying to solve?” There’s often not a good answer to that very simple follow-up question because, like so many other buzzwords, large institutions, executives, they hear about a buzzword and they say, “Well, we’ve got to do something in this area.”

At the same time, there are meaningful use cases and opportunities that we’ve found and are pursuing, but a lot of the activity is just that: Activity without really substantial impact.

KS: Right. So what is blockchain, really? What is it? Explain. Do it as if you had to do the simple elevator pitch.

Sure. I’m going to answer the question.

KS: Very good.

I’m going to answer the question, but then I’m going to answer a slightly different one, which is, “What is cryptocurrency?” if that’s okay.

KS: Right, yes, that’s true.

Because they’re related.

KS: I just was at an event where someone said, “Blockchain is gold, but not as dumb.”

Interesting. I’ll build on that.

KS: Okay. Well, I think it’s true.

To me, blockchain is two very different things. On the one hand, as a very simple technical answer, it’s just a new type of data structure. It’s a different type of database.

KS: Stores values.

Just a way to store data, actually.

KS: Data, right. Okay.

That’s one extreme and that’s true. At the other extreme, in a much more conceptual sense it is a new internet counterculture. It’s both of those things. Collectively, all the activity you see around the blockchain space is a sort of decentralized movement to sort of challenge the status quo in both Silicon Valley, the sort of FANG stocks, as well as Wall Street. Yet, it’s just a new type of database. So I think neither of those answers actually are very instructive.

KS: Well, it’s a database that doesn’t need gatekeepers.

When implemented in a decentralized fashion like cryptocurrency, it’s exactly that: A database that’s updated without a central authority making those updates.

LG: Does it have to be digital? Can it exist in an analog form or … Actually, Adrian Jeffries from The Verge just wrote a really good piece about blockchain that I encourage everyone to go read, but that was one of the things that was brought up. Does it have to be digital?

That’s interesting. If your listeners Google “bitcoin mining by hand” or on paper, there was someone who actually mined a bitcoin block, did all the mathematical hashing functions with pencil and paper, so maybe there is something to that.

Let me define cryptocurrency because I think that is the central question I think people are still trying to wrap their minds around. What is bitcoin? What is Ethereum? What is filecoin? What are all these ICOs?

I think the best way to understand cryptocurrency is that it’s a new asset class. Like every other asset class, it doesn’t exist for its own self. It’s serving some other form of organization. You think of equities as an asset class, they support companies. You think of bonds, government bonds, they support government borrowing. You think of real estate supporting property owners.

So cryptocurrencies are no different. They’re enabling some higher form of organization, and what that is is called basically decentralized software or decentralized applications. So cryptocurrencies enable decentralized applications. That’s sort of it. Decentralized applications are a new idea and bitcoin was the first decentralized application. It was a decentralized application for payments. It was a way to, say, look at something like PayPal and replace the company with a protocol in a network. It’s for payments.

KS: Right, and give it value.

That’s right. Ethereum, it’s a little bit more meta because it’s a decentralized application for creating decentralized applications, so you sort of have to think of Ethereum like a tree. And if you really want to get at what it’s for you’ve got to look at the fruit and sort of ask, okay, well, do I think this decentralized application, whether it’s a voting system or a prediction market, is useful and interesting.

There’s another one called filecoin, another cryptocurrency where it’s a decentralized application for file storage. So similar to bitcoin looking at PayPal and saying let’s decentralize this, filecoin looks at something like Dropbox or a cloud storage service and asks the question, “Do we really need a centralized application and a company around that application to manage file storage when we have the internet and these protocols in an economic token that we can use to incent people to organize in this new way?”

Cryptocurrencies are really about enabling this new software model, and I think the open question for everyone is in which circumstances are these decentralized software models — which, by the way, are a lot less efficient, a lot harder to use.

KS: Take a lot more energy.

Take a lot more energy. There’s a lot of downsides to them.

KS: Slower.

Slower. So in what situations are they better and on what dimensions are they really differentiated from a centralized product?

KS: What exists. The centralized product, like, you could get it. You could transfer money in seconds and these take what, minutes?

It’s just hard to argue that for everyone bitcoin is better than Visa or filecoin is better than Dropbox or Ethereum is better than Amazon Web Services. What I’ve identified as one attribute that cuts across all decentralized services that centralized services just don’t have, don’t even aspire to have, is censorship resistance. Basically this ability for me to send anyone in the world bitcoin and really nobody can stop the two parties.

KS: Right. Which is why criminals and the porn people love it. At the same time, other people that don’t like all the gatekeepers love it too. Explain Ripple, then, because they’re saying Ripple could be the next bitcoin. Explain what it is and …

Sure. There are two technologies that are called Ripple and Stellar, similar models actually founded by the same person. Ripple and Stellar have a different model than bitcoin. The primary, the best way I could explain this is if you go look at the bitcoin network — and you can do this. There’s a website called Blockchain.info and you can just sit there and watch bitcoin transactions streaming through.

What you’ll see is it’s just different people, you won’t know who they are. It will be anonymous. You’ll see this person sent two bitcoins to this person. You can just watch the network. It’s pretty cool. If you look at the Ripple ledger or the Stellar ledger, again, these are global public ledgers, if you look at those you won’t see primarily the Ripple asset, which is called XRP, or the Stellar asset, which is called Lumen. What you will see instead are all sorts of other assets that are riding on top of those ledgers.

So the core idea in a technology like Ripple is to allow you to anchor in or tether in other assets, but use it as a open rail. I think I get excited about that sort of technology because it starts to now allow us to think about moving assets that are meaningful to us — dollars, loyalty points, securities, bonds — but benefit from very low cost, very transparent, very efficient movement.

KS: Movement. Mm-hmm.

LG: I want to make sure I follow you here because I’m actually on Blockchain.info right now and I see some of the transactions you’re talking about. It’s all BTC, it’s all bitcoin. The other things you’re describing, you’re saying that those are more open? Like Ripple is the equivalent of bitcoin in the sense that it’s a cryptocurrency, but it’s also providing the rails that others can trade on?

Yup.

LG: Yeah, I think we’re going to have to break this down a little more.

Yeah, so I’ll explain a little bit more. So let’s start with bitcoin and then we’ll come back to Ripple. Part of what’s so difficult in terms of understanding bitcoin is that bitcoin actually serves three purposes on the bitcoin network. There’s a whole bunch getting conflated. It’s very elegant, but it’s helpful to unpack it.

So what are those three purposes? The first is that it provides the economic incentive or reward for the so-called miners which are processing the transactions to do that processing work. They don’t do it out of the goodness of their heart.

KS: They get a piece of it.

They’re getting paid, and so they’re getting paid in bitcoin. That’s its first use.

KS: It goes up in value.

That’s right. Its second use is as the fees that you pay to send a bitcoin transaction. So it actually costs a little bit of bitcoin to send bitcoin. It’s the fee or like the postage stamp that you would put on the envelope. The third thing is it’s the thing you’re sending on the network, right?

KS: Mm-hmm.

It’s like the store value that you’re sending and then you can translate to whatever your local value is, so it’s all three of those in one. In other blockchain models, those three get separated out, and Ripple is a good example. In the case of Ripple or Stellar, their respective tokens are only one of those three things, really. It’s the fee. To send a transaction on Stellar or on Ripple, you have to use their respective token as the postage stamp.

But what’s in the envelope isn’t also that — it can be, but usually it’s not. What it’s designed for is to put any arbitrary asset in that envelope and therefore benefit from the same …

KS: And transfer it.

… transfer model as bitcoin, but allow you to send other things.

KS: Right, not just bitcoin.

Not just bitcoin. I think that’s really important, because I think until we see a convergence of these open rails with assets that actually touch businesses and consumers …

KS: Meaning you’ve got to be able to spend it on something.

That’s right.

KS: So you don’t buy something in bitcoin. You don’t buy anything and … You’ve got to be able to trade in bitcoin for a horse or whatever the heck you want to buy.

That’s right. Bitcoin is not a particularly good medium of exchange. It’s very volatile, which isn’t its fault. It’s just the reality of the way the market works, but therefore it’s not desirable for merchants.

KS: No, why would you take it or give it?

That’s right, who want dollars to pay their bills that are due in dollars. Yes, you can exchange it, but with the volatility being where it is and the fees for exchanging, it all kind of washes out where it’s not that superior to just taking a traditional method of payment. But as soon as we can have the benefits of a bitcoin-like network with any type of asset, now I think you’re going to start to see innovation that will actually touch people beyond …

KS: To people actually use it. People actually …

That’s right, people actually using it.

KS: Why the volatility in price? What are people buying, precisely?

So all the price movement in cryptocurrencies is demand-driven. What I mean by that is when you say, “Well, why is the price of a barrel of oil X or Y?” The supply side …

KS: Well, people are hoarding it.

… and the demand side.

KS: That’s what’s happening, right? They’re grabbing it and holding it. Holder or whatever.

HODL?

KS: Whatever.

Yeah, H-O-D-L.

KS: I don’t care for their stupid acronyms, but go ahead.

That’s because you’re not part of the counterculture.

KS: Oh, but they’re ridiculous. They’re so …

They want you to say that, though. That’s the thing.

KS: No, they don’t.

They do. They do.

KS: Whatever. What are they, 12?

LG: Wait, I have a question for you.

Many of them are 12. It’s very possible the inventor of bitcoin was only 12 or 13 at the time.

KS: All right, whatever.

LG: All right, the quick question I have about HODL is does it actually … I’ve heard two different explanations for it. It might be both. Does it stand for “hold on for dear life” or is it supposed to indicate that when you type really quickly that you might key in the wrong letter?

It’s the latter, so hold on for dear life was …

LG: It’s the latter? Okay.

… that was quite brilliant because when the thing was going down everyone is saying … But it was originally some kid, probably 12, in an internet forum during an early panic years ago saying, “Hodl,” just a typo, and he became famous. Or she.

KS: You know I have bitcoin. Do you know that?

I’m sorry?

KS: I have bitcoin.

You do.

KS: I bought it when I wrote a story about it in 2013. I don’t know where I put it.

That’s the problem.

KS: Right, that is. I know where I put my gold bars.

It’s like a Jerry Seinfeld, anyone can take a reservation, it’s the holding part. Yes, there’s the HODLers, but I think there’s something beyond that, which is because the supply of cryptocurrency is fixed, so there will only ever be 21 million bitcoins ever minted, it’s actually a very simple way to think about price. It’s all demand-driven. More people want it, the price goes up. Fewer people … So what drives people to want bitcoin and what drives people away from it?

KS: They’re scared of Armageddon, for some reason.

Yes, I think the HODLers are sort of long-term opportunistic, thinking about a better future, a future that they believe in. But I think in the short term it’s actually two different types of fear. There is the fear of missing out, which is … right?

KS: Yeah, of course.

Which is like every cocktail party you go to you hear about a cryptocurrency. You ignore it. Then the next year you’re like, “Oh man, if I had just invested when I heard it at that cocktail party I’d be on 100X return.” So that FOMO, which was really pronounced last year.

Then there’s a different type of fear, which is FUD, or the fear, uncertainty and doubt that this thing is all a giant Ponzi or there’s going to be regulatory or …

KS: Tulips.

… tulips, so it’s actually, it’s this sort of tug-of-war between FUD and FOMO that drives the price in the short run.

KS: There’s also the very real feeling that this world, everything is … I just interviewed Chamath Palihapitiya that everything is co-related, money, everything. It’s affected. This doesn’t get affected, and it’s an asset that you have. Like gold bars, that’s the first thing, gold but not as dumb.

It is.

KS: You’ve got to move gold around. It’s heavy. You need a guard.

It’s uncorrelated, for sure. It’s uncorrelated. I think gold — you brought it up earlier, too — gold’s a great example. Because when somebody asks me, “What’s the right price for bitcoin?” I just ask, “Well, what’s the right price for gold?” Unlike a company where you can do what’s called like a discounted cashflow analysis, look at the potential profit streams and do some math on it and get to a reasonable number for what a company should be worth or building what it should be worth based on rents, gold and bitcoin, they’re not really like that.

KS: No, they’re a hoarding mechanisms. That’s what, it’s a hoarding mechanism of value. Unless you want to wear it.

I think the original bitcoin paper was much more focused on bitcoin being a means of exchange. In reality, what’s happened is it’s become more of a digital gold idea and a lot of …

LG: That people are holding.

That’s not a criticism. A lot of startups start doing one thing, become something else, so …

KS: All right, we’re going to answer a couple more questions very quickly, very fast, because we want to get to the questions. We have so many. ICO, explain what an ICO is, just very quick because …

So it stands for initial coin offering.

KS: Got it.

It’s the idea that a team that wants to create a new cryptocurrency or a new token …

KS: Karacoin.

… like Karacoin, which I think you should do. You have a lot of followers HODLing Karacoin. The idea of an ICO is you’ll sell some of the coins in advance as a way to raise money to then build this project and bring it to market. It’s sort of a funding mechanism that combines a Kickstarter-like mentality with the token itself. It’s come under a lot of scrutiny recently as well from the FCC and …

KS: Ponzi scheme.

LG: How does it turn into actual functioning currency?

So the promise of an ICO is that you give us some money now, we’ll invest that in building the technology, and then when the network turns on your stake will be available on that network. That’s, by the way, exactly how Ethereum came about. So Ethereum …

KS: It’s exactly how stocks work. It’s how anything of value works, right?

Is it how stocks work, is that what you …

KS: Well, it’s equity.

Yeah, that’s true. If you think about a startup, exactly right, a private company, but I think Ethereum, bitcoin didn’t do this. It didn’t, conceptually the first one couldn’t have, but Ethereum did and because Ethereum itself can facilitate, by nature of it being a platform, further tokens to be created on top of it, you saw between 2016 and ’17 a lot of these tokens being created and minted on top of Ethereum. And I’ll say more if you want, but …

KS: No, I think we’ll go …

LG: These are not backed by traditional exchanges, so it’s not like you’re raising, it’s not on the Nasdaq or anything like that.

Correct.

LG: You’re just saying I want to raise $ 150 million or whatever it is in exchange for when I get my cryptocurrency launched I will give you some of that coin.

That’s right, and then when they do launch, and sometimes even before, they’re listed on cryptocurrency exchanges like Kraken, Poloniex, etc.

KS: I see. Can you build entire societies on cryptocurrency and blockchain technology? We used to trade wheat for horses, we moved around, and assets were worth what they were worth. Not a very organized system, and that’s why we have currency.

Right. I will say there are people in the blockchain community who do see this as a foundational platform for a whole new way to think about society and civilization. As a startup entrepreneur just trying to make money and build a business and hire people, I don’t have a lot of time to be a philosopher, but there are definitely the philosophers in the community who talk about a future where everything is decentralized and enforced on networks, etc.

KS: They thought that about the internet, didn’t they? How old are you? You weren’t around for that.

I’m 36.

KS: No, you weren’t around. They were like that. Same thing, they were going to build communities that the gatekeepers were not going to be able to control.

We’re in the counterculture phase of the emergence of this technology.

KS: Right. The Whole Earth … That whole gang.

Yeah. By the way, this is what attracted me and I think a lot of people. I was in middle school and high school during the ’90s and felt kind of in the atmosphere the change the world …

KS: Oh no, that’s when the money grubbers got there. Before that it was …

Well, my dad was running a BBS out of our house …

KS: Oh yes, of course.

… in the early ’90s, so just before it got a little bit kooky.

KS: Yeah, ’94. The Netscape IPO. That’s the end.

’92, ’93, ’94. And I just loved it. I used to go to 2600 Meetups. I got my drivers license, the first thing I did is I drove to the train station in LA, went to 2600 Meetups, so I loved that era of the internet. I think I was very attracted to bitcoin because it felt like that again. So yeah, I think we’re in that phase again. It’s fun. But again, I don’t know or have a strong point of view on whether that will radically change society.

KS: There will be a Google of this. There will be a Google. There will be a …

Yeah, but they’ll just look so fundamentally different from what Google and Amazon look like that I think people will probably continue to be wrong about what is the next Amazon or Google.

KS: Right. No, 100 percent.

So we have tons and tons of questions. Lauren, I’m going to get to those because we have so many. I love all these questions. We’re here with Chain CEO Adam Ludwin talking about blockchain, ICOs and cryptocurrencies — that’s initial coin offerings and cryptocurrencies — and we’re now going to answer some questions from our readers and listeners. Lauren, will you read the first question?

LG: Sure. The first question is an email from Maryam Mujica, I hope I’m saying that correctly. The email says, “I’m definitely embarrassed to be asking this since I work in tech, but in a non-technical role so cut me some slack. Can you explain in layman’s terms how bitcoins actually work and how if at all they can be used to buy anything?”

KS: All right. Adam?

They can be used to buy things. When I’m demoing bitcoin I usually go to the Wikipedia website and go to donate and then click donate with bitcoin and then scan the donation QR code with my bitcoin wallet, like a Coinbase wallet. That’s usually a pretty good example and experience. If you’ve never used bitcoin to buy anything, I think donating to Wikipedia is a good way to try it out.

KS: You don’t give a full bitcoin to them, do you?

Not a full bitcoin. This is the other thing to know about bitcoin, you don’t have to deal in whole units. Each bitcoin is divisible 100 million times, so you can send up to a one hundred millionth of a bitcoin, which happens to … That cent is called a Satoshi, which is the pseudonym of the founder or founders.

KS: Every five, seven days I get an email from someone who says they’re Satoshi.

Do you really?

KS: One of them will be.

People are claiming to you that they’re Satoshi?

KS: One of them is. I know one of them is Satoshi.

Interesting.

LG: I think Kara is actually Satoshi.

KS: I am Satoshi. I am. I do, I get them all the time. So you can buy … presumably that’s the goal, eventually, is a currency. You want to buy something with it.

Yeah. I don’t know if bitcoin has missed its window to become that. I think it’s very possible it has.

KS: What would be the coin? Amazon coin.

I don’t know that it’s Amazon coin. I think bitcoin as a settlement instrument, as a digital goal, that’s become pretty clear, but I think mediums of exchange that are existing mediums of exchange like central bank money or merchant-issued money is probably …

KS: Yeah, so credit cards and cash seem to work pretty well right now.

Yup, yup.

KS: I think cash …

LG: I would love to be a fly on the wall, by the way, in a meeting room when Amazon meets with the government after it develops its decentralized cryptocurrency and starts having people buy things with it. That would be very fun.

Yeah. Well, Amazon Prime Reload, which is a prepaid cash program, is basically Amazon’s virtual currency.

KS: Yeah, it’s true. But there’s currency involved. I think all, I think currency currency, paper currency, is insane. It’s dumber than gold.

Paper currency is dumb because … I have some paper currency here and I’m just going to take it out.

KS: I never use it anymore.

I take Casual Carpool in the morning so I always have dollars, but the problem with paper, the problem with currency in general is it’s no longer free to use it. So the promise that the government’s going to give you a currency that’s free to transact in society, that’s a broken promise. It actually costs money to use money, not just in terms of bank fees …

KS: You move it around.

Just basic things like yeah, every single transaction costs the counterparts collectively 2 or 3 percent in fees. So we don’t have free money anymore. I think …

KS: It never was free money. It always cost something.

Maybe that’s true.

KS: It always cost something.

Yeah, yeah.

KS: You’re just not adding it up. You’re just not adding, just moving stuff around. You know, drug dealers like it.

Anyway, next is the email from Frank Reid. They like bitcoin better, I’m guessing. “As I understand it, there is no central depository or control of bitcoin other than trying to hide money.” That’s not true. “Why would someone want to invest in it? It seems like it’s the latest pyramid scheme. These pop up from time to time.” All right, that’s the tulip thing, or whatever, the porn center.

It empirically has been the best-performing asset class since the financial crisis, by a long way. People have been saying it’s a Ponzi scheme or the tulip thing …

KS: People believe it.

… and every few years it does have a big crash and correction.

KS: It just did.

It is right now, but it usually crashes to 90 percent higher than the previous low, so I think a Ponzi scheme is, the way I think about the Ponzi scheme …

KS: Pyramid, they said.

Or a pyramid scheme is like some entity that is intending to scam people by showing false returns that are based on new money coming in.

KS: Yeah, that’s true.

It’s not that. It’s not a fraud. It’s an open source technology you can audit and see for yourself. Whether it’s a market mania is a different thing.

KS: Right. Is it worth what it’s worth because it’s worth it?

But again, I come back to …

KS: Where are those dumb sneakers, Frank? I bet you have a pair of dumb sneakers that are not worth $ 1,000.

It’s also like the art market, like gold. There’s actually no empirical answer to what is the right price. It’s just too early. Most nascent technologies, they don’t get noticed in the first few years, nor do they have a massive capital market’s phenomenon around them. This one does because the thing itself is money.

KS: Right, but it has to convert to something. I think that’s the point, it does, but by the way, Frank, it’s not a central depository because it’s decentralized by its very design.

Right, there’s no central depository.

KS: All right, next one. Lauren.

LG: Next one is from Ravish Kumar. “Is the bubble burst and can anyone just spin up their own cryptocurrency?” That’s a good question. “I heard that many companies are working on their own, though I don’t know how true that is. #TooEmbarrassed.”

So the huge market mania in 2007 was — depending on how you count — probably the fourth or fifth big, excuse me, big bull market in bitcoin’s history. Those are usually followed by the market cooling off for a period. Anyone can … What’s the name of the …

KS: Karacoin.

LG: Karacoin.

Karacoin.

KS: It’s going to be. It’s coming soon to a pyramid scheme near you.

Karacoin. We could create Karacoin by the end of this interview by taking the bitcoin source code off of GitHub, forking it, renaming it Karacoin, and maybe changing one or two parameters and giving it to the world. Whether Karacoin would have value …

KS: But someone would have to buy it. What price would I put on it?

It would be worth whatever the market says it’s worth. It would just be a demand …

KS: It has to start off at some price.

Well, the first buyer is going to come along and maybe you can set the price. If you’re the only one that has it at the beginning, but typically what would happen if it’s mined would be that people would run mining software and start generating them and they wouldn’t be buying it. They’d actually be converting energy into your coin. Then they would take those two in exchange.

KS: But how do I stop it from more coins being created, because that’s inflation, right?

You would. The way bitcoin works is the number of coins that will ever be created is hard-coded into the software.

KS: So I could make a number.

LG: Oh, so you can decide.

You can pick a number. Yeah.

LG: What are the parameters? When you said that you would take the source code but you’d change a couple parameters, what does that mean?

For example, you could say instead of 21 million Karacoins there’s going to be 100 billion Karacoins. You could say instead of the block time — meaning the amount of time between new blocks being added to the network, instead of that being 10 minutes, we want to make it five minutes.

KS: They can make more.

I’m basically implicitly referring to what actually has happened. So litecoin, if you’ve ever heard of litecoin, effectively took the bitcoin code base, tweaked not probably five lines of code — Charlie, if you’re out there, feel free to tweet at me and correct me — but very small amount of tweaks, renamed it litecoin and created it. It’s one of the interesting kind of emergent behaviors in this space, that you have this rich ecosystem of competing projects vying for attention and the ones that will survive …

KS: There’s going to be one Karacoin and people are just going to trade it back and …

Well, that’s kind of like the Wu Tang Clan album where there’s just the one.

KS: Just the one.

Like that. I think there’s something to that.

KS: It moves from person to person. They pay more and more for it. You see what I’m saying? It’s genius.

I like how you’ve been watching our Recode …

KS: Yeah, that’s true.

Why don’t you do a crypto-conference?

KS: We may launch a currency at Recode. You’re going to launch a currency.

You know what you should call it? Recoin.

KS: Recoin. Oh, you know what? Right now. You’re coming to Code. You are going to start a currency, you and me.

Recoin.

KS: Recoin. Okay, got it.

Keynote.

KS: Together.

I’m with you.

KS: We’re the founders. You’re Satoshi and I’m Satoshi II or something. We’ll have a name like that.

All right. “So what’s the deal with Coinbase?” Yeah, what is that? I think I have an account there. I don’t know how that happened.

Yeah, so Coinbase is a application that will store your bitcoins for you and will …

KS: And protect them from the people who want to kill you to get them.

Yeah, so one of the challenges around bitcoin is very much like paper currency, you’ve got — or gold — you’ve got to figure out a way to hold it securely. So you can hold bitcoin yourself with what are called private keys and you’ve got to keep those private keys in a secure software environment. If you’ve ever lost a password or forgotten a password, it’s about five times harder than managing passwords.

So most people have decided they don’t want to manage their own bitcoin. They want to use a service like Coinbase, which is centralized, and allow that centralized application to do it for them, make it easier to both manage and also to buy and sell. So that’s Coinbase.

KS: And presumably protect you.

They’re the most successful company in the space.

KS: The issues are some people break up their passwords. Sometimes they give it to someone else. They put it in … They don’t want to put in a safety deposit box because someone could take their kid and say, “Go get it from the safety deposit box.” People have a lot of it.

That’s right.

KS: They don’t like to talk about it. Although, these people have gold, too. I don’t know why they’re not nervous about holding the gold where it is. Anything can be taken, essentially. Some people split up everything.

That’s right.

KS: Does Coinbase stop that or is there …

Have they stopped …

KS: Because the bank, it’s really hard to take your money out of the bank.

Yeah, yeah, yeah.

KS: Because people are on to that.

Yeah, Coinbase, they have this thing called Vault, which for example has certain limits. Like you can’t take all your money out of the Vault at once. There are additional policies and there are good solutions for folks that are trying to manage a lot of the currency.

KS: That’s the business, protecting it.

Yeah, custody is a big … Cryptocurrency custody is one of the business models that works in this space. Exchange is another good business model. Being your own Satoshi, if it works, is a good business model.

KS: Meaning?

Meaning having a coin that has a large market cap.

KS: Right, right, but at the same time people are worried about holding. Just so you’re aware, if you hold it, don’t tell people you hold it. Don’t. There’s going to be people kidnapping people, things like that, just like they would with gold or a pile of cash. But in the case of gold — or not gold, but a pile of cash — if you start taking it out of the bank, the bank alerts authorities. There’s a good reason for gatekeepers in some cases.

That’s right, yeah. That’s why I have zero crypto.

KS: Right. Oh, interesting. You’re just selling the picks and shovels, aren’t you?

No, I’m joking, but …

KS: Oh, you have zero. You just lied to me.

Yes, yes.

KS: Okay. All right. That means you have 10 billion cryptos. All right.

“How are ICOs and IPOs different? Why can’t ICOs be launched through stock exchanges?”

Fundamentally, an IPO is an initial offering of shares. Shares are the ownership model for companies. ICOs are an initial offering of coins or tokens, and coins are the enable economic model for decentralized software. So just very different ideas there. What unites them — and I think what has drawn the interest of, say, the SEC — is that even though they’re fundamentally different things that they’re supporting and different mechanisms, they both are fundraising mechanisms.

So can you imagine a Nasdaq or a New York Stock Exchange facilitating ICOs? Sure. It would be a totally new business for them, but you could.

KS: You could. All right. Long question. Lauren, why don’t you read the whole thing, try to do it quickly.

LG: Yeah, let’s actually Bradley Kalgovas, thank you for sending in your questions. I’m going to ask the last one in your bunch because I think this is the most interesting and we’ve answered a couple of the others. “Is the price of bitcoin fundamentally linked to the cost of electricity to mine bitcoin? So example, as time goes on, there could be more processing power and more electricity required to power the processor to mine bitcoins so the cost to extract could go up over time.”

The price of bitcoin is not really tied to the cost of electricity, but the profitability of mining is tied to the cost of electricity, meaning the price of bitcoin is X, the amount you have to spend on electricity to get said bitcoin is Y. If you’re in a country with a expensive electricity it’s going to be unprofitable for you to mine. That’s because of the sort of perfect competitive nature of the bitcoin network. That’s why you see most of the mining in low-energy-cost countries like China, potentially even where governments may be even subsidizing.

KS: You make what, 12, what was the … You get point something.

Twelve point five bitcoin. It’s either 25 or 12.5 right now.

KS: But then at some point there won’t be any more.

That’s right. That’s probably another too embarrassed to ask question, which is if …

KS: No more miners.

As I was saying, there’s only 21 million and they’re still being mined, what happens when they’re all mined? By the way, you need miners to keep the network decentralized and operating, so what’s going to happen? The answer is, in addition to what’s called the block reward, which is this newly minted bitcoin that is generating, given to the miner for investing the energy in the network, miners also are the ones who received the fees …

KS: From moving it around.

… that I referred to earlier, from moving around, so they actually get both fees and block reward. So the theory at least is that once the block rewards are all gone, the miners will still have an incentive because of the fees.

KS: Right, so they’ll become bankers. That’s all. They’re bankers, right? They’re the little green guys.

I guess so.

KS: That’s what they are. All right, so let’s do from the Canadian. Which one’s from the Canadian? Here we go. Shami Humphries, which is, “I bought bitcoin from Coinbase not realizing I could add or buy more of it, but not transfer or sell because I’m Canadian. After many attempts …” What, are Canadians barred? Isn’t tariffs enough? “After many attempts to talk to them the only response I got was sorry, not at this time in Canada or Australia. We’re working on it. Do you have any idea” — HODLer — “what might change or how I can extricate myself from this?”

This is funny because Coinbase is like the fail whale of our era.

KS: I know, they’re like Trump.

They’re so successful and they’re doing great stuff and I’m a big fan.

KS: Yeah, I know. I met the CEO yesterday.

But … Brian? Okay, great.

KS: Yeah.

But their customer support has been this perennial challenge.

KS: Fail whale.

And it’s funny that people are so desperate they’re writing in to the Recode podcast to ask the CEO of an unrelated company if he might be able to put in a good word or help out with their customer problems.

KS: Do you know what? We have some dues here.

LG: Hey, that’s not desperate. I was just going to say. We get things done here.

KS: I do things all the time with no idea.

Maybe we can just say if Brian is listening, help out, who is it?

LG: Shami Humphries.

KS: Shami Humphries. All right, next one. So too bad, Shami. You’re going to have to wait until Coinbase or someone else gets to it, essentially. But they’ll get to it eventually.

LG: But we still think they’re nice.

KS: They need to be global. Coinbase has to be global for goodness’ sake, right? Come on.

Yeah, absolutely.

KS: Come on, Coinbase. What the hell.

Bitcoin’s global.

KS: Yeah, that’s right. Next one. Let’s get through these. We’ve got a couple more. We’ve got a lot more.

LG: Next one is from Dorian Benkoil who asks an inside-baseball question for us. “What applications are most likely to take hold in the mediasphere? There has, for example, been talk of both authentication tokens for identifying authors or subscribers and then using blockchain technologies to help with fraud.” So yeah, are we going to be running our new sites on blockchain?

KS: Recoin.

Recoin. I’m looking at this Recode sticker and I could just see it perfectly there. So media, all right, I don’t know much about media. You’re an expert, so I’m sorry to even broach this topic with any sense of an idea here, but there’s this thing called the AD Model.

KS: Mm-hmm. We know it.

I lot of people don’t like the AD Model.

KS: We don’t.

A lot of thinkers in the space, the intersection of cryptocurrency and media are asking is there a way to bridge these worlds so that we can create a new economic model to incent the creation of content, the conception of content, the curation of content? What might that look like?

I won’t say any more than that, other than there are a lot of people thinking about that, exploring that space. I’m hopeful something emerges.

KS: But it’s been done, payments, little tip jars and …

Yeah, the first thought is always the micro-payments, tip jar kind of thing, but I think we know that doesn’t work and I don’t think crypto solves that. I think there are more fundamental questions about can you curate and create content with new incentives? There’s a project called Steam It. It’s Steam, it’s another … It’s like a cryptocurrency Reddit.

The problem is they went too far and the whole thing is just people gaming it to make money off of content and so it’s actually a bad experience for the user when they’re reading the website. But the more experiments in this space, I think, the better. It would be exciting to replace the AD Model on …

KS: It would be. All right, next one, Haps: “I understand blockchains, it’s secure as long as no single entity controls more than half the processing power. If that’s the case, what do I do to combat potential fraud?”

So the listener is referring to something called the 51 percent attack, which I will allow others to Google if they’re interested, but basically yes, it means that a blockchain network, specifically in this case I think bitcoin, is susceptible to being … “taken over” is too strong of a word, but it loses some of its censorship-resistant properties if more than 51 percent of the network is controlled by either one or a set of colluding entities.

KS: That would be China.

In practice, that’s right, actually. I think more than half the mining is probably in China right now.

KS: Yeah, that would be China.

Yeah.

KS: Well, how do you combat it?

Well, it’s interesting because I’ve always wondered why, and maybe this is already happening, but since I’ve begun in this space, I’ve always wondered why U.S. government folks depending upon the department haven’t thought about creating just like a subsidized bitcoin mining project at real scale just in case bitcoin becomes a very important part of the world’s financial system. It just strikes me that China’s been a little bit more forward thinking and taking less …

KS: They only have a science adviser at the White House. It’s not happening, Adam.

True. But this was an Obama … this was too early.

KS: Obama forgot to notice or the Russians …

It was too early.

KS: … were attacking us on Facebook. None of them. None of them.

Yeah, I love Obama. I’m not blaming him, but …

KS: Oh. Oh, I am.

You’re blaming him for not getting into bitcoin?

KS: Not bitcoin. I think the Russian stuff.

Oh, the Russian stuff.

KS: I think all the government failed us on that. You know. Going way back, all the government failed us. They didn’t know. Okay, I’m going to give them …

So you should put the government on the block. You should join these people in Costa Rica that want to do like …

KS: No, Puerto Rico.

Puerto Rico. Yeah.

KS: Yeah, they’re crazy. No.

Yeah.

KS: A lot of … Go ahead. Next one, Lauren.

LG: Sure. Next one is from Bridget McGraw. “A lot of resources were dumped into digital badges, also known as micro-credentials in education, but the concept didn’t take off. How would we create a useful blockchain credentialing system for the broken education institution?” I feel like you just do for the insert broken institution here. This is really education.

KS: Yup, yup.

It is interesting that for whatever reason people, maybe because it’s so poorly understood, they take blockchain and make it its savior for everything. So I think tactically what the questioner is getting at is can you issue some sort of token that represents a qualification and put that on a global ledger such that it’s not run by a company that might go away, but for the foreseeable future I can always reference that?

This gets into other questions about, what about using blockchains for identity? What about using it for things like credit reports and credit scores? That whole area is fraught with challenges and I don’t have any good answers, but I’m sure someone smarter does. So I like the question. I don’t know that I have a good answer to it.

KS: Do you know if you put some blockchain on your skin it refreshes it beautifully.

I heard that.

KS: It’s like everything.

I think that’s one of the promises of Recoin if I remember …

KS: Exactly. Recoin is going to solve that.

Don’t forget to put that in your white paper.

KS: No, you’re going to make … You’ve just now been dragooned into Kara’s army.

If you put me in this red chair on your keynote stage I will launch Recoin with you. Okay?

KS: It is happening. Peter Kafka, get ready. Peter doesn’t get any.

“Is bitcoin’s future a long one or do you think it will be closed by another currency eventually?”

I think there will be an ecosystem of several cryptocurrencies. I don’t think it’s steady state to have hundreds or thousands, nor do I think …

KS: It’s like trains.

… it’s good to have one or two in the same way we have email, we have messaging services, we have web, we have Skype. I think you design a network with particular qualities and parameters and you optimize around those.

If you look at the financial system today, equities and loyalty points are very different, they’re very different systems, very different players. I think there will be several, but after any Cambrian explosion you typically get prey before predators, right?

KS: Tons. Yup.

You just get everything blooming and then something comes along and starts eating everything. So we’re kind of in that like everything has bloomed and it’s ripe for some predators, but I think there will be a steady series of several.

KS: The banks are freaking out, also the government. They’ll all try to insert themselves in some horrible lobbying fashion of some sort.

Yeah, yeah. I think that’s right.

KS: They will. They’ll have to.

It’s happening now.

KS: If someone’s going to eat their lunch it might as well be them. That’s what I always say about everything. So next one, Lauren, go ahead. Pick one.

LG: Yeah, we had several questions from our regular question asker, Liz Weeks, but unfortunately we don’t have time for all of them. Here’s one of them. “What happens if blockchain executes something and is then successfully challenged in court or an administrative process? For example, what if challenges a smart contract after it executes, is it irrevocable? If so, should we consider a higher level of capacity to execute a smart contract than a traditional contract?”

KS: Yeah, these are contracts. That’s what these are.

At the end of the day, a transaction on a blockchain is an irreversible bit of code that has been executed and forms an immutable history.

KS: Mm-hmm.

In fact, I think it’s pretty good evidence in court if you have the appropriate expert witnesses to explain it to the judge. So I think you’ll see probably more and more cases where a smart contract executed on a blockchain, if properly understood, will be about the best evidence you can have that you entered into a counterparty relationship and the thing was executed.

Now, the question becomes what happens if there’s a bug in the software and the spirit of the agreement is executed differently because it was written improperly? As everyone knows, all software has bugs. Those are issues which I think will be litigated.

KS: What happens if water pours on paper contracts? You can do that to everything.

That’s interesting. Yeah.

KS: Everything has comparability. The next question was about treaties, too. The same thing is how can you make sure people don’t go rogue on treaties?

Yeah.

KS: People can break them.

Yeah. I think in general folks are viewing blockchains as a solution to enforcing contracts and it’s helpful in general just to appreciate that. A blockchain can only enforce things that are native to the blockchain, so if you and I, Kara enter into a contract that says I will give you this bottle of Gatorade, the blockchain can’t say whether I did or not.

But if there’s a token on an Ethereum network that represents that Gatorade and I give that to you on the network, the contract can enforce that you have the Gatorade token, but again, it doesn’t mean that I’ve actually given you the Gatorade that it represents. So any time parts of reality live outside of a blockchain, the blockchain can’t actually help you. That often gets …

KS: So if a house gets transferred or …

Exactly. That’s a great example. A house or … There’s this IBM commercial I saw I think during the Super Bowl where it said, “This is a diamond. It’s on the blockchain thanks to IBM.” I’m going, “Okay, the diamond is sitting in a room somewhere. It’s not on the blockchain.”

So anyway, these connections between the real world and the digital, we have a long way to go before this tool can really help us.

KS: Yeah, you can’t make people from being cheaters. You can’t stop them. You cannot stop humanity from behaving badly.

I think that’s a deep and important point.

KS: For things. For things.

Yes, but on Recoin you will be able to.

LG: That’s like the internet. All tools can be used for good and can be used for bad.

KS: Okay, last question. I think I’ll ask it for both of you, but from Walt Mossberg, he’s a retiree. He’s trying to figure out where to put his money, his pile. Believe me, there’s a lot of piles of money over there, but it’s all in gold under his bed, of course, where Walt likes to keep it. He sleeps on it.

“Would you,” Lauren Goode, “accept your salary or your 401K match in bitcoin?” Same thing with you, Adam. Lauren?

LG: Only if it was Mosscoin. No, salary, no. 401K match, maybe. Maybe I’d be willing to experiment with that, but I’d have to do a little more research into it. It’s amazing actually when you think about all the people, myself included to a point, who will put things in mutual funds or say, “Sure, I’ll do it, my company will match my 401K and it will be distributed and diversified in some way,” but if you don’t actually really look at where it’s being held or what the movement is like, you could actually have no idea what’s going on.

KS: You never see your money, Lauren.

LG: What’s happening to your savings.

KS: When everyone’s talking about all these, I don’t want my money to be virtualized. It is virtual. You never see your pile of money. You don’t have a safe like in Harry Potter where it’s all sitting there making nothing, doing nothing.

It’s true. You want me to answer?

KS: Yes.

LG: Yes.

No, I wouldn’t want to take my salary in bitcoin because I think of cryptocurrencies and crypto-assets as part of a portfolio of assets, and I want to think about them separately in terms of what my allocation is going to be and which ones I want, if I want to rebalance and go long on certain ones or short on certain ones.

So I think of my paycheck as the thing I want to be the most stable kind of flat-line boring thing possible that I can then go and say, “All right, I’ll throw it away on this high-risk investment and see what happens,” or, “I’ll spend it on a latte.”

KS: What portion should people … Some are saying 2 percent.

I usually say, if you’re early in your kind of investment horizon, I tell friends 5 percent of your portfolio in crypto actually seems responsible.

KS: In which ones? All of them or just …

No, not all of them, because to your point earlier, there are a lot of hucksters and people that are just taking advantage, but there’s an emerging class of five or six that really are — and this is kind of goofy to say — but kind of blue-chip ones in this space, and there will be more. You do still have to be prepared to lose it all. It’s just, it’s that stark still.

KS: It’s like real estate in Florida. It could just be swamp. Lauren, would you accept your salary in avocado toast?

LG: You know, with how well it’s doing in San Francisco right now, absolutely.

Isn’t that the idea of a startup?

LG: That stuff is worth like $ 12.

KS: It is. It keeps going up in price. That’s because they add furikake or whatever that Japanese spice is to it. Then that’s another $ 3.

Anyway, this has been riveting. I’m going to talk to you about Recoin when we stop.

Great.

KS: This has been another great episode. Adam, we’re going to have you back to give us updates because this is really helpful. This is something that people are really interested in and they should be. It’s not total silliness. The redo of our currency system is the one thing that has resisted the internet and digital things, and so in some ways we’ve stayed in the dark ages in finance, for sure. It’s going to change. Same thing with health care and some other areas. So thank you for joining us.

Thanks for having me. This was a lot of fun.

LG: Thanks so much, Adam.


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What was the business venture you were most proud of? What do you think are the most exciting projects in space exploration currently? What was it like having Elon Musk as a roommate? Can I pitch you my startup idea? Ask all this and more to serial entrepreneur Adeo Ressi. Ressi is the CEO of the Founder Institute, a startup launch program and accelerator, that operates in almost 200 cities around the world and has helped generate $ 25 billion in shareholder value. He is known in Silicon Valley to mentor fast-growing tech businesses, is a pioneer in the protection of founder…

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Cash For Apps: Make money with android app

Google Search shows Stack Overflow answers in search results for some users

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Stack Overflow is an immensely popular website for asking programming-related questions. If you’re ever stuck on a coding problem, typing it into Google and clicking the first Stack Overflow result usually does the trick. Now it appears the last step might not be necessary for much longer, as Google is working to display answers directly in search results.

This feature still seems to be in testing; it only appeared for me once, and it has been showing up as early as November of last year.

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Google Search shows Stack Overflow answers in search results for some users was written by the awesome team at Android Police.

Android Police – Android news, reviews, apps, games, phones, tablets

Cash For Apps: Make money with android app

Google expands featured snippets to provide better answers to multi-intent search queries

Cash For Apps: Make money with android app

As Google so aptly states, we often pose nuanced, and sometimes ambiguous, questions to our favorite search engines. While we as humans often understand such questions in context, especially if we know each other well, search engines are not that smart or aware. Google is hoping to address that with the addition of its new multi-faceted featured search snippets.

The basic premise is this: you enter a nuanced query – that is, one that is not explicit in and of itself – and Google returns multiple answers to you, each meant to address a different meaning behind your question.

Read More

Google expands featured snippets to provide better answers to multi-intent search queries was written by the awesome team at Android Police.

Android Police – Android news, reviews, apps, games, phones, tablets

Full transcript: Writer Taylor Lorenz answers YouTube questions on Too Embarrassed to Ask

“There have been YouTube influencers since the birth of YouTube.” Now they just monetize a little better.

On this episode of Too Embarrassed to Ask, Daily Beast reporter Taylor Lorenz talks with Kara Swisher and Lauren Goode about the state of YouTube in early 2018. The three discuss how some of its biggest stars have begun to attract negative attention in recent years and what the site could be doing to keep exploitative content off its platform.

You can read some of the highlights from the discussion here or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Too Embarrassed to Ask on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.


Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode.

Lauren Goode: And I’m Lauren Goode, senior tech editor at The Verge.

KS: You’re listening to Too Embarrassed to Ask, coming to you from the Vox Media podcast network. I’m going to read this line now, Lauren. Are you sure it’s okay?

LG: Trying to take over the show step by step.

KS: This is a show where we answer all of your embarrassing questions about consumer tech.

LG: It could be anything at all, like, what does Kara Swisher watch on YouTube?

KS: A lot of things.

LG: Does she even watch YouTube?

KS: Yes.

LG: She’s complained about the amount of data her sons use watching YouTube.

KS: They use YouTube a lot. I don’t use YouTube a lot. I, sometimes, when I’m looking up “SNL” skits. That’s pretty much it.

LG: Or when you’re watching my series.

KS: Yes, sure. That too. Send us your questions …

LG: Did you like that last one about the smart cars, the flying cars?

KS: Yeah, yeah, yeah. I didn’t know …

LG: I had to mention the flying cars.

KS: Find us on Twitter or tweet … I know you’re a tricky one like that. Tweet them to us at Recode or myself or to Lauren with the hashtag #TooEmbarrassed.

LG: We also have an email address. It’s tooembarrassed@recode.net. A friendly reminder, there are two Rs and two Ss in embarrassed. I would do an episode on flying cars, that’d be a good one.

KS: Yeah.

LG: VTOL.

KS: Yeah, why don’t you do that one?

LG: That’s vertical takeoff and landing. Okay, all right. Today on Too Embarrassed to Ask we’re talking about the world of YouTube influencers.

KS: Influencers.

LG: There are people now — and in some cases, pretty young people.

KS: Pretty comma young people or pretty young people?

LG: Both. Both. Pretty comma young and pretty young people who make a living entirely off of their YouTube videos.

KS: A friend of mine’s dating one.

LG: They’re called creators. Really?

KS: Yeah. I’m not going to say.

LG: Okay. All right. Well there are also some people who are making a living off of YouTube who are at the center of a lot of controversy, including Logan Paul who came under fire after he published a YouTube video of a corpse in a so-called Japanese suicide forest.

KS: Yeah, I don’t think it’s a so-called forest. I think it is when he did that.

LG: Well, I mean, it’s a forest, but people have called it a suicide forest because of what has happened there, unfortunately.

KS: Yeah, that was really appalling in many ways. Anyway, there’s a lot of other recent issues in YouTube as well. I just recently read … When we just came, we talked a lot about this and some others. It seems like every week something else comes up, including last year’s PewDiePie controversy. All of this is brought to light not only on the growing industry of YouTube creators and how the industry works; it also highlights YouTube’s need to seriously figure out how to moderate its content and also payments. Just in every area, YouTube has been … It has a lot of folks, as well as the Russia issues, the use of the medium by Russian perpetrators to impact the election.

LG: So we’re excited to bring in Taylor Lorenz. She’s a writer for The Daily Beast who has been covering the world of social media influencers, from the stars of the HQ app to the Paul brothers in YouTube. Welcome, Taylor. It’s your first time on Too Embarrassed. We’re super excited to have you on.

Taylor Lorenz: Thanks so much for having me.

KS: Yeah, so let’s talk about the whole concept of YouTube influencer from the beginning of YouTube, cheeseburger, iJustine. I actually went to a party that YouTube threw when Chad Hurley was running it. They threw it in San Francisco at one of the docks, and the YouTube influencer at the time who was starting to get some traction was Katy Perry, which was kind of … and she performed. It was crazy. It was kind of … Now that I think about it, I got a whole Katy Perry concert, like, right from the beginning. But it has been the birthplace of viral videos. So can you talk a little bit about that, where it’s gone and where it’s going? What you’re seeing on the YouTube, as the oldsters like to call it.

Sure. Yeah. I mean, it’s kind of crazy, just the amount and content that is uploaded there daily, and also all the different sort of like types of communities that have evolved. I think you mentioned PewDiePie earlier. He’s obviously one of YouTube’s biggest creators. He’s got 60 million subscribers now. But there have been YouTube influencers sort of since the birth of YouTube. A lot of first-generation influencers like Tyler Oakley, Grace Helbig. I didn’t know Katy Perry was on there, but …

LG: She was.

But yeah, it has sort of entered into this mainstream culture, but more recently, we’ve seen I guess the culture around influencers pivot. So I would say YouTube sort of started off with these people who would … You didn’t have smartphones, they weren’t as prevalent back then, so it was a lot of people that were sort of like in their dorm rooms vlogging to the camera with their webcam. And then it sort of moved into more viral videos, and different types of influencers doing different stunts or different music video things like parodies, and then in the past couple of years, it’s been more sort of day-to-day vloggers that I’ve taken over, which are people who sort of document every part of their life and upload it as they go.

LG: What are the three channels that, if people aren’t familiar with the culture of YouTube influencers, what are three channels with three people that everyone should go look at right now to get a sense of what the trends are right now in terms of what’s big on YouTube?

That’s a really good question. I actually would recommend PewDiePie just because he is so massive and he’s sort of a commentator now, and he sort of talks about a lot of things that are happening on YouTube, so he can give you kind of a good overview. Also, I hate to recommend them, but maybe perhaps one of the Paul brothers, Jake or Logan, just because they are so emblematic of this culture. Their vlogs are sort of like what … They sort of pioneered this vlog style that has taken over sort of the influencer world. Then I feel like I don’t … I want to recommend a girl. I’m trying to think who would be the best.

LG: Think about that and we’ll come back to you on that.

Yeah, sure.

LG: But how many people would you guess are legitimately making their careers or living off of YouTube right now, if you just had to give sort of a rough estimate?

Honestly, that’s a really good question and I’m not sure. I mean, I think of the top, top, top creators. There are maybe under a thousand. I think there are several thousand now. I want to say 6,000, but it’s probably even more creators with over a million followers. So that was this one time, this big milestone, and now, a million followers is not such a … I mean, it’s still a milestone, but there are lots of creators that have scaled much further past that. But there are a lot of other ways that people make money on YouTube when they’re not living a sort of creator lifestyle. There are a lot of gaming channels. There are a lot of people who sort of produce series. You saw a lot of the kids’ content recently come under fire.

There’s this sort of algorithmically generated content on YouTube that people can play for their children. That’s all being monetized. So there are lots of sort of different ways to monetize your content. Some of the people that are making the most amount of money, though, are like the PewDiePies of the world who do the daily vlogging.

KS: About how many are doing really well? About a thousand, right? Like it’s something …

Yeah. I mean, there’s maybe a thousand top, top influencers. Honestly, to be truly honest, there’s probably 500 big names that are people that are hot and growing right now. There’s not tons but there are different …

KS: Yeah, and they tend to wax and wane.

Exactly, yeah.

KS: And they sometimes go into real Hollywood and usually not well. They try to jump to the next medium.

They all try and pivot out of YouTube because YouTube is not end-to-end sustainable, and like you said, they all have a shelf life. So a lot of them, either if they can’t successfully go into like becoming an actor or starring in a TV show — which most of them can’t because they’re not good actors — they’ll try to produce their own stuff or start their own talent agency or things like that.

LG: In terms of the style of content that you see really jumping out right now on YouTube, like obviously, there are different buckets or categories, right? There are antics and pranks. There’s the daily vlog, like, glimpse inside my life. There’s like the daredevil type stuff. Is there something that stands out to you as a thing that people should consider when they’re looking at these influencers, looking at this to … or even if they want to try to be one? Are you trying to do it as raw as possible? Should it be highly produced? Do you know what I mean? Is there a style that you can sort of attach this current moment in YouTube too?

Yes. I would say yeah. I mean, a 10-minute sort of daily vlog, that’s definitely produced. It’s usually like, you’ll take footage from the whole day, cut it down, or take footage from the whole week and cut it down, usually highlighting one big main moment, whether that’s a prank, whether it’s like a beauty reveal or something else. The 10-minute mark is significant because that’s when you can sort of like double monetize it well. So, you get a little bit more ad money if you reach the 10-minute mark, so a lot of vlogs now sort of follow that format.

I would say the one sort of broader trend that’s taken over, at least in the influencer community on YouTube over the past year, is drama. A lot of the top influencers have started staging drama between each other, engaging in real drama. It’s become this sort of thing where …

KS: Reality show.

It’s like a reality show, yeah. And that reality show …

KS: They all live in the same place in Hollywood, right? There’s that one ridiculous place.

Yeah, a lot of them live at 1600 Vine, and then each sort of squad will have their own house. So, Jake Paul has his Team 10 house. There is another sort of ex-Viner house that a lot of them live at. It’s like a frat house or like watching “Big Brother” or something where your … or “Real World,” I guess, where you’re kind of watching this reality show play out.

KS: They have big fans. I mean, that’s the thing they have. I said something negative about one of them, I can’t remember which one. I said something negative on Twitter, and it was literally like being … It was like a pack of 12-year-old girls who went crazy on me.

LG: You cannot …

KS: Crazy. “I cannot believe you don’t understand his soul.” I was like, “Oh I understand it, sweetheart. I got it down pretty pat. I don’t think you do, and good luck with that in the coming years.” But it was really … It was fascinating to watch the fan base. They love their YouTube influencers, let’s just say.

Yeah, it’s funny because people compare it a lot to like Backstreet Boys or N Sync and stuff, which I guess is a little bit older, or any sort of cult around certain entertainers. I’d say the difference, though, between a YouTuber is they have a much deeper relationship with their audience. Their audience really feels more of a friendship with them and relates to them, I think on a more personal level, because they’re usually experiencing all their personal stuff in their life, and then also they follow them on every platform. They’re watching every Instagram Story that they put out. So they’re just consuming a higher rate of content than … They might love One Direction too, but One Direction only puts out like an album a year.

KS: Yeah, that’s a really good point.

LG: I’m going to age myself, but it sounds to me like the “Real world,” like you know …

KS: Yeah.

LG: Some of the drama was real. Some of it’s manufactured. A lot of it was heightened …

KS: Even the Kardashians.

LG: … just because they would shove all these people in a house together in LA or somewhere else, and be like, “Go. Live life together,” and inevitably there would be all this drama.

KS: I guess.

LG: It was always on camera. Then there was the confessional room, which is kind of like the point the camera in the face now with your phone and be like … I mean,”Let me tell you what Puck said today that really pissed me off.”

KS: Gosh. The minutes of my life. I did not watch. Not watching that. In any case … But they veer into idiocy and real problematic, appalling content too, which YouTube has … They have had a lot of problems of late … but they’ve always had problems with content moderation. I can’t think, like, that story seems to go on and on.

So what do you think YouTube needs to do to fix this? Because I was at YouTube recently talking in front of the company, and they said … When someone stood up, and in a moment of honesty, said, “It used to be squirrel videos, and now we have a college ethics debate every day over something on the service.” They say they’re going to fix it by AI.

And Susan Wojcicki announced hiring 10,000 new content moderators. I think just recently I told her that they needed a million or two million to do that because of the amount of content going on there. So, what do they need to do to fix the problems? Because they say they have community guidelines, but they’re regulated unevenly.

Yeah. Their community guidelines are just so arbitrarily regulated and it’s so all over the place. And I agree that they would probably need like a million more people if they wanted to truly try to moderate a lot of the platform. I mean, one thing that we’ve seen recently is all of these major stars have very public kind of blowups in the media, like, doing really problematic stuff. I’m by no means a content moderation expert, but I do think that they should have some kind of system where things are being reviewed on a regular basis, if you reach a certain threshold on your channel.

KS: A number.

I would say it’s a subscriber number where, yes, they should be moderating tons of stuff, but if somebody has an audience of millions, like 16 million, they should keep a closer eye. They theoretically do, but they really don’t moderate. They’ve given a lot of — even the biggest creators — a lot of free rein, and it only becomes a problem when things are getting negative attention in the media.

KS: Right.

So, I don’t know. I think that they need some sort of tiered system where if people are generating this huge audience just because of the fact that their videos are going to be automatically viewed by such a large amount of people that they should have a little bit more scrutiny around that.

KS: They also have an issue, though. They don’t want editorial control. They’re very loath to admit that, even though they use the word media guidelines, but that’s really editorial control. But they don’t like to use editorial, the word, they hate it. They say, “Oh we’re not editors. We’re a platform,” you know, that whole speech. All of them give … not just YouTube.

LG: Do you see the similar … the Facebook approach.

KS: Facebook, same thing, yeah.

LG: But the more you say that it’s a platform, then you’re not acknowledging you’re a media company.

KS: Right. Well, whatever. It’s a stupid game we play with them. They’re a media company. They’re all media companies.

LG: But if you wanted to show the parallel … and this is not like in some huge defense of YouTube, but I’m really just curious. You want to draw the parallel right now between TV as we knew it for years and YouTube now, which is TV for a lot of young people growing up. That’s like all they watch. Cable was also not the media company either. It was distribution.

KS: It was regulated.

LG: Right, it was regulated, so …

KS: And it was limited.

LG: … in this case assuming like …

KS: It was limited in 24 hours a day on each channel. So, I mean, if there were 500 channels, that’s one thing. This is billions, right? I mean, Taylor, isn’t it some …

Yeah, yeah. I mean, it would be almost impossible to regulate it all or adhere … like put standards around it. I do think, though, if you are in the Google Preferred ad network or if you do have some threshold of millions of followers, that you should be held to tighter scrutiny.

KS: I agree.

Yeah, they say … You’re right. It’s any company. But right now, it’s just this really … They’ve alienated so many creators, because they’re just randomly punishing people if they get in trouble with the press, but they’re not really being proactive about changing the culture or changing what content performs … which I guess, what you’re saying, it’s true. I know that they don’t want to exert that much control, but I think they just need to take a little bit more of a proactive approach with some of the biggest people in their platform.

KS: And what about AI?

I mean, I’m so skeptical of …

KS: That’s something Susan Wojcicki points to.

I know. I heard her say that to you. I honestly … so much of this stuff, it’s not in my … and I don’t know. I guess maybe AI is smarter than I think. But take the YouTuber that just got in trouble last week for throwing water in people’s faces and a sort of fake acid attacks in London. That in itself, throwing water in someone’s face, is not necessarily a problematic prank, but the fact that London has been sort of hit with this spate of actual acid attacks and sort of the nature in which he was doing it is what caused such outrage around it and caused YouTube to remove the video in the end. I don’t know that an AI would have sort of that historical context and be able to sort of anticipate those types of nuances. I’m really skeptical. I think it takes a human being.

KS: Well, they don’t want to pay money. That’s what it is. They have to then pay the money like the rest of us do, the rest of the media. It has to have big costs in order to monitor things and they’ve been … all of these, not just YouTube, have been getting away with very few people and letting anything goes and then wondering why people behave badly. They have a presumption of that people don’t behave badly when, in fact, every single moment of human history says that you got some tool, you’re going to fuck with people.

LG: Right, and these social sites are an amplification of that in a lot of ways, but it’s a slippery slope from moderating to curating to editing to, “Oops. We’re a media company.”

KS: What’s the slope? What’s the slope? They take the money. They take the advertising money.

LG: In a sense that the more that you do as a so-called platform, the more you start to encroach on territory of, like I said, it starts with a little bit of moderation, and all of a sudden you’re into curation, and all of a sudden you’re into editing, and then you’re making decisions, and all of a sudden you’re a media company.

KS: Yeah, they are. That’s right. That’s so right there.

They are. I mean, they already [do] sort of like curate and promote certain content like they have.

LG: Right.

There are YouTube Red shows, too, where they directly work with some of these biggest creators on developing content. They already are a media company. I think that they just need to recognize it and be more proactive about …

KS: And communicate their values. I mean, that’s the thing. These are their values. “We do not promote this. This goes off. This comes off.” And I don’t think they’re going to be perfect about … like the haphazard nature, there’s so much content here. They’re going to make mistakes, but at least have a commitment to trying to keep those standards properly vetted among the people that are on that service.

LG: Taylor, I’m curious where you see YouTube fitting into society at large in terms of just the way people consume content right now. I mean, it has one and a half billion people on the site. YouTube says people are watching something like a billion hours of video a day, and as I mentioned earlier, there are some people who are growing up now where YouTube is the only thing that they watch. They don’t necessarily watch TV news. That was something that their grandparents did, or they’re watching other streaming services, some of its competitors.

I mean, do you see this as this is the way that people growing up now are going to watch videos going forward, even if YouTube continues to play fast and loose with its content moderation? And if so, what does that actually mean for video consumption?

Yeah, I mean, I certainly do. It’s hard to predict too far in the future, but certainly in the next several years, I don’t see YouTube going away. If anything, it just becomes more and more sort of prevalent. I interview a lot of kids and speak to a lot of fans of these creators and they’re hyper-dedicated to sort of following the content. That’s where they go. That’s where they go to watch stuff. It’s a better experience to watch stuff on YouTube, I think, than traditional TV — I mean, just in the sense that you can watch it whenever you want. You can subscribe to certain channels, and they’re pumping stuff 24/7 out that I guess is interesting, whereas it’s not like waiting for a TV show.

So I think … And also, obviously, the fact that it’s mobile, and it’s sort of short-form, easy to digest, I think … Yeah, I don’t see it going away at all. I think the type of content on the platform will evolve. I think eventually YouTube will do something to shift the format again. When they made a shift, I think it was in 2012, initially that was going — instead of cutting, sort of, optimizing for views, optimizing for watch time, and you saw these longer videos emerge. I think as they grow the platform, I think they’ll probably encourage different types of, I guess, content, like formats, and so maybe different types of videos will emerge, different types of creators.

But I think that YouTube as a service is still compelling, especially for young people. Yeah, it’s just like I was saying before, I think that the people that they watch there, they just have a deeper relationship with than other people. I mean, even people that they watch on Disney, they’ll still follow on YouTube.

KS: Yep, absolutely.

LG: Yeah, like there will be an era where people growing up will be like, “I don’t remember a time when there wasn’t personalized media.”

KS: Yeah, that’s true, although, again, anecdotally, my kids watch a lot of “Rick and Morty” and “Family Guy.” They watch it one after the other on demand.

LG: Oh interesting. They’re bingeing.

KS: They have certain things they find, and that’s their primary viewing, I’ll say. They watch shows or else do video games, that kind of thing. But they definitely use a lot … I think my kids use a lot of the YouTube videos that help you play video games, those kind of things.

I was going to say so many kids watch Minecraft videos and how-to videos.

KS: That’s my son, he was just doing that.

Yes.

KS: My one son loves historical videos.

LG: I can’t wait until some of these YouTube influencers that are like super popular now just get older. We all get old, get older.

KS: Oh they’re going to be sad at 1600 Vines.

LG: But they’re still going at it. It’s going to be amazing. They’re going to be like, “Here is an episode about how I can’t drink as much as I used to anymore.” And then the next day it’s going to be like, “Found another suspicious mole.”

KS: What’s that movie with Jim Carrey, the one where they followed him his whole life.

LG: Oh “The Truman Show.”

Oh yeah, Truman Show.

KS: That was a good movie.

I think a lot of them do age out. They age out of their audiences far before they ever stop vlogging.

KS: They do.

Even if you think of a few superstars from a few years ago … like Nash Grier and Cameron Dallas were both like the hottest, most popular people, and now they’re sort of passé and old. I think, right now, Jake and Logan Paul are the hottest, most popular people, and in two years they’re going to be subsumed by something else.

KS: Or before that. I think before that. There was a bunch of kids over at the house and I mentioned Logan Paul and they were like, “Douche.” They just were like … like it was over. They had been watching them six months before, but then it was like, they go through them fast. It’s like fast food or something.

It’s funny. Yeah, I was actually interviewing another … There’s this YouTuber called RiceGum that’s sort of like the foil to Jake and Logan, and he’s now getting basically popular because people think that they’re lame. Anytime they reach a certain scale …

KS: There’s a lame moment.

It’s lame.

LG: All right. You also wrote a great story, and before we get to the questions from readers and listeners, what it’s like for the parents of social media stars, which I think would be a nightmare of a parental situation. So, talk about the story really briefly.

Yeah, sure. So, I was really interested in how the families are affected when kids become really popular on social media, and it affects families I think a lot of different ways. A lot of parents, you know, fame will sort of come really quickly. Something that they have will go viral, or kids will just sort of develop this audience within six months or a year. I just talked to a lot of parents about how they navigate that. Some parents sort of go all-in. They move to L.A.

KS: Those parents.

They assume their kid’s going to … I know. And then other parents very much keep their kids out of that. Rob Bridges, who’s Jonas Bridges’ father, who’s a young livestreamer, he’s been so adamant about keeping his son in school and making sure that he has a contingency plan. I think it depends on the parent themselves. Like … not to keep bringing them up, but Jake and Logan Paul’s, their parents …

KS: They have parents?

VlogDad, Greg Paul, and Pam Paul or Pam Stepnick who has her Pamily. They both have tried to become social media influencers themselves.

LG: Wow.

KS: It’s like the Kardashians’s worse.

Basically.

LG: Wow. When I was growing up, I was obsessed with basketball growing up. I can’t imagine growing up, like, my mom suddenly being like, “I’m going to pick up a basketball career too.”

I would be mortified if my mom …

LG: I’m like, “Mom, we have to talk.”

KS: She got a license to be a parent. I’m sorry. I just feel like you should pass a series of tests and you’d have a whole lot less kids.

Yeah. I think it’s hard. I think that it’s just hard to keep your kids grounded in general. If they suddenly have a lot of money or autonomy or feel emboldened by their social following, it just can sort of be a challenge parenting them, but there’s a lot of responsible parents who … Kids who are YouTubers who do have responsible parents, most of them don’t live in L.A.

LG: Kara, would you let Louie and Alex, if they expressed interest in being YouTube influencers, would you encourage that?

KS: I would … I guess probably not.

LG: I could picture what they would do. I think Louie would do a cooking show, and he’d be really good.

KS: He would be.

LG: And Alex would be … I don’t know … building bombs in the backyard.

KS: Right, exactly. Or Legos. Bombs out of Legos. I don’t know. I don’t think they … I don’t know. Probably I wouldn’t. I wouldn’t like that. I would not encourage it. How’s that? I wouldn’t discourage it, but I wouldn’t encourage … I wouldn’t go, “Yay, good job.”

LG: Oh interesting. Why is that?

KS: Because it’s just kind of gross. You know what I mean? They’re just kind of … like they have to have more substantive lives. I’ve watched a lot of these videos. They’re idiotic. They’re absolutely … At any age you are, they’re idiotic.

LG: But some of them are fun.

KS: Well …

LG: What if Alex is building robots, which is really more …

KS: Yeah, I like the instructional ones. The instructional ones are interesting. Taylor, you were talking about the Minecraft ones. They’re quite good.

Yes.

KS: They’re quite good.

I think if your kid had a … There are some kids that have science channels and things.

KS: Yeah, some of them are good. Those are great.

Yeah, that’s very different than, like, you’re jumping off the roof of your house for the vlog or whatever.

KS: Yeah, and I don’t like them watching them, I’ll be honest with you. I don’t like them when they watch the stupid ones. I don’t mind … I’ll let them watch historical ones or even Minecraft ones for hours if they want to, if that’s what they want to do instead of in their TV watching time, but not the … I just don’t like …

LG: That’s a whole category on YouTube.

KS: It is. “I just made slanty eyes at a Chinese person. Ha ha, funny.” Like, what? There was one I saw. I literally was looking down my … I was like, “Turn that off now.” It was so … They’re racist. They’re rude. I get … They go, “It’s a joke, Mom.” I’m like, “It’s not a funny joke.” I’m like the angry old woman shaking her fist at the internet now.

There’s a lot of YouTubers, though, that will critique the popular YouTubers that have pretty popular followings too, though. I don’t know. I feel like there are some kids that are skeptical that have found their skeptical influencers, that are like, “Those kids suck.”

KS: Yeah. There’s that too.

LG: Right, yeah. They’re providing reasonable thought and filters.

Yeah, they’re not …

KS: But many of them are onto them, for sure.

We’re here with Taylor Lorenz from The Daily Beast talking about YouTube. And now, we’re going to take some questions from our readers and listeners. Lauren, would you like to read the first question?

LG: Yes, I would. This is from Grzegorz Ignatowicz. I really hope I said that correctly.

KS: That’s a name.

LG: “How many years ago should I have started uploading videos?” Well, I guess if you missed the boat on being a YouTube influencer, I don’t know what to tell you.

KS: What do you think, Taylor?

LG: Taylor, what do you think?

Actually, it’s funny. I don’t think you had to start as long ago as you think. I mean, I just interviewed this one girl, Elle Mills, who started less than a year ago and she’s already reached a million followers. It’s pretty easy to just scale quickly, especially if you get big on Instagram or something first, you can blow up really quickly on YouTube. So it’s never really too late to do.

KS: What does she do?

Actually, she’s a female pranker.

KS: Oh God.

I know. But actually, she does pretty creative ones, and she’s sort of trying to change this male-dominated prank culture.

KS: It’s like “Candid Camera.” I’m just dating myself.

Yeah.

KS: It’s the same thing. Embarrassing people for fun.

Yeah. I would just say, don’t think that to become a popular vlogger you would have had to start like nine years ago, because you’d be passé by now.

KS: There’s also no age, correct? Presumably?

Yeah, you can get …

KS: You’re just not writing about the oldsters who are doing great things.

I try, but they’re usually not as popular as like the 15-year-old, you know …

KS: I was at YouTube, and they were like, “Kara, you need to start your channel.” I’m like, “Uh-uh. No.” They want me every day to go, “Hi.”

“Hey guys.”

LG: I would watch the channel.

KS: Would you? Today?

LG: Yeah.

KS: Today in Kara Swisher Land.

I just want to see you carrying around the vlog cam. Every vlog cam.

KS: Hey, hey everybody, hey, I’m going to prank Lauren today, there’s a whoopie cushion on her seat, it will be crazy.

LG: You should bring back the Flip camera.

KS: I did. I was an original vlogger.

LG: You used to stick that thing in people’s faces and get answers.

KS: I did. That was genius.

KS: Yes, that was early genius by Kara Swisher.

Anyway, Jullian Sibi: “Are there any other ways for video creators to make money besides YouTube and Patreon?” Yes, that’s a good question.

Big time. Yes. Most of … I mean …

KS: Explain Patreon first.

Sure. So Patreon is a little way that you can subscribe to monthly payments to your favorite creators or really anyone. Basically, you would donate maybe $ 5 a month or something to support someone’s art or creation. It’s popular with a lot of podcasters, too, and other creative artists. I don’t think Patreon is honestly a way that most YouTubers support themselves. The biggest revenue stream for most top creators outside of ad revenue is merch.

KS: Merch?

Yeah, merch is the way that you make your millions. So basically, you sell merch. You sell … 40 of the biggest YouTubers just in the past year at launch, you sort of like make custom merch lines. The whole thing is to constantly be launching new merch. So it’s like flash sales 24/7 based off, say, like a YouTuber is in a relationship with another YouTuber, they’ll sell ship merch, with their ship name, relationship name on it.

KS: Oh no. Like what?

Yeah, so, if it’s like Kara and Lauren, your ship name would be like #Kauren, and then you’d sell sweatshirts with that on it immediately.

LG: Oh.

KS: Oh.

LG: Kauren. I like that.

KS: Kauren?

LG: Yeah, because it uses primarily my name.

KS: All right.

LG: There are people named Lara.

KS: It’s true. Did you see the Lara Croft movie is coming? Let me just say. I’m so excited.

LG: No.

KS: The new one. It’s Alicia Vikander or whatever her name is. I’m very excited. Anyway, I was just telling Lauren, Taylor, that I just bought my “Black Panther” tickets.

LG: Well, merch, but we need merch. We need #TooEmbarrassed. We need #TooEmbarrassed merch.

KS: Nobody wants TooEmbarrassed merch.

LG: Why not?

KS: We’ll have to think about it.

LG: You know what? If you guys want TooEmbarrassed merch, leave it in the comments please or email us embarrassed@recode.net.

KS: We have to do something really good. I have hats. When I was thinking of running for mayor, they say, “Make San Francisco gay again.” What do you think about that?

LG: That’s a pretty good one.

KS: It’s a red hat. I wore one the other day. Someone’s like, “Are you a Trump supporter?” I’m like, “Read it, you dumbass.” I didn’t get that person’s vote. Anyway, I used to have bumper stickers for my aunt, who is a born-again Christian, so I just made it for her and then I made more of them, which is, “When the rapture comes, can I have your stuff?” That was a good one.

These are good. You’ve already come up with like five viral merch ideas here.

KS: I know, I’m a mercher. I’m a mercher. Anyway, do the next one.

LG: All right. The next question’s from …

KS: So how much money do they make on YouTube? Just answer that very briefly.

LG: Yeah, while we’re talking about merch and our merch strategy.

Millions. I mean, people asked me that. Jake Paul made $ 65 million last year total.

LG: Oh God.

From merch sale. A lot of top YouTubers make like between five and seven million dollars a month.

KS: 65 million? That asshole? Oh my God.

LG: Five million dollars a month?

Well, yeah.

LG: But that’s like the top echelon of influencers.

That’s like the top of the top, but I think even a mid-level person, I think the … Somebody was telling me recently, for every million views, is like, $ 1,200 or $ 1,500 or something. Some of these people are getting 20 million views on a video or whatever.

KS: Oh wow. Let’s get to it. Let’s reinvigorate.

LG: Yeah, Kara. We can fake drama.

KS: We can fake drama.

LG: We can have real drama.

KS: Yeah. All right. Next question, Lauren.

LG: Next question is from Joseph Bullivant. “Hi guys. Just wondering, how do relationships between YouTubers and their agents differ from standard PR practices? How much does preserving a ‘personal brand’ play a role? Do YouTubers themselves usually approach an agent? Or is it the other way around?”

Well there are a million thirsty agents who would love to get their hands on a lot of popular YouTubers. So a lot of times, I mean, as soon as kids will hit 10,000 subscribers, 15,000 subscribers, on YouTube, you’ll have talent scouts reaching out to them, managers reaching out to them. I actually wrote about that in the Beast today. Spoke to the parents about it. It can be really difficult for kids to kind of assess who is legit and who’s not. But the biggest YouTubers all … I mean, absolutely, they’re repped by William Morris’ Creative Artists Agency, like top … There’s digital talent managers and agents at all of those places. So it’s sort of similar to Hollywood where you’ll have a traditional manager, agent.

Unlike traditional Hollywood, they don’t get … Your manager doesn’t always get a say over the type of content that you post on a channel. They don’t review, I guess, all of the editorial output that you put in a day, so it can be more challenging to manage digital creators. But they’re still sort of pumped into the same Hollywood system.

There are a lot more, also — I would say, especially in the past years — companies that have popped up that are supposed to be specifically tailored to working with, like, digital creators, because they feel like a lot of mid-level creators’ needs aren’t being met, and that basically those people will work with the creators, get the business opportunities, brand deals, things like that. Strategize with them on growing their channel. It’s a lot of actually ex-YouTube stars that are starting these types of agencies.

LG: Oh that’s interesting.

KS: They had a bunch where they want to tour … There’s a whole of bunch of things.

LG: Oh yeah, yeah, yeah. From an agent perspective, that’s really interesting, because let’s say you rep a movie star and then you know exactly what they’re shooting at what time, and then a year later, you’re taking them through the junket, and you’re like you’re going to sit there and talk to these outlets, and you’re going to walk this carpet and that’s … We’re going to do all this, right?

KS: That’s a manager …

LG: And a YouTube creator’s like, “I’m going to vlog with whoever the hell I want every day.”

KS: It’d be hard.

There’s still a cadence to the year, like a lot of it’s built around VidCon and it’s like a lot of them will sort of build toward VidCon or build around specific opportunities that they have. Like, their YouTube Red shows will all launch around the same time. So there’s still sort of a broader structure to it, but yeah, it’s more …

KS: Red is interesting. Still no hit from them, but we’ll see. All right. A traditional hit the way like “Transparent” or some others.

Yeah. It’s not very good.

KS: They have some good ones. I have a friend working on one that sounds pretty good, actually. A decent writer who’s working on what sounds like a good show, but we’ll see. Liz Nasty Weeks, one of our long-time fans: “If/then talked about YouTube stars vis-a-vis vlogging, and my takeaway was this is for tweens and just a way to sell merch. Am I wrong? Is being a YouTube star just about vlogging or is there more to it? I feel plugged in on most tech platforms but this mystifies me.

Is there more to YouTube than selling merch? Is that the question?

KS: Merch.

LG: Vlogging and selling stuff.

Honestly, merch and vlogging are so intertwined at this point.

KS: All right. You got it, Liz. No mystery. Mystery solved. Mystery solved. And also, stupid pranks.

LG: But it does seem like some of the vloggers are very good at speaking to an audience in a way that feels like they’re really talking to people.

KS: And confessional, too. There’s a lot of confessionals.

LG: And being authentic that you don’t necessarily get in more slickly produced type of media.

But you get that content on Instagram, too. You get … A lot of the Instagram influencers talk in the same way.

LG: That’s a good point.

It’s like the same kind of thing. I think that format and that type of voice, your audience, just resonates with people.

KS: Yes, absolutely. Oh my God. It’s Mossberg.

LG: Mossberg had two tweets.

KS: Oh my God.

LG: He actually followed up with one too. Where did that one go?

KS: Oh my God. Mossberg has too much free time. Maybe Mossberg should have a channel.

Maybe he needs to … He can be like the oldest YouTube influencer.

KS: He’d be good. I can see Mossberg. “Hello. I’m in a cigar store today.”

LG: Mossberg used to just talk to people on his Mac …

KS: He did.

LG: … about his review for 10 minutes, and those for a very long time were the most popular videos on wsj.com.

KS: They were popular. Yes, they were.

LG: This is a true story.

KS: All right. Questions from the original vlogger.

LG: He was a vlogger.

KS: Mossberg.

LG: Mossberg says, “Are YouTube stars, like some Twitter influencers, making use of the purchase of fake followers? And even if it’s hard to buy fake followers on YouTube, are YouTube influencers buying them on Twitter?” Which I would assume yes, the latter, but yeah, can you buy fake followers on YouTube? Is that a thing?

You can get bots and stuff to watch your videos and get views up. It’s funny, the Twitter thing, they’re so shameless about scaling their audience, and yes, tons of them do just buy fake followers. At least on Twitter and Instagram is like a big one. But one thing that they do that’s really scammy too is they’d subscribe to the Taye Diggs philosophy of following everyone back, or they’ll follow, they’ll be like, “For 10 minutes, tweet me and I’ll follow all the fans that tweet my new video out in the next 10 minutes,” or whatever. So they do a lot of scammy stuff like that. That’s not buying followers, but it’s like …

KS: Scammy.

It’s just kind of scammy. I don’t think the biggest ones would ever really significantly buy views. It’d be so obvious. But definitely for branded content and stuff, it’s usually given like a little bit of a boost, I think, by promotion.

KS: Promotion.

There’s a big thing to be first in YouTube comments.

LG: Yeah, it happens. It happens in every single one of my videos. When you scroll down to the bottom, there’s always somebody …

People are like …

LG: “No, I was first.” “No, I was first!” “I’m first.”

Yeah, it’s an honor.

LG: That’s the thing, yeah.

KS: Minutes of our life just tick on by doing things like that.

Anyway, next one. “Looking at the Logan Paul incident and the brothers’ whole behavior and influence on young people, is there anything YouTube can do to prevent bad role models from having a huge influence on future generations? How do they stop the next Logan Paul before it’s too late?” Oh my God. That’s a question from the beginning of time. Elvis Presley and the hips … It’s always that, right?

Yeah, I don’t think … I mean, like we said before, I think there’s things they can do to moderate truly problematic content, but kids are never going to idolize like some boring straight-A person that isn’t …

KS: Never. Hello. Come on. Let’s bar teenagerness. Let’s bar teenagers, right?

LG: No one wants to watch YouTube videos of people doing homework.

KS: “Hi. We’re doing …”

LG: “I’m looking for the answers.”

KS: “We’re conjugating the following verbs.”

LG: Latin. Es orem …

Oh my God. You’re kind of getting Latin there.

LG: I’ve taken Latin, for two years in high school.

KS: You obviously didn’t go to the prom. You took Latin?

All right. Last question, which is a very good one from someone I know very well. Go ahead.

LG: Okay, I’ll read it. All right. This is from Erica Joy. Erica Joy did say, “Fair warning.” Taylor, you blocked her.

KS: Blocked her?

Wait, what? Wait. Are you kidding me?

KS: You blocked Erica Joy? I can’t …

LG: That’s what she said.

Guys, first of all, I have a very non-block policy and I love Erica Joy. She’s like on my list of people … She’s like on my tech list.

KS: I know. “You blocked me for asking this question.” I think she was in the middle of a troll storm and thought I was yet another troll.

LG: She says, “I think that you, Taylor, were in the middle of a troll storm,” yes, exactly. She thinks that you thought she was accidentally a troll.

I was in the middle of … If you deal with YouTubers, you get so many things, and I have mass blocked, but …

KS: You need to de-block her.

Wait, Erica, I follow you. She’s still on my list. You get some messy things and I have like mass blocks but I need to do blogger Erica I follow you’re on my … She’s still on my list in TweetDeck of people that I follow.

LG: Okay. Well she’s not …

KS: Erica, you are not blocked. This is fake news.

LG: You know what? We’re all about making peace on Too Embarrassed to Ask, and I’m glad to bring you two together. I wish we had Erica call in right now, but she said she’s really interested in the answer to this original question that she had asked. I think I know what this is related to. “So news outlets have demonstrated that they can and will write stories about user-generated content,” she says.

KS: I’m texting her right now.

LG: “All the while monetizing that content. What value does a YouTuber with an audience get out of doing interviews with news outlets if the news outlets will use their content anyway?” So I think we have to back up the bus a little bit here, because this was related to a tweet that you sent out a while ago about how you … You explain it.

I was supposed to write about this and then I still haven’t written about this because I’ve been so busy. And honestly, people just ask me so much and I need to just like write a thing on it. But yeah, so do you want me to explain it?

LG: Yes, that’d be great.

I sent out a tweet, I don’t know, like a month ago, and I said, “I’m always amazed at how many YouTubers ask for money when I reach out to them for a comment or for interviews,” and that was that. I was just like, it’s amazing because it happens a lot. It happens a lot and frequently. I’ll get into sort of the details of why I think that is in a minute, but so many people went insane. It got retweeted by a lot of troll type of people, a lot of right-wing anti-media people like Mike Cernovich and sort of his crew, and they were like, “Well YouTubers don’t need you, and you’re the mainstream media, so they don’t care, and blah, blah, blah, blah, blah.”

Here’s the thing. I’ve never lost an interview or not gotten an interview with a YouTuber because we’ve not paid them. Honestly, it usually comes from a place of ignorance. It’s always with smaller YouTubers. It’s never with YouTubers that have a legitimate agent, but it’s usually like a smaller YouTuber that you’re reaching out to directly, they don’t understand how media works, and they’re usually like, in their mind, it’s like, “Content. I’m providing you content. I should get paid.” You just explain to them the value, why you wouldn’t be paid for some type of thing, and they’ll usually almost always speak to you unless you’re asking for comment on something that they truly don’t want to comment on. I felt like that got lost because people were like, “Ha ha, YouTubers don’t talk,” and I’m like, “No, they all still want …” They’re so hungry for attention. They’re so hungry for attention, they’ll almost always talk to you.

The only time they won’t usually give you a quote is if they can like monetize sort of like their response. So sometimes you’ll reach out to a YouTuber about something that happened on YouTube or something they did, and they actually do want to make a statement about it, but they know that if they can put up like a five-minute vlog and monetize that on their channel where they share their response, that’s much better than giving a quote to The Daily Beast.

KS: Yeah, that’s like the Donald Trump plan, right?

Exactly, yeah. So, in that sense, they don’t need media. But I would say — and which I do say and which most YouTubers definitely understand is — there’s a huge value to doing mainstream press, especially around certain sort of product launches or things or whatever. Most YouTubers are desperate for attention, so they’ll usually … I mean, they want to grow their audience, and they want to reach new people, and they usually know that … yeah.

KS: Yeah, exactly. I love when they do that. I love when anyone does that. “I don’t have to talk to you.” I’m like, “Fine. Fuck you.”

LG: But what does that say about, I guess, the lack of … Maybe it’s a lack of understanding around the delineation between traditional media and YouTube, right? Like this idea …

KS: They don’t care.

LG: But let’s say you are a young YouTuber and you grew up with YouTube and you make YouTube videos, you make content and you get paid for it, and that’s the mode you’re in. Then, if you don’t actually understand that at some point there’s a difference between what you’re doing and the free press that is doing journalism and writing stories, then you …

KS: I think they get it. I think they get it.

Yeah, I think a lot of them get it. I mean, honestly, the ones that don’t are like in another world. They get it. They’re still going to ask like, “I don’t follow them for asking.” Whatever. They can ask for money. They want money for everything or whatever.

KS: They’ll talk to Taylor.

I mean, they won’t talk if like … For instance, I have a lot of friends that cover gaming, and I know that there are certain reporters at Polygon that certain YouTubers really don’t like because they feel like they weren’t covered fairly or whatever. Whatever. But if you’re writing a thing … I mean, it’s sort of like the same thing with the … I wrote about Scott Rogowski at one point where I’m just looking to talk to this guy about hosting HQ, super benign, like whatever, and the founder ended up freaking out over it. Most of the time a hit piece isn’t being planned, especially if it’s, like, most of the time …

KS: That was ridiculous. He’s an idiot. The founder’s an idiot. Hello, HQ founder, you’re an idiot. I saw that whole thing. FFS, as I like to say.

Anyway, YouTubers, they’re generally … yeah, it’s whatever. It is what it is.

KS: They love attention. I’m guessing they love attention.

They usually want attention.

LG: To answer Erica’s question, though, you still see that they could get value out of doing interviews with news outlets, even if we’re still sort of aggregating some of their content in some way anyway.

Oh an enormous … I mean, the biggest thing, the biggest way that they get value is that, first of all, I mean, it’s getting them in front of a mainstream audience. These are people that are desperate for mainstream approval. A lot of them don’t even like to be called YouTubers even though they make their living on YouTube, or they want to be called an aspiring actor or whatever. So they know that studio executives read the mainstream press. They know that brand managers read the mainstream press. They’re still evaluating themselves in that.

LG: Nobody puts Taylor Lorenz in the corner.

I was so mad about that tweet, though, because of all these trolls who were responding to me, and they were like, “Everyone who’s quoted in the news story should get paid because they’re helping make content,” and I was just like … Anyway, I was on a block. I did go on a block. Erica, I’m sorry that you got caught up in that.

KS: I just texted her and said you are going to make amends.

LG: But wait, I don’t mean to hammer this home again. So you’re saying that people who responded in that way, like they’re making content, therefore they should get paid. Do you think they do understand the difference between press and making other content? Because it sounds like maybe …

I think it’s confusing. I mean, look, it’s confusing. I remember when I was at People magazine, often magazines — especially tabloid magazines — will buy exclusive photos from these YouTubers, or there is payment involved for certain appearances and certain things. So I think for some of them, honestly, the line can be confusing, and when someone reaches out to them, they aren’t always 100 percent sure. But a lot of them I think just ask for money because they want money.

KS: They do, they do. We get that sometimes every now and then at Code or at one of our events.

Yeah, and then you’re just like, “No.”

KS: Someone’s like, “How much are you going to pay me?” I’m like, “How about nothing? Does nothing work for you? Because it works for me.”

Like, do you know how much I make? You think we have extra money.

KS: That’s not even what I say. I’m like, “No.”

$ 5 million? I’m like, “Where do you think news organizations get money that they can pay people for every single quote?”

KS: That’s a really nice way of saying it. Here, let me give you another line.

LG: Merch. That’s where we get it all.

Yeah, it’s merch.

KS: This is what you say, Taylor, “Fuck you.” You say, “Fuck you.” Try that.

I do think it’s an interesting thing. There are a lot of YouTubers. I’ve written a lot about Keemstar who kind of runs like the TMZ of YouTube. It’s called Drama Alert. He always gets the exclusive interviews with everyone because he is a YouTuber. So people will like … He’s kind of a bully, but people will talk to him because he’s of that world. And other … like Philip DeFranco’s another one, is sort of like a YouTube commentator. People will …

KS: Oh God, really? There’s commentators on the comment … Oh my God.

He’s like pivoting himself and he’s trying to be …

KS: Oh, Taylor. Taylor, I’m so glad someone’s going down this sad and scary road. We appreciate it. What’s your favorite YouTube thing? We’re going to finish there, last question.

The thing is, what I honestly subscribe to is how-to videos and tutorials from brands. It’s very lame. That’s my favorite.

KS: Like what?

I was really into the slime thing for a while.

KS: What?

You know how there’s the slime trends on YouTube and Instagram? People making slime.

LG: It’s a thing. It’s really cool. My niece made slime after watching it.

KS: Is it like the Tide Pods?

LG: Oh my God.

KS: My son had a million of those.

LG: I don’t think people are eating the slime. I think they’re just making it, right? Taylor?

No, no one eats the slime. It’s like a ASMR-type thing. It’s like you watch people make different slime. It’s just like a relaxing thing.

KS: I used to like watching people cut up vegetables. Yeah, okay. All right. I get it. I get it. I’m getting it. I’m getting it.

I still like Joey Graceffa. He’s like sort of an older-school YouTuber, but he was of the Tyler Oakley [era], but like, he just lives this beautiful life in LA with his boyfriend and dogs. I watch his vlogs and it’s so relaxing.

KS: Oh all right. Okay, there you go. There you go. I like that.

What do you watch?

KS: I watch anything. I watch “The Alienist.” I watch that. I watch regular TV. I’m an old lady. I watched “The Alienist.” It was quite good.

LG: You watched “How to Get Away With Murder.”

KS: On YouTube, on videos, I watch the news clips and stuff, and I watch … I’m a clip person when I’m on YouTube. I’m watching news clips or “SNL” videos or, you know, what’s his name? The one on HBO, Stephen Colbert and the other. All of them. John, whatever his name is. Anyway, I watch those, but nothing else much really. I lose interest really quickly.

Anyway, Taylor, we are glad you’re doing this. This is God’s work, of a sort, and we appreciate it very much, and you’re doing great work. Taylor is a writer for The Daily Beast. She’s doing really some great articles on this topic and a lot of other social media stuff. This has been another great episode of Too Embarrassed to Ask. Taylor, thank you for joining us.

Thank you so much for having me.

LG: Thank you, Taylor. It’s been great. And Taylor, tell people where they can find you online.

You can follow me on Twitter. I’m @TaylorLorenz. T-A-Y-L-O-R. L-O-R-E-N-Z.

KS: I just blocked you. Oops.

No.

LG: Kara’s a troll. Don’t worry about it.


Recode – All

Fast talker: Alexa may offer speedier answers with Amazon-made AI chips

Amazon wants to cut the lag time between your asking Alexa a question and the virtual assistant giving you an answer. According to a report by The Information, the online retailer is developing its own artificial intelligence chips to be used in Echo devices and other hardware. If successfully created and deployed, these AI chips would allow more voice-based requests to be processed on-device rather than going to the cloud.

Currently, Alexa needs to contact the cloud to interpret commands. That’s why there’s a short delay after you ask the virtual assistant a question—it needs to analyze the command and gather an answer with help from the cloud. A dedicated AI chip in a device like an Echo would allow Alexa to process certain requests more quickly, decreasing the delay that lies in between your question and Alexa’s answer. While complex inquiries will likely still be handled with help from the cloud, more simple commands could be processed all on the device itself.

Amazon reportedly has 450 people with chip knowledge on staff now, many of which came via recent acquisitions. The company bought the Israeli chipmaker Annapurna Labs in 2015 for $ 350 million and the security camera company Blink for a reported $ 90 million at the end of 2017. It’s believed that Amazon bought Blink specifically for its low-energy chip expertise; the company’s smart home security cameras use these chips to extend the battery life of its camera modules to at least two years.

Read 2 remaining paragraphs | Comments

apple – Ars Technica

Got questions for the former CEO of Apple? John Sculley is joining us on TNW Answers


What do you hope is the future of healthcare? What was it like working with Steve Jobs? How did you create the marketing plan for the original Mac? Did Jeff Daniels portray you accurately in Steve Jobs? You can ask all this and more to John Sculley, CMO of RxAdvance and former CEO of Apple, for his rescheduled TNW Answers session. Sculley started his career at Pepsi-Cola, where he worked his way up from a traineeship at a bottling plant to become the company’s youngest marketing VP at the age of 30. In 1977 he became Pepsi’s youngest-ever CEO and…

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