One amazing thing about crypto culture is that there are few heroes and many villains. People have muted feelings towards Satoshi Nakamoto and Bitcoin Pizza Guy yet they make memes about how much they hate Roger Ver, a guy who actually spends time working on the blockchain. To make sense of this, we sat down with one of crypto’s most successful—and controversial figures—Ian Balina.
Non-traders might recognize Ian as the guys who got $2.5 million stolen from his account in the middle of his own livestream. Until then, Balina had been so successful that he was known for “The Ian Balina Effect” for the success that followed him. This is all, however, in the often shady world of ICOs, where a “successful” project really just means good marketing during a good market time. Only a few months earlier, Balina was extolling the virtues of starting a side business (he worked as a videographer on weekends, even after landing a six figure job).
Rather than tabulate whether every Ian Balina bet paid out, we decided to ask the man himself what it’s like being a controversial but in-demand figure in crypto. We found him to be surprisingly upbeat and optimistic for someone who’d just lost the equivalent of a Hamptons beach house in a matter of seconds in front of the whole world. What followed was an interesting and wide-ranging conversation that tackled success, race, class, gender, diversity, market timing, and the secret formula that made him millions.
What is the “Ian Balina Effect” and did your mom come up with it?
That was a term coined by the community. Similar to the “Oprah Effect,” the “Colbert Bump,” or the “Tim Ferriss Effect”. I got so influential that any ICO i Invested in the websites would crash within 24 hours.
What really causes it?
I was doing ICO investing on my YouTube channel. I was very open about how much I put in. As those ICOs began to do well, I had ICON and WABI do a 100x and Dragonchain do a 50x. I got those returns from carefully working my spreadsheet. Token metrics. I’m just using publicly available data to determine which investments were undervalued and made it less of a gambling situation. They get a number score and the highest number is the one most worth investing. In ICO investing, it used to be that four out of five would lose you money. I created a logical system using data and metrics so that four out of five were profitable. Once the audience came in, the success went viral. I put the spreadsheet up for free for anyone to evaluate
I always like to joke that you’re not really “viral” until people you haven’t come in contact with are “sick” of you (see what I did there?). Choosing the title “Diary of a Made Man” must have improved that process. When did this catch on beyond your audience?
I’m a big fan of [entrepreneur Gary Vaynerchuck]. Gary V, has a thing called “Document the Process”. He means that whatever you’re trying to strive, make the process educational for other people. Gary V documents his process in trying to buy the NY Jets. That’s where “Diary of a Made Man” comes from. January/February 2017, that was my YouTube channel. That’s when I finished graduate school and landed my first job. One week I was broke and eating McDonald’s $1 menu items, and the next I had a six figure job. The next year and I didn’t have to worry about how anything cost. Then I saw the light at the end of the tunnel. In school I could tell if it was worth it. Then I made it out of the tunnel and now I could see that it was all worth it. People don’t get to achieve that. People who are 25 don’t get to achieve that. The longer hours, the library hours, the tough exams—they were all trying to test me. But you really have to be exceptional and put in the exceptional work. Now that I’ve been tested and passed the test, I’ve become a made man. I was documenting my entrepreneurial adventures, my ups and downs, things I’ve learned. It was more of a Millennial platform about launching side hustles.
You landed a six-figure job at IBM and quit a year later. Meanwhile you also had a number of side-hustles.
I quit IBM in September. I was North America Open Source Sales Evangelist, I was a sales executive for retail, travel and transportation. So I was working at data and analytics for four years. Every single year I had a side hustle. Working as a videographer, making videos on the weekend, to doing Amazon FBA—I would import private label items from Asia and sell them on Amazon; I had a small AirBnb in DC. My platform was originally my journey. “How to Land a Six Figure Job in Your Twenties.” Then I started giving advice on crypto in February 2017. That video got about 5,000 views, which was a lot for me at the time. The YouTubers I knew at the time said that no matter what video you do that does well, do a follow-up right away. So I did a follow up on that about ICO investing. And now that had over 350,000 views. That’s what put me on the map. Nobody had done anything that in-depth online for free before. I wanted to make free content that was more valuable than anybody else’s paid content.
How much of your success is luck and how much of it is just hype?
Not everything I pick goes up . If every pick I picked did well, then that might be true. That’s why nowadays I may even delay announcing my investment in a project. That’s why I also took down the spreadsheet. In January, it was being viewed a million times a month. Probably the most viewed spreadsheet on Google. I had to take it down.
Alright, walk me through how you evaluate an ICO.
I have a short list of 3 steps:
- The product, is that an actual product? Something tangible, something I can see. Is this a Dapp? An actual blockchain that developers build on top of? Platforms have historically made more money than apps. So I look for a testnet or a mainnet. These days I ask for it. If it’s launched for something that has shipped, if it’s an application, I look for something where the product is almost done. I can check the website of their roadmap and I check their Github.
- I look for the team, I want two “all stars,” I want two people who’ve worked for a publicly-traded company or who have worked for a top 25 blockchain project. Basically, some product of importance. Then I do the same thing with their advisors—I want to see people with expertise.
- Then I go through their token metrics. What are they raising? What’s being given to the community? My spreadsheet will add up what I’ve seen 0 to 100; it has to score 80%. Then I ask for a call with the team. I bring in my team of developers who go through the code. And then we do a deep dive with the CEO. Their company, their business model, the technology. Then we publish a report on the ICO. Nowadays, that is usually 10 to 15 pages long. If we go through all of that, then we choose whether or not to invest.
What has actually gone 100x and what was the buy-in?
With Icon, I put in $20,000. At the all-time-high, that was $2.5 million. Total, I cashed out over $700,000. But because I went over the token metrics carefully, I also had a bunch of bonus tokens from making such a big buy at the right time. I kept my bonus tokens as a long term investment. WABI, I put in $2,000 and that went to $100,000. That also was over $300,000 at the ATH [all-time high].
Was this all money you made at IBM?
Total I put in $90,000 in one year, and about half to two-thirds came from IBM. From my last year in IBM, I made over $400,000 from commission checks. That was a big deal for me to leave. The only thing was I wanted to be in control of my own time. So I had to be self-employed. Out of everything I was doing, crypto was growing the fastest. My plan was to have one to two years of income. At that time, I had $250,000 in crypto. But last year, when I launched my Patreon, it made it so that I could quit. I got $50,000 a month in pledges my first week. The only people making money like that at the time had millions of subscribers. But I was in a space with people who had more disposable income, even though I had a small following at that time. I cancelled it after one year. But I have launched a new perks feature on YouTube, so that’s going to be replacing my Patreon.
But wait: you were working as a videographer on the weekends and making $400K?
Yes. Right through the summer until I got involved in crypto. I could do it an only take one or two jobs a month.
You’ve made a lot in crypto, but most people know you from the time you lost it all during a livestream. How did it happen and what can people do to keep their accounts secure?
My Gmail was compromised. The recovery email on that was my college account. My college account was hacked in a data breach and someone posted my old password for that. So they were able to get in that way. From there, they were able to get access to my Evernote where I used to store stuff when I was traveling. I had some private keys in there. Unfortunately, I was encrypting them with another password they found in a data breach.
What was their actual take?
They took all my Ethereum ERC-20. They took DragonChain, Pereto, Raiden Network. It was over $2.5 million at the time. They took everything except for PundiX, which, ironically, was my best investment this year.
I just got a text from my editor “The only thing worse than getting hacked is if the hackers gave it back to him now.”
[Laughs]. That was part of the recovery process. We knew if they tried to move it right away, it would be obvious. My friends came to my rescue. I got private investigators to track the funds. And then just trying to keep tabs on everything. All I can really say is there were three people of interest. And two out of the three have been arrested for other hacks. Just from working with exchanges, about a quarter of the funds have been frozen on exchanges.
So that’s a centralized thing? Exchange recovery.
Yeah. Crypto always says that centralized isn’t good. But when you get hacked, having someone to call is very good.
Let’s just get down to the hard stuff: after you got hacked you got called out on Instagram for using some unsavory language. [In a now deleted instagram story from just after the hack: Balina celebrated the arrest of one hacker and expressed his desire that this person would suffer from extra-judicial sexual assault in prison.] Okay. It was me. I called you out. And I’m still calling you out, but I want to commend you for taking the post down.
I do recall to what you are talking about. That was just me venting. It’s not something that I was proud of. When I saw that reaction I realized it wasn’t me at my best and I took it down.
I’m talking to you on the phone now and I like you. Last week, I spent this much time with Craig Wright. I like you both. So how come people in crypto talk like such a-holes online? You’d think we were a bank run by (male) teenage gamers trash-talking into their headsets.
Good question. I think that from speaking to women in crypto, what they’ve told me is that the character and personality traits, you need to have to be a big risk-taker. And what they tell me is not as many women take risks. Even several years back, this was basically gambling. It’s the same thing in gambling. There just aren’t as many women. We definitely need to have to diversity. Most of the women I do see in crypto typically come in from fields that have more gender diversity: marketing, design, etc., whereas others come from the tech space.
What does this industry look like to you as a black man?
People don’t ask me that question a lot. It’s not different than anything I experienced as a black male in the world. In a way, people’s true colors don’t come out when there is a lot of money on the line. People love you when you’re making them money but when they’re done making money, they can be more harsh. When the hate against me turns racial, when you go on 4Chan and they are calling me “Nigerian prince” or the n-word, then the category of hate that I get is different from other influencers that don’t look like me. Like getting death threats and the description of what they’re going to do to me. How they’re going to lynch me, whereas others might get another kind of hate mail.
I don’t get why people are the way they are on the internet. There’s a certain mob-mentality to it. Like people are okay being rude if everyone else is, but then we get upset when people are rude to us.
I think it’s because [THINK?] they can hide behind the screen. I don’t get this hate in natural life or at crypto events. Either most people are more polite in person or we don’t talk like that in the real world. It’s how Twitter is; everybody wants to put in their two cents. I have a big following and I prefer Instagram over anything else. Instagram and YouTube. Twitter is text, but Instagram is always pictures. I think it makes people feel like they have a stronger connection to you. Like you’re more human.
Me too. Even for something with a lot of text, I’d rather share on Instagram than on a Twitter thread. That way people can chose to engage or ignore.
Instagram is a better platform for storytelling. Gary V calls Twitter it the “water cooler” where everyone just wants to have a hot-take and leave. Nothing really neutral.
Hey I wanted to ask you about this week’s BCH war. From your perspective as an ICO wizard, could this bear market tip this in anyone’s favor?
It’s not impossible to win, but it’s much tougher in a downturn.
A lot of people try to pick winners and losers, but in the end whatever the consensus is ends up the “winner.” What do you want to see this year?
Ideally a bull-run. But that won’t be until the end of Q1. I want to see the confirmation of a turnaround. I want to know when we’ve bottomed out.
When will crypto be mainstream?
When most people use it. When the average person who isn’t a techie prefers it. A good example is Uber. Now anywhere you go, everybody knows what Uber means. As soon as we have other alt-coins, kind of like when people just started saying after dinner “I’ll just Venmo you.” Once more than half of a demographic understands that, it’s mainstream.
Walk me through a “mainstream” crypto transaction.
Just imagine what Venmo is doing, but with crypto. The problem is the user interface and the onboarding are there. Nowadays, Coinbase is on there. But even the process of sending that nowadays via hexidecimal addresses is harder. In the future, when we have handles like on Twitter or Venmo. Coinbase wallet is doing that now.
What ICOs are you looking at now?
I’m looking at Resistance, an anonymous exchange and privacy coin. All-star team, all-star advisors. The difference is, think of this as Bitshares or Ether Delta with a Coinbase-like interface on a desktop app. They have a privacy coin that lets you do an atomic swap with a different blockchain. They solved that by making privacy option. For regulation purposes, they still have to do KYC [Know Your Customer I.D. checking], so they’ll be blocking U.S. people from the anonymous platform so that you don’t have to broadcast your transactions to the blockchain.
Looking at a project in Tel Aviv called Coti. Still deciding if we want to invest; there’s a question of early investors getting a bonus. We don’t want to get dumped on if we go in now.
Mainframe (MFT) did pretty well this year. QuarkChain (QKC) did, too. Loom Network and still PundiX for the future. They have just been executing. They are a company that has gone after a need to make crypto mainstream and they have a physical tangible device even if you aren’t a crypto expert.
Where’s Ian going to be in five years?
I think I’ll be living a good life. And will just be trying to help more people adopt crypto and help other people live a better life through crypto. That will mean still making crypto content. We want to do a crypto-focused TV show. Right now, we are just putting our heads done so that the next wave of people coming into crypto we will be there for them—while also being fun and educational.