BROOKE GLADSTONE This is On the Media, I'm Brooke Gladstone. In the first segment, you heard Anil Dash describe means that were created specifically to be sold as Mufti's parallel to this trend. Are the finely aged memes being fashioned into valuable NFTs.
CLASSIC YOUTUBE VIDEO [LAUGHING] Charlie! Charlie bit me! Ow! Ow Charlie! Owwwww! [CRIES] Charlie, that really hurt!
NEWS REPORT Yesterday was the 14th anniversary of the uploading of this famous viral video, which has been viewed almost a billion times with a 'B,' a billion times. But guess what? It is officially off the internet after being auctioned off overnight as a non-fungible token or an NFT. The video, listen to this, sold for 760,999.
NEWS REPORT This cat meme, though, downloaded millions of times, sold for $600,000.
NEWS REPORT Remember, this one? The four year old in that picture, known as Disaster Girl, is now in college and nearly half a million dollars richer after selling the photo in an online auction. [END CLIP}
BROOKE GLADSTONE You can view these meme sales as cosmic justice for their creators. Most people who create a viral video or are the subject of one, experience the negative consequences of virality without fair compensation. One person trying to make lemonade out of his own viral meme is Carlos Matos, OTM reporter Micah Loewinger met up with Matos at the NFT auction of the meme that made him famous.
CARLOS MATOS My name is Carlos Matos, and I'm known as the king of all the cryptocurrency memes.
NEWS REPORT OK, so let's start way, way at the beginning. How did you get involved in cryptocurrency?
CARLOS MATOS I get involved into cryptocurrency. At one point in time when I saw a friend of mine through Facebook that shared with me that there was a song idea called BitConnect, and I was just very curious about it. So I put $25,610 and said, Well, let's see what happens with it.
MICAH LOEWINGER And what happened?
CARLOS MATOS What happens? Micah - it just went crazy. Like within a couple of months. My 25,000 became like 125,000 thousand dollars, and I was like, What?!.
MICAH LOEWINGER These massive returns were exactly what Bitconnect, an anonymously run service had promised its investors. But Carlos didn't understand how his money was growing so fast. How it worked, as Bitconnect described it. Was that first he deposited his investment $25000 worth of bitcoin on the Bitconnect app. Then Bitconnect Day traded his bitcoin using software, which the company described as a quote "volatility trading bot" for the bot to work, your bitcoin investment needed to stay locked in the app. So Carlos was paid out one percent per day, a guaranteed profit in the form of Bitconnect Coin, its own cryptocurrency. Carlos says his wife thought this was a big scam, but he brushed her off because – well, look at those profits! And because he had invested more than $20000, he was invited to Bitconnect 2017 first and only annual party in Thailand.
CARLOS MATOS I was very excited because it was an amazing ceremony, an amazing event. There was a party, there was dancing. There was a whole bunch of different things. They were giving Lamborghinis and Ferraris and everything to the highest promoters in Bitconnect.
MICAH LOEWINGER Carlos watched some investors get on stage in the main banquet hall to celebrate Bitconnect. He said he was moved to share his experience, too.
CARLOS MATOS Because I felt like that was a moral obligation for me to go ahead and share with the world and to say to the world that happened to me is very possible to happen to you. So why not take advantage of it?
MICAH LOEWINGER He's looking out over the sea of people sitting at tables, and he begins giving a speech that would change his life.
CARLOS MATOS [SING-SONGY] Hey, hey, hey... Hey, hey, hey... Hey, hey, hey. Whassu-whassu-whassu-whassu [repeats like 10 more times!] Whassuuuuuup Bitconneeeeeeeeect!
CARLOS MATOS They never pay me for this. This is not something that I did because I wanted to have some personal gain out of this.
CARLOS MATOS I am really so thrilled to be right now sharing this amazing. Glorious. Super EX-citing moment of my life with all of you guys. [CONTINUES UNDER]
MICAH LOEWINGER Were you sober when you gave the speech?
CARLOS MATOS Absolutely. I never have been drunk in my life. By the way, guys, I did not practice or did a prepared speech or anything. Its just flow.
CARLOS MATOS I am saying to so many people who say that this was going to be a conartist game. That this was going to be a scammer game. Hey, you're going to lose all your money. My wife still doesn't believe in me. I'm telling 'Honey, listen, this is real.' 'No, no, no, no, no, no. That's a scam.' Faith and belief is the one thing that we all need to be able to change the world. So guys, let me tell you, I loooo[too many o's]ve! Bitconneeeeeect. [END CLIP]
MICAH LOEWINGER What happened when the speech was over?
CARLOS MATOS Oh, a lot of excited people were hugging me, were congratulating me. And we're now feeling like that was like the most amazing moment of their lives. That famous speech became an iconic moment. A moment to remember for the rest of cryptocurrency history. It was after a certain time that I realized the magnitude when it started going viral.
[MUSIC CONTAINING CARLOS' SPEECH]
MICAH LOEWINGER The video was all over YouTube. People started remixing it, making songs out of the speech, plastering GIFs of Carlos dancing on crypto forums.
CARLOS MATOS If you go into any cryptocurrency chatroom and people are talking about cryptocurrency, if you're not saying like, 'Hey, hey, hey.' Or if you are not going whassu-whassu-whassup!' It's like you are not in
MICAH LOEWINGER All this free marketing helped Bitconnect reach a valuation of 2.6 billion dollars worldwide. But not everyone was quite so bullish.
KEEGAN-MICHAEL KEY Hey, hey. hey! [CLIP CONTINUES UNDER]
MICAH LOEWINGER This is Keegan-Michael Key on Last Week Tonight with John Oliver in 2018.
JOHN OLIVER Does this mean I shouldn't just throw everything I own into cryptocurrency.
KEEGAN-MICHAEL KEY That's right, John. That's right.
JOHN OLIVER I shouldn't – I shouldn't do it?
KEEGAN-MICHAEL KEY No, no, no, no, no, no, no, no, no, no. The crypto market is extremely volatile and insufficiently regulated. They pump, they don't.... [END CLIP]
MICAH LOEWINGER In 2018, American regulators started to crack down on Bitconnect, accusing the company of running a Ponzi scheme. The Securities and Exchange Commission alleges that those returns Carlos saw, that were supposedly produced by the Volatility Trading Bot, were just funds from newer investors. A couple of weeks after the government got involved, Bitconnect shut down, and thousands of people who had invested in the company saw their money vanish as the value of the bitconnect cryptocurrency tanked. Earlier this year, the SEC sued the founders of the company, along with a handful of YouTubers who had taken secret payments in exchange for promoting the scam to their followers. Even Carlos got a knock at the door.
CARLOS MATOS The SEC came and they did an investigation on me. I was expecting that because that's the normal thing. They are looking for the masterminds of the organization and all they found out with me was that I was an investor, just an enthusiastic investor.
MICAH LOEWINGER Were people angry with you when it came out that it was a scam.
CARLOS MATOS Yes, I got threatening messages and people saying that I should go to jail.
MICAH LOEWINGER How did your wife at the time react to it? Did she say, "I told you so. I told you this was a scam?'
CARLOS MATOS Absolutely, absolutely. She say, you know, you should have listened to me. Look at what happened. Now you are the laughing stock of everybody around the world. I don't even want to go out anywhere with you everywhere. Somebody must be laughing out of you, you know? She couldn't take it. She couldn't take that shame. What happened after that? We got divorced. I do not judge her, but yeah it was a very dark moment in my life. There was a point in time that I got depressed and that I gained weight that was like, 248 pounds after Bitconnect. Then it was directly related with the fact that I got divorced and all that stuff happened. And then I just took that. In turn it around in my life now is amazing.
MICAH LOEWINGER Carlos says he looked in the mirror one day and decided he needed to start taking better care of himself. Nowadays he's muscular and he keeps a rigid schedule that involves waking up in the middle of the night to stretch for an hour. He's 57, and he told me he intends to live for a very long time. He's laid low for a few years, working as a therapist, treating kids with autism, but he's approaching this NFT craze as his public comeback moment. We're speaking at a comedy club called The Stand in Manhattan just an hour before he's scheduled to take the stage to address crypto investors again. At an event he's calling Bit-redemption.
CARLOS MATOS Bid redemption is Carlos Matos saying to the world, Listen, I am not the one who scammed you. I am simply an enthusiastic investor who w\as run by Bitconnect and who right now is redeeming myself by providing something which I believe is going to help them grow.
MICAH LOEWINGER That something is a series of NFTs based on his famous Bitconnect speech. 28 NFT's related to 28 segments of the speech, one where he says, Hey, hey, hey. Another where he introduces himself. Another where he talks about his wife and so on. Carlos is launching the auction at this event
CARLOS MATOS Once the first NFT is released, and whoever the lucky person is going to be or whatever price they get it. Trust me, that's going to be an amazing, very lucky person.
MICAH LOEWINGER The videos on YouTube, I can watch the video. It's not as if by selling the NFT is the people who own them have the exclusive right to the video. So what is the value of owning an NFT for a meme that's already so popular?
CARLOS MATOS The NFT is coming directly from the living meme that really created the speech. Its coming from my specific wallet address. The MetaMask address has a signature in the blockchain, the signature of Carlos Matos.
MICAH LOEWINGER And you're about to launch the auction. I think just in like, what is it like 10-15 minutes? I'm sure you and your team have had some conversation about how much you think these are worth.
CARLOS MATOS Yeah, metamorphosis and I have an arrangement.
MICAH LOEWINGER Metamorphosis, the company behind this?
CARLOS MATOS Yeah, I get 85 percent of the sales at the beginning up to certain amount. You know, five million...Careful.
MICAH LOEWINGER I've just accidentally knocked over a glass of water.
CARLOS MATOS So if it reaches five million, they only get 15 percent and I get 85 percent. But if we pass a certain amount, you know, twenty five million dollars and then then they can actually get up to 48 percent.
MICAH LOEWINGER And this is for an individual NFT or the sum total?
CARLOS MATOS For the sum of total. We're going to give people all over the world the opportunity to own a piece of cryptocurrency history. Who knows what's going to happen, but I'm going to tell you it's going to happen - BOOM!
MICAH LOEWINGER Amazing. Carlos, though, when I first saw your video. For me, it seemed to like symbolize the caution we should have when approaching these new technologies that we don't totally understand, and I feel like maybe that's why it's so famous. I can imagine somebody is listening to us talk and they're hearing you talk with the same confidence about NFTs. How do we know the same result is not going to happen again?
CARLOS MATOS You know something. My guy, you know something. I'm going to give you a hug for that question. That was just right on. I mean, I love the question. Well, let me let me just share something. It is very probable that it's not going to work out. It might blow up on you. It's true. Yes. But what if? What if its the opposite? What if what you have is something that can dramatically change your life in the life of your family, in the life of generations of your family to come? How are you going to feel when someone else looks at you and say, you remember that time when the opportunity was right there knocking at your door? It was right in front of you? And can you imagine yourself in that position? Is that the position where you want to be?
MICAH LOEWINGER FOMO? It's always been a powerful force in speculative markets and something that people in the crypto world actually talk a lot about.
GWEN Well, the FOMO is kind of real. I haven't slept for days.
MICAH LOEWINGER This is Gwen, one of the people who showed up for the auction. She learned about the event when she met Carlos at another NFT party earlier this week.
GWEN Whenever this hype around something, it's for me, personally. It's just hard to miss out on it because you could be part...you have the potential to be a part of it. So why not? Yeah.
MICAH LOEWINGER They're probably around 50 people here at Carlos's event, but the crowd seems right for this. They're stoked on NFTs. They're young. Almost everyone is in their 20s and they're wealthy.
NFT-PERSON 1 I've been lucky enough to have also purchased an Ether rock and sold that for a ridiculous amount of money.
MICAH LOEWINGER You got to tell me how much?
NFT-PERSON 1 Well, I bought it for roughly 25,000 dollars, and three weeks later I sold it for 1,2 million.
MICAH LOEWINGER Holy crap.
[TO ANOTHER EVENT-GOER]
MICAH LOEWINGER How many NFT's do you have?
NFT-PERSON 2 Like 70? I have quite a few, but I'll sell them and then I'll be like, I'm done, and then I'll buy more. So it's kind of like an endless cycle
MICAH LOEWINGER You would consider putting in a bid on the first NFT?
NFT-PERSON 3 Yeah, 100 percent.
MICAH LOEWINGER How much do you think it's going to go for?
NFT-PERSON 3 Five digits? My cutoff is at six. I would play in the five range.
NFT-PERSON 4 Yeah, you're right.
CARLOS MATOS Hey, hey, hey.
MICAH LOEWINGER Eventually, everyone began to congregate near a stage where Carlos was speaking.
CARLOS MATOS Each and every one of us has the power of property.
MICAH LOEWINGER Carlos made his pitch for the auction very similar to the one he made to me that his NFTs would appreciate into a family nest egg. A ticket to generational wealth.
CARLOS MATOS And you said, Well, that's not true. This is going to happen. What? Don't you see some of the things that are going to the market? NFT's selling at 69 million dollars,
MICAH LOEWINGER there's this one part of the presentation that I can't stop replaying in my head. When we all started watching this video being projected onto a screen on the stage.
ETHAN KLEIN Are you guys like crypto bros? Is that what you would you consider....
CARLOS MATOS Yeah
MICAH LOEWINGER The day before the event, Carlos and his team from Metamorphosis had done an interview with Ethan Klein, host of the H3H3 podcast. One of the most popular talk shows on YouTube. This video, which again is being projected at the club, slowly turns into a roast.
ETHAN KLEIN I don't believe that Carlos owns the rights to that Video, am I wrong? How are you guys licensing that?
CARLOS MATOS Um the actual person in the video is me,.
ETHAN KLEIN But whoever took the video probably owns the license to the work, right? That's how that works.
CARLOS MATOS They are exploiting who I am, and they did it without my consent. So.
ETHAN KLEIN But it is ironic 'cause it's called the redemption arc. It could be funny if you guys got in legal trouble for this.
CARLOS MATOS Yeah, it would be hilarious.
ETHAN KLEIN [LAUGHING] Hopefully the feds, hopefully the feds have a sense of humor, for sure.
MICAH LOEWINGER Ethan goes on to say he thinks the project will make a lot of money, but everyone in the audience was getting a kick out of these jokes at their expense, and no one more than the metamorphosis guys themselves. And at the time, I was confused why they would share this video with the very investors they were trying to impress. My best guess is that it had something to do with what Carlos meant when he referred to himself as a living meme. Perhaps this was proof that he's not just that guy that gave that speech that one time whose value is limited to a viral moment in the past. But maybe the roast illustrated that Carlos and his team could continue to drive attention and clicks and therefore increase the value of his NFTs, now and into the future. That or they were just totally goofing off and making this all up as they went along. Whatever the intent, the Metamorphosis team didn't seem satisfied with selling that first NFT to the people here tonight. Instead of holding the auction in person, they did a last minute announcement saying that it would be up for sale on OpenSea, one of the popular sites for buying and selling NFTs. I pulled aside Alex Goldberg, the company's 26 year old COO, to try to make sense of their business philosophy and what they saw in the Carlos Matos NFT. Alex told me the group got their start when they made close to a million dollars, flipping an NFT called the Ether Rock, a play on the pet rock.
ALEX GOLDBERG Back in, I think it was the 70s,.
MICAH LOEWINGER The pet rock.
ALEX GOLDBERG The Pet rock. It was just like the dumbest thing, but like people bought them like hotcakes, so someone decided to say, I'm going to bring pet rocks to the blockchain. So I just made a hundred rocks. It was like a free clip art picture of a rock from like Windows 95, and that just made 100 of them, and put them on the chain. And we saw that we're like damn, like, that's so stupid. It's going to move. That's like the kind of thing in crypto. Sometimes it's like the dumber the investment, the better it is.
MICAH LOEWINGER Why is that? I mean,.
ALEX GOLDBERG Cause the community is around sort of flexing and what they are flexes at to say. I just spent $2 million on a pet rock. The more useless thing you can throw your money at like the bigger status symbol it is.
MICAH LOEWINGER I left the club to speak with Maximilian Zim, the 25 year old founder of Metamorphosis.
MAXIMILLIAN ZIM This idea of possession, this idea of we own something is evolutionary in our culture. He's vaping and waiting for an Uber. It's why we wear Gucci shoes or designer brands or people buying Basquiat's and and spending all this money at Christie's just to show that they own it. You know, whatever sex we're interested in, you know, potential mates. We're showing them. We have this bountiful well.
MICAH LOEWINGER Some people are going to look at this and they're going to say, here's this video of this guy who got scammed. Right? But a lot of people look at NFT's and they say NFTs are a scam. And I think a lot of people listening are going to find this quite ironic. Because they're going to say, here's a scam about a scam.
MAXIMILLIAN ZIM Sure. You know, you can call it a scam all you want, but at the end of the day, here's how a market works. If you buy something and somebody is willing to pay more for it, than you, then you can make money. If I sell a pencil to you for a million dollars, it's not a scam. Only if you don't want to buy another one. Now, if you want to buy another pencil for me for a million dollars, I didn't scam you.
MICAH LOEWINGER You're so deep in it, but there's extraordinary wealth inequality in this world. There are, and.
MAXIMILLIAN ZIM It gets worse every day.
MICAH LOEWINGER There are people who are dying because they can't pay for a hospital bill. And you and I are standing out on the streets of Manhattan talking about spending tens of millions of dollars on a Clip Art, a picture of a rock.
MAXIMILLIAN ZIM Yeah.
MICAH LOEWINGER Does that ever strike you as absurd?
MAXIMILLIAN ZIM It doesn't, because this is this is the way the world works. I mean, wealth inequality has always been that game. The rich want to get richer, and it's not just crypto people. I mean, look, we got my boy, Mike here. Mike, s an example, right, of somebody who had hardship his entire life but understood crypto was online due to hustles like I've never seen anyone before, right? It's not about the the rich surviving, it's about the intelligence surviving. Mike is extremely intelligent. The intelligent are surviving the people that are catching the waves, and they really are driven to see where this money is going. Because in this blockchain world, I can see where all the money is headed. People who hustle and want to get more, they always want to get more because they're addicted to dopamine. It's like cocaine. That's why people take cocaine, releases dopamine. It's your brain firing off that want more molecule? It's not that you're actually getting more, it's that you always want more.
MICAH LOEWINGER There's nothing about that, that bums you out? Just this drive for more.
MAXIMILLIAN ZIM It is what it is. Play the game, play to win. All right.
MICAH LOEWINGER Fair enough.
MAXIMILLIAN ZIM What other choice you have?
MICAH LOEWINGER Thanks, guys. I appreciate it. This has been a really.
MAXIMILLIAN ZIM That got really deep. [EVERYONE LAUGHS] That got really deep. Yeah, yeah, yeah.
MICAH LOEWINGER The first Carlos Matos NFT is being auctioned on BitRedemption dot com. At time of recording. Its top bid is 4.1 Etherium, about 477 dollars and 5 cents. For On the Media, I'm Micah Loewinger.
[CARLOS MATOS' SPEECH MIXED INTO A-HA's 'TAKE ON ME']
BROOKE GLADSTONE So if you joined at the start, now you know the when, what, and who. Coming up, we conclude on the why. This is On the Media.