If I could hope for but one thing for you, so you'd be curious in all that you do.
Cause love like a flower just wants to grow.
Oh, and knowledge like your heart just wants to be known.
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This is Bitcoin Study Sessions.
It does feel so good, Lucas.
We are back.
Today we are discussing retaking.
It's been a while since we had our last discussion, but the wait was worth it.
We're taking up a new book here, The Satoshi Papers, Reflections on Political Economy After Bitcoin.
This was edited by Natalie Smolenski, published by the Bitcoin Policy Institute and copyrighted by the Texas Bitcoin Foundation.
The book itself is incredibly ambitious.
It wants to start a whole new conversation, not just about Bitcoin, but about this project that we find ourselves in that we call the United States of America.
What does it mean?
and today this is a an anthology it's a collection of essays what we're going to look at today is the
introduction which is ambitious in and of itself when you have an anthology and you're introducing
it you need to give kind of a coherent framework so that people can both see the essays as distinct
but also pull them together with a common thread and this introduction does that very well it's by
Natalie Smolinski, the editor, and David Hughes. Smolinski is an anthropologist, a senior fellow at the Bitcoin Policy Institute, and founder and executive director of the Texas Bitcoin Foundation.
Daniel Hughes is noted in here to be a technologist and philosopher. He doesn't appear to have a real Twitter footprint, but he was the founder of several software companies and a founding board member of the Texas Bitcoin Foundation.
And judging from the caliber of the writing here, both of them excellent thinkers.
So I'll give a little introduction, a summary rather, of this introduction, and then Lucas and I will delve into the discussion.
The introduction begins by calling into question the idea of the nation state, which the authors describe as kind of the modern political form that has historically embodied the principle of rule by the people.
If once we in the United States at our founding were a nation state, if we once were guided by a principle, guided by the will of the people, a lot of time has now passed since that founding.
A lot of things have changed.
Maybe we sense, maybe you sense something in the air.
There's a divisiveness that we see about us and open questioning of the project we're a part of.
And these authors, Smolenski and Hughes, pose questions.
questions. What projects unite us now? If we began as a nation based on inalienable rights around
ideals of life, liberty, and happiness, what are those ideals now? And what should they be now?
Do we need, the authors ask, a refounding, a new beginning based on new principles? And if so,
what would that look like? So the answer to that question is this right here. The Satoshi Papers
is an attempt to kind of answer that question about what a refounding would look like or what
it should look like. Or if not answer the questions, again, start the debate on that question.
Look at the title, the Satoshi Papers. We know it's about Bitcoin, Satoshi Nakamoto, obviously.
But the Satoshi Papers, the model is the Federalist Paper, the debate between the Federalist and the
Anti-Federalist that occurred at America's founding regarding the nature and extent of
state power. So in this dialogue that we're going to get here in these series of essays,
the authors of the introduction note here that all of them are kind of undergirded or begin
with some basic assumptions. So these are the assumptions shared by all of the essay writers
in this anthology. They are, quote, that respect for the privacy, the freedom and the privacy of
the individual is the bedrock of a just and prosperous society, that power should be rigorously
checked and limited, that human coordination happens first and foremost from the bottom up,
and that technology in the broadest sense is a critical engine for the progress of humanity.
So those are the assumptions the authors start from in describing what this refounding is going
to look like and giving it context, or what a refounding, again, to begin a dialogue on what
that might involve. The introduction notes that the authors also share at least one other view.
That, quote, the advent of a global, politically neutral, non-state, peer-to-peer sound money is not a prescription for the replacement of all other forms of money.
Rather, it transforms some of the background assumptions about the relationship between states, societies, and individuals that have suffered from an authoritarian consensus in recent decades.
Of course, that's a reference to Bitcoin. And that authoritarian consensus is a reference to the milieu we find ourselves in now, this deviation from the founder's vision of unalienable rights.
Given these assumptions and that point of view, why might a re-founding of the United States be in order?
So this essay begins kind of with a history talking about that deviation from the founders' vision.
We began as a nation of individuals that saw the state as a necessary evil and somehow have become a state that sees the individual as unnecessary and perhaps evil.
If we have now an authoritarian consensus in the United States, the consensus during our founding during the U.S. Constitutional Convention was that the state had no power of its own, no money of its own, and no army of its own, the author's note.
How has that changed?
The author's note dramatically.
Before, the state had no power of its own.
Now we have bureaucratic rule.
We have agencies so numerous and so ill-defined, we can't even count them. There's different definitions of what an agency might be. Agencies that unite rulemaking and rule enforcement into one entity outside of the checks and balances that the Constitution put into place.
If before we had no money, if the state had no money of its own, now we have the 16th Amendment giving power to levy income tax.
And the authors know just as a way to kind of give an indication of the paradigm shift, people think of tax as, quote, government revenue instead of the people's money.
If before the state had no army of its own, no standing army, now we have constant war with most of them kind of undeclared formally, but a state of hostility around the world, secret wars.
First against the American Indians, second against socialist and communist movements, third under the banner, the very vague banner of a war on terror, and now fourth, maybe you could describe what the authors do as a containment of adversary nations, proxy wars against Russia and China in a financial sense and things like that.
So we've seen an inversion of the founding principles, the authors argue, but they know this is really kind of the visible manifestation of an invisible system that underlies all of these changes.
They call that provocatively and kind of very memetically, propulsively, the banker revolution. I like that phrase, and I do think it has mean power. What is the banker revolution?
What is this thing that undergirds this expansion of state power?
In short, it is the union of those who control money, the bankers, with those who control the state, the bureaucracy, which is made possible by legislation permitting financial surveillance by banks on behalf of the government and states of exception where the government can engage in physical and financial war as it desires without check or balance.
So let's unpack that as the authors do.
First, what even is the modern banking system?
They know that central banks issue and manage unredeemable fiat money.
Commercial banks then use that fiat as a reserve asset and make loans, multiplying the money.
We have here an alliance between banking and police power.
Banks share info with the military and police intelligence, and the state then supports the banks, bails them out, as they did in the 2008 financial crisis and also in the COVID-19 pandemic.
bailouts. That's generally the banking system. So second, the authors then go, historically,
how do we get here? What is this banker revolution? If our nation was founded giving precedence to
the individual with the state having no power, no money, no army, how do we get where we are now?
When does the banker revolution begin? So the intertwining of bank and state with attendant
financial surveillance and financial repression begins in the 70s. The history in kind of short
form is something like this. After World War II, we see the rise of a post-war military-industrial
complex where we kind of normalize a wartime posture in a peaceful setting. GDP begins to
depend in part on enhancing arms deals with other countries. Communism becomes a new threat,
and we have to then prosecute wars, we feel, against countries that are flirting with communism.
How do we then fund these new hostilities?
After World War II, the U.S. entered into the Bretton Woods Agreement, where the U.S. dollar has made the world reserve currency, but it's made redeemable in gold.
So it's tied to gold.
This constrained U.S. spending.
If we print dollars to spend more money, the dollar loses its value, and people are just going to redeem it for gold.
Gold constrains spending in that way when it's tied in a fixed rate with the dollar.
So then the U.S., it wants to fund these hostilities. It wants constant war. So the U.S. unilaterally suspends the Bretton Woods Agreement in 71, ending gold redeemability, allowing money printing to fund these sorts of hostilities.
The banker revolution unfolds then through legislation allowing financial surveillance that's going to help prosecute these types of hostilities that the government wants to prosecute.
We have in the 70s, the Bank Secrecy Act. The banks are then required to keep extensive transactions of anything that might possibly be relevant to some sort of investigation in the future. They have to report domestic transactions of over $10,000.
This is then upheld by the Supreme Court in the United States v. Miller, where they then broadly state that under the Fourth Amendment, the third party exception where Americans have no reasonable expectation of privacy and records that are held by a third party.
This kind of causes a fervor. Congress reacts, and they passed the Right to Financial Privacy Act kind of in reaction to Miller, in reaction to that Supreme Court case. But this actually makes the situation worse because the Right to Financial Privacy Act carves out specific exceptions, which is a recurring theme we'll see in this legislation.
The Foreign Intelligence Surveillance Act of 1978 also purports to restrict financial surveillance, but it establishes exceptions that allow secret courts to issue warrants.
And then in the war on terror, we also get a militarized – later on, past the 70s, of course, we get a militarized homeland, state supervision increasing.
And then we again see with things like the Patriot Act, legislative attempts to restrict or restrain or define end up actually permitting.
The exception eats the rule in a lot of these legislative attempts to restrict something and actually ends up permitting the practice that one would think is trying to restrain.
In addition then to this legislative financial surveillance, there is legislation that allows the U.S. banking system to become a part of the policing and military function of the state.
Authors note the National Emergencies Act and the International Emergency Economic Powers Act, which allowed presidents to declare states of emergency and impose financial sanctions.
legislation this type of legislation is passed purportedly to kind of restrain these powers but
again the exception ends up defining the rule and then sanctions issued through executive order
become the norm the important point one of the important points the author's making this that's
really good is this perversity of trying to legislate restraint that all this legislation that
is trying to provide,
is trying to like restrict financial surveillance
and the use of like the state
using these financially repressive powers to do things like unilateral sanctions or funding secret wars these things actually end up being permitted by legislation because there always exceptions embedded within them that secretly give immense power to the government
The flaw, the authors note, is that the Constitution is already the limit.
If you're passing this legislation to give the state some sort of state of exception style power, you're really overruling the Constitution.
the result of the banker revolution and its utilization by the states that's the history
of it then what is the result of this banker revolution this tying of bank power and state
power according to the authors we then return to pre-revolution assumptions about state versus
individual revolution is in pre like our founding pre the founding of the united states um there was
an authoritarian consensus prior to the founding. We had our founding where we assert inalienable
rights and have the Constitution with the Bill of Rights. And then we have the Bank of Revolution
and its utilization by the state that returns us to that authoritarian consensus that preceded
our founding. More surveillance, more war, more control through bureaucracy. What is needed is a
return, the authors think, to these founding principles. We need sovereign citizens. Laws
have not worked. They've perversely led to the result they tried to legislate against.
We need to change that from the ground up and to be realistic about what is needed to actually
accomplish change, which again, is not passing a new law. Bitcoin then enters the picture.
One of the problems, of course, is that we have this invisible financial system created by the
banker revolution. Bitcoin, the author's note, creates an alternative with really three important
aspects that disrupts this kind of insidious development of the banker revolution, this
insidious development. First, Bitcoin harnesses human psychology incentives and game theory to
spur adoption of an alternative system. I'm going to quote the authors here because I like
the way they phrase this, Satoshi, quote, called the banker revolution into question by building a
counter infrastructure in the world and allowing the game theory behind its adoption to act as a
social forcing function around matters of wage value, savings debasement, and the human right
to transact. So Bitcoin set something in motion that only relies on human nature to keep it going.
Second, Bitcoin makes the bank revolution visible and forces us to know.
So the bank revolution kind of depended on operating in the background.
But Bitcoin is an open source protocol.
Anybody can go in, interact with it, look at its code, and visualize it through certain things like Block Explorer.
The open nature of the Bitcoin protocol then is a new type of common knowledge.
this visibility forces us to know.
And as Bitcoin monetizes, it becomes more and more visible.
To quote the authors again, because I liked the way they phrased this,
quote,
The removal of naivety around such things as the Cantillon effect, sovereign debt reserve assets,
and the confidence gains and social consensus around fiat currencies and their debasement
necessarily moves populations toward common knowledge regarding the civic and civil systems of control
that have become devastatingly effective in curtailing, if not criminalizing, essential
liberty. If we are to avoid the worst ramifications of the return to aristocracy that has been
underway since the 70s, we must, and I love this right here, we must risk knowing these things and
build what is next. That is what is at stake. And so the third then, so Bitcoin visibilizes the
invisible makes us, forces us to know what is happening with the banker revolution and these
changes, this developing authoritarian consensus and financial surveillance. Finally, Bitcoin
increases our horizons about what is possible. I'll just quote the authors here. Quote,
if politics is the art of the possible, as certain proponents of real politic have argued,
then the domain in which the art is practiced has now been reformed. Bitcoin has shown us,
Bitcoin has showed us that new things are possible that we did not think were possible before,
such as a financial system rebuilt on an open source protocol.
This anthology then contains essays that begin a dialogue about what an American refounding would look like
once Bitcoin that has these characteristics as an open source protocol has forced knowledge upon us
and shown us what is at stake.
I'll end this summary with the final sentence of the introduction.
The authors end this essay summarizing each of the essays in this volume.
I won't read their summaries, the summaries of each of those individual essays.
Hopefully we'll go through those.
But what they say in the very last sentence,
We hope these essays will serve as invitations to think further, to build a community of good faith interlocutors participating in the shared project of transforming science into new tradition, enabling a self-sovereign future for humanity at large.
So I said the project was ambitious, starting this new dialogue about a founding, but also it's humble, as we see. This is just the start of a dialogue, and I really like the way that that's framed. There's a lot to talk about here.
And Lucas, just to throw it back at you, we had this discussion once and we lost it, as we often do through our quite incredible technical talent that's sometimes frustrated by the underlying technology itself, I think.
the question i have um there's assumptions the authors smolensky and hughes note that like
all of the essays in this volume are kind of they share the same assumption that respect for the
freedom of the privacy and individual is the bedrock of a just and prosperous society that
power should be rigorously checked and limited that human coordination happens first and foremost
from the bottom up and that technology in the broadest sense is a critical engine for the
progress in humanity. So these are substantive assumptions. This excludes like Luddites and AI
safety dystopians. It excludes socialists and communists and statists comprising much of the
modern, I don't know if you call it new left, but a certain kind of progressive element of the left.
Also excluding those on the right, like Curtis Yarvin, a theorist who tends to have views of
robust state power and the need for almost an authoritarian corporate or monarchical
structure to move things in the right direction. So do you think, I mean, what do you think about
this? It seems to be a debate among libertarians and classical liberals. Do you think that,
that what is the value in that, I guess, or do you see any issue with that from excluding or
starting the debate in a certain point with certain assumptions? I don't hear you, man. I
I don't know if you're muted or – there we go.
Yeah.
Yeah, I think the first thing we need to do is we need to take the other side of it, which would be China.
And so the Chinese example very much respects technology and what it can do.
as has been noted very loudly on some podcasts,
and you see this chart floating around,
China is currently adding the entire energy generation capability
of the United States every 18 months.
And so energy seems to be directly tied to prosperity
and if that is the case, then China is rapidly leapfrogging everyone
and doing so with top-down, not bottom-up,
and also doing so with state-first, not individual.
So of the three things you mentioned, two of them they don't have.
The third one, which is the technology first aspect, they do have – I think that's really telling because I think what that tells us is just how powerful technology is in that you can have a reasonable facsimile of putting all three of those together by just having one of those, just having the technology aspect of it.
You can get probably 90 to 95% of the way there.
Now, the interesting part is that that last 5 to 10% seems to be where the robust experience of a joyful life is embodied.
to unpack that a little bit.
I'm around a lot of Chinese nationals
who are very happy to not be in China
regardless of the technological advances.
And they show me videos all the time of
this is how you order something in China.
You tap on your phone, you're in your hotel room,
it's delivered to your balcony in 120 seconds by a flying drone.
something that would take 20 minutes in the United States and you'd have to go down to the lobby to get it.
Even though that technology and that superiority in certain realms of technology exists there,
they are happy to not be living that experience.
And so I think there is something to be said for let's take those three things
and let's realize that technology gets you almost to the finish line,
but as is the case with almost anything that you do,
almost there is halfway there.
People who build projects around here talk about when you're 99% done,
you're halfway done.
Yeah.
Because it is those fine details at the very end that make the project.
The impression I get from hearing you talk about this and especially relate like those kind of four concurrent rulings in the 70s that truly did lead to the Bank of Revolution.
The first one
The Bank Privacy Act
Bank Privacy Act, USV Miller
Bank Secrecy Act rather
Two things come to mind
One is
Just how hypocritical
The names of these things are
Because they don't
Do what the title
would purport that they do. They do, in fact, the exact opposite. We talked about this the
first time. What they do is carve out exceptions to things that are already expressly prohibited
by the Constitution. Or if not expressly, then as the Constitution states, the implicit
granting of certain privileges, taking those back.
It makes me think of growing up in a small town,
it was very common to think about the preacher's daughter
is always the craziest person to hang around with
because they have the most restrictions on them.
Yeah.
And it's a forcing function of these concurrent rulings that continuously make it harder to transact as a private individual, discourage you from trusting other people.
So, VUSV Miller, the third party exception, I have no right, I have no expectation of a right to privacy if my information is held by a third party.
Yeah.
And what that says to me as an individual is that I have no reason to trust someone else.
I can only trust myself with my own information.
And it discourages me from when the punishment for allowing someone else to control your information exceeds the benefit of having them do so that moves you in the direction of self in the direction of responsibility for oneself
And this whole discussion is very difficult to have
because there really is no jumping over and back on this fence.
Once you go and you explore the side that realizes
what type of power it gives to a nation state
when they have control over the money,
then there is no way out but through to a technologically superior form of money
that disallows them from ever having that ability.
And I'm at the network school.
It is not pretty to see someone try to restart, hard restart society.
It's not easy.
And unfortunately, there's no going back.
Once you do see just how damaging, how many millions of lives have been affected by this since 1913 when we entered World War I, we have effectively been in constant battles throughout.
and the military machine continues to grow.
It continues to eat more and more and more.
And yes, I know that if you look at the budget of the United States,
there are other programs that do eat a significant portion of that.
The military is not just the only big piece of the pie,
But as we're finding out with Doge and some more investigative releases, a lot of those things are actually part of that military complex.
A lot of those NGOs are implicitly or explicitly tied to that military machine in one way or another.
And so I think it is, it actually is much larger.
That piece of the pie is much larger than it looks.
So what is the cost of constant warfare and constant, constant adversarial context throughout the world?
It is that we're entering this point where people are just tired and they're just giving up because they see how difficult it is to fight that machine.
Yeah.
And what is the alternative?
The alternative is to learn something completely new that absolutely wipes out everything that you've ever known.
It's uncomfortable.
And, yeah, so we are diving into this thing that is necessarily difficult because hard things are worthwhile.
Yeah.
I think our generation was made like the veil was lifted a bit even before Bitcoin, I feel, with the Iraq war and then the war on terror.
I mean, it was such a big grab, both by Bush and then Obama, of surveillance powers of the United States and the prosecution of a war based on false premises.
that looking back, I mean, it's just like the tendency now is just to forget the Iraq war or the reason why we purportedly engaged in that war,
which was the presence of weapons of mass destruction, which turned out to not be there.
And in the aftermath of that, just the ramping up of surveillance was viscerally also made evident to anybody with eyes to see.
When, of course, Snowden, when you have high-ranking administration or bureaucratic officials saying under oath that there is no mass surveillance of the U.S. domestic population, and then Snowden revealing that, sure, there actually is.
Like, these people are lying through their teeth.
But we begin to see these things, like the financial surveillance that our legislation has implicitly permitted, or explicitly, rather, through these exceptions, is actually occurring.
And so the banker revolution maybe visibilizes a bit in the war on terror.
And then as the authors know, with something like Bitcoin,
meant now the masses, you and myself at least, I don't speak for you,
but myself, I began learning a lot more about the financial system once Bitcoin,
once you have an alternative to something,
you then see that what you thought was as clear as air,
that you, you know, the air that you breathe is actually a constructed thing and you need
to learn about it.
Like once you have an alternative, then the thing that it opposes takes form.
And like Bitcoin gave us the form of the financial system, a mirror in which to see all that
is wrong and for millions of people to learn about the Federal Reserve, to learn about the
creation of broad money from base money, things like that.
And so, I mean, so I agree with what you're saying.
And as far as how problematic it is, and I just, the education is happening, unfortunately, as it usually does, through a series of catastrophes, the war on terror, the 2008 financial crisis, you know, but here we are and things maybe will improve.
Yeah, there's so much. I think you can think about the world in maybe three sort of distinct categories.
I know that there's technically more in terms of the generations that we talk about now, but you've got the people that are older than you and I, the boomers and beyond, the people that are younger than you and I, the Gen Z and below, and then us.
And if you look at each one of those groups, there's a big disincentive to challenge.
Like if you're part of the older group, then you just want to get to the finish line.
There's no will to fight if you're 65 years old.
You've lived your life.
you are really just hoping to be taken care of a little bit here at the end.
If you're in the Gen Z category and younger,
then you've been raised in this illusion machine,
so much so that it's nearly impossible to see the way out.
There are, obviously, there are people who have sought their way out,
And those, I think, are the ones that are truly going to change the world, the younger ones.
Yeah.
And then there's the people like you and I that I think it's easy for us to see that there is something behind that layer because we're also at this mid-stage point of our life where we're seeing the other side of a lot of things.
We're seeing the other side of being a son or a daughter.
As your parents age and they are no longer the infallible, infallible, always strong, always right, you start to see your parents as merely children in older bodies.
You look at the difficulties of the economy as someone who participates in it and recognize that there is something wrong if a person who works full time, earns a purported good salary, can barely afford to live alone, much less raise children, own a home,
and enjoy the fruits of their labor to the same extent that people 60 years ago could.
Yeah.
And so it is inherently difficult, I think, to have these conversations.
And the scary thing is that the default position of people having these conversations,
because I'm involved in these a lot,
The default position is what laws do we need in order to ensure this doesn't happen again, right?
Yeah.
And that is a horrific place from which to start.
Better laws do not make better people.
Laws are kind of like a reaction function to the decay of morality.
Right. And when the morality decays in a culture to a point that laws need to be instantiated to say this is bad, when clearly that is morally bad to begin with.
And you have to keep ratcheting up the punishment in order to discourage people from doing the thing that they already know they shouldn't do.
But it just has become morally accepted in society because the cultural Overton window keeps moving further and further away from the good.
it's very hard to move that back because our starting point is this idea that there is a higher power
not spiritually but temporally um or in the nation state realm like yeah we we naturally
because we've grown up in this system we naturally want to turn to the state to the nation to the
government, to the official, to the politician. And, uh, it, my dad, I say this a lot around here
because there's plenty of opportunities to say it. Uh, my dad's always fond of saying that, uh,
you can't solve the problem with the same sort of thinking that got you into it and
something new is needed.
And so this is that something,
this is potentially that something new
for those of us who have looked.
This being, what's this?
Bitcoin self-sovereignty,
individual approach,
the acknowledgement that
responsibility for oneself
is greater than,
is the responsibility
that needs to be primary, that you need to look out for your own health
because those that are telling you what to eat and how to exercise
and what pills to take, et cetera, have a financial incentive for you to do otherwise.
You need to look out for your own money because those who are in positions
to tell you what to do with your money are those who profit off of that.
You need to look out for your own family because those who would want to,
basically everybody has an incentive to discourage you from doing
what you would otherwise naturally do.
and so it is yeah we we've entered this age where there's so much information there's so many
people that are experts that are giving us their take and we can draw and we can pull from that
in a way that we never could have before and yet i don't know if you feel this but i was one of
those guys that was like super hooked on all of these betterment podcasts, all of these like
ways to improve yourself, et cetera, et cetera. And now I've to the point where I think yesterday
I started listening to a podcast for the first time in like a month. And the reason being is that
everything has now become quite obvious to me. Um, if you just peel that layer back,
what do I need to do? I need to get up early. I need to go to bed early. I need to eat well.
I need to exercise. I need to manage my finances. I need to sustain my relationships. I need to
work on something that is rewarding, hard, and robust in that it returns.
If you're sad, lift a heavy object or run faster than you think you can run. Sprints and lifting,
man.
Yeah.
So it just, it boils down to a lot of simplicity, right?
So yeah, that's, that's where I end up on it.
I think you totally right that like people do like the proliferation of legislation is a sign as you say of a sort of moral or societal decay If you have to explicitly prohibit things it shows that people no longer hold that prohibition in their heart or think it natural or see that it forbidden by some sort of natural law or constraint
And that's why Bitcoin is nice. It's not legislation. It presents, I mean, as Jason Lowery in his software thesis elaborates at length, kind of a new, it's real world in that it uses, these miners consume all this energy to secure the network.
It's not just code. It's also the consumption of real world energy to provide robust security to the system. And so you provide like constraints on doing something of double spending within Bitcoin of stealing, you know, essentially through not just code, even not through written law, but through real world natural constraint, which is the incentives that are harnessed by requiring the use of real world power.
to process and validate transactions.
So something more than legislation is needed.
We're not going to legislate ourselves into a better future out of the mess we're in.
I think you're right.
I mean, it's not going to be just Bitcoin or something like that.
It's also going to be the cultivation and development of personal virtues,
something that's getting harder and harder to do,
maybe for the younger generations who find themselves born after the catastrophe,
the catastrophe being 2007 with the invention of the iPhone, right?
When the unleashing of the digital swarm,
I'm borrowing from James Polis here in his book, Human Forever.
These things that like the biggest threat is not even AI.
It's not even all the devices we have.
These things are visible.
The bigger threat is the invisible is the algorithms.
We were talking about this before that present us a world innocently as if
it is the world, but it's a world that's been cultivated for us by people trying to sell us
something. We've had advertising forever, but we've not had the addictive form of the personalized
algorithm. And, you know, lifting the veil on the banker revolution is one thing, but lifting the
successive layers of veils that are personalized on top of every person through their social media
feed, their Twitter feed, Facebook, Instagram, all these things, that requires a personalized
effort and really ancient virtues, something like that, an exercise of character for sure.
Yeah. Having been a banker, thinking about how people would come in and we had our standards,
60% of your balance sheet needed to be owned.
So no more than 40% leverage.
So let's say you have $600,000 in assets, $400,000 in liabilities.
We would consider that healthy.
and I remember sitting across the table from a young kid he was in his 20s he had already amassed
a net worth of over two million dollars and his gross balance sheet I think was approaching five
So he was running that ragged edge. He was below our standards. He was over leveraged is what we would have said. And I was trying to counsel him on that. Like, look, you need to understand that having liquidity is your freedom to act.
when you don't have liquidity, that's when we get to tell you what to do.
And he was sitting across the way telling me that what he learned from the old farmers
was that ideally you want to have 100% of everything borrowed because it's all upside.
If it's borrowed, even if you lose it, you never owned it in the first place.
Yeah.
Right?
And if you don't lose it, then everything is upside.
And I remember just like sitting there kind of stunned and knowing that that was absolutely correct, but also entirely the opposite of what we purported to tell people, what we're supposed to be promoting.
And it was like at that point I realized like everything here is wrong.
Everything here is, it's not shady in the sense that everyone working in the system is shady.
Just like I'm sure that Austin Powers' henchmen are good guys that go home and watch The Simpsons and eat cereal and don't beat their wife or kick their dog.
But it's at the top.
Yeah.
Sorry, I should say gold member because Austin Powers is the good guy.
But gold members, bad guys, henchmen.
The people who work in the system are reluctant to admit that they are part of the problem because they don't see themselves as part of the problem.
if I were still in that business, if I were still encouraging people to maintain a 60% ownership,
I would still think that I was doing a service to the world.
And you would be doing a service. It's incentives, right?
You're just like advising people how the system works as it's designed.
I mean, that's the system we live under, right?
Right. It's the idea that it works until it doesn't.
And when it doesn't, that's when you have the 1980s when all of the farmers went broke, when everything was reclaimed by the government, when the credit crisis hit and everyone realized that they weren't at the ledge.
They were in that Wile E. Coyote moment where they were 30 feet off the ledge and their legs were spinning and they just hadn't looked down.
and the only thing left to come was the crash.
The fall had begun and it was inevitable.
And we're back at that point.
I mean, we are clearly at that point.
We have bond auctions that are getting no bids.
The United States credit has been downgraded.
There is no appetite politically to bite the bullet.
and move into an austere type of stance.
And the spiral is continuing and worsening and accelerating.
And I think the biggest part of this conversation
is getting people to recognize that
much like gravity does not have an opinion,
this scenario does not have an opinion.
This is happening.
you don't get a choice whether or not to believe in it
it believes in you
and it will be imparting its physical reality
upon you very quickly
and I do fear
I continue to go back to this
because I keep everyone's smile
I pull up the table
for anyone who's listening
search Hanky Krauss hyperinflation
H-A-N-K-E-K-R-A-U-S-S
I keep every once in a while
pulling that table up
and it shows how long it takes
currencies to hyperinflate
being defined as
moving to
a point where
prices have doubled
and every instance on that table
I think except one or two
occurred pre-Bitcoin
and
these are major economies
that experienced hyperinflation, a doubling of prices within, in the craziest instance,
it's less than a day.
But most of them are like a month or two or three.
And I keep coming back to the idea that none of those instances had the availability of
an alternative.
If you were in Nigeria, if you were in Argentina, if you were in Brazil, if you were in Turkey, there wasn't this option to just on a weekend dump all your money and grab Bitcoin.
And how much faster would that have occurred if there had been that option?
So that option exists.
I think the danger is very apparent.
So having these conversations has to be paramount because so many people are already in that Wile E. Coyote stage.
They're already clear out on the cliff and off the cliff and legs are spinning.
But there is time to get back.
There is time to move, to claw your way back to something where there's solid ground underneath.
Yeah, no, that's an excellent point.
And I mean, that's, I think, part of this introduction is noting the importance of opening the debate, being educated about these issues, the way that Bitcoin forces this dialogue on people, this realization.
I mean if the system just was the way it was and there was no alternative, what's the point of debating it, right?
But if there is this alternative and then there's – like you said, people can buy out of the system.
Maybe the hyperinflation will occur more rapidly.
But if you're prepared, then you're prepared, right?
So this is an excellent conversation we're having.
We've started.
I'm going to have to cut it short.
I don't want my phone to die.
I'm having to record this on my phone and then we would lose this conversation.
I don't want that to happen.
And we're going to continue on, though, I hope, through the Satoshi papers here.
This is an anthology, as I mentioned.
I just wanted to quickly know what is ahead because it is an incredible lineup of names that you will have heard of if you kind of are on Bitcoin Twitter.
And even if names you've not heard of, once we start talking about these individuals and their backgrounds, people are very well-informed, academic credentials, industry credentials.
Not that that's necessary, but the quality of these essays is very high.
We have Andrew Bailey and Craig Warmke, the author of Resistance Money.
They have an essay.
Smolenski contributes an essay toward an anthropological theory of money that I'm very excited for.
We have essays on the one titled Easy Money, Easy Wars, The Evolution of War, Finance, Forever Wars, and the Prospects of a Bitcoin Peace.
one other one, The Treasury Standard
Causes and Consequences, Bitcoin
and Credit, Argentina Against Central
Banking, an
article by Aaron Daniel, who's an attorney
Dispute Resolution Without
the State, I'm excited for that one
Then They Fight You, the last essay
by Avic Roy
I've kind of leafed through a lot of these
read a bit, this is an excellent collection of essays
a debate is started with
the Satoshi Papers, I hope
that if you listen to this you'll
contribute to the debate
The debate is open to everyone who's a part of this project in the United States.
What does a refounding look like even out of the United States?
What does it mean for the world to refound on principles that are consistent with the nature of Bitcoin?
Lucas, did you want to add anything here as we close up?
The only thing I'd add is having already read that first essay.
I'm super excited about this because it uncovers a layer of understanding that is previously unexplored for me.
And it's made me excited to have these conversations where at times maybe I ran out of steam just because of the lack of novelty.
There's some novelty in here that is very refreshing.
and I'm super encouraged to be having these conversations.
I think it's a very important collection of essays, very well done, incredible writing.
But the writing is merely a reflection of the work that's been done on the back end for the research.
So it's fantastic.
As always, great pick by you, killer pick, and I'm very excited to do it.
Awesome, man. Yeah, thanks for the combo.
You bet. We'll see you guys later.
Hey, thanks for watching. If you like what you listen to, that's my brother, that's Christopher, please subscribe. It gets me one step closer to owning a cave, and that way I'll never have to mow a lawn or replace roof shingles ever again, which would be wonderful. Thanks.