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Kevin, I'm sitting with you here in the studio and I have to ask, is that a fidget spinner that's in your hands? It is. I did recently acquire a fidget spinner, actually inspired by some of our conversations about Sam Bankman-Fried, who also is a big fan of the fidget spinner.
And, you know, a guy I really seek to emulate. I didn't realize that SPF was a fidget spinner guy. Like, what do we know about his relationship with fidget spinners? Well, he used one, or I don't know if they let you have fidget spinners in jail, but he did use one, and it was a way to deal with his nervous energy. But this one that I have, it's not just a normal fidget spinner. It's a new one that has these little bubbles that pop. Oh.
Wow. I mean, this is a show about advancements in technology, and so I just want to thank you for bringing that one onto the show. Yeah. You know, SBF went from a fidget spinner to spinning one of the greatest financial frauds in history. So I'm looking forward to seeing what you're going to spin in 2023. Yeah.
I'm Kevin Roos, tech columnist for The New York Times. And I'm Casey Newton from Platformer. And this is Hard Fork. This week on the show, a conversation with The Times' David Yaffe Bellany about the arrest of Sam Bankman Freed. Later in the show, Kevin and I make our big 2023 predictions. And finally, after weeks of anticipation, we will take your questions from the mailbag. Plus, a holiday treat. A holiday treat, you say? All right.
Casey, you ready? Yes. David, you ready? I'm ready. David Daffy-Bellany, aka DYB, welcome to Hard Fork. Great to have you here. Yeah, thanks for having me. Since you're in the studio with us, I thought we should call this segment the IRL SBF FTX FAQ with DYB.
Sounds great. I approve. Okay. So, David, you cover crypto for The New York Times. And we're here, of course, to talk about what has become the biggest story in crypto. Sam Bankman-Fried, the former billionaire and CEO of FTX, has been arrested. So...
I'm curious. Was this on your 2022 bingo card? No, we can't use this formulation. Here's what we learned about bingo cards in 2022. No one had anything on their bingo card, okay? The bingo cards were constant surprises. Well, I think it is fair to say that no one saw this coming. Yeah? Did you see this coming? Did you see SBF getting arrested as a
a possibility this calendar year? No, I definitely didn't. I mean, I think at the beginning of the year, I spent some time with Ben McKenzie and Jacob Silverman, two of the biggest kind of crypto critics. And they were arguing that this whole kind of house of cards would collapse really soon. You know, a lot of their arguments struck me as pretty plausible. And so, you know, I kind of went into it with, I think, a healthy dose of skepticism about the long-term viability of a lot of this. But
You know, I was in the Bahamas in April for FTX's big conference writing a story about Sam Bankman Freed. You know, I had plenty of questions about how the business was run and about, you know, whether what they were doing was actually good for consumers and that sort of thing. But, you know, like everyone else, I didn't anticipate that, like,
the whole thing was a massive fraud that would collapse over the course of a month and leave, you know, SBF in a Bahamian prison. And so, I mean, we will get to everything that has sort of put this man in prison, but can you just give us a little flavor of what it was like to be in the Bahamas in April as this company is sort of at the height of its powers? Like, was this sort of a jubilant moment in the lives of the FTX employees?
Yeah, absolutely. I mean, it was a giant party. There was, you know, FTX-branded beer cans at the lunch area. You had to walk through a giant casino at the Baja Mar Resort to get to the conference area, which I thought was, you know, a little interesting symbolism there. Yeah.
I was there to write about Sam, and a lot of what I was doing was trying to kind of follow him around. And he was getting stopped in the hallways like he was a rock star. People were taking selfies with him or saying, you know, Sam, Sam, say happy birthday into my camera so I can send this to my friend. At one point, his mother was trying to get his attention, and some crypto guy got in between them and was like, Sam, Sam, I want to talk to you. It was like he was this sort of huge celebrity who was on stage kind of
rubbing shoulders with Bill Clinton and Tony Blair. I think there's a photo now of kind of Bill Clinton giving him sort of like a fatherly clap on the shoulder. You know, that was the vibe at Crypto Bahamas. But it was also weird. It always felt weird, you know. It was a bunch of kind of 20-something, early 30s crypto people who just kind of descended on this island nation. You know, they were living in a resort. So the whole thing was strange,
It set off maybe a few alarm bells, but it certainly didn't scream to me, the whole thing is a fraud. - And I will say, this sounds like it could have been an iconic season of The White Lotus. But why don't we get to what happened this week
SPF, I understand, is now in jail. So what happened and what's he being charged with? He's being charged with sort of all manner of fraud against investors, against people who lent money to FTX and Alameda, against customers. He's got eight counts of criminal charges from the Justice Department, but he's also got civil charges from the SEC and the CFTC. And, you know, what we learned from those charges was that this went back years and years. I mean, the allegation is that it was a fraud from the start.
You know, from the very beginning of FTX, SBF was taking customer money and using it to make political contributions, to buy lavish real estate in the Bahamas, to invest in other companies, and just to expand this empire. And this is a very different story, right, from the one that SBF himself has been telling for the past few weeks as he's been on this kind of grand media tour. He's been saying, essentially, that this started off as a legitimate crypto exchange with a hedge fund attached, right?
They made some boneheaded accounting errors, and all of a sudden they're missing all this money. And the story that it sounds like came out in these indictments is that none of that was true. That not only was he using customer deposits to fund risky bets and investments and political contributions from the beginning, but that a lot of the acquisitions that FTX had made of other crypto companies was in part fraudulent.
a way to get more money into the system so that he could use that and commingle it with Alameda's funds and do all this shady stuff with it. Yeah, absolutely. And the other thing that is very clear from the charges that he sort of denied in his media appearances is that he was very involved in Alameda. I mean, that's one thing that he has disputed on this media tour. Like he said, I didn't know what
was going on in Alameda. You know, I wasn't running it. I stepped back. I was overstretched. But especially if you look at the CFTC's complaint, there's very specific instances of, you know, messages where he is specifically discussing Alameda trades and that type of thing. And, you know, that supports that reporting that I and other people have done that, like, he always had a hand in trades at Alameda, that he was involved in venture investment decisions and that sort of thing.
So now SBF is where? Is he still in the Bahamas in jail? Has he been extradited to the United States? What is his current status? He's in custody in the Bahamas. The extradition process can take weeks or months to unfold. It's not totally clear yet whether he's going to be contesting the extradition. If he did, there'd be like a legal fight in the Bahamas over whether he gets moved to the United States.
there's an extradition hearing scheduled for February 8th. So that's the kind of next date, you know, mark your calendars, get your plane tickets to the Bahamas. Sounds like you're going to have to be spending a lot of time in the Bahamas this winter. I'm sorry. Real hardship reporting assignment, yes. Hope you get hazard pay. In light of the charges that have come down recently,
this week against Sam Bankman-Fried. Does his media tour of the past couple weeks, his sort of very freewheeling, like it seemed like he was being interviewed by everyone, like random guys on Twitter spaces. What do you, do you make of that, that he knew that this was happening and in the works and probably going to happen and he was kind of trying to road test his defense? Or why did he do this insane media tour? And how bad was it for his legal defense?
Obviously, no criminal defense lawyer in the world is gonna tell you that it's a good idea to go talking to the media when you're under criminal investigation. The basic advice is just shut up, don't say anything, don't incriminate yourself, don't lock yourself into a narrative that when you get to court and you actually see the charges, you might wanna deviate from.
However, you know, it's not as if, like, Sam wouldn't have been charged if he hadn't been talking to the media. Like, it's clear that the investigators at all these agencies had plenty of evidence available to them. But some of his statements over the last couple of weeks were cited in these complaints. So, you know, it's coming back to bite him already. But, yeah, it was pretty extraordinary to watch. I mean, I talked to him very shortly after the bankruptcy. We did the first interview with him afterwards. And he was pretty cagey, but he said some stuff. We ran our story.
And then, you know, like fast forward a week and a half, he's talking to literally every news outlet under the sun. He's like getting on Twitter spaces with crypto influencers who are like clamoring to ask him questions and like shouting over each other. And it was just this kind of bizarre spectacle. So at the same time that these charges against Sam Bankman Freed were unsealed, the House Financial Services Committee in the U.S. was holding a hearing that
was actually supposed to attend. He didn't attend. It's not something that you can attend from a Bahamian jail cell. So I went to the jail cell
I wanted to just talk about that hearing because I did watch a couple of clips from that and they were pretty remarkable. Sam Bankman-Fried did not appear, but John Ray, who is the new CEO of FTX, who we've talked about on the show before, who was the cleanup guy who was sort of brought in not only to help make sense of what happened at FTX, but he was also the Enron cleanup guy before that.
And I just thought we should play a clip from his opening statement in this House Financial Services Committee hearing. The FTX group's collapse appears to stem from absolute concentration of control in the hands of a small group of grossly inexperienced and unsophisticated individuals. A small group of grossly inexperienced and unsophisticated individuals. I got it.
Just a savage burn. I mean, he did start out this whole process by saying, I did Enron, and this is the worst thing I've ever seen. So the burns don't get much worse than that. That is true. That is true. I also loved the part later in his testimony where he talked about how FTX executives kept their corporate records. So let's play that. Literally, there's no record-keeping whatsoever. It's the absence of record-keeping people.
Employees would communicate invoicing and expenses on Slack, which is essentially a way of communicating for chat rooms. They use QuickBooks, a multi-billion dollar company using QuickBooks. QuickBooks? QuickBooks. Nothing against QuickBooks, very nice tool, just not for a multi-billion dollar company.
Okay, so we have the now infamous QuickBooks exchange where it's revealed that FTX, this multi-billion dollar venture-backed company in the Bahamas, was using QuickBooks for its accounting. This is not presumably a place where a lot of multi-billion dollar companies do their accounting.
- No, QuickBooks is very much like Baby's First Business, which is the sort of business that I run. It's like, what's sort of the bare minimum that you would need to create and send an invoice? So the idea that you are processing billions of dollars on it, I think is a little kooky. - I know in some of the bankruptcy papers, John Ray also took issue with the fact that a lot of business was conducted basically on Signal, through disappearing messages. - Wow.
I mean, from what you know about the company and your reporting and your conversations with employees, was that kind of lax record keeping a red flag to any of them? Like, were they asking, like, why are we doing our invoicing in QuickBooks? Not really. I mean, one thing that's become clear to me in conversations I've had with people who believed in the company, worked at the company, didn't know anything about the fraud and are now watching this all kind of collapse in front of them is that they really thought they were onto something.
that the way that Sam, you know, thumbed his nose at VCs meant, oh, you know, we're actually smarter than VCs. We don't have to listen to them. The fact that he kept the company size at about 300 employees, even though its competitors were, you know, more than 10 times larger, they thought, oh, well, you know, we're running a kind of like lean mean operation and we're avoiding the bloat that, you know, Coinbase is dealing with, that sort of thing. They really kind of bought into that. And in retrospect, it's,
It all seems sort of foolish, and people are thinking, you know, why didn't I ask tougher questions at the time? But psychologically, it sort of makes sense that you would sort of embrace the things that were odd about the company and kind of interpret them as, oh, we're just smarter than the others. So let's talk about what, if anything, this means for the crypto world at large. And maybe the first thing to ask is sort of how have crypto folks been responding to this news?
The crypto world is just furious, just like apoplectically angry. At Sam Bankman Freed, not at the fact that he was arrested. No, at Sam Bankman Freed, absolutely. He is public enemy number one among crypto people. You know, to a degree, some of the anger is...
designed to make a point that's important for crypto people to make, which is that we're not like him. Regulators don't assume that we're like him. And, you know, it's kind of an existential issue for crypto. There are also like more substantive things that crypto people are arguing like, oh,
This wasn't really a crypto problem. This was basic financial fraud. It had nothing to do with any of the kind of unique, specific, technological aspects of cryptocurrency. And in fact, like the way that we prevent this in the future is to really kind of lean into transparency and decentralization and all of those founding values of crypto.
Now, if there's one thing we've learned over the last 15 years of crypto's existence, it's that those things are actually incredibly difficult to execute in the real world, which is why we ended up with a company like FTX in the first place. However, that is the sort of thing that crypto people are arguing as they try to distance themselves from this. So let me ask you on that point of this idea that FTX is not really a crypto story. My understanding is that a significant portion of both FTX and Alameda's assets were
were these crypto coins that they'd invented out of thin air that then served as collateral for some of the risky trades they were doing. And so I read that and I think, I don't know that you could have done an FTX-like scam had you not been propping it up
with these crypto coins. But I'm curious what you make of the argument that this isn't really a crypto story. Oh, yeah. I mean, 100%. I mean, one thing that Alameda was doing was taking this token that FTX had invented called FTT and borrowing against it, basically. You know, invent fake money so that you can
use it to borrow real money. It's, you know, sort of genius. And that's obviously something that could only have happened in this kind of like bizarre world of kind of an emerging new form of finance. So in that way, it's 100% a crypto story. And you have to take what, you know, the crypto community is saying with a grain of salt, because, you know, like I said before, it's a matter of life and death for them. And they need to kind of push this
story that like it wasn't really about crypto. At the same time, they are right in saying that like the basic fraud that happened didn't have anything to do with crypto. Like, you know, taking customer money and using it to buy stuff for yourself is something that you can do with traditional currency. And it has happened. It's been done. Yeah, well, it's happened. I mean, MF Global, I mean, there have been firms in traditional finance that have done...
things, but not on anywhere this big a scale. Yeah. Yeah. I mean, it depends how you measure it, but yeah. I mean, this is a pretty remarkable level of fraud. So, David, I'm curious, like, as someone who's been covering crypto this year, we're in a... It's our last episode of the year. We're in a reflective mood. We're doing some year-end predictions. Yeah.
When we started this year, crypto was at an all-time high. NFTs were selling for millions of dollars. People were very excited. Celebrities were endorsing it at the Super Bowl. People were creating podcasts with names like Hard Fork. Yeah, all these signs of just irrational exuberance.
And now in December, we're at a point where the guy who oversaw the Enron bankruptcy is standing in front of Congress telling people about how one of the biggest crypto exchanges in the world was using QuickBooks and doing their accounting over Slack. What, if anything, do you feel like you've learned there?
during this crazy, tumultuous year? Yeah. Well, one thing that people who work in crypto and people who cover crypto say is that, like, you know, crypto years are like dog years, basically. And that, you know, really, in the last 11 months or so, we've really had, like, 10 years of financial evolution and collapse and all that sort of thing. And, you know, everything sort of imploded much, much faster than anybody anticipated. I think even the kind of fiercest crypto skeptic
you know, many of whom have improved right on all kinds of things, you know, didn't expect that it would happen this quickly. In terms of like what's coming next for next year, I mean, more dominoes are going to fall. Like we've seen kind of delays in the cause and effect of the crypto crash. So the firms that are teetering because of their links to FTX are maybe going to be able to survive for a few more months and then everything will come crashing down again.
you know, I think that there are more stories of collapse and fraud to come. Well, I'd love to have something to look forward to. Yeah. It sounds like you're going to be busy. DYB, thanks for the IRL FAQ. Thanks for coming on. Anytime. When we come back, we're going to make our predictions for 2023.
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- Hello, this is Yuande Kamalefa from "New York Times Cooking," and I'm sitting on a blanket with Melissa Clark. - And we're having a picnic using recipes that feature some of our favorite summer produce. Yuande, what'd you bring? - So this is a cucumber agua fresca. It's made with fresh cucumbers, ginger, and lime.
How did you get it so green? I kept the cucumber skins on and pureed the entire thing. It's really easy to put together and it's something that you can do in advance. Oh, it is so refreshing. What'd you bring, Melissa?
Well, strawberries are extra delicious this time of year, so I brought my little strawberry almond cakes. Oh, yum. I roast the strawberries before I mix them into the batter. It helps condense the berries' juices and stops them from leaking all over and getting the crumb too soft. Mmm. You get little pockets of concentrated strawberry flavor. That tastes amazing. Oh, thanks. New York Times Cooking has so many easy recipes to fit your summer plans. Find them all at NYTCooking.com. I have sticky strawberry juice all over my fingers.
All right, Casey, it is time for our year-end predictions. Yes. In preparation for this episode, I came up with three predictions for next year in the tech world.
I believe you also came up with three predictions for next year in the tech world. I did. And I thought it'd be fun if we could sort them into buckets of high confidence, medium confidence, and low confidence. So maybe something that you're 80% sure will happen, something that you're 50% sure will happen, and something that you're only 20% sure could happen, but it's a fun thing to think about. So do you want to go first?
Sure, I'll go first. What's your highest confidence prediction for 2023? My high confidence prediction is that in 2023, the media's divorce from Twitter will begin in earnest. And that to the extent that Twitter and the media are inextricably linked, that will be much less true at the end of 2023. Twitter and the media are consciously uncoupling in 2023. Yeah. Yeah.
Elon Musk has managed it in such a way that I think increasingly the sort of mainstream users of the platform are somewhere in between nervous to outrage about what's going on. You know, over the past week, we saw him smear his former head of trust and safety in a really gross way that also, by the way, sent that person into hiding because he now faces so many death threats.
And I don't know, man. I looked around and I said, I don't think I really want to be here anymore. And so I wrote a piece this week saying that I basically put my Twitter into post-only mode. I'm going to post new editions of my newsletter. And that's it. No more replies. No more having fun in the comments. And since then, I've seen some of my friends start to do the same thing. So this is going to be...
a multi-month process. It might take all year, right? Like I have been looking at an open Twitter client 12 hours a day for like over a decade. It's hard to sort of find new alternatives for that overnight. But I think in 2023, the Twitter and media love affair is going to really unravel. And I should say, this makes me extremely sad.
My own career and Twitter have been inextricably linked. Building an audience there has helped me get the past several jobs that I've had. It's been the way that I get most of my news for over a decade. It's where I've met some of my best friends. It's probably how we met. It is how we met. So this is a really sad moment for me. And yet, when you look at what's happening around there...
I don't know how a year from now, most people aren't going to come to the same conclusion that I have, which is it's time to build some lifeboats to somewhere else. So I read your newsletter this week, and I confess that my first reaction was kind of like, he'll be back. Because it's sort of a cliche at this point. People write their why I'm leaving Twitter column, and then six weeks later, they're back on, and they have some justification for why they have to continue using it. But you seem to be serious about it.
Yeah, and by the way, I think it's totally fair to say you'll be back because everyone I know who has said this in the past did come back in some way. But, you know, I do think it is different this way for a couple of reasons. You know, one, I think that Twitter, the product, is going to get worse, not better, right? I don't think it's improved in any meaningful way since Elon bought it. I'm not sure what is going to happen in the next three months or so that is going to make people feel like they've got to be there. Two, uh...
I do think more users are starting to explore alternatives. I'll be the first to admit they're not amazing. I don't think Mastodon is what Twitter was. Not it. But I've been spending some time on it this week, and I have been, I'll say, pleasantly surprised by how many of the people who I follow daily on Twitter are already there kind of trying to make a go of it.
And I've also been getting emails from people, including some who used to work at Twitter, saying, hey, we're working on a new thing. We want to show you this beta. We think that we can sort of come up with a better way to do this. So I'm expecting to see a lot of experimentation around this in 2023. And again, Twitter is not going to be unseated overnight. But look, let's face it. A lot of publishers have been disillusioned
dying for a reason to get themselves and their reporters off of Twitter. Twitter, for all the good things it does, I think also has a lot of really corrosive effects on the news business. And maybe if we weren't all spending 12 hours a day there, I don't know, we could even get some better journalism. So that's your high confidence prediction. What's yours? So my high confidence prediction for 2023 is that it's going to be the year of the mini-Musk.
So I think what we've seen this year is that Elon Musk has been flailing at Twitter, struggling. But there is this one group of people in Silicon Valley who really admires him and what he's doing and the way that he's been managing that company. And that is his fellow CEOs.
So I've talked to a number of CEOs and investors. I know you have too. Maybe they don't agree with all the moves he's making at Twitter, but they love his management style. They really do. And they're using it as a playbook. They're saying to themselves, wait a minute, I can just fire a bunch of people with an email and...
and get away with it. Like, I can disband employee resource groups and... Force them to sleep in the office. Force them to sleep in the office and make them sign pledges that they'll be extremely hardcore. Like, it really does feel like there's a kind of awakening happening among bosses, frankly, in Silicon Valley who see Elon Musk doing all these things, getting away with it for the most part, and thinking to themselves, like...
Why can't I do that too? Right. And, you know, we should say that for a lot of people, this has sort of always been their reality. But in Silicon Valley, over the past 10 years in particular, there was this move toward giving workers more power. And it wasn't a voluntary move, right? It came about because engineers were in short supply. They were in hot demand. And so they could actually ask for things like perks at the office and companies would compete to give them those perks.
And instead of creating a utopia, I think a lot of CEOs felt like they just got a workforce that was extremely entitled and unhappy anyway. And so what's the point? And as we sort of head into a shakier economy, if you can claw back all of that stuff, that's
and tell everybody, no more Mr. Nice Guy. You're just going to have to work super hard. They're going to do it. So I completely agree with you. I think 2023, we're going to see just a lot of these reactionary CEOs trying to claw back whatever gains the labor movement has made for the past 10 years. Okay, what's your medium confidence prediction? Medium confidence prediction, I think that in 2023, chat GPT
and tools like it are going to upend the world of education. Tell me more. So last week, we talked a lot about ChatGPT, this AI chatbot. And afterwards, we got this wonderful email from a teenager who said that more and more kids in her class are using it to do schoolwork. She told us she was able to finish a science project with it. She also used it to make a poem that she wrote better. And her classmates are doing really similar things. So it just seems obvious to me that more and more kids are going to start doing this as soon as they can.
This is going to be the biggest tool of the second semester of the school year. Yeah. If you thought the TI-83 calculator was hot in 1996, buckle up, buddy. Yeah. This is going to be what everyone is secretly sneaking a look at below their desk during exams.
But I think that by January, we're going to be having a huge national conversation about this, right? Like we may be having congressional hearings about how chat GPT is destroying like secondary education in this country. Yeah, I think that's a great prediction. And I would actually say that's like, I have fairly high confidence about that one. I was on a radio show this week with a high school English teacher who,
who was talking about this exact topic of chat GPT being used for homework. And his basic thesis was that this is going to destroy the high school English assignment as we know it, because so much of what you do in high school English class in particular is reviewing books, doing expository essays, synthesizing, you know, various ideas, like writing,
These are things that students have been using Cliff Notes for for decades, but it is now just so much easier to just put a prompt into a thing and get back a perfect five-paragraph essay. So I think we're going to start to see some interesting cat-and-mouse games there with teachers trying to figure out how to detect when the answers on the essay have been generated with ChatGPT. I think we're also going to start to see
a return to oral essays and in-class exams rather than take-home exams. Kind of the way like some math tests, like you can't bring in your TI-83 graphing calculator. I think we'll start to see in-person exams taking over for at-home assignments.
Yeah, I think it's going to be a huge story next year, and I'm sure we will have a lot more to say about it here on Hard Fork. But how about you hit me with a medium confidence prediction? All right, my medium confidence prediction is that 2023 is the year that TikTok gets banned in the United States. Wow, you're medium confident about this? I'm medium confident about this. And I admit, it's a little bit of a cheat because I think just this week, we've seen an escalation of the TikTok battle, right?
Marco Rubio and a bipartisan group of House legislators proposed a bill this week that would effectively ban TikTok in the United States. There's some difference between why Republicans want to ban TikTok and why Democrats are skeptical of TikTok. Republicans generally are more sort of seeing this as a national security threat. They accuse TikTok of sort of spying on U.S. users. Democrats, from what I've seen, are more...
more broadly worried about the use of the platform to distribute propaganda or to influence in some way content moderation in a pro-China direction. And they're worried about that, not necessarily the stealing or misuse of data from U.S. users.
I don't know for sure how this will end. I don't have a ton of confidence whether it's going to end with just an outright ban or whether it'll be some sort of forced divestment. One interesting possibility is that a U.S. company could bid for TikTok the way that it sort of happened during the Trump administration with Oracle and Microsoft.
I also think we could see a company like Disney make a bid for TikTok and their U.S. assets. So I don't know whether ByteDance would do that, but I think if it's forced to, it obviously will. It would rather get something for the assets of U.S. TikTok rather than just shutting it down and exiting that market altogether. So I think you're wrong about this one, Kevin.
The best bet that you could have made over the past five years when it came to any question of tech regulation was that nothing would happen, because guess what? Nothing happened, right? Do you know how many times I've heard that a bipartisan group of lawmakers had proposed something over the past five years? Because it was a lot. And you know what happened to all those proposals? They went nowhere. Whether it was antitrust, Section 230, you name it, right? People had so many ideas, and they went nowhere. I think that 2023 ends with TikTok as still an app that is owned by ByteDance. We'll see who's right.
All right, let's get to our lowest confidence predictions. And I will start with mine. I predict that the Supreme Court will uphold the Texas and Florida social media laws and make content moderation illegal there.
Go on, because I haven't followed these laws as carefully as you have. So in Texas and Florida this year, the state legislatures passed laws that would make it illegal for companies like Facebook, Twitter, TikTok to remove content based on its political viewpoint.
Of course, the trade groups sued and the cases made their way through the legal system and are now headed toward the Supreme Court, which is expected to accept these cases and hear them in 2023. So what would these laws mean in practice? Well, it would mean that if you posted something like people should not be forced to take the vaccine because it's dangerous, platforms would not be able to take that down even if they thought that that was a danger to public health.
It would also seem to mean that if you were, for example, a Nazi and you wanted to post on Facebook, hey, everybody, come join the Nazi party, Facebook would not be able to remove that because that would be considered a political viewpoint. Now, if you talk to people with these platforms, they will tell you the reason that they take those posts down is one, because yes, they think they're bad, but also it's like essential to their business. Their users do not want to be around Nazis, right? That drives people away and it makes them less money, right?
And so there's this open question of, well, if they're not able to remove, you know, Nazi content, how do these platforms even survive?
At the same time, Justice Clarence Thomas has written that he believes that these platforms should be treated more like railroads or telecom lines, you know, what he would call a common carrier. You know, a telephone company, you know, can't not let... A dumb pipe. They can't judge the content or downrank or remove it. All they have to do is transmit it. Exactly. In which case, you're going to have potentially two
very different versions of Facebook and YouTube and TikTok in this country. One that is just moderated normally, and another in Texas and Florida that is full of crazy hate speech. And you think they would actually segment it out like that? Or would it be like what happens with car emission laws where California makes a law and everyone else follows it because...
because the automakers don't want to make two versions of the same car. So I talked with somebody who works on this stuff at a big platform recently, and they were saying that at this point, they honestly have no idea whatever they decide will require massive engineering resources. There's a thought that maybe you would have a Texas-Florida switch
So it's like, if you live in Texas or Florida, you get there and you see the default and it says, by the way, you know, welcome to the new default YouTube, for example. It's full of horrible things. If you would like to get a normal good version of YouTube, flip this switch. Right. Like pay for YouTube premium and get fewer ads. It's like VPN in from another state and get fewer Nazis. Yeah.
It's like really dark. So absurd. I can't even believe we're having this conversation. But yes, anyway, the reason this is a low confidence prediction is I think there are better reasons to maintain the status quo than to enable this sort of chaos. And yet you look at the political makeup of the court and it seems quite plausible to me that we are headed into the absolute content moderation wilderness next year. All right, here we go. My low confidence prediction for 2023, uh,
is that we will discover that the entire field of quantum computing has been a hoax. Oh my God! I thought of this the other day when I was reading a story in the New York Times, a very good story, about a group of researchers who had simulated a pair of black holes in a quantum computer and sent a message between them through a shortcut in space-time called a wormhole.
I just realized, like, I probably get 10 pitches a week for some quantum computing thing, and I'm never actually sure that they're real. I mean, just because I imagine this will be torture for you, how would you define quantum computing?
You know, I absolutely could not define quantum computing. I mean, let me just say, when the quantum computing people hear this, they're going to get so mad. Oh, we're going to get so many angry emails from physicists. Don't say we, I didn't say this. I'm not signing on to this. Like a lot of credible people believe that this is possible.
I'm sure that there are people who are much smarter than either of us who know for a fact that quantum computing is real. Do not cancel Casey for my bad quantum computing opinion. I'm taking the opposite side of this bet. Please send all feedback on this prediction to Kevin Roos.
All right, Casey, those are our predictions for the year 2023. So good. I think at least two of those will come true. That's my guess. I'm hoping for six out of six. Well, and here's the hard-fork promise. We will make fun of ourselves as ease of these predictions does or does not come true. Yes. Yeah. After the break, we're going to open up the mailbag and take some listener questions.
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All right, Kevin. So for the past several weeks now, we've been asking listeners to send in questions to the Hard Fork mailbag. And today, we're opening the mailbag, we're reaching in, and we're pulling out the finest questions that listeners have had to offer. It's mail day, baby. So call up the mailman, invite him in. You're so corny. Pour him a glass of milk. Come on. We're diving into the mailbag. Let's hear our first question.
Hi, my name is Kevin. Great name. When FTX went bankrupt, it was widely reported that SBF lost billions of dollars in mere days. My question is, did he really? It seems like the majority of his supposed assets were some cryptographic keys, not anything that would be traditionally considered wealth. Should the financial or tech press say a person is high net worth when their assets are volatile or just plain made up?
So I'll take this one. I think the question is, you know, does someone having essentially the cryptographic key to a crypto wallet mean that they own a cryptocurrency?
Yeah.
It's all just entries on a bank's database. You don't actually, the bank's not physically keeping your cash in a vault with your name on it. And so I think in that way, it's not so different. I think I would say that someone who controls the keys to a crypto wallet that contains cryptographic assets that
are valued by the market at billions of dollars, I think it's fair to call that person a billionaire. Also, I mean, if the question was like, was this all just paper wealth? Like, sure. Like, in a way, it's true of any rich person, you know, like a Jeff Bezos, a Mark Zuckerberg, a lot of their value is tied up in stock that they're not going to sell anytime soon. At the same time, Sam Bankman Freed was donating millions
millions and millions of dollars. He was spending millions and millions of dollars. Those were all real dollars that he had that he spent on things. So yes, SBF was rich AF. And that's that on that. This is Scott from Tacoma. I've read that there are consent decrees in place against Twitter about content moderation. So if Elon is laying off the content moderation teams, that seems like it could be a problem. I'm wondering how this works and how big any fines might be.
So this is a great question. Your memory is correct that Twitter did reach an agreement about a consent order from the Federal Trade Commission, and that happened in March of 2011. However, it was not about content moderation. Rather, it barred Twitter for 20 years from, quote, "...misleading consumers about the extent to which it protects the security, privacy, and confidentiality of non-public consumer information, including the measures it takes to prevent unauthorized access to non-public information and honor the privacy choices made by consumers." End quote.
So what does that mean? It means that Twitter has to be really careful with your data. You know, earlier this year, the company had to pay a $150 million fine because, you know, when you sign up for two-factor authentication and give Twitter your phone number so it can text you a code every time you need to log in? Well, it
turns out Twitter was taking those phone numbers and trying to build an advertising profile for that person. The FTC was like, you can't do that. That is a violation of this consent order. So, you know, there's a lot happening at Twitter right now, and some of it does involve that non-public information. And I am not Lena Kahn. I'm not the FTC. And I cannot tell you if Twitter has violated this order. But we know that the FTC has said that it's tracking developments at Twitter with, quote, deep concern, and that if it
does violate this order, you better believe we'll come after you. And as we know, Elon Musk is a person who takes warnings from regulators and agencies of the government very seriously. Big rule follower personality. He's a big color inside the lines guy. So I imagine that he's up at night worrying about that possibility of being chastised by the FTC every day. Let's get the next question.
Hi, this is Liz. I would love to hear your take on how far we are from fully realized self-driving cars. When will I be able to say, call a Lyft, have it show up my house without a driver and take me to the airport?
So I think the answer to this question is it really depends on where you live. I had a friend last weekend tell me this story about how he was out late with someone and they had been wanting to try these new cruise self-driving cars in San Francisco. Where does this friend live? We're here in San Francisco. Okay. And he was able to open up the cruise app and summon a
A cruise, cruise is a company that makes self-driving cars. They have a taxi program that is live in San Francisco. It doesn't even yet go to all of San Francisco and it actually won't even come to your exact location. You might have to walk a couple blocks away, but my friends ordered the car. It showed up. There was not a driver inside. They got in and it took them home. So depending on where you live, you might already be able to do this. This is a classic case of the future is already here. It just isn't evenly distributed.
Let's go to the next question. Hello, Casey and Kevin. I'm currently listening to Kevin's book, Future Proof, and I'm amazed by how quickly AI has outpaced even his most optimistic predictions. So my question for Kevin, given the accelerating pace of AI development, which prediction or rule from your book would you most like to go back and change?
Also, Casey probably won't remember me, but we used to work together. I was part of the original group that started The Verge, so in a way, Casey owes me his entire career. Love the podcast. Keep up the good work. Wow, somebody brave enough to take credit or blame for your entire career. Hello, Dan. Thank you for inventing The Verge. Dan, thank you for giving birth to baby journalist Casey. He's turned into a fine young man, and we're all very proud of him.
And thank you for listening to my book. So I wrote this book a few years ago, and at the time, this was before sort of the explosion of generative AI in the last year or two. The biggest thing in the AI world was something called RPA, which stands for robotic process automation. And it is literally the most boring set of three words that I can imagine putting in a sentence together. But it was...
all the rage in corporate America. And what it is basically is just a series of very dumb bots that you can use to automate sort of routine office functions. And that was a, you know, multi-billion dollar industry. There were all kinds of companies making a ton of money doing this kind of RPA integration at big old line companies. And I thought that that was kind of going to be the first wave of disruption from the
these tools. And that was something that I was scared about. So I wrote a chapter in my book called Beware of Boring Bots, because I was sort of under the impression that like,
While the, you know, all of the hype was around like self-driving cars and stuff like that, the real labor disruption was going to come from these kind of like boring back office RPA implementations. Right. So I think I was wrong about that. I mean, I think that one thing I got wrong is I underestimated how slow big companies, big old line companies were going to be to automate the jobs that they could automate, you know?
this is not fancy AI technology that's being released by OpenAI and Google. This is like stuff that was technically possible 10 years ago, but that big companies in like the beverage industry are just now getting around to installing on their machines.
And I think I underestimated just how much inertia there is in the IT departments of big companies and how resistant they are even to do something as simple as like installing a little RPA bot. Well, hopefully you'll make better predictions in your next book about AI. But I think to finish that thought, like I think I underestimated how much was going to happen in fields like generative AI. I didn't foresee the just...
massive explosion of capability that we've seen in the past couple years. And I think that actually I would revise that prediction. I don't think that these tools are going to cause mass unemployment and the loss of jobs either, but I do think that they're going to radically transform white-collar workplaces. I don't think it's going to be in the IT departments. I think it's going to be in...
Areas like copywriting and sales and customer service, I think that's where these tools are going to be most useful. It's not going to be kind of in the bowels of accounts payable. All right, next question. Hi, Kevin and Casey. Huge fan of the show. My name's Olivia, and my question involves the metaverse, namely the P-Draw bed.
I'm kind of afraid of the metaverse because I imagine it becoming so prevalent and involved in society, like the iPhone, and taking place of real human interactions. Like, are we becoming the humans from Wall-E? Will meta concerts replace real ones or meta hikes take place of going outside? Or am I anxious for no reason, totally missing the goals and purposes of the metaverse? I'm looking forward to hearing your thoughts. Thank you.
Casey, what do you think? I mean, first of all, Olivia, how dare you question the wisdom of Silicon Valley and sort of, you know, the idea that they wouldn't know what was best for you and your family. I think you owe these people an apology. No, of course, this is the right question. You know, I remember, you know, last year I was interviewing Mark Zuckerberg when he was sort of first announcing that they were going to pivot this company to the metaverse. This was one of my questions for him was like,
if we're living in a world that is primarily like mediated by technology, where you're sort of wearing something on your face at all times, it is perpetually connected to the internet. Is that a good thing? And what he said to me was like, look, it's never going to totally replace real life. Like people are still going to go surf and I love going outside and other people will too, but it is undeniable that the goal of this technology is to be so valuable
mesmerizing and so hypnotically entertaining that you never take it off. So this is the right time to ask yourself what relationship you want to have with that technology if and when it comes along. Yeah, and I would just point out that, you know, this concept of the metaverse, which itself came from science fiction, it's never, like, talked about in science fiction as, like, something that arises when, like, the
the real world is going really well. It's usually, you know, the world is falling apart. It's uninhabitable. There's climate change. It's a dystopian hellscape. And so people are escaping into the metaverse through their VR headsets or whatever. I think I'm...
I'm optimistic when I see just how unpopular some of these early metaverse experiences have been. And obviously the technology will get better and they'll get, you know, more compelling. But, you know, I attended a metaverse concert and it was not fun. It was nowhere near as good as... Wait, who did you see in the metaverse? I saw the Travis Scott concert in Fortnite. Oh, in Fortnite. Yeah, yeah, yeah. And...
And, you know, it was kind of cool on like a novelty level, but it was not a concert. It was watching something in Fortnite. Yeah, you're basically watching a YouTube video at that point. But I think it's still going to be a long while yet before this question, which I think is a very good question, will feel pressing. Yeah.
All right. Well, I think that's all the time we have for listeners' questions today. But Kevin, I believe that you and I have each written a secret question for each other. Oh, wow. I forgot about this. Oh, yeah. So I did write a secret question for you. Do you want me to go first or do you want to go first? Yeah, go first. Okay. My question for you. If tomorrow a wealthy platformer benefactor offered you $100 million...
Oh, man.
Well, you know, I'm not one of those that thinks of like the pre-iPhone era as a halcyon time where I, you know, only read 600-page historical biographies. No, we're not talking the Stone Age. We're talking the BlackBerry. Yeah. We're talking Windows 98. We're talking Winamp. We're talking Napster.
Look, no one is going to believe me when I say that I would not accept this offer. But I would for a couple of reasons. You would accept the offer? I would not accept the offer. Wow. Because I like what I do too much, right? I like being part of what is new and what is next. And so I would sadly have to say no to my platform, Benefactor. Wow. Strong position. I respect it. So here's my secret question for you.
What part of writing your column do you think it is ethical to outsource to AI? And what parts will you always insist on doing yourself? Great question. So...
I will make a confession here on this podcast that I have tried to write parts of my column using AI. I've been testing out an app called Lex that is sort of like a Google Doc with a GPT-3 built into it.
And I've tried. I've said, you know, I wonder, I'm sort of stuck on this paragraph. I wonder if it could help me figure out a way to complete this thought. And, you know, sometimes what it comes up with is passable, but it's not good. It's not like something that I would be happy to pass off as my own, even if it were ethical to do so, which I don't think it would be. So I think that the part of...
this process of column writing that AI could be really useful for. Sort of the outlining and the background
and research. Like I'm going to write a column about, you know, self-driving cars, give me five, you know, major milestones in the history of self-driving cars. And I would put that into chat GPT or some other AI, and I would get back those sort of wireframe bullet points. And then I could use that as sort of an outline to sketch kind of the short history of self-driving cars and
But I wouldn't actually be copying and pasting any of the text verbatim because it just frankly isn't that unique or interesting or stylish. I feel like I'm – maybe this is hubris, but I still feel like I'm a better writer than ChatGPT in most instances.
And so I feel like that will be the part of it that I feel like is ethical and very useful potentially to outsource to AI is kind of the drafting of the first sort of initial outline of the column. Right, so it's kosher to use AI as a research assistant, but the actual writing needs to come out of your brain. Maybe, I mean, maybe it'll get to a point with GPT-4 where it's better than I am, and then I'll have to like,
have some hard, you know, thoughts about what I can sort of ethically and spiritually stand outsourcing to the AI. I mean, I certainly think that it could be useful for, for example, sort of coming up with counter arguments. So one thing that I do when I'm writing is,
is I try to anticipate what people might object to, you know, what good points people might make in response to some argument that I'm making. And, you know, I feel like I'm okay at that, but a GPT-3 or GPT-4 might be better at it. I might be able to
paste in my column and say, you know, what are three counter arguments to this? And then maybe find a way to address those if I feel like they're compelling enough. Right. Until now, if you wanted to find out why your argument was stupid, you had to tweet out a link to your story and then you find out in a hurry, buddy. But we're moving into a new age and we're not going to have to tweet. Yeah, I want to be, I would rather be dunked on by an AI than by, you know, hundreds of strangers on Twitter.
All right. I would just like to thank everyone who wrote in with questions, sent in their questions over DM. We couldn't get to all of them, but they were really thoughtful. And we will take your questions again. Yeah, we'll do this again. And
You know, I'm feeling reflective and sentimental at the end of the year, and I just want to say thank you to everyone who's been on this journey with us. We've had so much fun making this show every week, and it's been so rewarding to hear from people who listen to the show, who have questions and comments about it. Even the people who say that I say like too much. I love you. And I definitely say you know too much, and I'm working on that, by the way. But yes, just to echo that sentiment, what a fun first few episodes it has been. I truly feel like we are just getting started.
Before we turn off our microphones and say goodbye for the year, we have a special Christmas gift.
Easter egg? Christmas egg? Christmas egg. Holiday egg. Have you ever celebrated Christmas before? Well, it's an Easter egg, but it's for Christmas. About the holidays. Yeah. You know what we should call it? A stocking stuffer. A stocking stuffer. Last night when we were getting ready for this, I had the questionable idea to have ChatGPT write us the lyrics to a tech-themed Christmas carol. Oh, and it's so beautiful. And we're going to sing it for you right after the break.
When it comes to making plans, you are the best.
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I'll just say before we start singing this song that the prompt that I gave ChatGPT was write a Christmas carol to the tune of Jingle Bells with lyrics about the tech world going into 2023.
And then I gave it some suggestions of possible topics that it might want to include. And did you edit the text that it spat out? A little bit because it's not great at meter. Yeah. So we did a little condensing along with our amazing accompanist here, Alicia Bittutube from the audio team at the New York Times, who helped me whip this into shape and make it somewhat presentable. Okay, you ready? I don't know. Play the karaoke. Play the karaoke.
I'll take the first verse. All right. Dashing through... Oh, sorry, wrong key. It's lower than I thought. This is off to a great start. We're going to be here for three hours. Sorry, play again. Dashing through the news in a world of constant views. Tech world's in chaos. SBF falls to his doom. Elon's on Twitter taking over with his tweets.
All right, you go.
Metaverse has no legs. TikTok is on the rise. People join Mastodon to avoid Twitter's lies. Crypto has collapsed. Investors in a state of shock.
But the Tech World soldiers on despite the chaos and rocks. Yes! Oh, Tech World! Oh, Tech World 2023! We'll see a world full of endless possibilities. Oh, Tech World! Oh, Tech World 2023! We'll see a world full of endless possibilities.
Before we go, you know what I want for Kevin this year, Christmas? Wait. I've got to stop calling you Christmas. Before we go, you know what I want for Christmas this year, Kevin? What do you want? I would love more people to follow our TikTok, which you can find at Hard Fork. That's all we want for Christmas this year. And speaking of Hard Fork, it's produced?
by Davis Land. We were edited this week by Sarah Saracen. This episode was fact-checked by Caitlin Love. Today's show was engineered by Alyssa Moxley. Our incredible original music is by Dan Powell, Alicia Viettube, Rowan Emisto, and Marian Lozano. Special thanks to Hannah Ingber, Mel Galogli, Kate Lepresti, and Jeffrey Miranda. You can email us at hardfork at nytimes.com.
That's all for this year, unless something truly wild happens. Don't wait back. Maybe, who knows? But in the meantime, happy holidays. We'll see you down the dusty trail. We're leaving that outro line in 2022. You don't like me seeing you down the dusty trail? We're going to have it on merchandise. I want it on a coffee mug.
