Shaan presents three “lore” stories: the remarkable founding of Bank of America by Amadeo Giannini, who built the world’s largest bank while taking no equity and capping his salary at $50K; Preston Thorp, an incarcerated man in Maine who taught himself to code and landed a full-time software engineering job from prison; and Stefan Thomas, a programmer sitting on $400M+ in Bitcoin he can’t access because he lost the password — and won’t use the team that cracked the device. Sam connects the stories to the principle that trouble is opportunity, and both hosts discuss the 22 Immutable Laws of Marketing and the idea that different beats better.
Speakers: Shaan Puri (host), Sam Parr (host)
Introduction: Three Lore Stories [00:00:00]
Shaan: The first story made me inspired. The second story made me double inspired. And the third story just pissed me off.
All right. So I have a theme here for this episode. Have you seen this meme going around on Twitter where it’s like a stick figure at his computer and it says, “Share a bit of lore about yourself”? So — share some lore. And lore means the epic backstory, the untold backstory of something. I have three pretty insane lore stories that I want to tell you.
I think you might know about this first person. It was new to me, and I’m going to call them — we haven’t done this segment in a while — but they are the Billy of the Week.
Billy of the Week: Amadeo Giannini [00:00:30]
Shaan: The Billy of the Week is a person named Amadeo Giannini. Do you know who that is?
Sam: No, I don’t think so.
Shaan: All right. Amadeo, you are the Billy of the Week. Here’s the story.
This guy is born in San Jose. He’s born to Italian immigrant parents. His father is murdered when he’s 7 years old. So he’s raised by his mom. His mom remarries, and his stepfather is in a business that you’re kind of familiar with. His stepfather was a fruit stand wholesaler.
Sam: Which is, I think, kind of what your parents do. They’re wholesale adjacent for fruit or something like that. Your dad’s like a fruit broker?
Shaan: They are produce and fruit brokers. Yes.
Sam: So that’s exactly what his family did.
Shaan: And at age 14, Amadeo drops out of school and decides to come work in the family business because he needs to help the family make money. This guy’s an incredibly sharp business operator. He joins the business and really ends up taking it over, revamping it to the point where by the time he’s in his mid-20s, the business has done so well — they’re selling fruit all throughout California. He’s able to sell his share of the business for $100,000. That doesn’t sound like much, but this is the equivalent of maybe $2 million back then. This is like 1900.
So he does that and he’s thinking about what’s next. He decides he wants to give back to his community a little bit, so he volunteers to be on the board of a bank. And when he’s at the bank, he notices something he doesn’t like. The bank would basically lend money to the people who didn’t need it and deny money to the people who needed it. The bank was all about underwriting the least risky loans it could do — lending to very wealthy people with a lot of collateral. But the small business person who needed it? Not getting it.
Shaan: So he decides to create his own bank. He’s like, “I’m going to make my own bank that’s going to serve the little man, the common man.” And he calls it the Bank of Italy. He opens up the Bank of Italy in San Francisco in the North Beach neighborhood.
Sam: Which is a strange name.
Shaan: That’s kind of a weird name.
Sam: Bank of Italy, right? Haven’t heard of it, whatever.
Shaan: That’s his heritage. That’s where he’s from. So he starts doing this in 1904.
The 1906 Earthquake and Giannini’s Bold Move [00:04:15]
Shaan: Now in 1906, something happens in San Francisco — a devastating earthquake. And one of the weird things about the earthquake was that a lot of people didn’t have earthquake insurance, but they had fire insurance. So what people were doing was: earthquake hits, they would then light their building on fire to get a payout from the insurance companies. So San Francisco’s ruined, and the narrative is basically that’s the end of that city.
But while most banks just shut their doors and literally sealed their vaults — some had melted shut — Amadeo goes in as soon as the earthquake and fires are happening and basically takes all the money out of the vault. He doesn’t want looters to come and take what his customers stored there. He puts it in a fruit wagon, under a box of oranges, and gets it out of there.
A week later, basically when all the banks are shut and San Francisco’s in ruin, he pops open his bank again by the wharf on a table — just a wooden plank — with his box of cash. He says, “We’re back. We’re open for business. If you need a loan, just come to me.”
Sam: Where did the original money come from, by the way?
Shaan: So he had sold his fruit stand business, and then he raised $500,000 — the equivalent of about $5 million today — from friends, family, and people he’d met during his time in the fruit business.
Sam: And the business model was: I will lend out money to certain people and they will pay me 8% interest or something like that depending on their situation.
Shaan: His motto was basically: all the other banks are serving the elite, the big businesses, the wealthy individuals. But what if you were like me? What if you were a fruit peddler, a dock worker, a seamstress? Forget it. If nobody else is going to bank these people, I will. His job was to serve the everyday man and the everyday woman.
Now, this all sounds like good marketing speak, but there’s something kind of interesting about the way this guy actually did this. He never pays himself more than $50,000 a year in salary. You might say, “All right, well, he doesn’t need salary — he’s going to own the bank.” He also doesn’t own any equity in this bank. He decides the bank should be owned by whoever wants it. Anyone should be able to be a shareholder. He doesn’t want the power concentrated in himself.
So he creates the Bank of Italy and starts lending out money — often on a handshake, no contract, often with no underwriting, because these are people who didn’t have a lot of assets. He believed in the people in his community.
Sam: This sounds very similar to his Italian cousins — Tony Soprano, I think, would lend money on a handshake. Was he actually benevolent?
Shaan: Yes, he’s actually benevolent. Which is why this is kind of like lore, right? It’s a crazy story, because up until now everything sounds like what every business tycoon would say — but then you find out they’re basically greedy.
This guy’s the real deal. And when the fire happens and everybody wants loans and everybody else ran away, he decides to give loans with no collateral, no contract. And the crazy thing is: during that one year after the earthquake and the fire, when he’s the only guy lending money out with no underwriting, no contracts, he ends up getting paid back on every single loan. Every penny gets paid back. He did not lose money on a single loan. Which is kind of a crazy act of good faith in humanity.
Sam: Wow.
Shaan: Not a single loan defaults. And he then starts to get innovative. At that time, the bank business was local — you’d open a bank, serve the people in your geographic radius, that was it. He realizes that because of how he ran his fruit business all up and down the coast of California, it sucked to have different banks in every place because he couldn’t expand. So he becomes the first guy to do the bank branch model.
He’s like, “We’re going to have local branches everywhere. I’m going to figure out how to sync the ledger on the back end, keep all the balances up to date, have a local model with a central headquarters.” He expands all throughout California. He’s basically pioneering interstate banking.
Giannini Funds Walt Disney and the Golden Gate Bridge [00:09:45]
Shaan: He helps fund a bunch of interesting things. The California agricultural boom — he’s providing credit to all the farmers, the vineyards, the food distributors, because those are the people he knew. He meets this entrepreneur with this crazy idea to create a film — completely animated, just drawings, turning drawings into a movie.
Shaan: And he says, “You know, this fellow Walt Disney — I believe in you.” Even though Disney had been rejected by everybody else, he funds Snow White, the first full-length animated film. Nobody else would do it.
There are these crazy guys in San Francisco who say, “We want to build this bridge, a big giant bridge.” And he says, “Even though all the other banks have deemed this too risky” — he funds the Golden Gate Bridge.
Over time he ends up merging with another bank called the Bank of America, rebrands Bank of Italy to Bank of America, and creates what becomes the biggest bank on earth. And even through all of that, he still never takes more than $50,000 a year in salary. He owns zero stock in Bank of America. His family does not inherit a giant fortune. He dies in 1949 not owning a single share of the bank he founded.
His philosophy was: serving the needs of others is the only legitimate business.
Sam: What a badass story. That was really good. What a baller.
Shaan: Absolutely insane. So it wasn’t like a Sam Altman “oh I don’t own any shares” type of thing.
Sam: I’ll just do this.
Shaan: It was real. Walt Disney said about him: “Amadeo, that man gave us oxygen when we needed to breathe.”
Sam: Crazy.
Shaan: He started it in the North Beach of San Francisco, the famous Italian neighborhood. This is really cool. And I think — is this still the case? Doesn’t Bank of America use a logo of him pulling fruit or something like that?
Sam: I don’t know about that. I remember seeing a famous logo of a guy like pulling stuff. Another interesting one is Wells Fargo — Wells Fargo was started in San Francisco as well and I think the 1906 earthquake also helped their business thrive.
Sam: I wonder if there’s another example of someone who truly founded something and did not benefit financially from it at this scale.
Shaan: What are the odds that there’s a founder of a company worth more than $300 billion who did not do it for personal profit, took no share in it, took no wealth out of it? That’s got to be number one.
John Bogle Comparison [00:14:00]
Sam: Have you heard of John Bogle?
Shaan: Yeah. Vanguard.
Sam: So John Bogle — there’s this thing called Bogleheads. Have you ever been to Bogleheads.com? It’s a forum where people discuss financial advice and investing.
Shaan: The general thesis of Bogleheads is exactly what I buy into — just super boring. Just buy an index fund.
Sam: John Bogle founded that. He created the Vanguard Group, which created one of the first index funds — that’s now VTI and VT, the two largest — and it’s something like a trillion dollars in assets. John Bogle owned a portion of it, but I think when he died his net worth was like 50 or 100 million compared to the trillion dollars in AUM that the company had. Not the same as the Bank of America guy, but a little bit of a similar Robin Hood type vibe.
Shaan: Well, you did one on Chuck Feeney, who gave it away, which is similar. But I mean, I’ve heard of a lot of people who gave it away. I’ve never heard of anyone who built it and never took anything from day one. That’s pretty remarkable.
Sam: And you saw this story on Twitter?
Shaan: I was on “the most interesting man in the world’s” profile on Twitter. And he was actually talking about Lloyd’s of London — how during those fires, people were a little distrustful of an overseas insurer, and Lloyd’s of London instructed their team to pay all claims in full regardless of what coverage they had. This restored an incredible amount of trust in Lloyd’s of London. In times of trouble, trouble is opportunity. They stepped in to be the most trusted partner when everybody else was trying to deny as many claims as possible. Lloyd’s went the exact other way and that helped build their reputation.
He had a footnote at the bottom that this is similar to how Bank of America started. I thought that’s interesting, I’d never really heard this story, and I went and started reading about it.
Trouble Is Opportunity [00:17:00]
Shaan: I think about these moments all the time. Moments where the data says to do one thing, everyone says to do this one thing, and you choose to do the opposite and it somehow works. I’ve had many opportunities in my career to take those chances, and I basically never do — very seldom — because when you’re up against those situations, you need courage. You need to be a little crazy.
For example, I think Jeff Bezos has this story where he was like, “Yeah, the data shows that we can raise prices and just make more revenue, nothing will change, people will just continue buying.” And an employee was like, “Why don’t you do this?” He’s like, “Well, because we said we’re going to be the low-cost provider. We said you want to be able to buy everything from us at a low price, so I don’t care what the data says. The mission is the mission.” I’ve heard a variety of stories like this that I’m incredibly inspired by. Have you ever had an opportunity to take one of these moments and you actually took it? Or do you typically follow the data?
Sam: I have two stories, and I can’t go into too much detail because I’ve never really announced these companies. But my e-commerce company — when the tariffs hit and Trump started raising tariffs on all the countries, one country goes to 30%, China goes to 150%. Which is pretty crazy. Imagine you’re selling something. Let’s just use round numbers: this ball costs a dollar to make, and you sell it for $3. But then all of a sudden you make these in China. The ball still costs a dollar, but now you have a 150% tariff, which means this ball now costs you $2.50. So you can no longer charge $3 for it. To make the same margin, this ball now needs to cost $6 or $7.
And so everyone in our space started raising prices. One company raised prices, the second company raised prices, and they all did it back to back — like, “Oh, they took the bullet already. Now’s our time.” A Friday news dump. Let’s all raise our prices. We were about to do it. The CEO of our company wanted to do it. And then I was like, what if we just do the exact opposite? Like, what if we just don’t raise the price at all? Not cut the price — that would be suicidal — but let’s just not raise the price.
Sam: So I wrote out this long copywriting-style message, almost like a prank basically. “Hey, as you know, this is the tariff situation. The reality of the situation is this. Just want to let you guys know — we’re not raising prices.” And literally the crowd roared on social media. Thousands of people sharing this in other communities and other groups, like, “This is the type of company to respect.” And I’m like, “Oh my god, this is amazing.” Pat on the back.
Shaan: Third time. If you just give away free stuff, people love you.
Sam: Robin Hood out here, man. And then three months later, I’m looking at the P&L. Our margin has dropped to 3%. I want it to be 15 or 20%. And I’m like, how do we fix this? I guess we have to raise the prices. So now I’m trying to figure out how to go back and raise the prices when it just doesn’t make any sense to run this business at these costs.
Shaan: Yeah, this is the hard part of what I’m referring to. This is the hard part.
Sam: So I took the short-term roar of the crowd — “God, everybody loves it when I give away dollar bills for 70 cents, I’m the man, I’m a genius” — and now I’m like, “Oh god.”
Shaan: What’s the second story?
Sam: The second was a little bit different. One of my other companies — we had a situation where the business was going great. This is actually a slightly different version of the principle — not a pricing giveaway thing, but the principle of trouble is opportunity. Business is going gangbusters and then adversity hits. Something happened. A competitor did something that changed the dynamics, and all of a sudden we have to figure out what’s going on.
And in the moment, it definitely feels like absolute trash. You wake up and you’re just like, “Oh my god.” The business that was so great yesterday — I was so hopeful, and now I’m absolutely hopeless. We all know startups are a roller coaster. Even knowing that doesn’t quite prepare you for when you go from the peak and the roller coaster starts to drop.
We had this moment where we were like — okay, one mindset is damage control. Minimize the bleeding. But before we go into just minimize-damage mode, let me ask a question: Is there a way we come out the other side of this much better off? Is there a Lloyd’s of London moment here? Could we do something that on the surface sounds a little crazy, a little unorthodox, where in a time of trouble when everybody else is doing X, we just do Y? Would that work?
Sam: Again, I can’t go into the detail, but it led to a slightly different mindset. Actually — I think when we come out the other side of this, we’re not just going to be stronger because we survived. I think there’s a thrive possibility here if we just nail XYZ. And we never would have figured this out had this not happened. Everybody else went left — if we go right, I think we might really separate ourselves from the pack. We’ll see how that one plays out.
But I always remind myself: within every disadvantage, baked in, is a small potential advantage if you can figure it out. Trouble is opportunity. The natural reaction to trouble is that it’s problems, it’s pain. Yeah, there might be some challenges and some pain — but trouble is also opportunity if you have your eyes open during the trouble to figure out where the opportunity is.
22 Immutable Laws of Marketing [00:24:00]
Shaan: So we had Tim Ferriss on the other day. One of the most suggested books that he recommends to others is The 22 Immutable Laws of Marketing. Have you ever read that book?
Sam: I’ve never actually read it now.
Shaan: I started reading it this weekend because I just want to learn, and he was just on, whatever. It’s only 110 pages — very short and easy. And it’s written by these two guys who are marketing consultants with a lot of wonderful clients. They give you 22 laws not to break.
One of the laws refers to basically the idea that when everyone is going one way, it’s significantly better and easier for you to not try to be better than them, but to be different. One framework is to be the opposite. And when you call out that opposite, you can’t insult the other thing — you just have to objectively say what it is.
For example, they talk about two different mouthwashes. One was Listerine. The other one was the second-place player, and they were like, well, instead of going after Listerine and mocking it, we’re just going to say: Listerine makes you smell like you just left the doctor because it’s clinical. We are the opposite — this is the one that actually tastes good. They’re not saying one’s better or worse. They’re just saying this is what this is, and we are the exact opposite.
Shaan: It gives you all these laws to follow. It’s an amazing book. And what I’m learning is that what you’re describing is a marketing problem, and how most problems in business are marketing issues. I didn’t really think about that until recently, until I started reading this — how perception is reality. There is no objective truth as to what products are necessarily better or worse. It’s about what we think is better. You should reread it, because what you’re describing — it’s like when you reread The 48 Laws of Power and you see, “Oh, this person is committing this, they are doing this.”
Sam: You get the Neo in the Matrix moment where you see the code — “Ah, okay.”
Shaan: He’s like, “Are you telling me I’ll be able to dodge bullets?” He’s like, “I’m telling you — when you’re ready, you won’t have to.” It’s basically: if you understand psychology at a certain level, you’re able to do less work and have a better result.
Sam: I used to have — I don’t know if you remember this, at the office at Monkey Inferno — we used to have a giant poster that I made where it was three triangles and then a picture of an ugly circle, and it just said, “Different is better than better.”
Shaan: For sure.
Sam: I made this for our team because we were always just trying to say how we’re better than everybody, and everybody says they’re better. The only thing we have to focus on is saying how we’re different. The public can decide if that’s better for them. Maybe you want the mouthwash that’s really clinical. Maybe you want the mouthwash that tastes good. What do you want? Our job is just to highlight the difference. And it’s really hard to be better than something that has more funding, more people, has been out for 20 extra years. It’s really hard to topple the incumbent with a better product when actually you just have to be a significantly different product that will be way better for a certain set of customers.
Story 2: Preston Thorp — Coding From Prison [00:29:00]
Shaan: All right. So the second one. We went, you know, 130 years ago. Now we have a today situation that I think will inspire a lot of people.
Do you know who Preston Thorp is?
Sam: Preston Thorp. I don’t think so.
Shaan: You may have seen this story because it was going viral recently. So I see this headline: there’s this guy who’s a software developer, an engineer. Except the weird thing is he’s incarcerated right now. He’s a software engineer who’s employed, but he’s in a prison in Maine — and has been for a while. I was like, how did this happen? What is the story?
Shaan: The story is pretty crazy. This guy grows up. He’s 17 years old, a computer geek, kind of always torrenting music and movies — doing what a lot of people were doing. A lot of us on our computers as teenagers. Not me, of course, for anyone listening. But, you know, others.
Somewhere along the way, this is what he says — he goes: “I get kicked out of my house by my parents for being a stupid 17-year-old like kids are. But instead of being broken and homeless on couches, I come back, I’m apologetic, and I beg mom and dad to let me back in.” He says that was their plan, and it worked. The problem was: “I stumbled head-first into the dark web — Silk Road, the pre-Silk Road internet wholesale drugs — where you could buy chemicals from sketchy companies in India and China and Canada and Holland in bulk.”
Shaan: So instead of being totally apologetic and reformed, he goes off the deep end. Suddenly he’s making tens of thousands of dollars a week by age 18, 19, selling drugs he’s buying wholesale.
Sam: Like MDMA, weed, stuff like that?
Shaan: Okay. All right. He was buying and selling that.
Shaan: Age 20, he gets arrested for the first time. They catch MDMA coming in the mail from Vancouver, weed coming from California. Because of the weed, he ends up going to prison. He goes for a couple of years, gets out. Here’s what he says:
“A few years later, I leave prison with zero dollars in my pockets because lawyers and commissary are expensive and nobody pays what they owe you when you go to jail. I’m living in a halfway house that smells like crack smoke, filled with parole officers and junkies. And I’m left with a difficult choice. I can continue to live here and walk every day to a temp agency hoping to get a $10-an-hour manual labor job — but I don’t have an ID or a social security card at this point — or I could go to New York, go see some old associates, and come back home after a week with $10 or $20,000 in my pocket and spend my time living in a comfy luxury hotel until I get back on my feet and rent an apartment.”
He says: “I chose the latter, and obviously I was back in prison a short 14 months after — 14 months of addiction and misery.”
Sam: Where is he writing this?
Shaan: On his blog. It’s called “My Story.” He says: “I’ve been incarcerated with this sentence since 2017.” And he goes on — “I came in with a terrible attitude, a terrible outlook on life, and no hope for my future.” He spent three of the ten years he’s been there in solitary confinement. 22 or 23 hours a day. He writes, parenthetically: “10% of my life, question mark.”
And at some point he says he truly became one of the people he looked at when he first came in at 20. They would ask, “Is this your first bid?” And he would say, “First — I’m not coming back here.” And the older heads would always laugh. Everyone says that. And sure enough, he came back.
Preston Learns to Code [00:33:00]
Shaan: During the pandemic, he got lucky that he happened to be at this prison in Maine that has a program where you can both enroll in college coursework while in prison and also — they gave him limited internet access. Some prisons have the college coursework, but very few have internet access. So he gets on, he immediately blows past the college coursework, gets hooked on programming, becomes self-taught, and gets absolutely obsessed. 14, 15 hours a day he’s learning to code, learning about databases. He becomes a huge open-source contributor to projects — and people don’t know because they just see his open-source code. They don’t know his backstory.
So they reach out with a job offer. Then they find out about him. Well, one company that did that was willing to actually employ him. For the past few years, he’s been working a full-time job from prison. He pays 10% of his wages back, whatever he owes, and keeps the rest. He’s become this inspiring figure.
Sam: When I Googled him, his LinkedIn came up first. He’s employed at Turso. Is that right?
Shaan: Turso. Yeah.
Sam: Wow. Okay. And what did he say?
Shaan: He had this one quote that I really liked. He goes: “There was one day after spending a few years where I had an epiphany. I started questioning everything about my life. I no longer knew why I had accepted the former identity and situation. None of it made sense to me anymore. And I decided I was no longer okay being where I was or who I had become.”
Sam: This is fantastic. This is a great find. It says on his LinkedIn — he gets out this year?
Shaan: I know. I’m excited for him. I’m rooting for him. This is the new Serial for me.
Sam: I hope — if you’re connected to this guy, he works at Turso — is that a big, reputable company?
Shaan: I had never heard of them before this. They’ve gotten a lot of attention from this, but they’re basically trying to rewrite SQLite, from what I picked up.
Sam: If you can somehow get connected with this guy — I’m not sure if he’s allowed to watch YouTube.
Shaan: Not only is he allowed — he restricts himself to one hour a day of YouTube entertainment, and the rest he spends coding. He’s got more self-control than you or me.
Sam: They’re just like us.
Shaan: He did a podcast recently. I saw him on a podcast from prison and I really want to get him on here. If anybody can make that happen or knows him, please do.
Sam: Well, Preston — if you see this, comment in the YouTube comment section. We’ll pin it and we’ll see if we can get you on.
Recap So Far [00:37:30]
Shaan: All right. So I gave you one — the Bank of America guy. The generous titan. The guy who builds the biggest bank in the history of planet Earth, takes no equity and essentially no salary in the process. One of these sort of bank moguls who says all the right things and then actually did all the right things. He’s about that life.
Then we have Preston — inspiring guy, rising up from his circumstances, doesn’t let the past dictate the present.
Okay. Now the last one is a guy named Stefan Thomas. And this is a different sort of lore story that captured my imagination and kind of broke my brain a little bit.
Story 3: Stefan Thomas — $400M Bitcoin Lost [00:38:00]
Shaan: All right. So this guy Stefan. In 2011, he’s a programmer. He gets paid to make a video about Bitcoin. Again — 2011. I think the Bitcoin white paper was a 2009 thing, Bitcoin started in 2010. So this is one year into Bitcoin. He makes an educational video about Bitcoin and gets paid 7,000 Bitcoin to do it. 7,000 Bitcoin at the time is like ten grand — a dollar or two per Bitcoin.
Sam: Who paid him? Like, if you’re a year in, was it like Satoshi? Was it like a —
Shaan: I don’t think so. I think there were some early companies interested in making educational content about this.
Shaan: Now that same 7,000 Bitcoin is today worth $400 million. But of course, that assumes you held. The crazy thing about Stefan is — he held. He held the whole way.
You might be wondering: how does this guy have this incredible belief, this conviction, this foresight? Is he an investing genius? Does he have the self-discipline of a Navy SEAL? How did he hold all the way up to Bitcoin at $118,000 today?
The answer is he couldn’t sell. He lost the password to his Bitcoin.
What he did was: when he got the Bitcoin, he stored it on a hardware wallet — the IronKey, at the time the most secure way to hold Bitcoin. He wrote the password down on a piece of paper, folded it up, put it somewhere safe. Problem is, he forgets about it because at the time it was worth a little bit less. Ten grand. Cool. I’m going to hold this and see what happens. Life happens, and he loses the piece of paper.
Sam: Is IronKey a brand or is that like a protocol?
Shaan: It’s a company. It’s the name of the device.
Sam: Great product. It works.
Shaan: Yeah, exactly. Also great marketing for the product in a way. Actually, you know what — I take that back. It’s pretty terrible marketing. This is my fear with hardware wallets in general: you are the security vulnerability. You lose the password.
The 10-Guess Limit [00:41:30]
Shaan: So he loses the password and he goes and tries to guess it. Guesses once, guesses twice. The problem is IronKey has a limit — you only get 10 guesses.
Sam: Oh.
Shaan: So he has a $400 million treasure sitting on a device on his desk and he can’t unlock it. He tries everything. He tries to remember. He looks everywhere for it. He has hypnosis done on him to see if it can bring it back out of his subconscious mind.
Nothing’s working. He has now tried eight of his ten password guesses. He has two left as of right now.
Sam: Now that alone is already just like — oh, dude.
Shaan: Here’s where it gets weird. Have you seen the old TV show Twilight Zone?
Sam: Is that the vampire thing?
Shaan: No, no, no. This is from the ’50s. There’s a very famous episode where this guy’s like, “All I want to do is read all day.” Then a doom apocalypse happens. The world ends, everyone dies, and he’s all by himself. He’s like, “Finally, I get to read.” He’s walking to grab his favorite book and his glasses fall off and he accidentally steps on them. It’s one of these “be careful what you wish for” type things.
This is that story.
Sam: It’s almost worse. It’s like he found the genie and lost the lamp.
Shaan: He’s got this $400 million treasure sitting on his desk — which would be one of the biggest found treasures. Think about sunken treasures around the world, discoveries of diamonds or gold. This guy’s just got one in his house. It’s crazy.
The Cryptographers Who Cracked the IronKey [00:44:00]
Shaan: So he’s got two guesses left, as of 2021. And there’s this team of basically cryptographers and treasure hunters who heard about this story and were like, “We’re going to try to break the IronKey.” They start working on all these methods.
What they’re going to do — they weren’t able to figure out how to just pick the lock without knowing the password. But they took a different approach: can we get rid of this 10-password limit? If we can get rid of the 10-guess limit, we can guess an infinite number of times.
So what they do is: they figure out how to use a laser to cut open the USB without triggering the anti-tampering devices. Then they use nitric acid to get rid of another defense layer. These guys actually figured out how to turn the IronKey into an infinite-guess situation.
Sam: No way. When did this happen? Like recently?
Shaan: Three or four years ago.
Now here’s the problem. Stefan doesn’t want to work with them.
Sam: Why?
Shaan: He goes, “I made a handshake deal with two other groups to try to crack this and I want to honor that.” And they’re like, “What?” The quote from these guys is: “We’ve cracked the IronKey. We just haven’t cracked Stefan yet.”
Sam: Oh my.
Shaan: They have the solution and he won’t use it because he made a handshake agreement with two other groups promising them a portion of the proceeds.
Sam: But — wait. So it’s 7,000 Bitcoin, so that’s $700 million?
Shaan: Yeah, now it is.
Sam: So there should be enough to go around. You could have three parties work on this.
Shaan: There should be more than enough. In fact, there are other things he could do. He could just sell it today for a guaranteed payout to any of these groups. You could say: “I’ll take 50 million today, you guys go ahead. If you crack it, you keep 750 of the 800 million. The risk is on you.” He has all these options and it’s so bizarre to me that he is not taking any of the fantastic options in front of him.
Sam: This is weird. Is he wealthy?
Shaan: Complete nonsense.
Sam: I’m looking him up. It looks like he —
Shaan: It made me mad, to be honest with you. The first story made me inspired. The second story made me double inspired. And the third story just pissed me off.
Sam: Is Stefan rich or anything like that? Is he a big deal?
Shaan: I think he’s done well. He’s done other stuff in the realm of crypto. He started this company called Coil that was trying to do something interesting in crypto — it failed. Now he’s the creator of Interledger, which is like an open payments protocol he’s trying to make. Yeah, it’s kind of weird. I mean, he’s not $800 million rich. I think this would be the greatest thing he’s ever done.
Lost Bitcoin Stories [00:48:00]
Sam: Do you have any friends that have — for example, my roommate James was like a hacker early on. He was hardcore in the space. He was doing the typical stuff: as soon as Bitcoin was accepted in this weird experimental way, he was like, “Hell yeah, let’s do it.” He spent like 1,000 Bitcoin on whatever. Do you have any friends who have done crazy things like that?
Shaan: I have a friend who lost 200 Bitcoin. I know this personally. And every year it just sort of updates how bad that loss is. So now it’s a $23 million loss. He was kind of kicking himself when it was like a $200,000 loss or whatever at the time. But he’s like —
Sam: He’s like, “I mined 200 Bitcoin. It’s on a hard drive somewhere. I think I threw out the hard drive. I think I threw out the laptop. It’s gone.”
Shaan: And there’s another guy who had this story where his hard drive — his Bitcoin hard drive — was in a landfill.
Sam: And he was trying to search for it. They wouldn’t let him. He’s like, “I will buy the whole landfill.” He tried to purchase the landfill and they turned him down. And this guy’s just trying to get access to the landfill to go search for his hardware.
Wrap-Up [00:50:00]
Shaan: So that’s it. That’s what I got for you. Three stories. That’s just my gift to you this week, Sam.
Sam: All right. That’s awesome. That’s great. That’s the pod.