Transcript: WSJ’s MIB: Paul Vigna on Bitcoin


The transcript from this week’s MIB: Paul Vigna on Blockchain & Cryptocurrency
is below.

You can stream/download the full conversation, including the podcast extras on iTunesBloombergOvercast, and Stitcher. Our earlier podcasts can all be found on iTunesStitcherOvercast, and Bloomberg.



This is Masters in Business with the Barry Ritholtz on Bloomberg Radio.

RITHOLTZ: This weekend on the podcast, I have a special guest, my friend Paul Vigna has been a reporter with the Wall Street Journal for 120 years, he is the author of multiple books on block chain, crypto currency, Bitcoin, this is an area that is quite fascinating and a little bit wonky and if you are at all interested in a crash course, I heartily recommend both of his books or you could spend the next 90 minutes listening to us chat about all sorts of things involving Bitcoin, and to be honest, it’s really me asking Paul questions and him taking me to school about some of the details, history, minutia about Bitcoin.

I am really intrigued at how he breaks the entire block chain/Bitcoin discussion into three distinct groups. The first is the underlying software, the technology of the distributed ledger, a.k.a. block chain, that’s one.

The second is really the fascinating group of cyberpunks and libertarians and just generally kind of wacky dudes and it’s mostly dudes who become enamored of Bitcoin in the early days and helped take it viral from this open source software program to really a full-blown phenomena and now arguably a bubble in the actual coins itself.

And that’s the third part. The Bitcoins, the transactions, the mania surrounding the trading, that’s a different issue than either the people behind it or the technology underlying it. I found the conversation fascinating. I think you will also. With no further ado, my conversation with Paul Vigna.

(UNKNOWN): This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

RITHOLTZ: I’m Barry Ritholtz, you’re listening to Masters in business on Bloomberg Radio. My guest today is Paul Vigna, for the past 20 years, he has been a journalist covering markets and the economy for such august outfits as Dow Jones and the Wall Street Journal. He is the co-author with Michael Casey of two fascinating books on block chain and Bitcoin. His first book was The Age of Crypto Currency, How Bitcoin is Challenging the Global Economy, and his latest book The Truth Machine, Block Chain and the Future of Everything was just released to excellent reviews. Paul Vigna, welcome to Bloomberg.

VIGNA: Barry Ritholtz, how are you?

RITHOLTZ: Very, very well, let’s jump right in to the Bitcoin conversation, you know more about this than just about anybody I know.

VIGNA: That’s a totally untrue statement but…

RITHOLTZ: Well you know.

VIGNA: I know some about it.

RITHOLTZ: Well you don’t know the people I know and apparently everybody else knows less than you so it’s a flawed data set.

VIGNA: It’s all with circles you on it.

RITHOLTZ: That’s right.

But let me ask you this question, what was the initial idea behind the entire concept of Bitcoin?

VIGNA: The initial idea the — so this comes out in October 2008 some guy named Satoshi Nakamoto, nobody knows who he is.

RITHOLTZ: Right, is that a real name, is that is pseudonym?

VIGNA: It’s a pseudonym. Nobody knows what his real name is, who he is, if it’s a team of people, you know, it’s a whole mystery. So this white paper comes out, Satoshi Nakamoto, Bitcoin, I forget the exact title but basically the point is what he is creating is a digital version of cash. So in other words, if you’re a shopkeeper and I come in for a cup of coffee or whatever I hand you a five dollar bill, that is the transaction.

What Nakamoto was trying to do was replicate that transaction digitally on the Internet.

RITHOLTZ: Meaning no paper, no credit card, no banks.

VIGNA: No paper, no credit card, and also an immediate transaction between just you and I that nobody else sees. In other words…

RITHOLTZ: No third party, no government, no banks, no credit card, nobody.

VIGNA: Exactly.

RITHOLTZ: Just buyer and seller.

VIGNA: Right, just buyer and seller, peer to peer electronic money, that was the original idea.

RITHOLTZ: Sounds like a good idea.

VIGNA: Sounds like a good idea, sounds like a simple idea, right?

RITHOLTZ: And remember this is 2008, we are right in the middle of the financial crisis where confidence in banks and governments are at record lows.

VIGNA: Right.

RITHOLTZ: So he comes up publishes this white paper, how do you get from — and where was the white paper published?

VIGNA: He just released it online.

RITHOLTZ: Just on the internet.

VIGNA: Originally it was to this — I think it was an email listserv, you know, one of those distribution lists.



RITHOLTZ: So how do you get from a white paper to an actual block chain technology and a coin that starts to appreciate in value almost immediately?

VIGNA: So what the white paper was describing was a computer program and that the goal of the computer program was to create this digital money, this peer to peer electronic version of cash.

So he releases a white paper in October 2008 and puts the program online.

RITHOLTZ: So he sets up the program, it was more than a white…

VIGNA: It was more than a white paper, it was a paper describing what he was doing — he wrote the program too, puts the program online in January 2009 as an open source project where anyone is open to participate in building it.

RITHOLTZ: So let’s describe that. So building the software or building the coins themselves.

VIGNA: Well, the software.


VIGNA: So you know he releases version 0.0 Bitcoin and what he is looking for are collaborators, he’s looking for people to come on and help develop the program. In other words, again, you know, a company like Microsoft like Apple whatever, they have teams of developers…

RITHOLTZ: Thousands.

VIGNA: Yes, thousands. This is a different kind of version of that. You’re talking about developing a software program but you’re looking for collaborators like…

RITHOLTZ: Like Linux and those sort of things…

VIGNA: Linux is a great example of an open source program so that’s what he releases and again, it’s very key I think that you mention this is all happening during the financial crisis.


VIGNA: This is a time where the existing financial infrastructure has shown that it is just hopelessly conflicted, hopelessly corrupted, and this will…

RITHOLTZ: Filled with problems…

VIGNA: We can do a whole radio show on just that.

RITHOLTZ: You could write a book on it.

VIGNA: You could write a book on it, and some of us have right? Bail Out Nation? People are interested in alternatives, the existing, the warts of the existing system have been shown, people are looking for an alternative, he comes up with an alternative and people take to it. And it kind of goes viral, it takes a little while but inside this community of they call them cyberpunks, anarchists, libertarians, coders, tinkerers, this small clack, this thing does go viral and it starts getting this community very quickly.

And there is really a lot of skepticism, but once it goes and they see it working, people start coming on, and originally what you have is a lot of again tinkerers, programmers, anarchists, cyberpunks, this small group, it grows within that.

It probably takes a couple of years until it starts hitting the mainstream.

RITHOLTZ: So let’s talk about that period before it ramps into the mainstream, you download the software, you want to create coins so you have to solve a complicated mathematical problem and there’s only a finite number of potential coins, 21 million coins, is that right?

VIGNA: So what Bitcoin has, it’s really actually and to the degree that I understand coding and programming at all, it’s really — it’s a very elegant program, the idea is to create a program that can support a currency, a digital currency that does not need a centralized party controlling it. In other words, you don’t have a computer company running the software and responsible for it, you don’t have a government or a bank running the software responsible for the software and the currency, you have to come up with a way to create a system that can opt — that can be self system self-sustaining by this sort of decentralized group of people.

So within that, there are bunch of ways that hither, a bunch of levers that he pulls to make that happen. One of them is you want — you want people to come on board, you want people to download the software, you want people to run it. You need people to run the software for the program to work obviously, right? How do you do that? How do you entice people to contribute their computing power to a volunteer project?

Well one way you do it is you reward them, what do you reward them with? Bitcoin. So the way Bitcoin is created is you download the software, you are contributing your computing power to the network, what you are really doing is you are confirming transactions, that’s of the live operation of this software, is you and I trade right, so my mobile app on my phone, I use to send you five Bitcoins, now five Bitcoins will be like $100,000, I’m not sending you that.

RITHOLTZ: But back then, it was.

VIGNA: Back then, it was pennies.

RITHOLTZ: How did that leap from that period to bursting into the mainstream?

VIGNA: So that the program is released in 2009, 2009, 2010 it is like I said, it is this small group of coders, tinkerers, programmers, anarchists, libertarians, cyberpunks, and the currency and you know, 20 people argue, is it a currency, is it not? Whatever, I’m going to call it a currency for now.


VIGNA: It really had no actual value, right? I mean it was a program that these guys are using, there was nothing in the real world you could do with it.

RITHOLTZ: You could argue that any currencies value is only the populaces willingness to assign it a value?

VIGNA: Well, of course.


VIGNA: So no currency has a value unless people are willing to use it as a medium of exchange.

RITHOLTZ: Exactly, right.

VIGNA: The very first time Bitcoin gets used to buy something in the real world is 2010, this programmer in Florida says that he, on a message board is I will give anyone 10,000 Bitcoins if you’ll buy me two pizzas.

So in other words, he wants to show that the coin can be used to buy things but he can’t do it directly because no one is going to take Bitcoin.

RITHOLTZ: Because to start out, it’s just amongst that small group of…

VIGNA: Right, right.

RITHOLTZ: The pizza places don’t have a big right coin — swipe here for Bitcoin.

VIGNA: And so this guy, and it’s a pretty famous story, he has this open offer, he says I’ll give anyone 10,000 Bitcoin if you buy me two pieces and he does that for about two weeks and people are sending pizzas to his house and he is sending them 10,000 Bitcoin.

RITHOLTZ: Multiple pizzas.

VIGNA: Multiple pizzas, right, the first one was I figured, early in May and then he kept this thing open for about two weeks and he probably, you know, spent about 200,000 Bitcoin on it which is today a fortune.

RITHOLTZ: Oh my God.

VIGNA: But that was the first time that it was proven that you could actually use this to buy something in the real-world, it could actually work as a currency. At that point it starts changing. Now people realize there’s something here and of course at the very beginning, it’s really only being used basically on the dark web, right?

I mean people want to buy and sell things…

RITHOLTZ: Illegally?

VIGNA: Ilegally, illicitly.

RITHOLTZ: So he was the early criticism that I recall hearing about, this is used for drugs, this is used for human trafficking, this is used to buy hitmen, this is used for all sorts of nefarious things and therefore it will never be a credible product.

VIGNA: Well, I mean the answer to that is — there are two answers to that, the first answer is yes it is being used for that, but that is not the main — it really isn’t the main use of it, it is still there, and look we are in the media, we love sensational stories and we tell those stories, but it really is a very small percentage of overall Bitcoin trap.

RITHOLTZ: And the other push back is dollars are used for the same exact thing.

VIGNA: So is the dollar, so is the euro, I mean every currency is, you know…

RITHOLTZ: So does it make it corrupt?

VIGNA: The criticism of Bitcoin, it’s a criticism of currency.

RITHOLTZ: Of humans for that matter.

VIGNA: Yes, right. So 2010, 2011, 2012, people start realizing this can be used to buy and sell things.

RITHOLTZ: And what is the price of Bitcoin back then?

VIGNA: I think it’s in the single dollars.


VIGNA: It’s in the single, I mean if we pulled up the chart, we could find out. It is in single dollars. Around the same time, and we are not going to go out into a whole — but anyhow, in 2012, it starts getting out of this small sort of cyberpunk programmer community and it starts permeating a little bit into the mainstream really into sort of more than that the tech press, the tech mainstream, from there, probably around 2013, it starts hitting the mainstream mainstream because I remember first reading about it in early 2013.

RITHOLTZ: July 2012, it finally gets over $10.

VIGNA: Right, exactly.


VIGNA: $10, right. So in 2013, it kind of has its first wave of mainstream awareness.

RITHOLTZ: Almost runs by November of that year it’s just under $1000.

VIGNA: Right, it goes crazy.

RITHOLTZ: Which in it of itself is a great run from $10.

VIGNA: Yes, also remember too, and your audience will appreciate this and you will too, the thing you have to keep in mind when you come up Bitcoin and the price of it, you have to keep in mind that this is still a relatively small market, a relatively illiquid market, and it is a relatively one-way market.

RITHOLTZ: Meaning you could buy it but it’s very hard to actually convert that into cash.

VIGNA: Yes, well, it’s difficult to convert into cash, it is difficult to sell it, you know, they are just starting to build derivative products, they are just starting to build different more intricate ways to bet on bigger things that are in the market right now. It is also a market that runs 24//7, has no — there is no closing bell, there is no circuit breakers, it goes in whatever direction it is going.

RITHOLTZ: It is the Wild West of trading.

VIGNA: It is the Wild West of trade, if you like open markets, there has never been a more open market than this. So you have to you have to keep that in mind when talking about the price, the pricing go in crazy directions because of those reasons. But in 2013, it goes from 10 to 180 back down to whatever, and you know, the second half of the year, goes up to almost $1000, you have an exchange called Mount Gox which was handling about 70 percent or 80 percent of all the trading.

And Mount Gox was a terribly created financial exchange, it was just bad, it was not…

RITHOLTZ: Not secure.

VIGNA: Not secure, not well-built, not well constructed and all the money is going through it. So the liquidity there is almost nothing. So when Mount Gox shuts down and you can’t get your money out easily, what do you do to get your money out? Well, you got to offer higher prices, really higher prices. So that is a big reason why…

RITHOLTZ: To buy or to sell, do you mean?

VIGNA: To sell.

RITHOLTZ: So you are offering higher prices to sell or low — I would think your offering lower prices to sell.

VIGNA: The only way you can get it out because withdrawals were limited.


VIGNA: So it and it was thin, there was not a lot of liquidity, so you know, you got to entice people to sell so you offer higher prices, so the price goes flying up.


VIGNA: 2014 it kind of comes down a little bit, now you’re — now you’re starting to get more and more the mainstream, people are seeing it and you what you have though is again, still it is still completely a volunteer community, I mean this thing is just being built by volunteers by volunteer coders, you’re starting to have some people realize that there’s money to be made here and you are starting to have people try to build businesses on top of Bitcoin.

And that was sort of the…


VIGNA: 2014, 2013, and that was sort of the first time you have some infrastructure being put around this computer program that I was talking about before. And importantly, too, I think there are a couple of things you have to keep in mind when you are talking about Bitcoin and I think this is why people kind of get so screwed up about it. There are really three main things that are — and again, this is one of the reasons why love this so much as a writer, there are so many angles, there are so many stories, you have to keep in mind a couple of things. One, this is a computer program, that is really what this is.

If Microsoft in 2009 had said, hey you know what, we’ve come out with a new feature on Excel that will allow people to run a shared database, that will be all your transactions that you put into this database will be recorded and an exact copy will be distributed to everybody in real time and it will be cryptographically secure, it will be impossible to counterfeit, to create false entries, is the open source — a transparent database that an entire community can run and can feel confident that it’s real, and well, you would have said, okay, that’s nice.

And Microsoft probably would’ve done well and you would have said, oh, Satya has come up with a new product, he’s really doing good job over at Microsoft, and that would have been the end of it, it would have been a nice program.


VIGNA: However, what you have with Bitcoin is you have the program, you have the time that it was released like you said, people looking for alternative way to do things so you have the sort of viral community grow up around it.

Personally, I think Bitcoin is one of the three big social movements that erupted out of 2008 you’re at the tea party, you would occupy any of Bitcoin, Bitcoin is a social movement and that is why people are so passionate about it, this is not just a computer program, this is not just digits, ones and zeros, this is a new way to build finance, to build a financial infrastructure.

RITHOLTZ: That’s fascinating.

Let’s talk a bit about your career as a journalist covering markets and the economy and how that morphed into your coverage on Bitcoin. How did you get into financial journalism, what led you to your first gig?

VIGNA: Oh my god, well I mean it was — quite simply, it was money, but half of the reason that you might the most people will get into finance, I was just look — I was working at a weekly newspaper, I’d done — have been there few years making no real money, you make no money at community journalism.


VIGNA: It’s fun, it’s a good place to learn the ropes, but you make no money at it, so I needed a job to make some money. Dow Jones was hiring, it was 1997 so…

RITHOLTZ: Everybody was hiring.

VIGNA: Everybody was hiring. Dow Jones is hiring editors, so I took the editing test, I passed the editing test, I knew nothing about finance, I did not go to school for finance…


VIGNA: I didn’t, no, no — I didn’t study it at all.

RITHOLTZ: That is interesting.

VIGNA: I literally passed the editing tests so they hired me as an editor and my first job was rewriting press releases and that’s what I did, that’s how I started out, rewriting press releases.

RITHOLTZ: How did you end up at what was so for you young ones out there, there used to be ILX terminals and other such quote machines and the newsfeed would have a constant stream of stories, but my favorite feed back in the 90s was Dow Jones Market Talk which were all these little blurby stories about what was going on in the market, it was Twitter before there was Twitter, it was finance Twitter before there was such a thing.

VIGNA: Right.

RITHOLTZ: How did you find you way to Dow Jones Market Talk?

VIGNA: So I spent a few years on what was called the Spot News Desk doing the press release rewrite job which is actually another great education in journalism, and really…

RITHOLTZ: It sounds horrific to me.

VIGNA: Well, it was.

I mean it was a total, it was a grind, I mean it was…

RITHOLTZ: That’s what I was thinking, exactly.

VIGNA: Yes, but you learn a lot about finance, you’re constantly looking at what companies are telling you and if you’re — if you’re being discerning about it, you’re trying to find the holes in it…


VIGNA: So I learned a lot about finance doing that, then I spent a few years on the editing desk and then I had a friend who was on Market Talk.

RITHOLTZ: Which really was my — I miss that from…

VIGNA: I loved, well we still do Market Talk, I don’t think they publish it in quite the same way.



RITHOLTZ: They used to publish it on the web and then they stopped.

VIGNA: I know. So in 2005, now I’ve been there a while.

In 2005, I started at Market Talk with John Chipman and it was…

RITHOLTZ: Oh, sure.

VIGNA: It was great, it was just the two of us it was it was actually a great job because, I think our limit was 100 words, characters, 100 words…


VIGNA: So these tight little commentaries on what was going on in the market.

RITHOLTZ: Which is about a tweet today.

VIGNA: Yes, exactly right. So that was that was how I kind of got out of editing and into writing, and I did that for probably seven years, again another great education, write fast, write analytically, and write short, that was it, that was our only kind of remit, and I did that for a long time, love to — John and I had a great time doing it, we were kind of left out on our own in the newsroom…

RITHOLTZ: Nobody bothered you.

VIGNA: No one bothered us.

RITHOLTZ: You could see that by the — it had a voice.

VIGNA: It had a voice.

RITHOLTZ: Which you very often don’t get.

VIGNA: Right, and the voice was my voice and John’s voice. And from that, I moved over to one of the blogs and then in 2013 I heard about Bitcoin, and my first reaction to Bitcoin was this is an online scam, this is Internet joke, we are not writing about this, we are not writing about this.

RITHOLTZ: Because I was just going to ask you. So how much Bitcoin did you buy at $10 is what I was going to ask you.

VIGNA: The answer is zero.

So my first reaction was probably what everyone’s reaction is that this is some kind of scam and I thought we’re not writing about this, no way.

But like I said earlier, it was starting to permeate into the mainstream, they are starting here more and more about it, and the more I heard about it the more I read about it, and then I started become interested, and at the time, now this is 2013, this is the spring of 2013, at the time, the Wall Street Journal had nobody writing about Bitcoin.

RITHOLTZ: Most entities had nobody writing about Bitcoin.

VIGNA: Exactly, I was writing for our Money Beat blog and so I had a pretty wide pretty wide latitude in what I want to write about. My coverage was the markets. It was a market and the economies so I could about anything within that.

RITHOLTZ: Which is pretty much everything.

VIGNA: Which is pretty much — right, exactly, which was great.

So because I had that latitude to write about whatever I wanted to write about and I was starting to get interested in Bitcoin, I started writing some Bitcoin posts, and I did that for a few months and in the summer of 2013, I went to a conference here in the city, it was called inside Bitcoins, it was a one day conference at the New Yorker, and was the first time that had ever been around Bitcoin people, and again it was a small conference, they have like, e you know, one room, you know, one conference room, a couple hundred people, there was a lobby outside, may be a dozen, 12 or 15 tables set up of little businesses but it was, again, the first time I’ve ever been around these people, these Bitcoiners.

RITHOLTZ: So two questions, one is what was the response to the blog post you were doing on Bitcoin before that conference, and then second how did what was the impact of the conference on you?

VIGNA: So you are talking about the reaction among readers or the news…

RITHOLTZ: Readers or both.

VIGNA: Readers not much, didn’t, you know what, readers not much and the newsroom not much, you know, there was enough interest among the editors that they said, yes, go ahead, write that. It’s probably worth…

RITHOLTZ: So clearly…

VIGNA: …a little something out.

RITHOLTZ: So clearly, there is something going on there, but nobody knows what it is.

VIGNA: Exactly, right. And I think…

RITHOLTZ: And then how did the conference affect you?

VIGNA: Well, the conference affected me in that what I got out of the conference was this incredible energy of this group of people and the ideas are flying around, it was very utopian, very pie-in-the-sky, but again, you have remember all of this I’m coming to as a writer I’m not investor, I’m not an entrepreneur, I’m not looking to make money, I’m looking to write good stories, interesting stories and I realize that there are tremendous stories to be told here.

RITHOLTZ: Let’s talk a little about some of the specifics of block chain and crypto currency and what I’m comfortable getting into the weeds here but before we do, let’s start out a little basic.

What is a digital distributed ledger?

VIGNA: So that is — that is the heart of the Bitcoin program and it is come to be called by a couple of different names, you call it distributed ledger technology, block chain technology, just block chain but what it essentially is a program that is designed to maintain this online ledger, it’s a live ledger that is not operated from anyone central server.

In other words J.P. Morgan has a ledger of every transaction that they…

RITHOLTZ: But that is specific to…

VIGNA: But it is on J.P. Morgan servers and J.P. Morgan maintains it, and only J.P. Morgan can see it.

RITHOLTZ: What does it track, what does it keep count of?

VIGNA: Well, before we even get into that, just what this is a program that can run on any number of computers, every computer that is running the program live has an identical copy of the ledger, every transaction that goes into that ledger gets updated on every single computer at the basically at the same time, the transactions are secured cryptographically so it’s virtually impossible to change them, so what you have is a live transaction history that is transparent because it is on any number of computers and anybody can see it and it is impossible to change, that’s what it essentially is.

RITHOLTZ: So that means — that means it’s a legitimate record of each transaction.

VIGNA: Exactly.

RITHOLTZ: And it’s theoretically unhackable.

VIGNA: Right. And Bitcoins, block chain has never been hacked, you hear a lot of stories about hacking and in the it’s always some company that got hacked…

RITHOLTZ: Like Mount Gox.

VIGNA: Like Mount Gox got hacked, or someone’s wallet got broken into, that is possible to.

But the ledger itself, the transaction history has never been attacked, it has been attacked, it has never been hacked. Now you said what can you do with that? Well the question is and that’s why you have the sort of explosion in interest, the answer is anything that can be digitized and recorded and tracked, potentially these are still early days, potentially could be done with this program.

So in other words the first application of this technology was Bitcoin, let’s track a peer-to-peer transfer — a transaction exchange, value exchange, it’s currency. Could you use it for land registries, could you use it for identification, could you — you know, so many things now the people realize that you can use this for potentially, can artists use it to protect their copyright and maybe make some money and try and track where things you know, their works are being used.

RITHOLTZ: So anything that’s transacted digitally, you could keep a perfect so for example, you we were talking about the financial crisis earlier, MERS is a sort of unspoken villain of the crisis, this is the electronic registry of mortgages and they were so overwhelmed with the number of transactions and collateralize mortgages all put into other derivative products that very often when there is a default and people would go to court to defend it, the people who thought they own the mortgage couldn’t prove they actually own the mortgage, if you want to court with a lawyer you very often one because the people suing you couldn’t demonstrate they were the appropriate party, they with the mortgage holder, it’s amazing.

So block chain theoretically could solve for something like that.

VIGNA: Exactly, and you know, it’s amazing, I always think of this, 2007, Lehman Brothers reports record revenue, record earnings, best year in the company’s history, 2007, 150 years they have been around, 2007 best year, nine months later, they are out of business, how is that possible?

RITHOLTZ: Repo 105. Total accounting fraud…

VIGNA: Exactly.

RITHOLTZ: Moving $50 billion in liabilities off the books which to this day Dick Fuld still claims was legit which is hilarious.

VIGNA: Yes, so this is a really interesting program essentially what you have is…

RITHOLTZ: It would prevent that sort of fraud, theoretically.

VIGNA: Theoretically, if it was implemented, if the industry would accept it as a standard, that is the other thing, I mean one big problem for the banking industry is that this is too transparent.

RITHOLTZ: Too transparent, of course it is.

VIGNA: I mean, you know, listen, you have been in the market a long time I mean, I mean you know that information having and having it before other people in opacity are all virtues if you are trading.

RITHOLTZ: They are a feature, not a bug.

VIGNA: Exactly.

RITHOLTZ: You can charge higher prices by bamboozling people and making things that are simple sound complex and eliminating transparency.

VIGNA: And in 2015 when the banks started experimenting with this they’re all interested in and they’re going to be build, have their block chain labs and was going to build something.

RITHOLTZ: Yes, whatever happened with that?

VIGNA: Well, what happened was they all realized it was way too transparent and so they know really and it really held things up and now people try to build things that are sort of that — that will operate among a bunch of say financial institutions…


VIGNA: But they also try to put in checks so that nobody’s order book is visible to anybody else and, so you can make — so they’re trying to figure that out.

RITHOLTZ: So let’s talk about this exact subject, what are some of the legitimate uses for block chain and how likely is it that we are going to see implementations at banks, insurers, brokers, of this sort of technology.

VIGNA: I think eventually we will and I think the reason — I think there are two reasons why Bitcoin kind of took off the way did and my this technology is being so looked at the way it is.

One is certainly just sort of the viral nature of it, the panic of 2008, the idea that we can have an alternative way and that was a — but the other reason, I think the more important reason is just that this technology fits our lifestyle today. We are digital, we are online, we are doing things across borders, across time zones, across continents, and this is a program that will allow you to track things across borders, across time zones, across continents, and to do things live and to do things in — I hate saying the word real time, but real-time.

And it’s one feature the Internet when it was first built in the 90s that one feature that it didn’t have was an easy way to exchange value, to do currency transactions, so what gets built onto the Internet of course are all the sort of existing third-party credit card transactions…

RITHOLTZ: Literally punching in a credit card.

VIGNA: You are literally punching in a credit card, and because you’re doing this over such great distances, and it’s harder to verify identity, you have an entire industry that grows up around that, right? You have VeriSign, you have all these third-party providers who will take you information, validate it and allow you to do the credit card transaction. Bitcoin kind of takes that and blocking technology takes that and sort of flattens it and makes it all one transaction…

RITHOLTZ: Replaces it.

VIGNA: Replaces it.

RITHOLTZ: So the transaction, the verification and validation, and the exchange of value all happen in one…

VIGNA: That is it exactly.

You don’t sound like a skeptic on this, Barry Ritholtz?

RITHOLTZ: No, I’m — so let’s talk about the skepticism, it’s not on the block chain technology and it’s a cliche every time you hear someone say block chain is fascinating but I’m skeptical and…

VIGNA: Right, right.

RITHOLTZ: To me, when I see something rise 2000 percent in six months my experience both in the markets and as a trader is immediately to scream bubble you and I got a little lucky and the timing on writing something when should you sell your Bitcoin, and the timing on that as is often luck as anything else but how let let’s look at Bitcoin, is Bitcoin separate from the underlying technology, is that in a bubble if it was $10 in 2013, $1000 dollars in 2015 and now down to $10,000.

VIGNA: Well like I said earlier, to me there are three huge angles to this whole story, there’s the software which is what is really important and its applications…

RITHOLTZ: Which is by the way, is the thing people talk the least about.

VIGNA: Exactly, there is the counterculture movement, the social movement…

RITHOLTZ: That are featured around.

VIGNA: I think is a big part of the story that their party is the speculative mania, the trading of it, and you know you say is this a bubble, I don’t even know, if it’s almost it’s such a — it’s such a pre-thing, I don’t know if you can say it is really a bubble, I mean is this a speculative mania? Without a doubt.

I think it is virtually impossible from a fundamental perspective to say what Bitcoin is worth, I mean obviously it is worth what anybody will pay for it, I mean that is the simple answer so if someone’s willing to pay 11,000 12,000 9,000, whatever it is, that’s what it’s worth. But…

RITHOLTZ: At that moment.

VIGNA: At that moment.

RITHOLTZ: That’s the problem with it…

VIGNA: But can you fundamentally value a technology that has not really been implemented yet, no, you cannot, I mean does Bitcoin run, is it live do people who use it? Yes, absolutely. Absolutely.

Is there a lot that you can do with Bitcoin right now? No, besides trade it, I mean really.

So what you have is a mania, a speculative mania for a product that is virtually impossible to fundamentally value and like I said earlier, still a small market, still a thin market, still a relatively illiquid market so you get these crazy volatile swings. So yes, in terms of the price I think your skepticism is 100 percent on, I don’t buy Bitcoin because the Wall Street Journal would not want me buying and selling something that I’m writing about, I mean that’s obvious.

RITHOLTZ: Yes, every journalistic operation has rules…

VIGNA: Exactly, right.

RITHOLTZ: Avoiding you know you can go buy a stock and then talk about it and promote it.

VIGNA: No, you can’t be the Apple beat reporter if you are daytrading Apple shares. So it’s the same thing so I don’t buy Bitcoin for that reason but even if the journal didn’t have that restriction on me I personally would not buy it anyhow because it is a — you are gambling, it’s a speculative asset, you’re betting that it is going to go somewhere and it’s going to be something, you probably want to do but you have to understand what you’re doing and what you’re doing is just you’re gambling.

RITHOLTZ: So I my assuming too much in saying that you don’t believe this belongs in people’s 401(k) or their retirement portfolios?

VIGNA: No, and I’m not giving financial advice, you just asked me a question I mean does an unbelievably speculative asset belong in a 401(k) which is essentially retirement portfolio but my answer is no and I don’t think anybody else would say — and nobody should say, let’s put it this way, nobody should say yes to that.

RITHOLTZ: We have been speaking with Paul Vigna, he is the co-author along with Michael Casey of Truth Machine Block Chain and the Future of Everything. If you enjoyed this conversation be sure and check out our podcast extras where we keep the tape rolling and continue chatting about all things crypto currency.

Be sure and check out my daily column, you can find that on Bloomberg follow me on Twitter @RITHOLTZ, we love your comments feedback and suggestions, write to us at I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio.

So there’s so many questions I did not get to during the broadcast portion, let’s spend some time on those questions before I get to my favorite podcast questions that I ask everybody.

VIGNA: Okay.

RITHOLTZ: One of the things that I had to ask is so you write The Age Of Crypto in 2015, what made you think that there was an audience for a book on crypto?

VIGNA: It’s interesting because the whole thing goes back to that conference in 2013 that I was talking about, where I go to this conference I realize that there’s just this tremendous energy around this thing, I realize this is a story to be told, and I go back to the newsroom and talking to another reporter, this guy Dave Benoit, a very good report and I’m telling about the conference and these crazy people I saw, and he is listening to me and he looks at me and says that sounds like something Michael Lewis would write about.

RITHOLTZ: End of story.

VIGNA: I kind of snapped my fingers like, lightbulb, oh my God, this is it, and I’ve been looking for a long time, I wanted to write a book, I’ve always wanted to write, you I wanted to write a book and never found a good topic and he said that to me and I realized I’d just been handed a great topic and nobody else has done it yet, I’m the first one there.

RITHOLTZ: Was this book literally age of crypto currency, was that the first book on this topic?

VIGNA: By the time that went out, a few other people had also written their books and I don’t remember if Nathaniel Popper’s book came out right before or right after ours…

RITHOLTZ: But around the same…

VIGNA: Around the same time, the New York Times Digital Gold, Popper’s book, and it’s a good book, too.

RITHOLTZ: Digital Gold.

VIGNA: I shouldn’t plug a competitor’s book but whatever, you know, you got a free one from me, Nathaniel. So I mean that by the time our book came out other people have gotten onto this idea too that there were books to be written. But I think Popper’s book and our book were the first mainstream books, the first ones by big publishing houses to go out.

RITHOLTZ: He was May 26 — oh that’s the paperback, I’m sorry.

VIGNA: That is the paperback.

RITHOLTZ: Digital Gold, Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money.

VIGNA: Yes, that was his book.

So anyhow, so 2013 I realize there is a book to be written, I spend a lot of time actually the time I wanted to convince the journal to let me write an e-book, no one else has done, let’s do this…

RITHOLTZ: Get it out quick.

VIGNA: Get it out quick. And I remember I went home to my wife and I said I have this great idea, I said I want to write, and I’m going to try to do an e-book about Bitcoin and she said, she slows down, she says let me get this straight, she says you want to write a digital book about a fake currency? I think she said you want to write an electronic book about a digital currency.


VIGNA: And I said yeah, and she said so you want to write a fake book about fake currency. I said yes. She said, all right, she’s like, just go do it, I don’t want to hear another word until you get a check for me like just — she thought it was, you know, crazy, and again, you know that’s because you know people who grew up our generation were used to tangible things, right?

So anyhow, I come up with this idea, I try to sell to the Journal they eventually don’t want to do it and then by that time, Mike Casey, my co-author had also started getting interested in Bitcoin so we put our heads together, Mike had written some books he had an agent, we go to the agent, she loves the idea and we find a publisher and we sell it January 2015 it comes out…

RITHOLTZ: And so you beat you beat Popper by like five months?

VIGNA: Right, so we beat Popper, so I guess we were the first mainstream book to…

RITHOLTZ: So here’s the question I have with you, my experience with writing a book was that it was like a Ph.D, you know, it was your graduate thesis, it was exhausting and immediately after you start getting some sales and like how about a follow-up? It’s like go away for a decade.

You guys turn around and write another book three years later, that’s…

VIGNA: And I wrote another book in between.

RITHOLTZ: That’s a lot of book writing for someone who’s also writing a regular column in the mainstream paper.

VIGNA: You have to realize like I’m a news junkie…


VIGNA: I’m a news junkie, I want to write that’s all I want to do so for me it was — and I mean, look and also it helps tremendously having a co-author, because what Mike and I would do is…

RITHOLTZ: So you wrote two half books in other words.


RITHOLTZ: How did you guys split…

VIGNA: Well, what we would do is we would plot out the book, we would plot out the chapters, we kind of figured out what each chapter is going to be about and we just split them up. Who has written about this more, okay you’ve done this more so you do that chapter, I’ve done this more, I’ll take this chapter.

RITHOLTZ: Do you each then go back…

VIGNA: And then so we would write our chapters that we would send them to each other, edit what we were doing, rewrite what we’re doing, send it back to the guy having look at it again then we send it — we sent the book in chapters to our editors which is a little bit unusual, a lot of times, it was the whole manuscript and send it to your editor.


VIGNA: We were doing this in chapters. So you end up with this crazy dynamic where I’m writing my own chapter, I’m editing something Mike sent me, I’m getting back something that Tim Bartlett, our editor, at St Martin sent so you’re doing it — it’s a little hectic and crazy but like I said, if you’re a junkie for this kind of stuff, it wasn’t that bad, I mean really just wasn’t, I don’t know, I would work during the day, I come home, I would see my wife, I would see my son, they go to bed I put in a couple hours every night.

RITHOLTZ: So you guys did this very Postal Service like if you are familiar with Postal Service, the band?


RITHOLTZ: So Ben Gibbard from Death Cab for Cutie and Jenny Lewis who’s been with a number of other sort of alt country and alt rock, they start writing this music and literally mailing tapes back and forth to each other and the first Postal Service album, is this fascinating combination of odd electronic music overlaid with a sort of old country sort of yet you have to listen to it, it’s actually quite charming in and once you get past how initially confusing it seems, but they basically did album the way you guys did the book, and today you can do all that digitally.

VIGNA: And I think the thing, too is a lot of people say to me too like you just said, like, oh my god, I can’t believe you wrote a book and you wrote another book…

RITHOLTZ: Two books, three books.

VIGNA: I’ve written three books since 2015, yeah, and I wrote a book about The Walking Dead, too, because that’s my other sideline.


VIGNA: And people say, I can’t believe you wrote a book, I’ve always wanted to write a book but I can’t, what I figured out early on is that it is an extremely mechanical process. There has to be a lot of thought that goes into it, and analytics and you know, but that’s one element of it, the other the writing element is extremely mechanical, and all you do is you say okay, today is today, my deadline is this deadline, I have X number of days to write X number of words, do the division do the math figure out how many words you need to do per day and you do that every day no matter how long it takes, how short it takes. If you have a great day and you write 2000 words then great you can you ratchet back a little bit the next day, if you’re a terrible day and you only write 100 words, you have amp it up the next day, you have to average that many words every single day until your deadline and you can do it.


RITHOLTZ: It’s work.

VIGNA: It’s work but you can do it and you have to sit it out, I think you have to sit it out that way because if you sit it out as here’s my deadline and I need a book and you have nothing — no structure to what you’re doing in between that’s how you can kind of get lost in the weeds.

RITHOLTZ: When people say they want to write a book, what they really mean is that they are subconsciously paraphrasing Dorothy Parker, they don’t want to write a book they want to have written a book because the writing of the book is a lot of what you described is heavy lifting, it’s a bit of a grind.

VIGNA: Exactly, it is.

RITHOLTZ: But you seem to have really enjoyed it.

VIGNA: Well, I love it. I mean this is — it’s funny because I’ve been in this business since 1991, was my first journalism.

RITHOLTZ: Really, 25 plus years, that is impressive.

VIGNA: 25 plus years, and for that entire time I always, look anybody, like you want to be the guy at the middle of the story right I’ve always wanted to be the guy at the middle of the story and I never was the guy at the middle the story. And in the Journal newsroom, you would watch the guys and the girls in the middle the story, you’d see the other reporters…

RITHOLTZ: Who are covering a big breaking story…

VIGNA: Covering a big breaking story, a huge story where they are the person, they are at the center of attention, they are t the center of the big story and it’s great you wanted, for the first time in my career, I’m that person and a lot of times, even my whole career, would never be that person.


VIGNA: So I recognize that, I recognize that I’m in a very fortunate place and I lucked out in getting interested in this early I kind of set myself up to be that person at the middle of the story and now I’m there and I just wanted to take advantage of it, so I love it, again, I’m a news junkie, this is what I live for, this is all I want to do, so yes, right, I’m going to write constantly (ph).

RITHOLTZ: So you have two books on block chain and crypto currency…


RITHOLTZ: Is there another block chain book, crypto book, Bitcoin book, and you — where you pretty much said everything you need to say about the topic.

VIGNA: There is probably another book, I don’t want to say definitely, it’s funny because at the launch event on the Tuesday night, people are saying to me immediately oh what’s the next book about? And we got the — I got the check for this book for my publisher my wife is very happy with, it was all the money in the world but it is nice…

RITHOLTZ: By the way, if you want to earn a living writing books, if your name isn’t Stephen King or Michael Lewis or JK Rowling, you are going to be disappointed.

VIGNA: You are not going to do it as a full-time thing.


VIGNA: But I my wife we got the check and I immediately put in the bank and she was happy with it and then she said, okay, what is the next book about?

RITHOLTZ: (Inaudible) checks.

VIGNA: Yes, you got to keep working, you got to produce, you want to be the producer, you got to go produce.

RITHOLTZ: That is very funny.

VIGNA: I mean, there will definitely be another book, whether it will be another Bitcoin book, I don’t know and Mike I kind of shoot around ideas there’s just so many stories to tell in this so yeah I could definitely see another book coming out of it.

RITHOLTZ: So you mentioned the social network of sort of libertarians and…

VIGNA: Cyberpunks, libertarians, anarchists, programmers, techies…

RITHOLTZ: The question that had come up from Mike Batnick in my office who helps me put these questions together is what’s the overlap between the crypto enthusiasts and the gold bugs because there seem to be some similar — if you were to draw a Venn diagram, it feels like the enthusiasm for something that is a speculation asset that may or may not be working a lot more a whole lot less in a few years, they seem to have similar characteristics.

VIGNA: They do and an interesting thing about both the gold bugs and the Bitcoiners is you can make a rational argument that you know the world is an imperfect place and if you’re investing in this world, things are going to go up and things are going to go down and you should probably have a hedge against bad times. What’s that hedge? Well gold this is traditionally been a store of value and stable asset, you should have a little bit of gold in your portfolio, Bitcoin, they are trying to set up as a digital version of that so if you are looking to have a hedge against the world, something that when everything else goes down this is sort of stable over here and it’s all different, and you can make that as a sort of rational argument.

But it gets — that message gets lost somewhere, and there is a reason they call them gold bugs, because they get crazy about it and the Bitcoin people, they get crazy about it and suddenly you go from this sort of rational argument about well, you should have a hedge against bad times it might be this to gold is everything and the world is terrible. Bitcoin is everything and the world is terrible. And so they do have a sort of similar psychology in that they get so caught up in the idea that the world is terrible and everything is going to go to hell in a hand basket and we are just waiting for the next crash that you should put everything, nobody should ever put everything into gold or Bitcoin, I think that is insane.

But sometimes it feels like that’s their argument.

RITHOLTZ: It’s not their argument, my belief and I’m obviously biased, my belief is that is their post hoc rationalization, maybe they own all this gold and if the world goes to hell, gold or maybe Bitcoin is worth a whole lot more, they start internalizing the concept that it’s not I own gold because is a possibility of the world going to hell, its I own gold the world is gone to hell and therefore the school right you are so much.

So we everybody does it, we all lie to ourselves, the easiest person to fool is yourself…

VIGNA: Sure, talk yourself into an ad everything.

RITHOLTZ: Absolutely and so you end up with so that’s what I kind of find fascinating is there’s not a cold calculating what is the value, here is a price-to-book ratio…

VIGNA: Exactly.

RITHOLTZ: A nice filter for these, it’s a we don’t know what this value is but I’m so emotionally tied up in it, not only my personal net worth but my sense of self and how smart I think I am and therefore this proves it…

VIGNA: You’re right.

RITHOLTZ: All objectivity goes out the window, and that’s why I think Mike was looking at them as hey here are some very similar characteristics with two distinct groups, so the next question is what sort of overlap is there in terms of are the crypto people also holding gold and vice versa or have those two groups never the twain shall meet?

VIGNA: I’m sure there are people in this world who are holding Bitcoin and gold but I think the real Bitcoin you know of aficionados, they think Bitcoin is the better gold so they are probably not, they are not holding Bitcoin and gold, they are just holding Bitcoin.

The people who are doing it are probably people who are gold people who think, maybe I will…

RITHOLTZ: They are going to hedge their gold with Bitcoin.

VIGNA: Right, right right.

RITHOLTZ: So let us talk about some of the companies that have grown up around this. So we mentioned Mount Gox which very famously blew up after it was hacked, and I want to say $100 million…

VIGNA: Initially, they lose, 800,000 Bitcoin they later recovered 200,000 Bitcoin , and what’s interesting is so they lost 600,000 Bitcoin which at the time I think was worth 400 million something like that, the crazy thing now that the try to figure out is that that 200,000 that they were covered is now worth more than everything they lost. So who gets it? Who gets it?

RITHOLTZ: They have to distribute it equally.

VIGNA: Do the creditors get it? Does the company hold it? do you sell it at what was worth in 2014, do sell it at what it was worth now, you know this has become a whole different issue with Mount Gox. But Mount Gox was basically a one-man company, there was a guy who bought a website from another guy and just set it up and because there were no real exchanges it just got all that traffic, it was never really a very well thought out company.

RITHOLTZ: What is coin base?

VIGNA: Coin base is another company that started in 2012 and initially I think they’re just trying to build Bitcoin wallets.

So anyhow, so in other words…

RITHOLTZ: And a wallet is a place to save.

VIGNA: It’s a digital account, it’s where you — yes, it’s where you hold your Bitcoin.

RITHOLTZ: Although, apparently, a lot of these have gotten hacked over the years. Not Coin Base necessarily.

VIGNA: The interesting thing about Bitcoin is that one of their core ideas was that you are your own bank, you are holding your own money, you’re responsible for your own money, you are not putting your money at a bank and then the bank gets to do whatever it wants with your money, you have it, so your wallet, your digital wallet, your account, that is like that’s the equivalent of your bank account you are in control of it though, so you have to secure it, you have to make sure that the security measures are there, you have to hold the private key, the account number to it, never lose it, if you lose it, it is gone…

RITHOLTZ: Forever.

VIGNA: Forever, you are the only person with access to it, so you lose the key, it is gone.

RITHOLTZ: There’s been some estimates that 20 plus percent of Bitcoin keys have been lost and that money is gone.

VIGNA: Yes, which again gets my whole point I was thinking about liquidity I mean if a quarter of all the Bitcoin that exists can never trade that’s huge but anyhow, Coin Base started out building a wallet they have grown they now have an exchange, I think they do some enterprise business they work with companies trying to implement Bitcoin processes and everything.

They have become probably — you could safely say the premier Bitcoin company, and they have kind of gotten into the mainstream, at one point last year in 2017 their online app was the number one app in the Apple Store, it rose to the top. Estimates are they made $1 billion last year, they’re making a lot — I mean a lot of money now people are realizing is in operating as a “exchange”. And I don’t want to say not quote-unquote for coin base, they are a regulated company, they registered with the New York Department of Financial Services, but a lot of these exchanges are “exchanges” they are just websites where people are trading back and forth, but there’s a lot of money to be made in that.

And so right now the big money is being made by offering trading services.

RITHOLTZ: The Tel Aviv company, let’s see if I can pronounce this right, Comuteris (ph)?

VIGNA: Comuteris (ph) I think it is. Yes, it is interesting and again all you know a lot of these companies will come up and you have to realize that these are startups, they have ideas, but they have to build it and implement it, survive, find revenue — build a business, right?


VIGNA: Coin Base started in 2012, there a lot of companies that started in 2012 that didn’t make it, Coin Base made it, they built a business, Comuteris is an interesting idea it sort of a Bitcoin based version of Uber.

So in other words, Uber is this great popular app, you don’t have to explain what it is now at this point, but it is a piece of software that is owned by a company.


VIGNA: The idea behind Comuteris is to have a piece of software that is not owned by a company that operates the same way Uber does, it’s about hooking up riders and drivers but the program operates the way Bitcoin operates, on a decentralized network of computers, that is it, that is the idea behind it.

It’s really interesting, I don’t know how far they’re getting with it yet, as I was actually went online last night trying to find some update on how they’re doing I couldn’t really find anything which is never a good sign, no offence, Comuteris, I hope you make it, good luck, but again, interesting idea and there a lot of interesting ideas out there. At some point you have to build a business on it.

RITHOLTZ: What else is an interesting idea built around block chain?

VIGNA: A lot of the hot ideas and I think these are going to be difficult to build quite frankly, a lot of the hot things are people want to build the platform now, right? And the idea is you look at Ethereum which is essentially an operating system, it’s an operating system, it’s like Android, it’s like IOS on your mobile but it’s a decentralized operating system rather than Apple owning it…

RITHOLTZ: For computers or for coins?

VIGNA: For computers, so you would download the software you get on the network and then anybody who wants to build an app or service on top of that platform build it and then you have access to it if you’re on the Ethereum network, that’s what it is, so what you have now, a lot of people and a lot of people have raised money to build their own version of the platforms and any of this competition everybody wants to build the platform, the next Android.

RITHOLTZ: Right. Android for mobile…

VIGNA: Android for mobile…

RITHOLTZ: Linux for computers.

VIGNA: For decentralized, right. Open source decentralized. It’s a good idea but it’s going to be hard, you have to build up all the network effects, you have to build up the community, you have to build up users, you have to have people coming on building services on top of it that work, so that’s a really it’s a big bet kind of thing as pie-in-the-sky, I’m going to build the next Ethereum.

Meanwhile Ethereum is still trying to build the next Ethereum.

RITHOLTZ: What about other coins that are…

VIGNA: Which is Ethereum.

RITHOLTZ: So have Bitcoin is the best known.

VIGNA: There is probably 1500 coins…


VIGNA: Whatever you want to call them, crypto currencies, tokens, coins, yes, there is probably, there is at least 1,500 of them.

RITHOLTZ: Not off of the same block chain?

VIGNA: Not off the same block chain.

RITHOLTZ: So (inaudible) of a block chain.

VIGNA: Because Bitcoin is open source software, anybody can take that program, rewrite it to their own specifications…

RITHOLTZ: And now you have a new coin.

VIGNA: Now you have a new coin.

RITHOLTZ: So what are the top five coins out there?

VIGNA: The top five, and I have to say, of those 1,500, I would — my personal bet is no more than a dozen have any chance of ever becoming something, most of them are just you know either the flat out pump and dump schemes of they are well-meaning that are not going to go anywhere.

I mean it is hard to get a community of people to put them together and agree to use your thing. Bitcoin, Ethereum, Ripple, Litecoin, are probably the four major ones, then you have offshoots of that, you have Bitcoin Cash which is an offshoot of Bitcoin, you have Ethereum Classic which is an offshoot of Ethereum, those are probably the half-dozen that I think have the largest market value right now combined.

There are a couple others out there, but they are going to have a harder time but that’s really it there is not a true there are a lot of them out there, I think there are very few that have a real chance to cut a building of a viable future for themselves.

RITHOLTZ: So I have I have two more coin questions before I get to my standard questions. One is explain what forking is.

VIGNA: Okay.

RITHOLTZ: And the other is ICO, so let’s start with forking.

VIGNA: All right, so forking is a term, it’s a software term, basically what you’re doing is you are taking the software and you are update — you are updating it. You’re creating a new version of it and what you can have is a soft fork and a hard fork, in a soft fork, you are updating the software coming with a new version of it but the older versions of the software will still work with it think of when Microsoft comes up with a new version of Word, you can download the new version of Word or you can keep working off your old version of Word, they are still compatible…

RITHOLTZ: And it is compatible with using documents back and forth.

VIGNA: A hard fork is where there is a new version of the software but it is incompatible with the old version of the software. So say Microsoft comes out and says all we have a new version of Word that you have to download or the old version won’t be compatible, that’s a hard fork.

In open source, this becomes a — this really becomes a political tool on if there’s a community that wants certain features and they’re not getting them they can hard fork the software, they can come up with their own version of the software.

RITHOLTZ: So everyone have to either come along or not.

VIGNA: That’s it, everyone has to come along or not.


VIGNA: ICO stands for initial coin offering and this is a very nascent field, is very contentious.

RITHOLTZ: You rolled your eyes when I asked ICOs.

VIGNA: It is just a…

RITHOLTZ: Right for fraud?

VIGNA: It’s such a great story, again, remember, everything for me is the story, it is a great, great story, it is so much fun, it’s so interesting, there are so many angles to it.

So an ICO’s an initial coin offering, so it’s a it’s a way for companies to raise money, it’s kind of a cross between crowdfunding and an IPO. So start up says — what a start up says is we have this digital product that we’re building, we have this service, we are going to attach a token to it, you can buy the token and give us money and we are going to sell it and that’s it, that’s really what it is.

What I think happened in 2017 was you had a price rally in Bitcoin and Ethereum and a couple of the other coins so people who were holding were making tons of money, but again there’s not much you can do with this stuff besides trade it, so they are sitting on all these paper profits — paper profits, digital profits.


VIGNA: Without much to do with it, here comes this other trend of the ICO startup saying, hey invest in us, we could be the next hot thing, so you have a group of people have a lot of money and nothing to do with it and you have a group of companies over here saying we are going to be the next hot thing those two things merge, they bang into each other, and you have this unbelievable speculative mania, the ICO market takes off and he was it was 6 billion was raised last year via this method, it’s…

RITHOLTZ: Most of which no one expects to do anything.

VIGNA: Virtually all of which everyone expects will be dead money in the end.

RITHOLTZ: Amazing. All right so let’s get into my favorite questions these are what I ask all of my guests.

VIGNA: Okay.

RITHOLTZ: So let’s jump into our favorite questions, tell us the most important thing people don’t know about your background.

VIGNA: I don’t know if this is the most important thing but and I’m probably — an important thing, I’m probably going to expose myself here and maybe actually maybe people have figured this out on their own. I’m basically self-taught, I didn’t go to school for journalism, I didn’t go to school for finance, and I didn’t go to school for business or economics, I was an English major, got out of college, needed a job, and there was a newspaper my town that was hiring so I applied for and I knew the rudimentary writing and editing skills so they hired me and that was it.

So I learned everything I learned about journalism I learned on the job, everything about finance I learned in my 20 years of working at Dow Jones and reading the big picture and some other blogs.

RITHOLTZ: That is very funny, but there is a long-standing going with that said all of education is a function of giving students the tools to teach themselves.

VIGNA: You know what? The tools I got, I went to Fairfield University in Connecticut which is a Jesuit school and the Jesuits give you a great education, they really believe…

RITHOLTZ: Fordham in New York as well.

VIGNA: Yes, Fordham in New York as well, they are big on teaching you how to think, how to analyze, and giving you a broad introduction to everything, so I got a great, I actually got a great education in learning how to think…

RITHOLTZ: Which you then could apply to anything.

VIGNA: Which you then can apply to anything.

RITHOLTZ: So who are some of your early mentors?

VIGNA: My early mentors were — they are going to be people you never heard of, right? My first editor was a guy name Ward Mealey (ph) my first editor at at the Verona Cedar Grove Times, Verona ,New Jersey, my first editor at Dow Jones was his guy Pete Rooney and they were great mentors, they were old-school journalists right, work hard don’t F with the news, go out have a beer after work, this is just a job, don’t take it too seriously.

And that was what they kind of taught, they kind of taught me how journalists operate and that was great so my the mind you know, look, I started in 1991 right I mean I started pre-Internet era so I have a little bit of a foot in the old…


VIGNA: The old school journalist world and those guys were my early mentors and they were great guys, absolutely great guys.

RITHOLTZ: I picture you with a Fedora with a little press in the right end of that. So you mentioned you started in the 90s, who were the journalists, who were the writers who influenced your approach to writing?

VIGNA: Right. Some of them were actually — let’s see.

RITHOLTZ: You can read that without glasses? I am impressed.

VIGNA: I have glasses…

RITHOLTZ: I can’t do anything without glasses anymore.

VIGNA: You know, it’s funny, a lot of and I’m not just trying to kiss up to you because you already gave me the interview, I imagine you are going to publish this.

RITHOLTZ: This is just for…

VIGNA: I know, I’m just — I loved The Big Picture, the blog, you know, back in the early when you were doing it, that was a big influence on me. James Stewart, Den of Thieves, a great book, Daniel Yergin, The Prize, those were great books to read, they were great storytelling, they really kind of — especially den of thieves got all the craziness of the 80s that was going on, and Yergin’s whole history of the oil industry was really fascinating.

So those were those are some of my early influences.

RITHOLTZ: Tell us about — this is everybody’s favorite question you mentioned Den of Thieves and The Prize…

VIGNA: Right.

RITHOLTZ: What are some of your favorite books?

VIGNA: Right.

RITHOLTZ: By the way, finance, non finance, fiction, non-fiction, anything.

VIGNA: Most of it, it’s more fiction. My favorite book absolutely of all time is Zen and the Art of Motorcycle Maintenance.

RITHOLTZ: God, I read that repeatedly in college.

VIGNA: Did you?


VIGNA: Yes, I did too. I mean, not only did I read it repeatedly in college, I — there was a point in my life where I was probably reading that, the whole book once a year, I mean I just…

RITHOLTZ: I know people who do that.

VIGNA: It’s such a great book, that is without a doubt my favorite book then love other I’m is a lot of other stuff I think Dubliners by James Joyce’s short story collection, I just think that is, I think James Joyce’s probably the greatest English-language writer ever.

RITHOLTZ: You are not the first person who said that.

VIGNA: No, but I think he is, and you know, Ulysses and his novels can kind of you can get lost in them, they are difficult, but the short stories are unbelievable, they are great. This is going to sound odigous (ph), Meditations by Marcus Aurelius.

RITHOLTZ: Ryan Holiday just was talking it the other day.

VIGNA: Really? I’m not kidding, it was one of my favorite books, it’s on my bookshelf, I turn to it often.

RITHOLTZ: Have you read his book the Daily Stoic?

VIGNA: I have not, but I know who you’re talking about.

RITHOLTZ: That is something you should check out if you liked Meditations, check that out.

VIGNA: You know what else?

RITHOLTZ: Give me one more.

VIGNA: Give you one more? I mean, picking one…

RITHOLTZ: Give me the philosophical work…

VIGNA: I mean most of Hemingway, a lot of Kerouac, I think Fitzgerald was a great writer, I think he had a good command of the language but I don’t think he was a great storyteller. Like if look at Great Gatsby, there’s no real story there, which is I think why all the movie adaptations fail.

RITHOLTZ: The Riche as Different.

VIGNA: The Rich are Different, that is the whole…

RITHOLTZ: I was on a flight the other day and I’ve been carrying around the Old Man and the Sea…

VIGNA: I was going to say…

RITHOLTZ: Which is only like 100 something pages right and I had this thin book in my bag for weeks and I figure let me just bang out the first chapter and threw six hours later we landed and I had finished the book and I was debating going back and reading it a second time.

VIGNA: Hemingway’s a master of the language…

RITHOLTZ: And a master storyteller.

VIGNA: Yes I think people get caught up in his persona that’s a tough guy thing and they can’t miss his ability to write, unbelievable writer, and Old Man and the Sea, it a master — it’s so beautiful.

RITHOLTZ: The funny thing is it’s so sensitive and so perceptive it stands in stark contradiction to that tough guy…

VIGNA: Exactly.

RITHOLTZ: Hard drinking, womanizing persona.

VIGNA: Hemingway’s — I think Hemingway’s a great writer.

RITHOLTZ: Again, not the first person to have said that with me. Give me one other Hemingway but if you if someone says hey I’ve read Old Man and the Sea, what else should I read by Hemingway/

VIGNA: The first one I read by Hemingway that I really fell in love with when I was 15, a sophomore in high school was Sun Also Rises…

RITHOLTZ: I knew you were going to go there.

VIGNA: Which was interesting, at the time, but you know, it’s funny, because at the time, I really didn’t understand half of what was going on in that book, I was 15 years old, I was just entranced by the wording…

RITHOLTZ: Too young.

VIGNA: I was too young, I went back and read it years later and kind of caught everything I was missing, but to me all his are always early novels before 1930, I mean the Sun also Rises, Farewell to Arms.

RITHOLTZ: Well, that’s a masterpiece, clearly.

VIGNA: What is the one set in the Spanish Civil War, I’m blanking on the name now…

RITHOLTZ: Right, I will.

VIGNA: Obviously famous.

Oh, For Whom the Bell Tolls.


VIGNA: For Whom the Bell Tolls. I mean those are all great works and his early short story collections are great too.

RITHOLTZ: They are very, very good, I really like his short stories.

VIGNA: So I’m a big Hemingway fan.

RITHOLTZ: So since you joined finance, what has changed? Since you joined finance journalism…

VIGNA: Right, journalism, because I joined…

RITHOLTZ: Let me ask that question again, To Have and Have Not is such a spectacular movie, too.

Since you joined financial journalism, what has changed in that industry?

VIGNA: I will tell you what, I will broaden it a little bit, I will just talk about journalism because since I joined the journalism industry in 1991, what has really changed, the answer you want to give as well everything is changed, what is really changed is the business model, the business model of journalism and it’s funny, it’s funny when I got in, we were still, we’re making the pages by hand…

RITHOLTZ: Which is amazing.

VIGNA: We’re printing out the pages, we had a big piece of oak tag on a light table we would cut out the stories with an Exacto knife and glue them to the page.

RITHOLTZ: I did that in college.

VIGNA: That’s why I got into journalism, that’s what we did, but journalism hasn’t really changed, the business the jury — what journalism’s you know model is, goal is has not changed, what has changed is the business model the business model was blown to smithereens by the Internet, the idea that you could create a product, a hard product, the newspaper, sell ads in it and make a business on that is gone.

The Wall Street Journal does a wonderful newspaper, it really does, I love our newspaper, the Times does a great newspaper that that is a business model that has been blown to hell, and in my mind nobody is actually figured out what the new business model is.

RITHOLTZ: I think that the two papers you named along with the Washington Post in the FT that have a pay wall up that charge for online access, that’s the model and it looks like the whole fake news and the whole Facebook Twitter real fake news, not what the president calls fake news but actual Russian bots and other…

VIGNA: Propaganda.

RITHOLTZ: Nonsense.

VIGNA: Propaganda and fake news has become this kind of buzzy…

RITHOLTZ: Troll driven.

VIGNA: It’s propaganda and it is…

RITHOLTZ: I’m hoping that sends more people into the arms of the Wall Street Journal, the New York Times Washington Post FT because I’ve written about noise, I’ve written about signal, you can’t just take something off the web and say oh I read it on the Internet, that’s a joke now, you know it’s so maybe that will imbue to the benefit of the big…

VIGNA: Well, because you know, I think it’s interesting in that we think we are living in such a different time and everything is different, everything’s changed and it really hasn’t, the tools have changed. Politicians have always lied, political parties have always spread you know lies about their opponents, I mean these things are not new, the delivery system is news.

RITHOLTZ: What to do is consistently how you can influence people.

VIGNA: And the job of journalism has always been to independently verify facts, to independently tell the truth as best as we can get to it at that time, that has not changed and that will continue to be what our business is, the problem is just trying to do that profitably.

And I think what you’re you know you can see pro-public a is a really interesting effort, the Washington Post, look at what the Washington Post did, that was a big publicly traded company that bought a lot of pieces when things were hot, things turned south, they went private, they sold off a lot of business they got back to their core…

RITHOLTZ: Bezos buys them.

VIGNA: Bezos, they got back to their core which is Washington…



VIGNA: And so the business, what we do hasn’t changed trying to figure out a way to do it profitably that is a big challenge for us right now.

RITHOLTZ: Tell us about a time you failed and what you learned from the experience?

VIGNA: A time I failed.

So for a while in the 90s and I guess the early oughts, I thought I was going to make a career as a screenwriter.


VIGNA: Yes, I did. I thought I love movies, I like telling stories, I’m going to be a screenwriter.

RITHOLTZ: Have you written a screenplay?

VIGNA: I have written like e10, you know, bought some software read some books try to figure out what’s the — how do you write a screenplay, wrote a bunch of them, never sold one, never got close.

RITHOLTZ: Any of them on crypto currency?

VIGNA: No, this was before Bitcoin.

So one day I’m walking down the street in New York City, and this really happened, I’m walking down the street in New York City, a guy comes walking up the street, he is on his cell phone and he said I hear him say this he says I’ve got one day to get a script to Steve Buscemi and I’ve got $1 million, and I my first thought was I’ve got a script, like this is opportunity walking up the street at you, guy says I got $1 million I need to get a script to Steve Buscemi.

And I’m thinking I have a script and I literally with instant within five seconds is how fast it went I literally talked myself out of going up to the guy and saying I’ve got your script right now. I said…

RITHOLTZ: And that was the end of your screenwriting career.

VIGNA: Maybe my script isn’t ready for Steve Buscemi, I don’t know if he’s the best character, would he really be interested in it I don’t — opportunity walked up the street…

RITHOLTZ: And walked right by.

VIGNA: And I talked myself out of it, why did I talk myself — why didn’t I just…

RITHOLTZ: That is hilarious.

VIGNA: Why cares if it is ready for Steve Buscemi, like here’s a guy looking to buy a script, I got a script, talk to him and I didn’t do it and I regretted it my whole life, and…

RITHOLTZ: That went to the books.

VIGNA: How I learned from it is what led to the books, s when I realized that Bitcoin was a story, I was not going to let it go.

RITHOLTZ: You are not going to get Steve Buscemi on…

VIGNA: I was not going to Steve Buscemi myself again.

RITHOLTZ: Tell us the sort of advice you would give to a millennial or someone who just graduated college who said I’m interested in becoming a journalist or a writer.

VIGNA: Yes, I would say it’s really it’s — it’s two words, don’t stop, don’t stop. And it is funny, I learned this, I actually learned — you were talking about tennis, for a while I was running I was jogging and what I realized jogging was that as long as I didn’t give up I could build up my endurance whether I ran for 10 minutes or for an hour, whether I felt good, I felt bad, I was into it, I wasn’t into it, as long as I kept doing it and convinced myself I was going to keep doing it I would get better at it.

So if I didn’t run for a day, if I didn’t run for two days, if I didn’t run for a week, I was going to go back to it and keep doing it and I did that for a while and eventually I got pretty good at it and I realized to like in your career that is the only thing you can control is you, right? Don’t stop.

Especially in journalism, journalism is a war of attrition I’ve seen a lot of good writers over the years just give up and get out of the business, it’s not an easy business, it’s not a particularly lucrative business, it’s hard to do.

If you really want to do it on if you love it, if you are a writer, just don’t stop.

RITHOLTZ: And our last question, tell us what it is you know about writing and the markets today that you wish you knew back in 1991 when you began?

VIGNA: I mean one thing, this is going to sound very cliche but there is there is no substitute for experience, and it kind of goes back to what we were both saying, 25 years ago I was a bad writer and the only way I was going to get good at writing was by writing for 25 years, that it.

And there was literally no other way to get good at writing but by writing…

RITHOLTZ: Did you not know that 25 years ago?

VIGNA: No, I thought I was a good writer.


VIGNA: I thought I was a good writer, my very first story I interviewed three guys who were at Pearl Harbor the day was bombed so were doing a 50th anniversary and there were three guys at the local VFW who were at Pearl Harbor the day it was bombed and I interviewed them on December 7, 1941 and I wrote the story and I thought it was…

RITHOLTZ: ’91, you interviewed them.

VIGNA: I interviewed them in ’91 Pearl Harbor…

RITHOLTZ: About 30 years earlier.

VIGNA: No, 50 years earlier.

RITHOLTZ: That’s right, 50 years.

VIGNA: So I interviewed them I wrote the story I thought it was a really good story, it was such a good story I have gone back to read that story, it’s a terrible story, not for the guys you guys gave me a great story, they were at Pearl Harbor, the story itself is terrible, there was no way…

RITHOLTZ: You were writing it.

VIGNA: My writing, that terrible.

RITHOLTZ: That’s amazing. I missed your…

VIGNA: You did.

RITHOLTZ: Rollout event at the New York Museum of Finance.

VIGNA: It’s the Museum of American Finance, downtown on Wall Street.

RITHOLTZ: And what was that event…

VIGNA: Well, we were going to have it at the Museum, they have some water damaged we couldn’t do it there when they get that fixed up I encourage everyone to go to the Museum…

RITHOLTZ: Supposed to be fascinating.

VIGNA: Oh my god, it’s great, it’s absolutely great.

So we held it up at the Fordham Law school in Lincoln Center and it was — it was a launch event but we had a we had a — one of these “fireside chats,” which Mike conducted with Joe Lubin who is a cofounder of Ethereum which is another cryptocurrency platform and then we had a panel discussion which is myself, your colleague, Josh Brown…


VIGNA: And the Winkelvoss twins, Tyler and Cameron.

RITHOLTZ: The Winkelvi. Plural, yes, yes.

VIGNA: We talked about that actually.


VIGNA: And yes, I gave you a hard time for not coming.

RITHOLTZ: You gave me grief, it was Tuesdays I have a standing date on Tuesday so…

VIGNA: Unbelievable, I leaned over to Josh and I said is Barry coming, and he said no, it’s Tuesday, and I said, are you kidding me?

RITHOLTZ: So I have to — you gave me grief but I really have to share why that was an issue, so I am very late to the game of tennis I picked it up in my mid-50s okay right I’m and I’m only in my mid-50s right, and there is a longer story about a younger much dumber 14-year-old version of myself being offered tennis lessons by my mom and saying tennis, who plays tennis? A 14-year-old idiot.

So anyway I start playing and this is really a bizarre digression but since you been — you tortured me about it on Twitter, I have to explain this.

VIGNA: That was private, I didn’t give you a hard time…


RITHOLTZ: You DMed me which was worse, publicly, people can track and I would laugh, but privately it’s like oh he really means this, I start playing tennis and if you’ve never really played before but you have some eye hand coordination and have played other sports like baseball, you feel like you can hit the ball wherever you want and I could place the ball anywhere in the court I could catch that back anytime I want when I’m playing with other newbies, then you start progressing and you start playing with people have some skills here and now they are…


VIGNA: You want to — you want to be in that group.

RITHOLTZ: They are hitting the ball with some power and finally merely swing back doesn’t get it done and you start to learn you have to have the right mechanics of your swing, the distance to the ball, the footwork that all these things and it its classic metacognition ala Dunning Kruger where as you get better at something you develop the ability to self evaluate, right?

You ask most people if you are a decent driver and you how the people are above average drivers in the room 80 percent hands go up most of them right sure you are not.

VIGNA: I am among the group that is going to do that.

RITHOLTZ: So I have become skilled enough it tennis to know I suck, right? That is a skill set to be able to say honestly though I really have a lot of work to do. So a friend who I was playing with who also sucked disappears for a few weeks and he comes back and we were pretty head-to-head evenly matched and he starts running me off the court. I’m like, dude, where did this come from? I got a new guy and taking lessons from you can’t get to see him, he sold out, he coaches…

VIGNA: Was that a lie?

RITHOLTZ: No, no, it is absolutely true. He coaches all of like the top people at a particular tennis facility so one day so I ask hey, you know I’d like to take — my friend said he is taking lessons with you, I would like to take a lesson, he says sorry I’m booked, is what he said.

So a couple weeks go by and I’m still getting my ass kicked, this was like a year ago eight months ago and maybe it was September October I get a text on my phone, hey I had a cancellation if you want to take a lesson tonight, I’m free so I go in August September I go take a lesson the next day, I am playing with a bunch of people and like the lesson was just one of those things where just a few little mechanical changes keep your elbow down turn this direction make sure your shoulders are — like stupid things that I can’t believe in hindsight nobody else told me and you’re unaware of the– I think it is called prioperception where your various body parts are in space.

So the next day I go in and I just amongst my you know the junior crew, I do really well and I pinged him back and said that was a great a lesson, let’s do another one. He is like listen, I’m fully booked, I teach six days a week if you want a lesson if somebody drops out I’ll get but — you’re committing to that space every Tuesday at 7 o’clock for forever or for a year.

So I’m like, I’m willing to do that because my game, you made me 20 percent better in one lesson and I understand the rules of diminishing returns but I’m in, you get a cancellation, I’m there. So a few weeks later go by I get a cancellation and now I have to commit to him right for the next six months.

VIGNA: No matter what is going on.

RITHOLTZ: So Tuesday at 7, listen, if I had the Pope on the panel…

VIGNA: Would you have blown off the tennis lesson…

RITHOLTZ: I like this pope, but you have to extend my regrets, absolutely.


RITHOLTZ: And by the way I’m not like a guy who has been playing tennis for 40 years and I’m insane, I’m playing for three years and wish I’ve been playing for 40 years so I feel like I have a lot of stuff to make up, that’s five minutes of tennis that nobody who’s listening to this gives a flying thing about.

VIGNA: Well if you want to make it interesting enough, just a funny anecdote, I do think it’s interesting that in your mid-50s, you decided to pick up something that is brand-new…


RITHOLTZ: I can’t play basketball anymore…

VIGNA: You will never be a pro at, obviously, no offense, but I mean I think that is a thing that people kind of lose as they — and I’m 52’s folks on not like my 30 and I think people lose the interest in new things…

RITHOLTZ: Oh no, it’s fascinating.

VIGNA: I think that really is a problem.

RITHOLTZ: I’m fascinated by new thing just but I’m saddened when old things go away. So I used to play softball baseball and softball and you hit a certain age and you just can’t do that anymore. I used to play basketball, I have some — I got game and I remember like mid-30s rolling my ankle and usually the next day and it just takes days and days and weeks to heal and finally at 40 you know you’re fatter, you are slower, your wind, so there are lots of stuff with that. One last tennis then.

VIGNA: And you haven’t lost any listeners, they are still.

RITHOLTZ: They are gone, it’s just — dude, it’s just the two of us.

VIGNA: They are still here. I believe they are still here.

RITHOLTZ: So tennis has ruined the matrix for me, the original matrix movie, because if you is if you remember the movie the Matrix, the scene on the roof where he is leaning back and bullets are going by and she has to jump into the Huey and fly the helicopter, and she calls in, Tank, I don’t know how to fly a Huey, hold on and they download right now she could and it turns out that’s not true.

Hypothetically if you’re in a any sort of computer simulation and someone could download a skill set and I have watched enough of Dark Fish which is a online collection of basically every tennis stroke by every major player you will see how Federer serve, you want to see how Agassi back hands, you want to see, it’s all there, it’s an incredible service, it’s effectively free and I don’t know how they do this but anyway, intellectually I understand exactly how to do a backhand and how to do a forehand, a drop shot but actually developing the muscle memory to convert your intellectual understanding of the mechanics of a specific stroke to executing that stroke is a giant gap.

VIGNA: You have to realize to, the Matrix is not a real place, it is a computer program, they are not manipulating their bodies, they are manipulating digits, it’s all digits site, it shouldn’t be ruined for you. It should not be ruined for you.

RITHOLTZ: I completely understand that but even with…

VIGNA: They are not in the physical world, they are inside a computer program…


VIGNA: So the muscle they are manipulating are also digital, it is not real…


RITHOLTZ: So within the simulation.

VIGNA: Yes, within the simulation I can’t believe this conversation is happening.

RITHOLTZ: Within the simulation there isn’t even a — then why have a fight because all you are going to do is download various fighting techniques and so everybody ends up with the same various things, either skill matters…

VIGNA: But the point is that most people in the program don’t realize they are in a program, this is only a small group of people who figured out they can manipulate the program.

RITHOLTZ: But the agents who are within the program…

VIGNA: Who are programmed.


VIGNA: Who got programmed.

RITHOLTZ: They know their part…


VIGNA: They are programs, they don’t exist in the real word.

RITHOLTZ: That’s right, so theoretically…

VIGNA: Until Agent Smith of course busts out and…


VIGNA: The sequels are awful, oh my god.


RITHOLTZ: But theoretically shouldn’t every agent have at least this the downloadable skill set that.

VIGNA: They do which is why until Neo comes, they are unbeatable. That’s why they say to Neo, if you see an agent run because the agents were unbeatable until Neo who is the one, and I hate that whole like chosen…


RITHOLTZ: Well there is a little Jesus element to it…


VIGNA: Anyhow.

RITHOLTZ: But to me…

VIGNA: Weren’t we talking about Bitcoin.

RITHOLTZ: So let’s we will bring this back to Bitcoin.


VIGNA: Bitcoin to tennis…


RITHOLTZ: We are discussing digital technologies and the application of them, so you gave me grief about not coming and the whole tennis…

VIGNA: The launch event right.

RITHOLTZ: The whole tennis thing is I made a commitment on Tuesdays, there is a sum cost, I’m paying for the lesson whether I’m there or not so I sort of feel like an obligation to…

VIGNA: I respect your commitment to your game.

RITHOLTZ: You know what there are there are things that I am interested in that I know I have skills or abilities, I may not be able to win a Formula One race but I get on a track and hold my own with just about any other amateur, I wish I had more track time that’s another area I’m fascinated by.

VIGNA: You are a big car guy.

RITHOLTZ: Yes, if I get a chance, go to Lime Rock, take an advanced driving course, they are amazing you realize you don’t most people think they know how to drive you discover again back to the metacognition, really I can keep a car on a lane and I can make a left turn but I really don’t have the ability to manage a car in a variety of so you run through this whole — so I like being confident at things, I like being good at things and it was frustrating to find something that was fun that I sucked at…

VIGNA: Right.

RITHOLTZ: Ad the better I got, the more I realize how poor I was like with each additional skill that was added it was all really so you think like on a scale of 1-10, I’m a five and suddenly realized, no, you are a five on a scale of 1 to 100…

VIGNA: Did you ever find that early because now obviously if you host a show called Masters in Business, you should be a master yourself but I mean, in the early in your career in the markets did you ever find that dynamic that same dynamic?

RITHOLTZ: That’s an interesting question, I’ve talked about this before the training you — I started as a trader in the training you get is essentially they throw you in the deep end of the pool and whoever drowns isn’t a trader anymore. And so the people who managed to and you — one of things I picked up quickly was cut your losses short but when you’re winning, loss was — I felt lost very intensely in and would if anything, cut my losses too fast, you want to cut them quickly but not instantaneously so you eventually iterate and get better and better but I was more fascinated not by that process but why the people around me on the long trading desk who were effectively all doing the same thing, how come this person’s making money this month and last month he lost money, how come that reversed, less money, last month that guy was losing money this month he is making it and I it set me down the rabbit hole of behavioral finance.

And so I was a decent trader I made decent amount of money but was very volatile and inconsistent, I liked it maybe a little too much, I loved it, it was looking for a vein and so all of that stuff ends up going to well if you want to have a career in finance, you are going to make your wife crazy if you stay as a trader, so moved to research, moved to market analysis so that you’ll make less base money but more consistently and she won’t — I’m not a stress monkey, she is.

So say hey honey, how was today, all right I lost 100 grand, and she would go throw up, no, no, you don’t understand, that happens all the time, I’m up 100 and down 100.

Stuff happens.

VIGNA: They don’t care about that.

RITHOLTZ: No, not…


RITHOLTZ: She is a teacher, she wants ready steady life, the thought of you lost four cars or half a house, what’s wrong with you?

VIGNA: Right.

RITHOLTZ: Sometimes a position goes against you when you have limits of how much are willing to accept losses and now it’s everybody’s style is different and all of that led to where we are today. And by the way PS, if you go back and listen to the early versions of Masters in Business I find they are unlistenable, they are terrible.

VIGNA: Yes….

RITHOLTZ: Only because…

VIGNA: I got with a lot of my old stuff.

RITHOLTZ: Do you go back and read some your own writing? Listen I think Bailout Nation, if I was running it today I would’ve adopted a much more dispassionate tone I would’ve been a little less flamboyant in some of the…

VIGNA: You probably would have asked me to be your co-author instead of Aaron, right?

RITHOLTZ: Aaron was not my co-author, Aaron was my editor who kept me from having these long rambling digressions about things like tennis lessons..


VIGNA: I’m joking…


RITHOLTZ: Aaron is a wonderful editor and I really…


VIGNA: No, but I do find that, things that I wrote early in my career the videos that I made early because I did a live show for the Journal for a while all the early stuff I go back now and I cringe, I just cringe, I can’t stand it, I actually can’t stand, I don’t like it, I don’t like what it was at, it’s funny because…


VIGNA: You get criticisms and you think that person doesn’t know what they’re talking about, I’d be that person now criticizing me…

RITHOLTZ: I experience every five years or so, now it’s 5 to 10 years where you look back what you doing five years ago when you say oh what I’m doing whatever it is radio, writing, managing assets, whatever constructing portfolios I’m so much better at X, Y, and Z today than five years ago and I assume five years from now, I’m going to look back and say, what were you doing in 2018 talking about tennis and — it’s you clearly have no idea how to host a radio show and I will tell you…

VIGNA: 2023 Barry is looking at this right now and oh my god, this is terrible, everyone stop listening.

RITHOLTZ: It’s horrific.

VIGNA: I hope people are still listening….


RITHOLTZ: We will move this to the end, we will move this to the end so people who hang out get some extra…


VIGNA: You did have some interesting questions for me.

RITHOLTZ: One last thing about metacognition I want to share with you, if you’ve ever done live radio with somebody who’s a pro when I watch Tom Kean run a constant with the producer and you are counting down 10 seconds to the commercial 5, 4, 3, 2, 1 live commercials, were live billboards life throws to people on the floor, the exchange, and he does it flawlessly seamlessly people don’t appreciate how skilled the pros are because you just assume hey, how hard is it to get on the mic and go blah, blah blah for an hour but when you actually watch the Balls are in the Air, the moving targets, the precision in which the timing is done, you realize these guys are amazing and after 30 years you certainly should be good but they’re astonishing, astounding.

VIGNA: Yes, Tom is great. And I think you have to realize too, he has a team around him.


VIGNA: he has a team, he has producers, he has people on the floor…

RITHOLTZ: Researchers…

VIGNA: People on the control room, he has research, I mean that is a huge team and all those efforts get funneled through Tom Kean and he has to be able to maintain that, and he does it, he is great, I mean Kean is a total pro, he is great.

RITHOLTZ: But the listener doesn’t see it, they just listen to Tom’s voice…


RITHOLTZ: So that is why I keep coming back to Dunning Kruger, you have to get to a certain point where you can understand exactly what goes in and how much you suck at it. So the joke is What? You hosted a podcast where you interview people? My wife says I’m a terrible listener or something like that I wasn’t paying attention, so that’s the joke. So now we are go back in time and we have been speaking with Paul Vigna, he is the author and co-author with Mike Casey of two books, the first being The Age Of Crypto Currency, the second being The Truth Machine, Block Chain In The Future Of Everything.

If you enjoyed this rambling and aggressive conversation, be sure look up an inch or down an inch on Apple iTunes and you can see any of the other 200 such conversations we’ve had about of the art of the backstroke and the drop, we love your comments feedback and suggestions write to us at, I would be remiss if I did not thank the crack staff that helps put together these conversations each week, Medina Parwana is our producer/audio engineer, Taylor Riggs is our booker/producer, Mike Batnick is our head of research.

I’m Barry Ritholtz, you have been listening to Masters in Business on Bloomberg Radio


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