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Thank you to Foundation Devices for being a sponsor of this podcast.

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When it comes to beautiful air gapped open source Bitcoin hardware wallets, this is a

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fantastic team to check out.

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Foundation Devices.

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Because I've come to realize it's not just about the hardware.

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The hardware can look great.

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It can be open source, it can be secure, but you also have to know the ethos of the team

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behind it because they're the ones who are going to offer you firmware upgrades.

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They're the ones who can change the functionality of your device.

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You can have a hardware wallet that does exactly what you need, but if the team starts to develop

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in a direction you don't like, like some would say Trezor and Ledger have started to do

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over the past year or two, it's not easy to make a change.

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But the team at Foundation, they'll tell you right to your face, they're focused on more

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than just your Bitcoin.

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They're focused on your sovereignty and your freedom.

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And that's why I support them and I appreciate them supporting me with this podcast.

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You can check out Foundation and their Passport Bitcoin Wallet at foundationdevices.com.

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On today's episode, I have a really thought provoking conversation with Lynn Alden, who

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is the founder of the Lynn Alden Investment Strategy, a great blog at LynnAlden.com and

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the author of the upcoming book, Broken Money, about the history of monetary technologies.

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We're both Bitcoin fans, but I think you'll be surprised by some of the topics we get

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into here.

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Check it out.

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Okay.

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Yeah.

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Thanks for joining me, Lynn.

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I, I really appreciate it.

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The insights that you offer on Twitter and on your blog and you're one of the people,

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you're one of the few people in crypto.

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I know you go beyond crypto, but you're one of the few people who seems to be universally

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respected.

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I try my best.

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It's definitely not universal.

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There are certain pockets, especially among some of the less decentralized cryptos.

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They don't like my criticism, so I'm not really well respected from those groups, but I think

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I'm respected from most people I care about.

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It's interesting because I don't see that.

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Twitter doesn't show me that part of you.

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Twitter just shows me, oh wait, X.

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X are we ever going to get used to it, man?

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Are we ever going to get used to calling it X?

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I think I'm going to keep calling it Twitter.

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And I try to choose my battles, and so I've taken some swipes at certain cryptos, but

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I guess because I don't do it too frequently, I'm not often having those kind of challenges,

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but it kind of comes in waves.

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If I make a particularly harsh criticism of one of the cryptos, I'll get that crypto army

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coming after me.

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But other than that, yeah, I don't really make that many enemies.

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You tweeted the other day that you...

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Wait, let me find it.

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You said, you all see my published tweets.

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The unpublished ones are the funniest ones, but I've been too nice to post most of them.

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So what are we missing?

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What's in the drafts?

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I think if someone has seen some of my criticisms of Elon and Twitter, they'd probably get an

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idea what some of my other unpublished tweets are.

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Those are some of the ones I managed to publish.

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I've been pretty critical of Elon because I think one of the things that tends to annoy

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me is dishonesty.

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So if there are people I disagree with, but I think that they believe what they're saying

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and they're intellectually honest, even though I see the world differently, I feel like I

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can relate to that person.

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But I feel like if someone is playing a role or is trolling or is doing things like that,

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that tends to annoy me more than the other way around.

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And especially because he's now running the platform.

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And so I'm not going to take swipes at most people, but when the guy is running the platform,

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I'm willing to punch up, in other words.

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So why does it bother you?

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What is it about it that eats at you?

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Do you feel like he's being a scammer or do you feel like he has ulterior motives or what

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is it?

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I think it's partially hypocrisy.

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So he's historically been a very good marketer.

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For much of the Tesla period, he's been really focusing on the green angle and usually generally

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over-promising either in terms of Tesla or solar things that he's going to do.

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And so he's been very effective at selling equity, which has really helped the fundamentals

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of his companies.

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And then when Bitcoin was having its bull run, he played into the Bitcoin theme and

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he got Bitcoiners to like him a lot.

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But then he shifted over to Doge and would troll around with Doge, which actually would

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in many ways cost a lot of people money.

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He was basically making these traps for people.

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And then in the current era, I think he's playing politics in a way that he's purposely

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rolling up certain bases and provoking other bases and in all of these different things,

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whether he's playing around with ESG narratives, whether he's playing around with Bitcoin or

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crypto, whether he's playing around with politics, he's pushing buttons, I think, strategically

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rather than because he feels a certain way.

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And one of the, I think, hypocritical aspects of Twitter is that if you look at some of

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the statistics, he complot...

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So he's operating on a free speech theme compared to the prior management.

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And in some areas that's true, but then in other areas, especially outside of the US,

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Twitter's compliance with government takedown requests has increased under Elon's watch.

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And one of the complications is that because Twitter is not his largest business, so Tesla

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and SpaceX are more important, there is a conflict of interest there where if the people

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running Turkey or India, countries like that, if they reach out and say, hey, can you take

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this off Twitter?

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He's very quickly to comply because what he ultimately wants to do is sell Teslas and

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rockets in those countries.

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That's more financially important to him.

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And so there's a conflict of interest when you run a media platform and have other bigger

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business interests.

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I would argue that it's similar or worse than, say, corporate media when they have all sorts

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of major corporate sponsors, like pharmaceutical sponsors, for example, whatever the case may

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be, they're obviously going to be biased towards their major sponsors.

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While in Elon's case, his biggest, quote unquote, sponsors are the rocket company and the car

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company.

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And he will make deals with those countries.

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And then those tend to be the countries that he also has the most rapid takedown requests

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with.

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He basically complies.

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He doesn't fight back.

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And even years ago on Twitter, India or Turkey would ask them to take stuff down and they

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would say no.

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And they would challenge it in their courts and stuff and sometimes win.

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And Elon has generally folded over quicker in those jurisdictions.

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But the market where he has leverage is the United States.

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And that's where he's playing that what I view as a free speech game.

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It's not true free speech, but he's using that as his current theme in a similar way

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that he's used prior themes.

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And then there's obviously, there's things like the whole substack fiasco.

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You couldn't even like a post that would mention substack for a period of time.

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There's been like a weird set of behaviors that is not consistent with the angle that

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he's going on.

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And so I've been generally pointing them out.

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Isn't this though like what every company does now?

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Isn't this, I feel like global capitalism has resulted in if you're not a hypocrite

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in this way that you're describing, that you're almost betraying your shareholders

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because you're not seeking out the strongest profit route.

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You're giving up money if you're not doing this kind of stuff.

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So isn't this kind of like a global thing?

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Is it unique to Elon?

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So I think the thing that's unique is the delta, the difference between what people

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think he's doing and what he's actually doing.

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So for example, if we take Tim Cook as an example, Apple, not many people these days

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have illusions that Tim Cook is...

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Yeah, basically I think what Tim Cook's doing and what the perception of Tim Cook's doing

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are roughly in line.

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I think everybody knows he's got to do certain things to not piss off China, not piss off

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all the different major markets that he cares about.

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And he's got to be this kind of very controlled figure.

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And I have been critical of Apple.

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Like when they remove certain things in the app store, I think that they have that kind

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of monopoly power and they kind of go against their...

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They're almost the inverse of their 1984 commercial.

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They're now the big entity that's kind of...

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They'll take down certain apps and they'll say, you can't have like Nostr zaps in the

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app store, for example, because it violates that they get a cut of 30% of everything or

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that even if it's just a tip, it's not actually paying for content.

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And so I think critical of Apple, but I've not been as aggressive at most of these companies.

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And I think the issue with Elon is that unlike many other CEOs, a lot of people are actually

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fooled by it.

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Whereas no one's really fooled by Tim Cook.

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They're not even really trying to fool people that much, but Elon is more successful at

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it.

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And so I generally push back where I think there's a gap or a delta that's worth pointing

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back to because otherwise you're just preaching to the choir.

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If I just come out and say, hey, Apple's not a...

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They're basically a giant corporate tool like all other giant corporations.

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People are like, well, yeah, what else is new?

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So I generally only go after things where I think there's a mismatch.

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And also I think just naturally because my social media platform of choice is Twitter

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and Elon obviously has a very big presence on Twitter.

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So I would come across Elon more than I would say come across most other CEOs in terms of

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content.

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Yeah.

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I just wonder, like I'm thinking about, okay, Tim Cook, for instance, a good example, Apple's

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pretty consistent with what they do and what they preach and what they actually execute.

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But that's because that's their strategy almost.

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They've taken the human element out of leadership in a way, at least publicly, right?

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So Tim Cook obviously has a lot more views than he says to us, right?

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He's just not out there spouting out everything that he thinks.

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And then when he brings that stuff into the boardroom, the leadership of the company is

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able to shoot it down and make sure he's...

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It's not the Tim Cook show.

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Apple would never allow that to happen.

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Now it was the Steve Jobs show, right?

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So it's interesting how Apple has evolved and sort of learned its lesson from those

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days because I'm sure you'd agree like the Steve Jobs Apple was a lot more like the Elon,

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Tesla, SpaceX, X Twitter than Tim Cook Apple is, right?

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So it seems like Apple's made that strategic decision.

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So are there other...I just feel like though that there's almost like a balance...like

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do you feel like Apple struck the right balance there or should there be more humanity and

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less politics into the leadership of a company like that?

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Well, I think it's somewhat inevitable.

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When you're a $3 trillion company, I just think mainly it's not that I want to necessarily

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give Apple advice other than to criticize them for certain areas sometimes where I think

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it kind of interferes with decentralization or kind of makes a mockery of their prior

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themes, which is fairly uncommon but still pops up.

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And even the Steve Jobs era, I mean, I'm not someone who's ever really been that critical

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Steve Jobs.

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I mean, he has certain parts of his personality that I think people are critical of, rightfully,

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but I wouldn't really put him in quite in the same camp as Elon.

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He's certainly a colorful founder and larger than life character, but I don't think that

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he had that as big of a mismatch between what he would say and what he would really think

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as Elon does.

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And so I mainly just focus on where I think there's a gap.

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And it's a combination of focusing on where there's a gap and just focusing on what's

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around me and because I'm on Twitter, Elon's around more than say Zuckerberg is, for example.

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And I've been critical of Zuckerberg in the past, but I think in this kind of current,

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the past few years, I've generally found that the Elon mismatch, I think, is the most interesting

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one for me to criticize at least.

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I mean, there's other world leaders or figures out there that I would obviously dislike more

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than Elon, but I feel like anything I would say about them is not particularly different

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than what the consensus seems to be.

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So it's less worth saying.

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Yeah.

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I think a lot of what you're saying is there's direct connections to the stuff that I've

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been saying about the stuff that's going on with Ethereum and the DeFi slash Web3 stuff

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that's being built and it's being promoted as decentralized.

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And it's clearly not when you dig in and you find these chain link things and you find

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these different things that completely almost centralize it just by the essence of that

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one fact.

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And my take is always, look, if you're going to do this stuff, be transparent about it

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and don't just be transparent, like stick it on page 300 of your docs, but don't go

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out to the world, don't go out to the press and say, hey, this is decentralized.

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It's the first time in the world we're seeing stuff like this.

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This is going to remove middlemen from the equation when you know it's not true.

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You're actually out there lying to people sometimes through omission and sometimes by

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actually lying with words.

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And I think the common theme between what you're saying and what I'm saying with this

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stuff is about being transparent with your motives, at least to the point where people

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aren't getting scammed.

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And I think that it does, and I've been using the word scam a lot lately.

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I'm curious how you think about it, but I just think about it now as just dishonesty,

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dishonesty and a deliberate lack of transparency so that the people that are using a product

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or they're using a service don't really understand the ramifications of what they're using.

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Do you think that makes sense as far as calling something a scam?

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Yeah, so to unpack that a little bit, I think to start with, I think that whole comparison

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is correct, meaning that my criticisms of Elon are similar to your criticisms of crypto.

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Basically, you notice a gap between what is said and what you evidence is true.

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And maybe there's a number of categories where you might cover that, but you happen to have

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certain things you cover more.

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So it's crypto in this case.

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And so that's where people ask, why do you spend so much attention on this?

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And you can articulate better than I can, but you point out that, well, it's because

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there's a gap between what they're saying and what is true.

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And so you've been putting some effort into focusing on that.

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I don't put as much effort into the whole Elon Tesla thing.

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I just kind of point that out as something that I tend to be a little rougher on because

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that's the gap that tends to get my attention significantly.

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I think it's for similar reasons.

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And for both crypto and say, Elon companies, I try to be targeted.

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So for example, I don't criticize SpaceX that often, whereas it's not an area where it's

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not like if a rocket blows up, I'm out there like, hey, look at this.

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I'm not that critical of SpaceX.

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It's more been directed at certain aspects of Tesla, like certain false promises there,

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or more recently, certain false promises with free speech or the gap between what he's doing

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in the US versus elsewhere and these conflicts of interest and stuff.

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So it's a targeted type of criticism.

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And when I focus on crypto, I generally, I kind of start by painting with a broad brush

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because out of the tens of thousands of coins, most things are garbage and the burden of

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proofs always on the project to demonstrate some degree of value.

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But when I'm criticizing a specific project, I try to use the word scam a little bit selectively.

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I tend to reserve that for what I would define or describe as projects that from the inception

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are intentionally malicious projects purely to capture money, which is a lot of them.

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And I try not to use scams for projects that have a little bit of something there or that

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I can see why the creators honestly thought something that they're doing is interesting,

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but then are over marketing or overstating it or probably in some cases believing their

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own narrative.

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I generally criticize that in other ways rather than kind of outright calling them a scam

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because if I call everything a scam, then I dilute the word scam.

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And so if there's like a more obvious scam, then what word do I use for it?

263
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So I try to, usually when possible, I try to target appropriately or pick my words carefully.

264
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But I think scam is probably the right word for most projects in crypto.

265
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Yeah.

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What do you do when everything is a scam?

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What do you do then?

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Well, that's one of the criticisms that people level at me is they say I'm a Bitcoin maxi,

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which is, I'm certainly, I guess, Bitcoin maxi adjacent.

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I like Bitcoin as a network.

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I've been constructive on stable coins because there's real demand for them in certain markets.

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But outside of certain areas like that, I've been very critical of the broad space because

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I think the long tail of almost all of it is affinity scams, essentially.

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Yeah.

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I came from the Bitcoin mindset and I brought that to the Ethereum stuff that I'm looking

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at.

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And it's interesting.

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It's an interesting evolution actually over the last six, seven years.

279
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The core principles have stayed the same as far as the measuring stick, although Bitcoin

280
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does have some concerns for me long term.

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I want to talk to you about that later.

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But as far as the Ethereum stuff goes, what I've been noticing about myself is, well,

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not about myself as much as other people, I guess, is that people come into anything

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that's called blockchain or decentralized or whatever they call it that gives you that

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idea that it's something different, something new.

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People come into it assuming that it inherits a lot of the properties of Bitcoin as far

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as trust minimization and the ethos of it and the intent behind the project.

288
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People come in with that mindset.

289
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And in Ethereum, it's almost never the case.

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There's always these points of centralization that would be absolutely intolerable in Bitcoin.

291
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And so this is what I go to the developers and I say, you're not explaining this clearly

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enough so that a new user will get it.

293
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But they say, then they point to page 300 of the docs and they say, well, it's right

294
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there.

295
00:21:25,640 --> 00:21:29,960
I say, do you think that a new user is really going to read your docs and even get to page

296
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two?

297
00:21:30,960 --> 00:21:33,640
No, they're not going to know what you're talking about.

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And then I switch into a regulator mode.

299
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I switch into a government mind where I'm like, the only way that you can make this

300
00:21:43,360 --> 00:21:49,720
not a scam, in my opinion, is to on your homepage in plain English with a big yellow triangle

301
00:21:49,720 --> 00:21:55,700
or a big red siren, say to the user, there are centralized parts of this that you may

302
00:21:55,700 --> 00:21:57,600
not understand.

303
00:21:57,600 --> 00:21:59,040
This is who you have to trust.

304
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This is what you have to... and almost make it so obvious that you can't possibly miss

305
00:22:04,120 --> 00:22:05,120
it.

306
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But then I realize, okay, nobody's going to willingly do that.

307
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The only way you can do that is if you force them to do that.

308
00:22:10,960 --> 00:22:17,560
So I get to that point where I go from Bitcoin maxi to full on, I want to use the force of

309
00:22:17,560 --> 00:22:21,560
the state to force them to be honest.

310
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But it's interesting because that's what they do.

311
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It's almost inevitable, I think.

312
00:22:25,920 --> 00:22:30,640
Don't you think that that kind of regulation, that's exactly why regulators exist.

313
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And they're going to look at this stuff once it reaches critical mass and be like, you

314
00:22:34,520 --> 00:22:35,520
have to do this.

315
00:22:35,520 --> 00:22:36,520
Does that make sense?

316
00:22:36,520 --> 00:22:38,880
Well, that's what we've been seeing recently.

317
00:22:38,880 --> 00:22:41,680
The SEC has been at least trying to do that.

318
00:22:41,680 --> 00:22:47,760
I think the way I characterize it is that I say, if we take politics out for a second,

319
00:22:47,760 --> 00:22:50,680
wherever someone is on the political spectrum, whether they're in favor of regulation or

320
00:22:50,680 --> 00:22:56,600
whether they're in favor of no regulation, I think a lot of people would agree on consistency

321
00:22:56,600 --> 00:22:57,960
in regulation.

322
00:22:57,960 --> 00:23:03,780
So if you're arguing there should be zero regulation in crypto, you can also argue things

323
00:23:03,780 --> 00:23:11,360
like there should be zero regulation in mail spam or mail fraud, or there should be zero

324
00:23:11,360 --> 00:23:19,360
regulation in mailing penny stock things to senior homes and stuff like that.

325
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Basically you don't see people consistently arguing across the board.

326
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Crypto is kind of the current battleground.

327
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And so I think one way to think about it is that there's been a trend of gatekeepers being

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taken down.

329
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Before, to publish a book, you generally would have to go through a traditional publisher.

330
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Over time, self-publishing got easier.

331
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But of course, the upside is it's nice not to have gatekeepers, but the downside is the

332
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long tail of low quality books is going to be bigger because the filter is non-existent

333
00:23:50,120 --> 00:23:51,120
now.

334
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The same thing is true for games, or the same thing is true for music, where when you basically

335
00:23:57,840 --> 00:24:03,840
enhance technology and allow people to go to market more directly, it's good.

336
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But then users have to understand that there's going to be a longer tail of bad content with

337
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those gatekeepers gone.

338
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And what blockchain did was allow basically peer-to-peer security issuance.

339
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So instead of penny stocks having to go through the SEC, you basically make these penny stocks

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that go right to retail, and then regulators have had to kind of catch up to that and then

341
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decide how they want to apply existing securities laws to these types of assets.

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So I think in general, if someone's not in favor of any crypto regulation, you'd have

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to basically argue that you're in favor of the SEC being abolished or diminished in some

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way.

345
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Whereas I think if you're in favor of consistency, you say, well, however tight or loose the

346
00:24:47,100 --> 00:24:51,120
regulation should be, they should at least be applied as consistently as possible, which

347
00:24:51,120 --> 00:24:56,800
is basically my position that I think countries can have different levels of strictness, but

348
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I think consistency is important.

349
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Yeah, looking at it from that point of view where you can see the gatekeepers are being

350
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eliminated, as far as, like you said, books, stocks, sort of, like with crypto.

351
00:25:14,560 --> 00:25:17,120
I guess they are kind of like worthless penny stocks.

352
00:25:17,120 --> 00:25:20,440
You're just flipping tokens basically with penny stocks too.

353
00:25:20,440 --> 00:25:37,560
But people don't seem smart enough now to be able to filter out these types of dishonest

354
00:25:37,560 --> 00:25:40,560
schemes when it comes to crypto.

355
00:25:40,560 --> 00:25:45,920
And I think a lot of it has to do with the way that people have been infantilized almost

356
00:25:45,920 --> 00:25:51,040
like by the government over the past hundred years or governments around the world.

357
00:25:51,040 --> 00:25:56,720
I think that people just don't, they are too trusting, I guess.

358
00:25:56,720 --> 00:26:01,960
I always like to say misplaced trust is the root of all evil because it is, if you're

359
00:26:01,960 --> 00:26:06,600
not skeptical at the right moments of your life, your life can be absolutely ruined and

360
00:26:06,600 --> 00:26:11,160
you can be turned into an evil person yourself.

361
00:26:11,160 --> 00:26:17,000
So do you think that there's hope for people to be able to do this, to filter through this

362
00:26:17,000 --> 00:26:22,440
type of stuff without state actors coming in and making those decisions for the market

363
00:26:22,440 --> 00:26:27,640
or is it inevitable that the state is going to get involved and start to pick this thing

364
00:26:27,640 --> 00:26:28,920
apart?

365
00:26:28,920 --> 00:26:34,560
So I think these things tend to come in waves and as people experience it more and more

366
00:26:34,560 --> 00:26:40,100
and more, it starts to become ingrained in culture, at least not to everyone obviously,

367
00:26:40,100 --> 00:26:42,280
but it becomes more understood.

368
00:26:42,280 --> 00:26:48,880
The heuristics that crypto is a scam I think is widely being adopted.

369
00:26:48,880 --> 00:26:51,960
But it takes time, it takes iterations and takes multiple failed examples.

370
00:26:51,960 --> 00:26:56,720
Basically, you have to see multiple different wrong answers.

371
00:26:56,720 --> 00:27:04,400
And so an example is that older people will fall for email phishing attempts at a higher

372
00:27:04,400 --> 00:27:11,720
rate than younger, more internet savvy people because they grew up in this environment.

373
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It's more just obvious to them and that's just a generational learning thing.

374
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So I think a lot of those things go through that route.

375
00:27:21,560 --> 00:27:25,520
But of course, to the extent that regulators exist, their job is to try to apply the law

376
00:27:25,520 --> 00:27:27,120
consistently.

377
00:27:27,120 --> 00:27:31,600
And so if they're saying you can't issue a security and then someone says, well, I issued

378
00:27:31,600 --> 00:27:36,280
a security in digital form, it's like, well, you're still issuing a security then if it

379
00:27:36,280 --> 00:27:39,240
meets the description of a security.

380
00:27:39,240 --> 00:27:46,920
And maybe, for example, some country like Singapore or Dubai will have weaker laws.

381
00:27:46,920 --> 00:27:51,040
And maybe that's a good thing or a bad thing, but at least if they're consistent about it

382
00:27:51,040 --> 00:27:56,200
versus maybe the US or maybe the UK or whatever jurisdiction it might be, might have stricter

383
00:27:56,200 --> 00:27:57,200
laws.

384
00:27:57,200 --> 00:28:03,520
I'm not sure, I think people will debate along their own political lines where the right

385
00:28:03,520 --> 00:28:08,000
resting point is, but I think consistency is important.

386
00:28:08,000 --> 00:28:11,880
And I think that people can focus on what they control.

387
00:28:11,880 --> 00:28:18,160
So regulators are going to regulate and those of us that are just private market participants,

388
00:28:18,160 --> 00:28:24,920
instead it becomes more about social pressure or just warnings and educational content,

389
00:28:24,920 --> 00:28:30,720
the people that take the time to call out the scams or the bad marketing or the traps

390
00:28:30,720 --> 00:28:32,900
or things like that.

391
00:28:32,900 --> 00:28:36,880
It's important that people do that because that's part of the signal and that's part

392
00:28:36,880 --> 00:28:42,760
of the generational knowledge accumulation that helps a higher percentage of people avoid

393
00:28:42,760 --> 00:28:44,440
those types of traps.

394
00:28:44,440 --> 00:28:46,000
Yeah.

395
00:28:46,000 --> 00:28:52,480
But then you look at things like the Richard Hart thing recently with Hex and all that,

396
00:28:52,480 --> 00:29:03,320
and you look at other things going on and you realize you can't save people from themselves

397
00:29:03,320 --> 00:29:04,640
almost.

398
00:29:04,640 --> 00:29:15,320
So it's like human nature is devolved to the point where people are using their money to

399
00:29:15,320 --> 00:29:20,040
join a cult basically, stuff like that.

400
00:29:20,040 --> 00:29:24,800
You could even make that comparison to certain cryptocurrencies where there's maximalism

401
00:29:24,800 --> 00:29:31,320
to the point where people will just stay there and like drive it, they'll follow it to zero.

402
00:29:31,320 --> 00:29:36,800
And then these are the things that are going to be discussed in Congress.

403
00:29:36,800 --> 00:29:41,180
These are the examples that Elizabeth Warren is going to provide when she's advocating

404
00:29:41,180 --> 00:29:47,760
for crackdowns on banks to stop allowing people to purchase crypto and stuff like that.

405
00:29:47,760 --> 00:29:57,040
So I start to lose hope in the current set of humans on the earth.

406
00:29:57,040 --> 00:29:58,320
This is where I've been going lately.

407
00:29:58,320 --> 00:30:02,760
I've been going in a direction very, very kind of nihilistic way.

408
00:30:02,760 --> 00:30:10,320
I see the WorldCoin lines and I see the videos that are coming out now with biometric scanning

409
00:30:10,320 --> 00:30:12,080
and Whole Foods and stuff like that.

410
00:30:12,080 --> 00:30:18,400
And I start to realize, oh my God, the world's splitting between, it's just like there's

411
00:30:18,400 --> 00:30:20,480
some of us that can see it.

412
00:30:20,480 --> 00:30:21,480
It's They Live.

413
00:30:21,480 --> 00:30:24,680
Have you seen They Live, the old movie from the 80s or whatever?

414
00:30:24,680 --> 00:30:27,080
It's familiar, but I'm not sure I've actually seen it.

415
00:30:27,080 --> 00:30:29,320
Oh my God, you got to see this movie.

416
00:30:29,320 --> 00:30:30,760
It's still good today.

417
00:30:30,760 --> 00:30:36,240
It's about this guy who's basically starting to realize that there's almost like these

418
00:30:36,240 --> 00:30:39,240
aliens among the population.

419
00:30:39,240 --> 00:30:44,400
They just look like normal humans, but they're aliens and you can only see them if you wear

420
00:30:44,400 --> 00:30:46,720
this special set of sunglasses.

421
00:30:46,720 --> 00:30:50,580
And when you put on this special set of sunglasses, you can see who the aliens are.

422
00:30:50,580 --> 00:30:55,280
And you can also see that all around you is written all these messages that are like brainwashing

423
00:30:55,280 --> 00:30:59,860
people into just being complacent and stupid and stuff like that.

424
00:30:59,860 --> 00:31:02,920
And then when the aliens start to figure out he's got these special sunglasses, they try

425
00:31:02,920 --> 00:31:04,560
to kill him in this whole thing.

426
00:31:04,560 --> 00:31:05,560
It's so good.

427
00:31:05,560 --> 00:31:06,560
Please watch it.

428
00:31:06,560 --> 00:31:07,560
I think you'll like it a lot.

429
00:31:07,560 --> 00:31:08,560
Interesting.

430
00:31:08,560 --> 00:31:09,560
I'll check it out.

431
00:31:09,560 --> 00:31:13,360
I think to your broader point, I fall prey to nihilism sometimes.

432
00:31:13,360 --> 00:31:20,360
I think one thing I try to do is snap myself out of it by saying to myself not to fall

433
00:31:20,360 --> 00:31:21,800
for like recency bias.

434
00:31:21,800 --> 00:31:28,160
So whenever we're in a certain generation and so our generation has our focus on the

435
00:31:28,160 --> 00:31:31,840
current problems and it seems like worse than prior times.

436
00:31:31,840 --> 00:31:35,520
But I mean, if you look back in history, there were some truly awful periods in history.

437
00:31:35,520 --> 00:31:38,640
You just think how could people ever get so dumb and how could they ever recover from

438
00:31:38,640 --> 00:31:39,720
that?

439
00:31:39,720 --> 00:31:41,400
And then they did in some way.

440
00:31:41,400 --> 00:31:45,920
I think basically eventually it got so bad it ran its course and then there were some

441
00:31:45,920 --> 00:31:49,720
degree of societal adjustment around that.

442
00:31:49,720 --> 00:31:57,280
And so if right now a lot of that is this digital form, it's biometrics, it's tracking,

443
00:31:57,280 --> 00:32:03,620
it's lack of privacy, it's just low information, it's people getting caught in echo chambers

444
00:32:03,620 --> 00:32:06,200
of various types.

445
00:32:06,200 --> 00:32:12,240
Those are some of the modern problems today and they're unique problems, but they're

446
00:32:12,240 --> 00:32:21,400
kind of rhymes of problems of prior generations and sometimes worse problems.

447
00:32:21,400 --> 00:32:23,120
Yeah.

448
00:32:23,120 --> 00:32:28,860
To me it's like all roads with all this stuff and my main concern and the reason that I

449
00:32:28,860 --> 00:32:35,280
care about all this is because of this idea that's sort of been lumped under the term

450
00:32:35,280 --> 00:32:41,760
of the CBDC, the central bank digital currency, which now nobody actually even knows what

451
00:32:41,760 --> 00:32:42,760
it means anymore.

452
00:32:42,760 --> 00:32:50,200
It's just like this almost umbrella term for basically total government control of the

453
00:32:50,200 --> 00:32:59,080
money supply from the point of minting to being connected directly to your account with

454
00:32:59,080 --> 00:33:00,080
the central bank.

455
00:33:00,080 --> 00:33:01,760
And I think that's the way I think about it.

456
00:33:01,760 --> 00:33:06,760
I don't know how others think about it at this point, but to me that's the idea.

457
00:33:06,760 --> 00:33:11,680
The idea that no matter how many central banks, no matter how many central bankers tell you

458
00:33:11,680 --> 00:33:16,040
it's never going to happen, it's going to happen because technology never stops and

459
00:33:16,040 --> 00:33:17,760
the government never stops abusing it.

460
00:33:17,760 --> 00:33:23,120
So the idea is you got a central bank, you've got your digital wallet, whatever it looks

461
00:33:23,120 --> 00:33:26,140
like at the point that this is launched.

462
00:33:26,140 --> 00:33:28,400
Central bank mints money, it goes straight into your wallet.

463
00:33:28,400 --> 00:33:32,320
There is no third party retail bank and if it exists, it's almost inconsequential.

464
00:33:32,320 --> 00:33:36,360
It's like an arm of the government at that point and the government can add money to

465
00:33:36,360 --> 00:33:37,360
your wallet.

466
00:33:37,360 --> 00:33:38,360
They can remove money from your wallet.

467
00:33:38,360 --> 00:33:42,240
This wallet is connected to your biometrics, it's connected to your social credit, it's

468
00:33:42,240 --> 00:33:45,160
connected to your medical history, et cetera, et cetera, et cetera.

469
00:33:45,160 --> 00:33:51,400
All through what people are calling decentralized identities, ZK proofs, et cetera.

470
00:33:51,400 --> 00:33:54,560
Do you give this stuff much thought?

471
00:33:54,560 --> 00:33:56,360
Where does it stand on your priority list?

472
00:33:56,360 --> 00:34:02,720
Well, to give an idea of how much thought I give it, I just finished writing a 500 page

473
00:34:02,720 --> 00:34:07,360
book that's adjacent to this topic.

474
00:34:07,360 --> 00:34:12,080
It's coming out later this month actually, so I guess it's an accidental plug, but it's

475
00:34:12,080 --> 00:34:14,240
called Broken Money.

476
00:34:14,240 --> 00:34:21,280
It discusses the problems that I view that money currently has and how we got to this

477
00:34:21,280 --> 00:34:29,000
point and a big theme throughout the book is the past more than a century and a half

478
00:34:29,000 --> 00:34:34,760
of further and further centralization of finance.

479
00:34:34,760 --> 00:34:41,200
Of course, the later chapters get into central bank digital currencies and things like that.

480
00:34:41,200 --> 00:34:46,720
Certainly writing a book is not the most lucrative thing you can do.

481
00:34:46,720 --> 00:34:53,360
Obviously, some authors get a lot of value out of it, but in general, it's not the best

482
00:34:53,360 --> 00:34:56,520
return on investment compared to...

483
00:34:56,520 --> 00:35:03,400
I focused a lot of my spare time this year on the book and to some extent, I had to give

484
00:35:03,400 --> 00:35:08,440
up growth parts of my business.

485
00:35:08,440 --> 00:35:13,480
It's not the most lucrative thing by far that I could have focused on, but I did it because

486
00:35:13,480 --> 00:35:16,560
I felt like I had to.

487
00:35:16,560 --> 00:35:21,120
The culmination of a lot of my research over the past five years or so and I felt like

488
00:35:21,120 --> 00:35:24,920
I had a unique angle or a certain story I wanted to tell.

489
00:35:24,920 --> 00:35:28,040
It's not a book that I felt like I just chose to write, it's something I just felt like

490
00:35:28,040 --> 00:35:29,040
I had to write.

491
00:35:29,040 --> 00:35:36,800
Basically, to answer your question, the centralization of money including things like CBDCs as the

492
00:35:36,800 --> 00:35:42,840
ultimate expression of that is something that has been top of mind to me for the past several

493
00:35:42,840 --> 00:35:43,840
years.

494
00:35:43,840 --> 00:35:48,360
How imminent do you think the threat is?

495
00:35:48,360 --> 00:35:50,160
I think it depends on a jurisdiction.

496
00:35:50,160 --> 00:35:56,160
I think it's a very different answer between China and the United States, for example.

497
00:35:56,160 --> 00:36:01,760
I'm somewhat heartened by seeing what's been happening in Nigeria because they launched

498
00:36:01,760 --> 00:36:07,320
a CBDC and it has had very low adoption for, I think it's over a year and a half now, maybe

499
00:36:07,320 --> 00:36:10,160
approaching two years.

500
00:36:10,160 --> 00:36:14,440
It shows that governments don't always succeed when they launch one.

501
00:36:14,440 --> 00:36:20,880
Now, obviously, Nigeria might have less success than China or the United States that has more

502
00:36:20,880 --> 00:36:24,800
resources to deploy in the success of their CBDC.

503
00:36:24,800 --> 00:36:27,960
I think China has a much higher likelihood of being successful as they continue to roll

504
00:36:27,960 --> 00:36:28,960
out their CBDC.

505
00:36:28,960 --> 00:36:35,160
Basically, I think that answer is very jurisdiction specific.

506
00:36:35,160 --> 00:36:39,720
I think that China is many steps ahead of the United States.

507
00:36:39,720 --> 00:36:46,520
The United States benefits from, you'd have to change the Federal Reserve Act probably,

508
00:36:46,520 --> 00:36:50,280
you'd have to go through a very polarized Congress.

509
00:36:50,280 --> 00:36:56,960
Whereas generally, when you see big sweeping changes, like let's say when FDR banned gold,

510
00:36:56,960 --> 00:36:59,600
we had a super majority in Congress.

511
00:36:59,600 --> 00:37:06,240
You had such a landslide, it was the biggest landslide ever, or at least in the past 150

512
00:37:06,240 --> 00:37:09,920
years or whatever, just a huge landslide.

513
00:37:09,920 --> 00:37:13,720
That's how you get these major changes.

514
00:37:13,720 --> 00:37:20,400
If you don't have that type of political consensus, then there's a lot more blocks in the gears

515
00:37:20,400 --> 00:37:23,480
that prevent those types of big things from happening.

516
00:37:23,480 --> 00:37:28,960
Whereas if you're in more of an autocratic country like China, there are fewer things

517
00:37:28,960 --> 00:37:35,200
between the enactment and the outcome.

518
00:37:35,200 --> 00:37:39,880
China's been able to move somewhat quicker, whereas other countries are going to have

519
00:37:39,880 --> 00:37:45,080
all different degrees of speed based on their own specific legal roadblocks and frameworks

520
00:37:45,080 --> 00:37:47,000
that can slow it down.

521
00:37:47,000 --> 00:37:54,240
That's what I wonder sometimes, can we ever really reverse these trends or can we just

522
00:37:54,240 --> 00:37:55,920
slow them down?

523
00:37:55,920 --> 00:37:59,920
Because the technology doesn't go back in the box.

524
00:37:59,920 --> 00:38:05,280
Once it's out of the box, somebody's going to use it at some point.

525
00:38:05,280 --> 00:38:10,120
I think the only defense is other technologies that are out of the box, things like Bitcoin

526
00:38:10,120 --> 00:38:18,000
or other encryption in general, sorts of decentralizing technologies.

527
00:38:18,000 --> 00:38:25,280
One of the themes I touch on in the book is that a lot of banking developed because precious

528
00:38:25,280 --> 00:38:30,920
metals has certain limitations of authentication, portability.

529
00:38:30,920 --> 00:38:37,760
A lot of these proto banking channels would be set up many centuries ago, basically ways,

530
00:38:37,760 --> 00:38:43,200
early versions of bills of exchange, ways to send money long distances, ways to transfer

531
00:38:43,200 --> 00:38:46,720
value without having to actually transfer gold every time.

532
00:38:46,720 --> 00:38:50,080
Then of course, it got more and more sophisticated over time.

533
00:38:50,080 --> 00:38:54,400
You got more and more full service banking.

534
00:38:54,400 --> 00:38:59,000
Then in the second half of the 19th century with the invention of the telegraph and the

535
00:38:59,000 --> 00:39:04,800
deployment of the telegraph throughout the 1860s, for example, you had now the ability

536
00:39:04,800 --> 00:39:10,480
to send information around the world nearly at the speed of light, which means you can

537
00:39:10,480 --> 00:39:14,200
send transactions at the speed of light, but of course, you can't send settlements.

538
00:39:14,200 --> 00:39:16,280
You can't send physical gold at the speed of light.

539
00:39:16,280 --> 00:39:21,840
You had more and more abstraction between transactions and settlements, and that results

540
00:39:21,840 --> 00:39:25,400
in more and more centralization.

541
00:39:25,400 --> 00:39:29,400
Then of course, that only expanded with credit cards, the internet, and everything else as

542
00:39:29,400 --> 00:39:31,520
it got faster and faster.

543
00:39:31,520 --> 00:39:36,960
What's interesting about strong encryption and what's interesting about Bitcoin is that

544
00:39:36,960 --> 00:39:43,120
well, Bitcoin now speeds up settlements to nearly the speed of light to varying degrees.

545
00:39:43,120 --> 00:39:52,920
In some ways, it's one of the first financial innovations that might reverse the multi-century

546
00:39:52,920 --> 00:39:59,120
trend where previously everything that made money more convenient tended to centralize

547
00:39:59,120 --> 00:40:04,920
it more, whereas now in some ways, this makes it more convenient but also decentralizes

548
00:40:04,920 --> 00:40:10,840
it or at least gives tools to decentralize it or gives escape valves to the existing

549
00:40:10,840 --> 00:40:18,640
trend of centralization, gives people ways to opt out, gives governments frictions if

550
00:40:18,640 --> 00:40:20,480
they want to go after them.

551
00:40:20,480 --> 00:40:25,680
You have to try to get people not to run nodes or not to buy it from exchanges.

552
00:40:25,680 --> 00:40:31,480
Then they cut it off from their country's banks, but then you see in Nigeria and Argentina,

553
00:40:31,480 --> 00:40:33,920
they get it cut off from their banks and they still manage to acquire it.

554
00:40:33,920 --> 00:40:37,780
They buy it peer to peer because they're in environments where it's more obvious to them

555
00:40:37,780 --> 00:40:40,960
that they need it.

556
00:40:40,960 --> 00:40:46,880
I think to some extent, I'm a technological determinist, which is that most things that

557
00:40:46,880 --> 00:40:51,440
can exist will exist over time.

558
00:40:51,440 --> 00:40:57,200
It is true that things like centralizing technologies, like central bank digital currencies, once

559
00:40:57,200 --> 00:41:00,720
they are an option now, they're always a threat forever.

560
00:41:00,720 --> 00:41:07,760
At the same time, now that certain decentralized peer to peer technologies are existent and

561
00:41:07,760 --> 00:41:13,500
known, they're also an alternative forever and they can keep propping up whenever people

562
00:41:13,500 --> 00:41:14,500
feel like they need them.

563
00:41:14,500 --> 00:41:21,360
Now it's like a battle between can the bottom up decentralized people build faster and build

564
00:41:21,360 --> 00:41:26,960
more robust solutions or are the top down people going to win?

565
00:41:26,960 --> 00:41:34,000
I think in terms of culture, I think the decentralization is doing well around the margins.

566
00:41:34,000 --> 00:41:42,040
Basically the faith that people have throughout much of the world in institutions is low.

567
00:41:42,040 --> 00:41:43,600
It's been dwindling for a long time.

568
00:41:43,600 --> 00:41:47,440
That's politics, that's media.

569
00:41:47,440 --> 00:41:54,640
All the things that say our parents and grandparents would trust more than we trust now, we've

570
00:41:54,640 --> 00:41:59,460
had a degradation, I would argue both in the quality of those institutions, but then certainly

571
00:41:59,460 --> 00:42:03,660
measurably the perception of those institutions.

572
00:42:03,660 --> 00:42:07,400
That certainly weakens the top down ability, at least in many jurisdictions, to implement

573
00:42:07,400 --> 00:42:09,440
these things successfully.

574
00:42:09,440 --> 00:42:16,120
But then to your point also shows how gullible or ill informed a lot of people can be.

575
00:42:16,120 --> 00:42:22,760
When they have pain points in their lives or things aren't going well, they are pretty

576
00:42:22,760 --> 00:42:26,400
easy to turn to big government promises for things.

577
00:42:26,400 --> 00:42:32,320
So I think what gives me some of your hope is that while the centralizing technologies

578
00:42:32,320 --> 00:42:38,120
will keep getting better, now there at least are some decent tools to push back.

579
00:42:38,120 --> 00:42:39,120
Yeah.

580
00:42:39,120 --> 00:42:41,880
That's the reason I got into Bitcoin.

581
00:42:41,880 --> 00:42:46,000
It was about having an escape hatch, right?

582
00:42:46,000 --> 00:42:47,080
Having an alternate path.

583
00:42:47,080 --> 00:42:49,880
It wasn't about the investment opportunity.

584
00:42:49,880 --> 00:42:57,200
It was about having some separation from this group of people in Washington DC that want

585
00:42:57,200 --> 00:43:00,560
to control my life with money.

586
00:43:00,560 --> 00:43:03,560
It offered that to me.

587
00:43:03,560 --> 00:43:07,840
That was definitely responsible for the early growth, the creation of course, and then the

588
00:43:07,840 --> 00:43:09,520
early growth of Bitcoin.

589
00:43:09,520 --> 00:43:20,480
But what I've come to realize as time goes on, years into this journey, is that idea,

590
00:43:20,480 --> 00:43:25,080
just like the Bill of Rights almost, just like the US Constitution, just like any form

591
00:43:25,080 --> 00:43:33,040
of rights that we have, it's all only there as long as we actively defend it and actively

592
00:43:33,040 --> 00:43:34,880
fight for it.

593
00:43:34,880 --> 00:43:39,760
One of my concerns with Bitcoin, it's great that we now have...

594
00:43:39,760 --> 00:43:45,000
Bitcoin, I like to say, it was not a technological revolution.

595
00:43:45,000 --> 00:43:47,120
It was an intellectual revolution, right?

596
00:43:47,120 --> 00:43:50,320
Because there was no new crazy tech, no new microchip that made it possible.

597
00:43:50,320 --> 00:43:54,840
It was an idea that came along and all the pieces were already there.

598
00:43:54,840 --> 00:44:01,840
It just took putting them together to make it happen.

599
00:44:01,840 --> 00:44:05,480
That idea was great for 2008.

600
00:44:05,480 --> 00:44:11,220
It was 2009 when things started to come together.

601
00:44:11,220 --> 00:44:17,480
But as time has gone on, we've seen most Bitcoin holders don't value it.

602
00:44:17,480 --> 00:44:18,560
Would you agree with that?

603
00:44:18,560 --> 00:44:22,440
Most Bitcoin holders don't value decentralization like you and I?

604
00:44:22,440 --> 00:44:26,760
Well, I think, yeah, the average Bitcoin holder just holds a little bit of Bitcoin in their

605
00:44:26,760 --> 00:44:28,960
Coinbase account.

606
00:44:28,960 --> 00:44:37,760
I think someone who identifies as a Bitcoiner, which most holders of Bitcoin don't, they

607
00:44:37,760 --> 00:44:44,920
don't identify as a holder of Coca-Cola stock or Apple stock or Tesla stock or Bitcoin.

608
00:44:44,920 --> 00:44:51,360
But I think people working in the Bitcoin space generally have a decent view of decentralization.

609
00:44:51,360 --> 00:44:55,520
That's in large part why they're in the Bitcoin space and not the broader crypto space.

610
00:44:55,520 --> 00:45:01,160
But yeah, the average person that just has 300 bucks of Bitcoin on Coinbase along with

611
00:45:01,160 --> 00:45:09,360
some Doge or something like that is not really thinking too often about decentralization.

612
00:45:09,360 --> 00:45:16,640
But I think sometimes, in many cases, the surrounding environment encourages certain

613
00:45:16,640 --> 00:45:17,640
behavior.

614
00:45:17,640 --> 00:45:23,160
So when you look at the, I don't really like chain analysis too much, but they have that

615
00:45:23,160 --> 00:45:26,040
chain analysis crypto adoption index.

616
00:45:26,040 --> 00:45:29,960
And I think the last time I looked, 18 out of the top 20 countries by crypto adoption

617
00:45:29,960 --> 00:45:33,920
were, and they don't really separate Bitcoin and crypto, so a lot of that's going to be

618
00:45:33,920 --> 00:45:39,120
Bitcoin and stable coins, but 18 out of 20 of their crypto adoption index were developing

619
00:45:39,120 --> 00:45:41,320
countries.

620
00:45:41,320 --> 00:45:45,360
And that's understandable because people in developing countries on average have worse

621
00:45:45,360 --> 00:45:47,360
currency problems.

622
00:45:47,360 --> 00:45:54,840
And in many cases, their bank accounts are more likely to be shut down.

623
00:45:54,840 --> 00:45:58,560
There's authoritarian countries, there's inflationary countries, there's ones that are both, but

624
00:45:58,560 --> 00:46:00,800
there's a whole spectrum to deal with.

625
00:46:00,800 --> 00:46:07,280
And so it's not shocking that more Argentinians as a percentage care deeply about things like

626
00:46:07,280 --> 00:46:13,040
Bitcoin and stable coins because for them, it's not a theory of why it's useful.

627
00:46:13,040 --> 00:46:16,440
It's like either you have them or you're getting devalued.

628
00:46:16,440 --> 00:46:22,280
Whereas Americans, for example, have a little bit more luxury to not be as cognizant of

629
00:46:22,280 --> 00:46:23,280
it.

630
00:46:23,280 --> 00:46:27,440
So if things start to get worse in some of these countries, I think then those types

631
00:46:27,440 --> 00:46:28,960
of adoptions take off.

632
00:46:28,960 --> 00:46:35,400
For example, when Canada was freezing bank accounts and stuff, there's a little bit of

633
00:46:35,400 --> 00:46:37,520
a mini wave of Bitcoin adoption in Canada.

634
00:46:37,520 --> 00:46:41,080
There are a number of some prominent people that came out and said, well, I didn't really

635
00:46:41,080 --> 00:46:44,160
get Bitcoin and this event made me see it.

636
00:46:44,160 --> 00:46:49,680
And I think that basically the worst a currency gets either because it's losing value quicker

637
00:46:49,680 --> 00:46:58,000
or because something happens to them or something that provokes them directly.

638
00:46:58,000 --> 00:47:00,920
There are other things that maybe could have provoked them but didn't and something finally

639
00:47:00,920 --> 00:47:05,880
does or something happens to them is when a light bulb goes off.

640
00:47:05,880 --> 00:47:14,120
And so in some ways, the worse that fiat currencies or CBDCs get, the more it can incur

641
00:47:14,120 --> 00:47:15,800
this type of adoption.

642
00:47:15,800 --> 00:47:19,960
Now certain societies are so locked down that it's harder to make happen.

643
00:47:19,960 --> 00:47:24,360
I mean, one end of the spectrum is North Korea.

644
00:47:24,360 --> 00:47:30,000
You have China a little further in the spectrum and of course you have other ends of the spectrum.

645
00:47:30,000 --> 00:47:35,600
But if someone starts in a pretty free environment and these things start chipping away at it

646
00:47:35,600 --> 00:47:40,120
while there's an alternative and there's an army of people kind of like shouting and

647
00:47:40,120 --> 00:47:44,280
advertising that this alternative exists, that makes me somewhat hopeful.

648
00:47:44,280 --> 00:47:48,600
And of course, developers are constantly trying to make the network better and more usable.

649
00:47:48,600 --> 00:47:53,620
I mean, it's certainly more usable now than it was five or 10 years ago.

650
00:47:53,620 --> 00:47:57,640
And I see a future wave of tools coming out.

651
00:47:57,640 --> 00:48:01,680
And I'm also active in a little bit in startups and venture capital.

652
00:48:01,680 --> 00:48:07,100
So I try to do my small part to help bring forward some of those tools and find things

653
00:48:07,100 --> 00:48:10,200
that I find interesting.

654
00:48:10,200 --> 00:48:15,320
And so I think that's kind of the best we can do is just try to build the tools or build

655
00:48:15,320 --> 00:48:22,720
the world or send out a message, whatever our skill set might be, to do our small part

656
00:48:22,720 --> 00:48:25,400
to change some minds.

657
00:48:25,400 --> 00:48:27,120
Yeah.

658
00:48:27,120 --> 00:48:31,000
It's so tricky when you can't offer stable value.

659
00:48:31,000 --> 00:48:38,520
We haven't yet figured out how to offer stable value, stable buying power that's decentralized.

660
00:48:38,520 --> 00:48:43,880
And there's been attempts, like within the Ethereum ecosystem, there's been attempts

661
00:48:43,880 --> 00:48:49,480
and some of them are working and some of them are not, but they still rely on crypto.

662
00:48:49,480 --> 00:48:57,120
But it seems like that's the main problem, the main barrier to adoption for decentralized

663
00:48:57,120 --> 00:49:04,160
form of cryptocurrency to the extent that Bitcoin is decentralized is the volatility.

664
00:49:04,160 --> 00:49:10,400
That's at least in my experience, people, and this happened to people, look at El Salvador.

665
00:49:10,400 --> 00:49:15,800
El Salvador bought tons of Bitcoin and now it's worth half of what they bought it for.

666
00:49:15,800 --> 00:49:21,120
And we're talking about a national reserve, a national treasury where we're talking about

667
00:49:21,120 --> 00:49:23,120
millions or billions of dollars.

668
00:49:23,120 --> 00:49:28,480
And I understand that there's a, well, just hold it, it'll be okay attitude.

669
00:49:28,480 --> 00:49:33,160
But at the same time, for somebody who's trying to just buy food for their kids, for somebody

670
00:49:33,160 --> 00:49:40,360
who doesn't have time to think about the philosophical benefits of decentralization, it seems like

671
00:49:40,360 --> 00:49:42,100
that's the biggest barrier.

672
00:49:42,100 --> 00:49:45,160
And I don't know how we can ever get there, or at least in the near term.

673
00:49:45,160 --> 00:49:49,600
In the long term, you may be, but in the near term, the CBDC is definitely going to beat

674
00:49:49,600 --> 00:49:51,460
us to that.

675
00:49:51,460 --> 00:49:53,560
It seems like, at least for the average person.

676
00:49:53,560 --> 00:49:59,040
Yeah, I don't think we're going to get to stable decentralized value anytime soon.

677
00:49:59,040 --> 00:50:01,600
I think it's going to be a long process.

678
00:50:01,600 --> 00:50:07,400
The reason that developed market fiat currencies are somewhat stable is because they're centrally

679
00:50:07,400 --> 00:50:08,400
managed.

680
00:50:08,400 --> 00:50:12,780
So they basically sacrifice most of their other attributes.

681
00:50:12,780 --> 00:50:16,320
And there's like a central group that's running this control function.

682
00:50:16,320 --> 00:50:20,360
If inflation starts to get hot, they use their various tools to try to tame it.

683
00:50:20,360 --> 00:50:24,240
If inflation is below their target, they actually try to encourage more inflation, which I think

684
00:50:24,240 --> 00:50:27,400
is silly, but that's the policies they use.

685
00:50:27,400 --> 00:50:34,340
And so the cost of that partial stability is that you constantly bleed out value.

686
00:50:34,340 --> 00:50:39,920
And you're also, the central policymakers are prone to making centralized mistakes.

687
00:50:39,920 --> 00:50:45,840
In crypto land, they generally rely on oracles to try to do decentralization.

688
00:50:45,840 --> 00:50:51,480
There's various techniques to try to do stable value that they view as somewhat decentralized.

689
00:50:51,480 --> 00:50:54,720
And there's a little bit of a spectrum there.

690
00:50:54,720 --> 00:51:01,360
But if you really emphasize decentralization, you have to minimize how much contact you

691
00:51:01,360 --> 00:51:03,040
have with the outside world.

692
00:51:03,040 --> 00:51:08,480
If you're trying to read outside data, for example, you're going through an oracle.

693
00:51:08,480 --> 00:51:14,280
And so Bitcoin is kind of the example of one that it's as self-referential as possible.

694
00:51:14,280 --> 00:51:17,920
It's not completely self-referential, but it's about as close of a system as you can

695
00:51:17,920 --> 00:51:19,500
get.

696
00:51:19,500 --> 00:51:23,760
And the downside is that there's no attempts at stabilization.

697
00:51:23,760 --> 00:51:28,680
There's no attempts to read the outside world and then kind of fluctuate the supply or change

698
00:51:28,680 --> 00:51:31,560
certain things to stabilize it.

699
00:51:31,560 --> 00:51:37,680
But that's also what makes it the most immutable, the simplest rule set that's not really as

700
00:51:37,680 --> 00:51:43,840
prone to as many gaming or changes as other things or kind of specific models.

701
00:51:43,840 --> 00:51:51,320
And I think in Bitcoin's case, to the extent that volatility in the long run will go down,

702
00:51:51,320 --> 00:51:53,360
I think it's a larger matter of adoption.

703
00:51:53,360 --> 00:52:01,400
So if Bitcoin was 10 times more widely held and had 10 times liquidity, I think it would

704
00:52:01,400 --> 00:52:03,240
be somewhat less volatile.

705
00:52:03,240 --> 00:52:10,760
And I think basically the larger it gets in time and the less upside potential it has,

706
00:52:10,760 --> 00:52:16,960
the less certain types of leverage is likely to exist on it.

707
00:52:16,960 --> 00:52:22,380
And then also, as we've run out of these various types of crypto scams and re-hype authentication

708
00:52:22,380 --> 00:52:28,560
and things like that, I think people get trained to avoid these types of leverage blowups.

709
00:52:28,560 --> 00:52:34,080
And so I think we have to keep in mind it's still less than a 15-year-old asset class.

710
00:52:34,080 --> 00:52:40,140
And you can't really go from zero to trillions of market capitalization without volatility

711
00:52:40,140 --> 00:52:41,420
along the way.

712
00:52:41,420 --> 00:52:45,120
One analogy that I've used is like, or at least comparison, not really analogy, but

713
00:52:45,120 --> 00:52:51,880
comparison is if you look at most technological adoptions, most of them are non-monetary.

714
00:52:51,880 --> 00:52:57,760
So when electricity is invented, there are very few people that switch to electricity

715
00:52:57,760 --> 00:52:59,320
and then switch back.

716
00:52:59,320 --> 00:53:01,560
It's almost a one-way move.

717
00:53:01,560 --> 00:53:05,440
Unless you get really poor or something, you don't go back to not having electricity.

718
00:53:05,440 --> 00:53:10,300
Same thing is like once you have a radio, you don't go back to not having a radio.

719
00:53:10,300 --> 00:53:15,440
Once you have air conditioning, you don't go back to not having it.

720
00:53:15,440 --> 00:53:17,520
And same thing for smartphones.

721
00:53:17,520 --> 00:53:21,400
People don't go from flip phones to smartphones and then go back again.

722
00:53:21,400 --> 00:53:26,640
And the challenge with something like Bitcoin is that because there's one, leverage, and

723
00:53:26,640 --> 00:53:34,280
two, just bad investor behavior, they get euphoric at tops and despondent at bottoms,

724
00:53:34,280 --> 00:53:39,640
a monetary technology like that is one where it's going to have these big adoption cycles,

725
00:53:39,640 --> 00:53:42,840
but then it's going to get over-leveraged, over-euphoric, and then it's going to have

726
00:53:42,840 --> 00:53:44,640
a multi-year bear market.

727
00:53:44,640 --> 00:53:50,360
And I don't really see how a monetary technology, especially where the unit of account fluctuates,

728
00:53:50,360 --> 00:53:53,200
is openly tradable, can adopt quickly.

729
00:53:53,200 --> 00:53:58,760
I think in some ways it has a speed limit on how quickly it can realistically adopt

730
00:53:58,760 --> 00:54:02,200
because it has to go through multiple of these cycles.

731
00:54:02,200 --> 00:54:09,960
Yeah, I wanted to ask you, as we think about the future of Bitcoin, I wanted to ask you

732
00:54:09,960 --> 00:54:12,320
about something that's been on my mind lately.

733
00:54:12,320 --> 00:54:19,960
I recently did a podcast with Jameson Lopp and we were talking about this possibility.

734
00:54:19,960 --> 00:54:27,240
As we all know, Ethereum moved to a proof of stake consensus system, which basically

735
00:54:27,240 --> 00:54:34,160
allows the wealthiest Ethereum holders to control the network to a certain extent at

736
00:54:34,160 --> 00:54:35,160
least.

737
00:54:35,160 --> 00:54:36,160
Bitcoin doesn't have that problem.

738
00:54:36,160 --> 00:54:42,560
And a lot of the reason Bitcoin doesn't go to proof of stake is because proof of work

739
00:54:42,560 --> 00:54:49,440
prevents or it adds in a game mechanic that's really critical to decentralization, having

740
00:54:49,440 --> 00:54:54,480
these competing incentives between various parties.

741
00:54:54,480 --> 00:55:04,400
But people tend to ignore the fact that that game mechanic that proof of work offers us

742
00:55:04,400 --> 00:55:10,060
is really only effective from the inside looking out almost.

743
00:55:10,060 --> 00:55:14,720
It's like within the game, within the universe of Bitcoin as it currently exists, that game

744
00:55:14,720 --> 00:55:16,920
mechanic matters.

745
00:55:16,920 --> 00:55:22,460
But if you're able to look at it from the outside and you're able to almost like slice

746
00:55:22,460 --> 00:55:29,960
the atom that is Bitcoin, like just have god mode control, then you can do whatever you

747
00:55:29,960 --> 00:55:30,960
want.

748
00:55:30,960 --> 00:55:39,400
And you can achieve that god mode control when you, arguably, and this is what I want

749
00:55:39,400 --> 00:55:47,720
to talk about with you, arguably when you hold most of the value as custodians now are

750
00:55:47,720 --> 00:55:54,600
doing, centralized exchanges holding Bitcoin to the extent, I'm not sure what the percentage

751
00:55:54,600 --> 00:55:59,480
is now, but I know it's a huge percentage that they're controlling and it's growing

752
00:55:59,480 --> 00:56:02,720
because most people don't care about decentralization.

753
00:56:02,720 --> 00:56:04,320
They're willing to leave it on an exchange.

754
00:56:04,320 --> 00:56:12,360
So when you reach a point where the Coinbase is and the Binance is and the Bitgoes and

755
00:56:12,360 --> 00:56:16,360
all the custodians of the world are holding, and eventually the JP Morgan's and whoever

756
00:56:16,360 --> 00:56:22,080
else are holding most of the value and they decide, you know what, it would be better

757
00:56:22,080 --> 00:56:30,240
for us if we hard fork Bitcoin and we change the consensus mechanism and make it eco-friendly.

758
00:56:30,240 --> 00:56:31,640
We want to do this and that.

759
00:56:31,640 --> 00:56:34,740
We want it to be a different system.

760
00:56:34,740 --> 00:56:37,280
They begin to accumulate that power.

761
00:56:37,280 --> 00:56:45,240
They have most of the world behind them because most of the world has Bitcoin in their custody.

762
00:56:45,240 --> 00:56:47,800
And as we all know, anybody can hard fork Bitcoin.

763
00:56:47,800 --> 00:56:53,240
It's all about who can win the hearts and minds of the users.

764
00:56:53,240 --> 00:56:54,760
What does that world look like?

765
00:56:54,760 --> 00:56:55,760
To me, that's inevitable.

766
00:56:55,760 --> 00:57:00,480
I mean, I'm totally willing to debate whether that can happen, but I'm pretty sure it can.

767
00:57:00,480 --> 00:57:03,640
But what happens once that happens?

768
00:57:03,640 --> 00:57:10,280
Are we now the Bitcoiners who are just clinging to a sinking pirate ship in that world?

769
00:57:10,280 --> 00:57:12,120
What is that dystopian scene?

770
00:57:12,120 --> 00:57:13,720
How does it play out for you?

771
00:57:13,720 --> 00:57:17,360
Well, I think it can happen, but I think there's a couple ways to think about it.

772
00:57:17,360 --> 00:57:22,840
So one is, the block size war was kind of the first attempt at that because you had

773
00:57:22,840 --> 00:57:27,000
the majority of exchanges on the side of the bigger blocks.

774
00:57:27,000 --> 00:57:31,640
You had the majority of hash rate on the side of the bigger blocks.

775
00:57:31,640 --> 00:57:38,480
You had the biggest maker of Bitcoin miners on the side of the bigger blocks and it didn't

776
00:57:38,480 --> 00:57:39,480
work.

777
00:57:39,480 --> 00:57:44,320
So now because it didn't work that time doesn't mean it won't work anytime, but I think it

778
00:57:44,320 --> 00:57:46,560
was a heartening example.

779
00:57:46,560 --> 00:57:53,840
And it also shows that Bitcoin survived a really big attack on its decentralization

780
00:57:53,840 --> 00:57:59,320
in a way that many other cryptocurrencies have not survived or not had to deal with.

781
00:57:59,320 --> 00:58:05,640
So I think it's a constructive example to analyze and people are going to form different

782
00:58:05,640 --> 00:58:09,800
views on it, but I think that's a useful example to analyze.

783
00:58:09,800 --> 00:58:16,760
If it's like a current statistics, according to say, Glassnode data, less than 12% of Bitcoin

784
00:58:16,760 --> 00:58:18,440
is on exchanges.

785
00:58:18,440 --> 00:58:24,840
Now that number is higher if we include pure custodians like the Fidelities or NIDIG, kind

786
00:58:24,840 --> 00:58:30,700
of these other types of non-exchanges, but there's still a pretty significant degree

787
00:58:30,700 --> 00:58:31,700
of decentralization.

788
00:58:31,700 --> 00:58:36,200
And generally, you've seen the exchange balance go down over time.

789
00:58:36,200 --> 00:58:42,700
Now some of that wound up in GBTC, some of that wound up in like wrapped Bitcoin.

790
00:58:42,700 --> 00:58:47,380
So there's certain other honeypots that kind of got stuck in.

791
00:58:47,380 --> 00:58:54,080
But in general, the trend has been gradually in Bitcoin's lifetime, there's been a gradual

792
00:58:54,080 --> 00:58:55,360
distribution.

793
00:58:55,360 --> 00:59:00,360
So a little bit more distribution of coins over time, a little bit away from whales.

794
00:59:00,360 --> 00:59:05,720
Eventually a whale gets so rich they want to sell out, those coins kind of spill out,

795
00:59:05,720 --> 00:59:08,440
decentralize a little bit, more people come in.

796
00:59:08,440 --> 00:59:11,880
There's no guarantee that that trend will continue, but that has so far been the current

797
00:59:11,880 --> 00:59:14,340
trend.

798
00:59:14,340 --> 00:59:22,000
In general, I think one way to look about this is what happens post fork.

799
00:59:22,000 --> 00:59:27,980
So let's say a lot of coins are held by major custodians and BlackRock and a bunch of them

800
00:59:27,980 --> 00:59:34,140
try to initiate some sort of fork that is more centralizing and has more problems associated

801
00:59:34,140 --> 00:59:37,580
with it, but is more endorsed by institutions.

802
00:59:37,580 --> 00:59:42,800
Now maybe that would be more of a credible challenge on Bitcoin than the block size war

803
00:59:42,800 --> 00:59:45,120
was.

804
00:59:45,120 --> 00:59:47,380
But we have to think in mind then what?

805
00:59:47,380 --> 00:59:53,360
So when they have that more centralized blockchain, what happens to it?

806
00:59:53,360 --> 00:59:55,720
Does it actually get censored?

807
00:59:55,720 --> 01:00:00,000
Does that lack of decentralization begin to matter?

808
01:00:00,000 --> 01:00:06,600
Because if it does, it starts to become a worse network for many types of users.

809
01:00:06,600 --> 01:00:10,440
And so if they try to fork it and say make the supply more inflationary, if they try

810
01:00:10,440 --> 01:00:19,400
to fork it and make it easier for censorship to happen, then it becomes a worse system.

811
01:00:19,400 --> 01:00:24,840
And that's where I think literally culture becomes important, kind of like how Congress

812
01:00:24,840 --> 01:00:30,400
has like a 15% approval rating and news has like what, like a 20% approval rating.

813
01:00:30,400 --> 01:00:32,120
I don't even know the current numbers.

814
01:00:32,120 --> 01:00:39,840
All these major kind of corporatey government institutions are having really bad outcomes.

815
01:00:39,840 --> 01:00:45,720
People memed ESG so hard that even the CEO of BlackRock admits that that term is kind

816
01:00:45,720 --> 01:00:46,720
of dead now.

817
01:00:46,720 --> 01:00:50,720
Like they lost the marketing war on the term ESG.

818
01:00:50,720 --> 01:00:52,960
And I think the same thing is going to happen to CBDC.

819
01:00:52,960 --> 01:00:57,600
I think that they're going to like literally memes change, you know, memes in their current

820
01:00:57,600 --> 01:00:58,760
form are what they are.

821
01:00:58,760 --> 01:01:06,120
But I mean slogans and memes and satire, different ways to change minds have been prevalent for

822
01:01:06,120 --> 01:01:13,300
you know, the dawn of language and writing and communication and poetry and satire.

823
01:01:13,300 --> 01:01:18,080
And so I think that basically you could have certain long drawn out battles, but whenever

824
01:01:18,080 --> 01:01:23,120
they're trying to make the system worse and then especially if it's like the corporate

825
01:01:23,120 --> 01:01:29,000
tools doing it, they have more capital, but they have in many ways less sophisticated

826
01:01:29,000 --> 01:01:32,240
messaging and less truth on their side.

827
01:01:32,240 --> 01:01:38,440
And so I still think that there's a significant degree of ammo or weaponry on the other side

828
01:01:38,440 --> 01:01:40,640
to push back on that.

829
01:01:40,640 --> 01:01:48,880
Yeah, I can see that there's greater distribution like among custodians like you were mentioning

830
01:01:48,880 --> 01:01:49,880
before.

831
01:01:49,880 --> 01:01:56,560
I guess the point I was trying to make was that they're all subject to the same set of

832
01:01:56,560 --> 01:02:02,480
regulations for the most part, you know, and they're all subjects of the same, even foreign,

833
01:02:02,480 --> 01:02:07,440
even ones that aren't based in the US still succumb to US force.

834
01:02:07,440 --> 01:02:13,520
You know, so the scenarios that I'm thinking about involve the US realizing that they're

835
01:02:13,520 --> 01:02:14,960
losing the battle.

836
01:02:14,960 --> 01:02:18,900
They realize that Bitcoin poses a threat.

837
01:02:18,900 --> 01:02:26,640
They begin to push regulators and push corporations in a certain way that makes them realize,

838
01:02:26,640 --> 01:02:32,880
you know what, maybe we should take these steps to change the way that this works and

839
01:02:32,880 --> 01:02:37,960
then combine all of that with the type of media brainwashing that we've seen over the

840
01:02:37,960 --> 01:02:39,560
last three, four years.

841
01:02:39,560 --> 01:02:43,600
You know, as we know, when the government gets on a certain note, when they want to

842
01:02:43,600 --> 01:02:48,600
push a certain agenda, they're able to get the media behind them.

843
01:02:48,600 --> 01:02:54,640
They're able to, or at least they were able to control social media and really like you

844
01:02:54,640 --> 01:03:00,520
and me and anybody listening to this probably is going to be on the side that understands

845
01:03:00,520 --> 01:03:02,840
like, wow, this is a total Psyop.

846
01:03:02,840 --> 01:03:07,560
But then you got the other 99% of the world that just does whatever they're told.

847
01:03:07,560 --> 01:03:12,640
You know, and then you start to get Bitcoin, the old Bitcoin is the enemy, you know, that

848
01:03:12,640 --> 01:03:14,400
anybody who uses it is a criminal.

849
01:03:14,400 --> 01:03:17,600
The new Bitcoin, this is what you need in order to buy your bread.

850
01:03:17,600 --> 01:03:21,000
This is what you need in order to be a good citizen.

851
01:03:21,000 --> 01:03:24,860
You know, and that's what I get worried about with the Bitcoin because Bitcoin, ultimately

852
01:03:24,860 --> 01:03:26,720
Bitcoin is a meme too, isn't it?

853
01:03:26,720 --> 01:03:30,480
It's just an idea, you know, and it's about who owns the idea at any given point.

854
01:03:30,480 --> 01:03:34,200
And I get concerned that we're not going to be able to keep ownership of it in the long

855
01:03:34,200 --> 01:03:35,200
term.

856
01:03:35,200 --> 01:03:36,440
No, I think it's a good risk.

857
01:03:36,440 --> 01:03:39,040
I think it's a it's meme plus truth.

858
01:03:39,040 --> 01:03:45,120
So like, you know, if like Dogecoin is a meme, but there's less truth behind it than there

859
01:03:45,120 --> 01:03:47,240
is with Bitcoin, I would argue.

860
01:03:47,240 --> 01:03:52,880
And so you need both the fundamentals and then you need people to be aware of the fundamentals

861
01:03:52,880 --> 01:03:56,880
to market it and to fight for it.

862
01:03:56,880 --> 01:04:00,600
You know, again, if you look at like, say, Nigeria, I mean, they launched their CBDC,

863
01:04:00,600 --> 01:04:07,280
they have like 1% adoption and something like 40% of people have owned crypto.

864
01:04:07,280 --> 01:04:11,120
You know, probably a lot of that's Bitcoin and stable coins.

865
01:04:11,120 --> 01:04:15,880
And so it shows that in their case, the government messaging is failing.

866
01:04:15,880 --> 01:04:21,080
Same thing in a lot of cases in Argentina and other countries.

867
01:04:21,080 --> 01:04:25,800
And you know, how many people five years ago would have thought that the CEO of BlackRock

868
01:04:25,800 --> 01:04:31,800
would admit that ESG is kind of a dead term now, like it's been so hurt.

869
01:04:31,800 --> 01:04:35,180
And part of that was like relentless memeing.

870
01:04:35,180 --> 01:04:36,600
But then other parts of it is truth.

871
01:04:36,600 --> 01:04:42,860
Like, for example, you know, some of Germany's energy policy decisions have come back to

872
01:04:42,860 --> 01:04:44,660
haunt them.

873
01:04:44,660 --> 01:04:47,360
And these matter for people's outcomes.

874
01:04:47,360 --> 01:04:53,140
And then eventually their voting behavior and their polls and things like that.

875
01:04:53,140 --> 01:04:58,500
And so I can imagine a situation where they say they fork Bitcoin and some people have,

876
01:04:58,500 --> 01:05:05,400
you know, like walled garden, like struggle Bitcoin and other people have real Bitcoin.

877
01:05:05,400 --> 01:05:06,920
And that could be a battle.

878
01:05:06,920 --> 01:05:11,320
But to the extent that there's consequences with having the walled garden Bitcoin, people

879
01:05:11,320 --> 01:05:14,220
will begin experiencing those consequences.

880
01:05:14,220 --> 01:05:18,320
And meanwhile, the other Bitcoin will still exist.

881
01:05:18,320 --> 01:05:24,000
And then it becomes a battle between like the controlled one with the people that lost

882
01:05:24,000 --> 01:05:27,400
the ESG meme kind of culture war.

883
01:05:27,400 --> 01:05:32,200
And they're the ones with the failing institutions, the ones with just poll numbers that keep

884
01:05:32,200 --> 01:05:33,820
going down.

885
01:05:33,820 --> 01:05:39,340
And then when we look at, say, US presidential candidates, it's funny that the top two,

886
01:05:39,340 --> 01:05:46,800
so Trump and Biden, they've not been very favorable on Bitcoin slash the whole space.

887
01:05:46,800 --> 01:05:52,040
Whereas when you look at pretty much all the other major candidates, you know, you look

888
01:05:52,040 --> 01:05:58,320
at you look at Kennedy, you look at DeSantis, you look at, you know, Rama Swamy, like Swam

889
01:05:58,320 --> 01:06:03,320
Swami, the whole a lot of them are actually pro Bitcoin.

890
01:06:03,320 --> 01:06:09,000
And so I think over time, it's seeping into culture and politics a little bit more.

891
01:06:09,000 --> 01:06:14,080
And then one thing I've been interested, because I follow a lot the Bitcoin energy argument

892
01:06:14,080 --> 01:06:21,400
because, you know, I'm initially a electrical engineer by education and my kind of my first

893
01:06:21,400 --> 01:06:23,040
decade of career.

894
01:06:23,040 --> 01:06:30,080
And so I've generally taken more attention towards the energy angle to defend why Bitcoin

895
01:06:30,080 --> 01:06:34,040
energy expenditure is well spent and important.

896
01:06:34,040 --> 01:06:41,160
And a few years ago, you know, the narrative was generally not looking great.

897
01:06:41,160 --> 01:06:48,760
But enough people have put out content and have criticized bad journalistic content that

898
01:06:48,760 --> 01:06:51,740
I'm actually seeing a pretty significant trend change.

899
01:06:51,740 --> 01:06:58,800
And one of the things I focused on over the past, like, say, 18 months is there was a

900
01:06:58,800 --> 01:07:03,680
rise of progressive Bitcoiners, which I found interesting because Bitcoin has historically

901
01:07:03,680 --> 01:07:07,320
been more associated with libertarians and conservatives.

902
01:07:07,320 --> 01:07:08,720
And of course, it's a global phenomenon.

903
01:07:08,720 --> 01:07:12,280
So there's people from all sorts of different political persuasions.

904
01:07:12,280 --> 01:07:16,440
But generally, especially on the energy side, a lot of the criticism came from people that

905
01:07:16,440 --> 01:07:19,440
would identify with more progressive.

906
01:07:19,440 --> 01:07:23,080
But then there's like this wave of progressive Bitcoiners that came.

907
01:07:23,080 --> 01:07:28,120
And for example, Jason Meyer just published a book, A Progressive's Case for Bitcoin.

908
01:07:28,120 --> 01:07:32,200
So he's like a progressive schoolteacher who likes Bitcoin and is really good articulating

909
01:07:32,200 --> 01:07:35,960
around it, both in interviews and with his book.

910
01:07:35,960 --> 01:07:42,000
And they're sending that to all the progressive politicians.

911
01:07:42,000 --> 01:07:47,280
Whenever you see a New York Times article or a Greenpeace thread and they're criticizing

912
01:07:47,280 --> 01:07:53,780
Bitcoin energy usage, if you actually go look in the comments now, there's a bunch of progressives

913
01:07:53,780 --> 01:07:57,320
in there that are ridiculing it.

914
01:07:57,320 --> 01:08:00,000
And so it's still a much smaller component.

915
01:08:00,000 --> 01:08:04,260
But now there's this left flank of Bitcoin, which is interesting because it's more firmly

916
01:08:04,260 --> 01:08:05,680
been on the right.

917
01:08:05,680 --> 01:08:10,000
And now it's like there's this growing little node on the left there.

918
01:08:10,000 --> 01:08:16,640
And when it comes to highly polarized environments where Senates are split 50-50 or Congress

919
01:08:16,640 --> 01:08:24,320
is split 50-50 or things can't get through filibuster, any little pool of a little node

920
01:08:24,320 --> 01:08:29,620
you can get or a little group like that is important.

921
01:08:29,620 --> 01:08:35,640
So I think the fact that it's become a little bit more bipartisan or a little bit less clear

922
01:08:35,640 --> 01:08:39,600
cleanly among party lines, I think is good.

923
01:08:39,600 --> 01:08:43,440
And it's something I've been trying to fuel the flames of a little bit to keep that alive

924
01:08:43,440 --> 01:08:47,080
because I think that flank attack is useful.

925
01:08:47,080 --> 01:08:54,080
And so I think the main thing is to focus on low-hanging fruit and keep that decentralization

926
01:08:54,080 --> 01:08:59,720
marketing and I would say truth-telling alive and well.

927
01:08:59,720 --> 01:09:03,640
See, I like speaking with you.

928
01:09:03,640 --> 01:09:05,100
It's like therapy for me.

929
01:09:05,100 --> 01:09:06,100
This is good.

930
01:09:06,100 --> 01:09:10,360
I'm getting because I'm bouncing all my nihilistic nonsense off of you and you're giving me all

931
01:09:10,360 --> 01:09:13,880
the reasons that I should all the things that I might be missing.

932
01:09:13,880 --> 01:09:17,360
I think there's a lot of you're right as far as like the other points of view that are

933
01:09:17,360 --> 01:09:25,640
coming in and I just can't like in the back of my mind, I just have this like constant

934
01:09:25,640 --> 01:09:31,200
this constant just I don't want to call it a fear, but this premonition that in the next

935
01:09:31,200 --> 01:09:35,880
10, 20 years Bitcoin is going to get political somehow.

936
01:09:35,880 --> 01:09:41,360
Like there's going to be and hey, maybe it's even going to be with the new progressive

937
01:09:41,360 --> 01:09:47,400
sort of crowd that's coming in and making sense of it all.

938
01:09:47,400 --> 01:09:51,400
I just don't like the way that humans work.

939
01:09:51,400 --> 01:09:54,840
We're just never happy with leaving things alone.

940
01:09:54,840 --> 01:10:00,760
If we can tweak knobs, we love to tweak knobs and we've seen it with the United States,

941
01:10:00,760 --> 01:10:07,360
but I think the parallels are uncanny between the US Constitution and the way that it was

942
01:10:07,360 --> 01:10:16,740
meant to set up rails to the best that technology would allow in the late 1700s.

943
01:10:16,740 --> 01:10:23,440
Compare that to the spirit behind the genesis of Bitcoin where to the best that technology

944
01:10:23,440 --> 01:10:29,940
would allow in 2009, Bitcoin sets the rails for this financial system.

945
01:10:29,940 --> 01:10:35,680
That gives you an alternative to central banking.

946
01:10:35,680 --> 01:10:42,280
In both cases, I feel like the Constitution was sort of thought of as settled for so many

947
01:10:42,280 --> 01:10:45,880
centuries and then all of a sudden you realize it's not so settled because humans can just

948
01:10:45,880 --> 01:10:47,520
do whatever the hell they want.

949
01:10:47,520 --> 01:10:52,520
With Bitcoin, I feel like it's settled, but it's not so settled.

950
01:10:52,520 --> 01:10:58,920
I feel like the narrative is what's up for grabs.

951
01:10:58,920 --> 01:11:01,240
It's going to be so interesting to see.

952
01:11:01,240 --> 01:11:08,960
I hope I'm alive to see most of it over the next few decades.

953
01:11:08,960 --> 01:11:13,280
For me, it all just comes down to who owns the story.

954
01:11:13,280 --> 01:11:16,360
I think it's important to be critical.

955
01:11:16,360 --> 01:11:20,680
I think it's important for some people to be constructive and other people to be critical

956
01:11:20,680 --> 01:11:22,960
and ideally for us to all be both.

957
01:11:22,960 --> 01:11:27,560
We all want to be critical of what we might be missing or what weaknesses might be and

958
01:11:27,560 --> 01:11:33,480
then try to do our best to address those weaknesses, which is why I try to pick off things that

959
01:11:33,480 --> 01:11:40,720
I think are lower hanging fruit and try to fuel those flames a little bit.

960
01:11:40,720 --> 01:11:47,680
I think the Constitution analogy is good because the Constitution is one of those things where

961
01:11:47,680 --> 01:11:50,600
I think it worked because it had certain truths to it.

962
01:11:50,600 --> 01:11:54,440
It was like time for it to exist.

963
01:11:54,440 --> 01:11:59,680
It filled up a certain critical mass and then it was designed well enough that it was hard

964
01:11:59,680 --> 01:12:03,360
to change by design.

965
01:12:03,360 --> 01:12:11,320
Even as politics changed throughout the country so much, that core Constitution was very challenging

966
01:12:11,320 --> 01:12:12,320
to change.

967
01:12:12,320 --> 01:12:16,400
In order to do amendment to the Constitution, you have to get a super majority in Congress

968
01:12:16,400 --> 01:12:20,720
and a super majority of individual states to agree to it.

969
01:12:20,720 --> 01:12:24,120
That's why I've not had an amendment for decades because we're in a very polarized environment.

970
01:12:24,120 --> 01:12:28,600
What do we all agree on?

971
01:12:28,600 --> 01:12:34,800
That's been a very useful document that is not incorruptible, but it has a high level

972
01:12:34,800 --> 01:12:36,280
of corruption resistance.

973
01:12:36,280 --> 01:12:42,320
At the end of the day, there's still a social layer to defend it, but the combination of

974
01:12:42,320 --> 01:12:49,880
a social layer and then the fact that the status quo is that it's very hard to change.

975
01:12:49,880 --> 01:12:53,000
When it comes to narratives, I think they're going to change over time.

976
01:12:53,000 --> 01:12:54,560
It depends what's happening.

977
01:12:54,560 --> 01:12:58,360
We have to remember that there's something like 200 countries in the world.

978
01:12:58,360 --> 01:13:05,960
Obviously, some countries have a much bigger sway on global order and global law than others,

979
01:13:05,960 --> 01:13:12,080
but there is all these little pockets of safe havens and different views out there.

980
01:13:12,080 --> 01:13:16,680
Even if Bitcoin struggles in some jurisdictions, it can potentially flourish in other jurisdictions

981
01:13:16,680 --> 01:13:20,360
and still have that foothold to try to keep growing from.

982
01:13:20,360 --> 01:13:24,560
What I find interesting about the political divide in the US is that the narratives around

983
01:13:24,560 --> 01:13:27,480
Bitcoin will be somewhat different.

984
01:13:27,480 --> 01:13:33,720
The libertarian slash conservative view historically has been it protects you from state overreach.

985
01:13:33,720 --> 01:13:36,040
It gives you centers that resist in money.

986
01:13:36,040 --> 01:13:38,360
It's resistant to inflation.

987
01:13:38,360 --> 01:13:42,360
Some of these progressive ones are saying, well, it's also protection against corporate

988
01:13:42,360 --> 01:13:49,280
cronyism because at the end of the day, state overreach and corporate mixing with the government

989
01:13:49,280 --> 01:13:52,240
are in some ways the same problem.

990
01:13:52,240 --> 01:13:58,920
Like Tea Party and Occupy Wall Street were two sides of the same coin in a way.

991
01:13:58,920 --> 01:14:03,480
One side is mad at Wall Street, one side is mad at government bailouts and deficits and

992
01:14:03,480 --> 01:14:07,520
debt, and they're all intertwined.

993
01:14:07,520 --> 01:14:11,680
The narratives are why someone might use Bitcoin based on their politics might differ a little

994
01:14:11,680 --> 01:14:14,680
bit, but there are ways.

995
01:14:14,680 --> 01:14:18,000
I can make an argument to a progressive why Bitcoin is useful to them.

996
01:14:18,000 --> 01:14:20,680
I can make an argument to a conservative why Bitcoin is useful to them.

997
01:14:20,680 --> 01:14:24,280
I can make an argument to a libertarian why Bitcoin is useful to them.

998
01:14:24,280 --> 01:14:27,080
That's probably the easiest.

999
01:14:27,080 --> 01:14:31,840
I can make an argument to a person in China, a person in Nigeria, Argentina.

1000
01:14:31,840 --> 01:14:38,480
You can tailor the argument and there are people that either live in those jurisdictions

1001
01:14:38,480 --> 01:14:44,560
or they're members of those political parties and so they tend to focus the best on constructing

1002
01:14:44,560 --> 01:14:47,160
those narratives.

1003
01:14:47,160 --> 01:14:50,520
That gives me some hope, but of course, I don't know what the future is going to look

1004
01:14:50,520 --> 01:14:55,400
like in 20 years and I think it's important to be critical of stuff and then just to build

1005
01:14:55,400 --> 01:14:57,880
and work towards what we think the future should be.

1006
01:14:57,880 --> 01:14:58,880
Yeah.

1007
01:14:58,880 --> 01:15:00,120
Amen to that.

1008
01:15:00,120 --> 01:15:02,800
I hope I'm being constructive with my criticism.

1009
01:15:02,800 --> 01:15:03,800
I try.

1010
01:15:03,800 --> 01:15:06,560
I think you are.

1011
01:15:06,560 --> 01:15:10,520
Sometimes I have my doubts, but sometimes it doesn't feel constructive, but then I think

1012
01:15:10,520 --> 01:15:14,040
to myself, well, all I want to do is make people think.

1013
01:15:14,040 --> 01:15:16,080
I think you're the same way.

1014
01:15:16,080 --> 01:15:17,240
I just want people to think.

1015
01:15:17,240 --> 01:15:22,640
I just want people to think about possibilities, even the uncomfortable ones, because what

1016
01:15:22,640 --> 01:15:28,520
I do know is that if we only focus on what we think is going to be the good outcomes,

1017
01:15:28,520 --> 01:15:33,480
just have rose colored glasses with everything, then we're going to fail because history has

1018
01:15:33,480 --> 01:15:37,320
shown that that is not how you do this.

1019
01:15:37,320 --> 01:15:41,360
When the founders of the United States were sitting down to write the constitution, they

1020
01:15:41,360 --> 01:15:45,440
weren't thinking about humanity always doing the right thing.

1021
01:15:45,440 --> 01:15:49,920
They were thinking about humanity screwing up over and over and over and over and over

1022
01:15:49,920 --> 01:15:54,640
the last like thousand years and all the ways that people have screwed up everything.

1023
01:15:54,640 --> 01:16:01,120
So understanding that humans are fallible and messed up and are oftentimes going to

1024
01:16:01,120 --> 01:16:02,360
do the wrong thing.

1025
01:16:02,360 --> 01:16:07,280
I feel like people want to ignore that when they're thinking about the future, but to

1026
01:16:07,280 --> 01:16:12,040
ignore that is a recipe for disaster.

1027
01:16:12,040 --> 01:16:14,960
But I'm so glad you joined me here.

1028
01:16:14,960 --> 01:16:18,400
What's the name of… do you have a name for the book that's coming up?

1029
01:16:18,400 --> 01:16:20,560
Because by the time people hear this, it might be out.

1030
01:16:20,560 --> 01:16:27,800
It's called Broken Money and it's expected to come out in late August or early September.

1031
01:16:27,800 --> 01:16:31,840
It tracks a lot of what we're talking about here, the historical centralization of money

1032
01:16:31,840 --> 01:16:39,160
and some of the tools we have to potentially try to decentralize it.

1033
01:16:39,160 --> 01:16:44,600
I've written articles in the past that have been critical of Ethereum, for example, and

1034
01:16:44,600 --> 01:16:46,720
it's not because I set out to make people angry.

1035
01:16:46,720 --> 01:16:52,160
It's that I set out to say, okay, here's why I don't think this system is decentralized

1036
01:16:52,160 --> 01:16:54,920
and robust enough to survive government capture, for example.

1037
01:16:54,920 --> 01:17:01,760
If I looked across the full spectrum of crypto, I view Bitcoin as the best current chance

1038
01:17:01,760 --> 01:17:02,760
we have.

1039
01:17:02,760 --> 01:17:08,200
I still think there's more tools that can be added to it to make it say more private

1040
01:17:08,200 --> 01:17:13,880
or more decentralized, not necessarily on the base layer, but just different tools that

1041
01:17:13,880 --> 01:17:20,280
are stratum V2 for mining or fediment for custody and privacy.

1042
01:17:20,280 --> 01:17:24,560
There's different tools we can add throughout the ecosystem.

1043
01:17:24,560 --> 01:17:32,600
I think that whether people are capital allocators or developers or just interested in the subject,

1044
01:17:32,600 --> 01:17:38,440
maybe they're political and they vote and so their vote matters.

1045
01:17:38,440 --> 01:17:43,800
Whatever they do in life, I think that if they're interested in the subject, they should

1046
01:17:43,800 --> 01:17:48,200
learn about it and then do whatever small part they play, especially if they're listening

1047
01:17:48,200 --> 01:17:54,760
to a podcast like this where they probably agree with us to some extent to go out and

1048
01:17:54,760 --> 01:17:59,320
see what little part they can play to try to make a more decentralized world more likely

1049
01:17:59,320 --> 01:18:01,520
than a more centralized world.

1050
01:18:01,520 --> 01:18:02,520
Yeah.

1051
01:18:02,520 --> 01:18:05,360
No, I totally agree with that.

1052
01:18:05,360 --> 01:18:13,160
I think that if people take the time to learn and they get educated and they actually dive

1053
01:18:13,160 --> 01:18:17,800
in and get down the rabbit hole, once you do that, you're sold.

1054
01:18:17,800 --> 01:18:20,380
That's not my concern at all once people are there.

1055
01:18:20,380 --> 01:18:23,080
My concern is that most people will never get there.

1056
01:18:23,080 --> 01:18:28,160
My concern is that people just don't have the curiosity, don't have the intellectual

1057
01:18:28,160 --> 01:18:33,360
curiosity to even approach it because they're too busy trying to just feed their kids.

1058
01:18:33,360 --> 01:18:39,840
They're too busy just trying to survive in the world.

1059
01:18:39,840 --> 01:18:46,280
It's such an exciting thing to think about how it's going to play out and whether we

1060
01:18:46,280 --> 01:18:52,280
can overcome that apathy I feel like that most of the world has when it comes to money.

1061
01:18:52,280 --> 01:18:53,720
I guess that's what we're all trying to do.

1062
01:18:53,720 --> 01:18:57,200
Just say, that's why I have a podcast, man, just to see if people will listen and try

1063
01:18:57,200 --> 01:19:00,800
to think these things through.

1064
01:19:00,800 --> 01:19:03,720
I want to thank you again, any closing thoughts?

1065
01:19:03,720 --> 01:19:08,640
No, just thank you for having me and thanks for doing what you're doing with, you know,

1066
01:19:08,640 --> 01:19:11,040
trying to bring attention to the issues you care about.

1067
01:19:11,040 --> 01:19:31,400
Thanks to you too.