HODL Podcast Episode 5 was originally published on February 8, 2023.
Join Drew, Skyler, and Joel as they talk about Checks - VV edition, open edition metas, on-chain vs off-chain, the Kevin Rose hack, and why custodial wallets are necessary.
Episode Rundown:
- Checks - VV edition and their significance.
- The birth of a new meta - open editions.
- What it means to be on-chain vs off-chain.
- The Kevin Rose hack.
- Opinions on custodial wallets — and why they'll be necessary for the future of web3.
About Holder
Holder is a CRM and marketing automation platform for web3 brands and creators. They help businesses engage and communicate with their customers on the blockchain. With Holder, companies can manage customer data, track user engagement and automate marketing processes. For more information visit our website.
Podcast Transcript
Read the Full Podcast Transcript Below:
Hello everybody. Welcome back to the Hold on for Dear Life podcast. We are at episode five and my name is Drew Bechler. I am the CEO and co-founder at Holder. We are a web three CRM and marketing automation platform, and we just happen to be the host. Of this fun podcast here, and I'm joined by my two esteemed co-hosts, Skylar Braun and Joel Moser on the holder team with me today.
We do not have a guest joining us, but we'll be bringing on more and more guests over the next kind of few weeks, so look for more guest appearances here as we go. We don't have a ton of topics to discuss. This week though, there's lots of headlines. It's just we've been very heads down building product and not paying quite as much attention to the news.
But there's a handful of couple things that we thought would be fun to talk about and riff on. They're a little more evergreen, but also related to pop culture headlines in the news today. So maybe to start us off, I'll kick it over to Skylar. I know that we've seen this kind of open edition meta and, I don’t know if you would say what started with Jack Butcher and the VV checks, but I don't know.
I would give him a lot of credit for kind of what has now pushed it into the mainstream. But anyway, you've seen this kind of explode over the last handful of weeks, so maybe, I know you had some thoughts on this and a lot of early exciting things to share. So maybe if you wanna just go a little bit deeper.
So Jack Butcher is an artist and he has been the person who kicked off all of the meta around Open editions and specifically with his piece called VV Checks.
Each one of these pieces I think is pretty profound, even though they are all the same, because it revolves around the idea that Twitter has brought in, which was, back in, I think 2009 when they started this. Maybe it was a little bit earlier with the idea around verification.
And then as we all know, Elon Musk took over Twitter and made a couple jokes around this account May or may not be notable with the way he changed verification overall. He latched onto that and named this. This artwork may or may not be notable.
So he kicked off this meta with open additions, where now there are many other artists who are jumping in by this tech that I believe has been powered by man manifold for the most part.
And it's really just exploded in popularity with even web two artists who haven't done a bunch of work in Web three yet.
Someone like Nest Graphics has recently done a couple that have been super cool. I'm trying to think, who else has War Huddle Did his lid? Open edition. That one was really fun. So lots of people jumping in on this and I think this is good for artists overall. I know there's been a lot of controversy with, hey, this open edition meta is just, pumping the bags of already rich artists.
But I don't think that's the great way to look at it. I think the better way to look at it is this technology is now empowering. Artists who may have only been in web two or in web three to now use a technology to widen their audience.
And there's no reason why artists can't take advantage of the tech that's happening. So yeah. One of the things that's most interesting to me about it is more of the existential discussion that comes up around. Validation. Cuz it's more of like an anthropologic thing of humans needing validation and needing social, like verification that they are it's a psychological thing of wanting to be, quote unquote verified because it, it gives you some sort of, I don't know, higher status even though it's really not.
And so I think. What's most interesting about the checks are that the it is mocking that in a way of. Yeah. You want to check? Yeah. Here's a bunch of checks. And I think that's really, that's where it's more from like a social experiment and from that regard, which is really interesting.
And and it brings up a different kind of, A different conversation around the a rather than it always just being about the visual beauty about kind of the overarching like existential thoughts that it makes you have. So that's what I think is interesting. And then there's lots of derivatives I've seen come out about this and there's some I've seen that were like ducks and whatnot.
Lots of really weird things. Just, as in. Everyone that every time something explodes, there's always, a thousand derivatives that come out cuz people are trying to capture the attention and capture the same thing and they're combining 'em in different ways. There's pepe checks and punk checks and just combine any two popular projects and people are always trying to find ways to make money from that.
And so that's where it's a little bit like it starts to muddy the waters a bit, but this is a CC zero.
Yeah, which I just, all of it I think is just really fun around, I don't know, there's lots of different elements here and it seems so simple and a little bit of his like, oh, why are people like,
I think the checks are interesting and I think there is like the cultural kind of phenomenon, but I think too, like there's a handful of other layers, like the CC zero component that's oh hey, go and rip this off. And Jack's been like retweeting anything that he thinks is cool, that is, reusing it like on his Twitter timeline as well.
So he's, supporting a lot of these, which I think are pretty cool. There's also the element, I think this I think took off. If I remember the story he like tweeted out the picture of it basically and was felt cute, might delete later and just see what people say and got a handful of likes and retweets on it.
And so then he put it onto Zuora. Did an open edition mint. I think the mint was $8 or tried to get it around like $8, which is what it costs to buy your blue check mark on Twitter. and I think more people minted than actually liked his original tweet that also exploded, which is also just this very wild and of interesting phenomenon.
And then after this took off, he realized, all right, let's do something really unique with this. And so now he has the mechanic too, around, Hey, if you own, and I can't remember, I think you can burn two of them. In order to make a black and white edition or something like that. And then has this really stair step kind of progression around if everyone keeps burning these, there are three, penultimate conclusions that could be this.
Like you have a single edition of just one check basically, and they keep condensing down every time you burn it. There's a few fun dynamics too, and this is maybe leading into another conversation around on train and off train art, but he's also been very adamant around you're not buying the art.
You are buying this Digital token that today points to an art piece. And so if you go in and burn, you can actually choose. So some people now are like, the highest, I think sale of course was like four 20 or 69, the number mint. And so you can actually keep your item number. And so when you burn two, you'll say, I own, item number one and item number 300.
I could say I want to keep ID number 300. And so basically what they're doing is just swapping out the image link on the NFT, like that's not actually giving you a new NFT or anything like that. And so I think he's also just playing with the fact that people are also buying all these checks of artwork that, they don't actually.
Own the image itself, cuz it's not on chain. Yep. But anyway, there's just a lot of kind of, I think, fun things around. He's pushing the boundaries and this kind of blend of modern art. And I dunno, I find it really interesting. I have a friend that owns like 15 of them and I'm very jealous that I own zero.
But I should have bought a week ago, like a 0.6 or 0.7 70. Now from an $8 mint, pretty incredible.
It feels like it was a recipe for success with all of the Twitter $8 blue check mark and. Open additions and the new technology coming out and CC zero being a topic. I feel like Jack Butcher has the Midas touch. Everything he touches just turns to gold and this was definitely one that happened, so I'm really excited to see what he does in the future with it.
And you are deep in a number of on chain projects. So maybe just for the layman that may not be an expert, maybe a 101 of on chain versus off-chain art and then maybe some. The projects that you are most interested in excited about and some of the kind of news in that on chain world over the last couple of weeks?
Yeah. So on chain versus off chain, the whole idea is, With on chain, it is entirely stored on the Ethereum blockchain and the art behind it, or the token itself, will exist as long as Ethereum does. Whereas off-chain art is stored in some sort of other centralized storage, or it could be decentralized, but it is not on chain, which means as soon as somebody stops paying for the server, even if it's decentralized, it will go away.
So IPFS is one of the most common ones. It is technically decentralized, but it is not on chain. The difference being that it, you are pointing to some sort of website URL, that will return you an image. The problem is that somebody is hosting that image on their IPFS server and then you can just hit any other IPFS server to get to it.
But eventually those will expire and the image will become a dead or expired or the little red X image.
But the difference with on chain is it's directly in the metadata on it's directly in the bits that are stored in memory in the database that is, The blockchain that is an Ethereum node. So it is usually some of the most common ones are bitmaps. SVG can also be stored directly on chain.
Anything that is codified bay 64 encoded, but usually is one of the most co one of the ones I see a lot. There are new techniques that are coming out that I keep hearing lingering of. There's actually a whole. Website that one of the guys at indelible Labs who does kinda like a manifold.
It's kinda like Zora, kinda like all of those that help you deploy a project. They are geared towards on chain. And then he actually deployed a website called, is it On Chain xyz, and you can literally put in any. Ethereum contract address, and it will try to determine whether or not it is on chain through some like random code sniffing that he's written.
So I have a question. Wouldn't there be advantages though to storing certain parts of an NFT off chain? I'm thinking things that are large in file size, like it could be a video or it could be something that you really shouldn't be storing on chain. And I asked that question in the context. Blockchain, which is the underlying technology itself, is only going to become bigger and bigger.
And I just wonder if we start storing everything on chain, have people thought about the ramifications of an exponentially growing ledger that now we're storing art, now we're storing video, now we're storing whatever else on chain. Like how is that going to impact the technology itself? Or is this just, not that relevant?
It is relevant. I think the long-term ramifications is a good question. I'm not a hundred percent sure. I know that there are lots of techniques that they're using to make it more efficient. The problem is though, to your question is it's actually more expensive to load, to upload on chain versus off chain, which is why a lot of people don't do it.
Even just a tiny little project can cost like half an. Just to upload on chain. It could be tiny, not even that complicated.
Nope, one time. That that's the whole, maybe not the whole premise, but that's, How the blockchain works is you pay a one-time fee and you don't, you're not really paying for ongoing maintenance other than the gas transactions of interacting with the contract, which are, you're gonna pay for that regardless.
Yeah, that's a pretty significant fee. I can't think of anything off the top of my head that would cost more in gas to execute on the blockchain. It's a whole, it's all based off. There are certain baseline transactions that you could do, and each one of them has a base cost. And then depending on network effects, it could cost more.
Yeah.
And to be clear, this is just uploading the initial contract. Once it's on chain, the other transactions don't cost
anymore. Yeah it's just an interesting thought to me because. Technically anybody could download like the Bitcoin ledger or the Ethereum ledger onto their computer.
And I you do that every time you spin up an Ethereum node, right? You have to. It has to download the entire ledger. And yeah, it is a growing thing, but also, Google has the same problem. They have a billion quadrillion pet, I don't even know. Petabytes they, they're now in the petabytes worth of storage.
Or more whatever's after petabyte. I don't even remember as an engineer, that's probably a failing on my part, but whatever. But no, that's the problem is as many data points as the Ethereum blockchain has or any blockchain at this point, for that matter. There are analytics platforms out there that are run by Google or Netflix or Amazon or whatever that actually have more because they're just gathering that.
Larger volume of data, eventually that might inverse and there might be more Ethereum it depending on, more mass adoption means more transactions, but that's also why that cost goes up to execute a transaction. Yeah, so in relatively, I think it's only a couple hundred gigabytes right now, the whole ledger itself, but I think with the whole promise of Web three and decentralized technology is that it is decentralized and it's permissionless and it's, I wouldn't say government free, but it's more free to an extent and.
I would almost challenge, the people that I know this is happening today are running these nodes in AW w s or in the GCP and you're saying there's petabytes, as I said, that of storage right now that they're dealing with right now. Hundreds of gigabytes that these ledgers are right now that's not that big, relatively.
I just wonder at what point are people gonna start considering running these things in the cloud and how is that going to work from a decentralized perspective?
Yeah, that's a good question. I And that's also why part one of the problems that we talk about at work is cuz we're not necessarily fully indexing the blockchain, but we're pulling in a lot of blockchain data and we're trying to only pull in what we care about.
Because if we tried to pull in everything and store it in a database, not like a ledger, It's a very expensive, or it's, that's a very expensive storage medium in comparison with the way that the ledger is designed and the ledger is designed to be lightweight, designed to be like more inter, more storage efficient.
At least that's my understanding.
Would you say it's designed for people like ourselves or companies like ourselves to be able to pick out the data that they want to pick out of the ledger itself?
It depends on exactly what you're trying to get. If you're just trying to get, a specific transaction, yeah, that's fairly quick.
If you're trying to get a specific ID of something that's pretty quick. But if you're trying to get a list of something that's very hard, interesting. So like individual pieces are very easy to get, which is in general always true. For databases, I mean like doing a single index lookup is usually an order of one. If you're figure, if you're familiar with like the way that they evaluate performance of code and I would say the blockchain is probably no different in that regard, depending on what it is.
But I mean think about every time you load up a transaction on skin. Yeah. Which is just a block explorer. It's. Takes half a second. Like it's never, the only time it's bogged down is when your computer is not downloading stuff from the internet fast enough because your local internet is slowed down.
Yeah. So all of this to say that there is some definitely cool benefits to running things on chain, there's also sounds like some benefits to keeping things off chain, at least for now from like a storage perspective. Overall. Maybe, a lot of it comes down to cost, but also it's like someone's incurring that cost like you're gonna pay for the ongoing storage of goo of storing something in Google Cloud every month. But the people who want to develop or build on the blockchain are probably naturally going to go toward the things that is the cheapest and the easiest to use. And right now, would you say that's IPFS versus it depending on change.
Honestly, it depends. There's so many tools now that make it easy to do things on change. I In Indelible Labs just launched like more public now and. Their entire thing was you had to own an on chain, Kevin, to be able to deploy, to be able to deploy a contract. But the whole idea was that their tool, they are now doing support or working on support for off chain, but they are doing everything on chain and they even designed a new contract type or a new extension of the 721 contract for expiring token approvals after 30 days or whatever set time period, which is cool. So like they are very much focused on chain. As I said earlier with the guide deploying a website of determining whether or not a contract's on chain.
So there are tools out there that make it. To deploy stuff on chain. And a lot of the ones that, cuz I'm in their discord channel, their discord community, a lot of the people that are building these are not developers, they're artists. And yeah, it's a little bit more expensive, but they take that into account and they're willing to pay for that, to have their art live forever on the blockchain.
Yeah.
I think's gonna be really interesting in the next couple years is we're probably gonna see more and more, we'll call 'em crypto or blockchain historians, especially on chains like Ethereum, where you can store all sorts of this data on there. The Ethereum name service, which is probably the largest decentralized naming service right now on Ethereum.
It lets you tie a domain name and human readable, recognizable name to these hex Waller addresses that are, I believe, 42 characters along, and it makes it much easier to send. And receive Ethereum two. So there have been projects in the past, or historians I should say, where people have actually gone and tried to dig up old contracts from 2017, 2018 to try and find out okay, who was the first person who really did this?
And I think all of those, for the most part, were just, Cash grabs say, oh, this was the first system that was ever created on the blockchain. But it was still interesting to see a lot of that happening because there were three or four projects that kind of just came out of nowhere that, oh, actually this one was the first one that a lot of this stuff takes work to look at and to figure out.
And as this blockchain gets bigger and we store more and more data, Especially things that are on chain. I just wonder how much more complex it's gonna be and if we're gonna even need to build infrastructure that makes it easier to read, because even ethers scan is hard to use. It's very difficult to use to, to gather insight.
If either Scan was easy to use, people would be able to gather those insights from Ethers scan and there wouldn't be like half of any of the API providers. There wouldn't. There half, there's so much of the one three infrastructure at this point would not exist if either.
Easy to use, but that's not what it's intended for. It's a block explorer. It's intended to be very lightweight and very specific. It solves a very specific problem of being able to see kinda like all of the raw data as generally pretty as possible. It's very ugly, but that's like as pretty as you can make a, think you, think about looking at a raw bank transaction for getting a direct deposit from.
It's not gonna be pretty. It's not gonna be a nice user interface. It's just trying to give you, it's just trying to provide numbers to you. Yeah. It's really just a verification engine in many ways. Yeah, I that's exactly how we use it, is, to verify that the transaction I just submitted is, in the queue is submitted to the block and then is it successful or not?
Yep.
You would rather that be accurate over pretty, yeah. All every day of the week. And that is, yeah, it's just it's an ex, a black explorer that is exactly what's in what it is intended to do. And it's amazing at that it is very hard to aggregate or pull insight out of it, which is why we've seen so many companies and analytics providers and, amazing companies like Dune pop up and we are, yeah.
Hopefully just trying to take that to the next step where, how do we point all the information in one very specific use case to the market. How do we help them use this to connect better with their customers? I dunno how we got onto an advertising campaign holder, but there you go. You're welcome.
Sign up at Holder.xyz. Engineer. The engineer in the room. Teed it up
One other thing to add about the on chain versus off chain and why somebody would decide one or over the other.
Some projects have decided to do both on Chain Monkey is a really good example of that. They're kinda like, Genesis contract is on chain. It's fully on chain. The art is it's almost iconic at this point, how basic it is. And there's a whole story behind it and whatnot.
But then they have their. They're Karma's contract, which is not on chain, which is more of the kind of p fp style, like more high quality, high definition, different kind of crazy looking with like flames and, laser eyes and all those weird stuff. But like Genesis one is just very simple, basic shapes.
Your five-year-old could draw it and paint. They even don't say that and part of their wiki. But yeah, that's, Interesting thing is they decided that is like their Genesis one is on chain, but then their karma so that they could do higher quality, higher resolution, they are intentionally off chain and they still have built this like crazy massive community that's really dedicated.
So I think you will see co projects decide to do both. And as innovation continues to evolve on the blockchain like one of the other communities that I'm a part of called On Chain Birds is really trying to push. A lot of that and push fine art on chain and try to find generative ways of, are fairly, I'm gonna say this wrong, at least like three times probably, but it's like fairly generated on chain.
If you were opening a pack of, TCG cards like Pokemon cards or Magic the Gathering or which those are mapable technically, but if they weren't, this was like fully generated on chain, as randomized as you could get it. So like they're trying to push that and there's other contracts trying to do the exact same thing or other projects.
And so it is really interesting. I think they, this will continue to evolve and honestly, I think storage mechanisms will probably get more efficient. There's maybe other ways that the problem of the ever-growing ledger may be able to be dealt with or handled.
For our last topic, another really big headline in the web three in particular, NFT World over the last couple weeks was that Kevin Rose's wallet was hacked through a pretty sophisticated phishing mechanism and leveraging the.
Open Sea Seaport contract that he had granted approvals for specific contracts to, and they're able to drain a ton of chroy squiggles and a za and probably a million plus dollars worth of any NFT art, which is insane. And I don't know if I have much, too much to add to all of that conversation.
A, I don't really know exactly how it happened and everything, and. B I am not a security expert movie to get into it, but the only thing I will say that I think is interesting, he published a tweet yesterday. Around his kind of updated approach to wallet security and just making it really public, which I really commend.
I think they've been, he and the proof and Bloomberg's team have been trying to be very open around what happened and how you should be thinking about security. But anyway, he goes into kind of Hey, I now have four wallet types. I have my hot wallet, which is my daily interactions, low volume, low value in there.
I have my warm local ledger. Where I keep sub 10 eth NFTs that may be traded, he has a sale wallet, which is individual wallets created for high value NFT sales slash transactions. And then he has a pure cold wallet, high value NFTs help for the long term. And he kinda goes into like the difference in these and how you should think about delegate cash and stuff like.
The only thing that I think is useful that I might add to this conversation is just I think about this and I'm like, oh yeah, that's like the best way to be like highly secure with it and have all of your ledger seat phrases recorded in steel and stored not at your house or whatever. And I just think back to like our conversation last week around how do we get this how do we make web three more for the masses?
And I. There is no way any average person that I know is gonna even take a 10th of that, go down the rabbit hole like that much to take that level of security and no way. My parents and I don't know, just cuz all of that to bring up their. Is still, I think, a very valuable place for centralization in some of this and that we still have kind of a long way to go.
Because even some of the most sophisticated, collectors in this space are still, who go through pretty extreme ways of keeping themselves secure are still struggling here. Yeah.
People can't even. Good passwords and you're telling me they have to, they're responsible for managing a, at minimum 12 word seed phrase at minimum 12.
Most, like what the, there, there was some PO percentage of people that literally their password is password. It is. That, that might not password. 1, 2, 3. Yeah.
Or password. 1, 2, 3. Because they had to have a number or password, 1, 2, 3, exclamation point, because they had to have a number and a symbol.
It's just bonkers that, and people reuse the same passwords and it's just, it's crazy. And it, there's just no I just I don't see how it really, how we get from that reality to. A fully decentralized one where people actually have control over their wallets, full control. There's going, some people are just gonna decide, I would rather not deal with that than I will just let someone else do it for me, and I will just trust them.
I don't think there's anything wrong with custodial wallets at all. In fact, I think they're gonna be totally necessary. Just like I don't think that Bitcoin is going to overthrow the banks and we're not gonna need banks anymore. Here's the things that Bitcoin can't do. If you have some kind of issue or you need help, like you're an older person who just doesn't understand the technology, who you get a Ghostbusters, right? I mean, your 18 year old grandson, whereas with a bank, you call the clerk or you call the number that's on the back of your card, right? And that's the kind of value that we're never gonna be able to stray away from, which is what I think custodial wallets are gonna bring to the table and why I think they're going to be totally necessary and frankly, totally fine as long as.
Give you the option to off ramp. If you do want to take the deeper dive into more of decentralized, “Hey, I want to own my own wallet. I wanna manage my own seed phrase, which by the way is a huge pain. I have been doing my taxes”. This is a plug for everybody who trades NFTs, does. Defi uses crypto at all.
Please make sure you're doing your best on your taxes, and I've been rounding up all my wallets. My seed phrases and I've gotta say it is a huge pain, especially when you have a bunch of wallets to try and figure out, okay, this seed phrase goes with this public address and this is what I did on that wallet.
And like trying to track all of those things is a total mess. And I have been doing this for a very long time and it is still hard for me to keep all of these things in one place. And I still don't frankly think there is a very good tax software out there for all of this. There are some that are okay.
There is still a lot of manual work that's involved in this and I think all that to say that it just means that we need better interfaces for this and custodial wallets to me are the answer. Yep. I love that.
And with that, I will sign us off for this addition of the Hold on for Dear Life Podcast. Reminder, this is not financial advice.
Do your own research and just to cover our butts here, but you're interested in learning more about Holder or finding any of us online, you can go to Holder.xyz or at Holderxyz on Twitter and we will see you on the next episode.
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