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who is like a former career diplomat of 15 years, been to Africa, other places.
Now he's a CEO of some like a mineral processing company as well as some Bitcoin mining stuff.
I'm really excited to rediscuss this one with Lucas here.
It's kind of some of the things that it say are some of the same type of things that are really gelled my conviction in Bitcoin.
So we're going to get to that, I hope.
But I'll do what we usually do and give a quick summary of this essay and then Lucas and I will discuss it.
The essay, though, by the way, is from this anthology, National Security in the Digital Age, Bitcoin as a Tool for Modern Statecraft, a Bitcoin Today Coalition publication.
Incredibly excellent. The quality of these essays, non-perreal.
They are academic in substance without being overly academic in style. Very good.
So a short summary. This essay kind of begins with the assertion that African independence in politics, economics and finance is in U.S. interest, which is interesting given kind of the deep history of top down colonial influence and control of Africa, that now African independence and sovereignty of African nation states can stand as a bulwark.
a bulwark against what? Why is this in U.S. interest now? It can be a defense against
Chinese influence and control through their Belt and Road Investment Initiative, where China makes
loans of a somewhat predatory nature, builds infrastructure in developing countries as a way
to gain influence and kind of control elites and the ruling class in this country. African
independence and sovereignty can also act as a bulwark against Russian control and influence.
In Africa specifically, the Wagner private military group, which is tied to the Russian government, is kind of preying on African instability to increase Russian control.
The Wagner group, for example, stepped in and offered security services in the Central African Republic in exchange for mineral resources.
And when they did that, they also installed a Russian citizen as the head of national security.
And Wagner group is now kind of running the same plan at Mali.
They jump in where there's regional instability, offer their security services and really get their tentacles in deep.
So in the face of all this, the U.S. and the West kind of generally, we lack the heart to put troops on the ground and for military intervention and for good reason.
Right. Like that's a colonial legacy that I think we're finally getting passed.
So how do we now then how does the U.S., the West confront encroaching Chinese and Russian influence and control in Africa?
How do we fight totalitarianism at scale in Africa, as the author Kincaid puts it?
So just even further frame this question, because it's really interesting.
Last week or last-ish week, we read a Matthew Pines essay from the same anthology, Great Power Network Competition in Bitcoin.
And Pines frames this whole struggle against China and Russia as kind of Cold War 2.0.
He said, Cold War 2.0 will be fought in the global south as emerging markets and developing countries choose which model of techno-monetary governance they want to subscribe to.
China's aggressive sales model is likely to attract many authoritarian and authoritarian-inclined customers.
So, Kincaid is now, in this essay, developing this thesis in the context of Africa.
How do we fight Cold War 2.0 against Chinese authoritarian and authoritarian inclined influence?
So how do we do that? Bitcoin is a prime example of this.
Kincaid is going to argue that it strengthens sovereignty and freedom from the ground up, which is a particular strength in Africa.
How can Bitcoin strengthen sovereignty and freedom of nation states in Africa?
So before we kind of get into the idealistic abstraction of what Bitcoin can do for sovereignty and freedom, Kincaid looks at what it's already doing very materially in Africa.
So in Africa, Bitcoin is banking the unbanked. The vast majority of Africans are unbanked. But Bitcoin, though, does not require an intermediary. You do not have to wait for institutions and infrastructure to develop in your local community before you can open a bank account.
You can get a wallet and begin to purchase Bitcoin and use Bitcoin.
You can connect yourself to a global financial infrastructure with a cell phone and internet connection.
That Bitcoin offering connection to a global financial infrastructure also allows easy and fast remittances to Africa, which are another important thing that Bitcoin is doing for Africa.
because many Africans abroad work abroad in stronger economies and then send value back to their families in their home countries.
So those are two things, banking the unbanked remittances.
A third very important use case of Bitcoin right now in Africa is monetizing stranded energy.
Africa is replete with solar, wind and hydro energy.
But the problem is these are often in remote locations, away from power grids and away from paying customers.
As we've discussed in past episodes, Bitcoin kind of helps monetize stranded energy. It allows for it because Bitcoin miners, location agnostic, you can drop them in a remote location next to the power source, wherever it is, away from civilization.
And as long as you have a low bandwidth internet connection from a satellite or whatever, you can begin harnessing that energy to do Bitcoin mining, which can then bootstrap the local energy grid, build it out, attract more people to live close to those new jobs provided by Bitcoin and begin to really monetize stranded renewable energies.
He mentioned a couple of companies. Gridless is one that is doing this. And he notes that these types of companies are monetizing stranded energy to help electrify the continent. There are 600 million Africans who currently live without electricity.
I watched a separate documentary that really drove home why this is incredibly important.
Three million people around the world die every year from inhaling particulate matter for diseases associated with burning biomass fuels and inhaling particulate matter.
When you cook on a fire, around a fire, and live next to that fire, it's very unhealthy.
Three million die from that.
That's more than malaria and AIDS combined.
Electricity reduces the need for burning biomass fuels,
monetizing stranded energy allows for electrification.
It saves lives in Africa.
Another use case that Kincaid points out is it saves natural resources.
It has helped save Vironga National Park,
which is Africa's oldest protected space.
It's located in the Dmitry Republic of Congo.
The area itself suffers from kind of political instability.
It's under threat from poachers and kind of armed fighters.
But they've begun Bitcoin mining in the park, which enabled them to monetize that remote hydropower located there in a very renewable, environment-friendly way.
And that's led to the creation of 10,000 jobs that help protect the park.
So Bitcoin is helping very materially in Africa right now.
It's attaching Africans to a global digital financial network that banks the unbank and helps ease remittances, facilitate them.
It's also monetizing shredded energy to bootstrap grids, save national parks and save lives.
This is all excellent.
But back to the original question, how does this strengthen sovereignty and freedom in Africa from the ground up in support of U.S. national interest and against CCP, the Chinese Communist Party control?
So first, let's take a look at the very particular nature of sovereignty in Africa.
This is one of the most interesting parts, I think, of Kincaid's perspective on this.
And I think he gets that having been in Africa for 15 years or for some of those 15 years as a diplomat.
So first, the history of sovereignty in Africa and sovereignty, you know, big, airy, abstract word.
It means self-control, self-determination of a people, of a group and a country.
So sovereignty in Africa historically has been compromised for decades, perhaps centuries by colonialism.
which de-emphasized African sovereignty, kind of made African states into vassal states for foreign extraction of resources.
There were, after World War II, there were kind of global independence movements,
but the end of World War II then coincides with the beginnings of the Cold War.
And the Cold War then gives France kind of the pretext to step in, exert colonial control in Africa,
And with the United States, okay with this because it helps prevent these states from falling under the Soviet sphere of influence.
After the Cold War, then the Soviet Union falls.
But a new form of colonialism then begins to develop, a sort of globalist form where supranational institutions step in to manage the global south.
So multinational corporations in cahoots with governments begin to mix politics with commerce, work closely with governments to extract resources from them in Africa.
We've talked in the past about how the IMF and World Bank extend predatory developmental lending that gets countries caught in the debt cycle.
And in this way, a form of like neocolonialism from the West continues to occur after the end of the Cold War.
Now we have Cold War 2.0 and we see China and Russia seeking influence and control with their own types of debt trap diplomacy, Belt and Road initiative, even as the U.S.'s global power is now kind of appearing to wane.
so Kincade states the current problem this way the most critical takeaway with the drawdown of
French influence in their old colonial sphere Russia and China saw a geopolitical opportunity
to step into the gap with their particular and malign form of neocolonialism the most critical
question to come from this are how does America shore up democracy and security in these vulnerable
corners of the world without spilling blood and treasure? And how do African nations, in fact,
all nations, break the cycle of dependency on stronger external powers? So if neocolonialism
in Cold War 2.0 is the threat, the answer in Kincaid's estimation is not top-down counter-colonialism
by the West, not more troops on the ground, not more, you know, extension of aid and debt-trap
diplomacy, but bottom up sovereignty. So despite the waves of constant top down colonialism and
foreign interference on African nations from above, Africa has, and this is the most interesting part
of the article, kind of the sovereignty superpower, and the sovereignty super weapon to the superpower
is that there's a strong fabric for sovereignty at the bottom below the state in Africa, and the
super weapon we're going to see is Bitcoin. So let's take a look at that superpower,
the strong fabric of bottom-up sovereignty in Africa. So that's the kind of ethos of the
African village of tight-knit families and villages and tribes, which are very important
in Africa, Kincaid says. These are face-to-face communities where there are strong traditions,
despite globalizing forces that tend to homogenize everybody into the same gray mass of humanity.
it's very vibrant. This localized, strong tradition in Africa is still very vibrant.
It's also a decentralized population that is kind of diffusely spread, but growing rapidly.
It's a strong localism where people are able to govern themselves through communally enforced
reciprocal obligations. So why is this strong fabric of sovereignty at this very local level
a form of superpowers, I've kind of framed it. It helps Africa to escape a dilemma of sovereignty,
where sovereignty around the world is currently being challenged from both the top and the bottom.
So to quote Kincaid again, in 2023, supra, top-down alternatives to sovereignty,
are represented primarily through multinational corporations and international governmental
institutions which transcend the state. So that's the threat from above that includes the
neocolonialism of China and Russia and also U.S. and IMF attempts to control and extract as well.
That's the threat from above sovereignty. To quote Kincaid again, today's sub-state alternative,
the bottom-up threat to sovereignty, finds expression through tech-enabled isolation
and avoidance of face-to-face relations in a community context, always essential for consensus
building and for life to go well, especially in the context of liberal democracy. So that's the
bottom-up threat where kind of at the local level, bullying alone, people are not congregating
together, people are not doing things that make for strong and vibrant localism in communities
around the world. People are becoming isolated through tech-enabled isolation of logging on the
internet instead of going and talking to your neighbors. So Africa, though, has still a strong
and vibrant localism. They can resist that threat from below of tech-enabled isolation to their
sovereignty. So then if it can resist the threat from above, the neocolonialism already being
resistant to the threat from below, then that's kind of its superweapon in a way that its sovereignty
can be bootstrapped through the use of Africa's superweapon, which is Bitcoin. That can help them
avoid the threat from above of neocolonialism and globalism. So how can it do that? First,
Bitcoin can enable sovereignty at the level of the nation state, because it monetizes energy
development and energy is what makes a country independent. So when you begin to monetize all
this stranded energy and Africa becomes known for producing vast amounts of energy, that's going to
help with local nation state sovereignty, give them more bargaining power and leverage internationally.
Also, it can help them escape endlessly refinanced debt cycles, both to the IMF and to China,
because, of course, if you can begin to mine Bitcoin through utilizing stranded energy,
you can begin to hold that Bitcoin.
And if Bitcoin appreciates faster than fiat currency, you can pay your way out of debt traps.
Second, Bitcoin can help with sovereignty, empower sovereignty by increasing local prosperity. And this empowers sovereignty because, as Kincaid describes it, desperation drives radicalism.
Bitcoin can penetrate into ungoverned spaces, kind of brings its own rule of law with it.
Its code and its proof of work security exists anywhere Bitcoin is, and anyone can opt into it wherever they have internet.
So Bitcoin can penetrate into ungoverned spaces, places where people usually are subject to being recruited maybe by an armed group or a terrorist group.
But the thought is maybe once they're beginning to earn and save in Bitcoin, they can begin to feel hope, avoid economic despair, and avoid falling into these extremist groups.
So third, and most significantly for U.S. interests, Bitcoin empowers sovereignty because it allows a country to opt out of China's offering of a techno-authoritarian stack.
Africa is looking for digital cross-border payment solutions all countries are China is
helping them to do this currently by supplying them with vast numbers of smartphones that are
compatible with Chinese central bank digital currency technology to try to advance the spread
of that CBDC technology which is a form of financial surveillance as we've talked about
in past conversations. China is also helping to build out a centralized infrastructure.
They've done 70% of the 4G network in Africa and making other large investments in digital
infrastructure that allows them to capture African elites and the ruling class. When they invest all
this money, there's corruption. There's just becoming hooked on foreign money by the ruling
class. So right now, Africa is looking for digital cross-border payment solutions. China's offering
all this tech and infrastructure. But Bitcoin would allow Africa to simply, an African state,
to rug pull all of China's centralized offerings and investments because anybody can opt into it.
It's a decentralized open source permissionless protocol, which can provide a digital infrastructure
for cross-border payments without needing to use China's centralized CBDC option.
Bitcoin is being organically adopted in Africa.
People are voluntarily choosing to use it at the individual level, whereas the people
are rejecting central bank digital currency, CBDC.
As an example, the e-Naira in Nigeria was kind of roundly rejected by the populace, even
as cryptocurrency usage continues to grow rapidly.
Bitcoin being the principal crypto among those, according to Kincaid.
So Bitcoin protects property rights, evades top-down and post-capital controls, and prevents debanking of dissidents.
These are all freedom-enhancing properties that Bitcoin has.
And so by organically adopting Bitcoin, the African people are acting in a bottom-up way to speak to the ruling class about the vision of the future they want.
They want a liberal, free and sovereign future, and they do not want an illiberal, censored and controlled future with sovereignty compromised by the CCP.
So those are ways in which Bitcoin can be a super weapon to empower sovereignty in Africa.
Regarding U.S. national interests, if Africa opts for Bitcoin, Kincaid emphasizes how much of a threat and a blow this would be to China.
So Bitcoin kind of becoming a global reserve asset would, Kincaid says, take China by surprise.
China has been repossessioning for an end of the dollar system by amassing gold.
The CCP, Kincaid thinks, will avoid Bitcoin because of its freedom enhancing properties,
if it's their inability to control or manipulate it,
And that it also simply the spread of Bitcoin is going to enable or kind of incline previously authoritarian inclined countries to opt out of their of the China CBDC and opt for Bitcoin.
To quote Kincaid, it should be of no surprise that the CCP will not tolerate an open, free, decentralized and censorship resistant financial asset in mainland China.
It is antithetical to the CCP ideology that Bitcoin is an uncontrollable financial rail that facilitates capital flight.
So Africa adopting Bitcoin would, Kinkaid thinks, indeed threaten the CCP beyond just kind of a blow in Cold War 2.0 where they lose influence in Africa.
Kinkaid notes that Chinese leaders have this is an interesting ideological thing I hadn heard before but Chinese leaders have been infatuated with the writings of Alexis de Tocqueville a French aristocrat and a commentator on early U democracy
So here's a quote from Tocqueville that has been influential to Chinese elites.
quote it is almost never when a state of things is the most detestable that it is smashed but when
beginning to improve it permits men to breathe to reflect to communicate their thoughts with each
other and to gauge by what they already have the extent of their rights and their grievances so
basically based on toqueville and writings like these it appears that china is afraid that
improvements that allow people to breathe and reflect and to be prosperous improvements and
prosperity and liberty also lead people to begin to question the repressive governments over them
and the repression they're subject to. Kincaid notes that Bitcoin presents this problem all in
one. It increases prosperity and freedom. And he notes that Chinese Bitcoiners, people who are,
you know, once you get fall down the Bitcoin rabbit hole, you begin to take in that culture
of freedom. I can imagine a Chinese citizen beginning to watch Breedlove, Freedom Maximalist,
to begin to hear a lot of Glenn Alden talking about the nature of the financial oppression
of the financial system.
So there are some further observations that Kincaid makes that I want to discuss, but
I'm going to save those for discussion and summarize and end this way.
So overall, a big takeaway from this essay is that the U.S. can nudge countries in the
direction of a free liberal sovereign future instead of a Chinese and Russian neocolonialist
future by encouraging adoption of Bitcoin. We don't need millions of dollars of USAID,
and we don't need foreign intervention. We don't have to outspend China or support proxy wars
against Russia to do this. Instead, the premise is simply that open systems just work better.
That is the underlying premise of the West, of the free market system.
Open systems just work better. And if we encourage their adoption organically,
it's a win for the US. So we pull the rug under totalitarian states simply by encouraging
organic adoption of Bitcoin, which leads, for example, China to hold bags of their own CBDC
and stockpiles of yellow rocks. And this is a further point. I'll end with this because this is,
again, kind of one of the things that really gelled my conviction of Bitcoin and made me
capable of holding long term is you can do this yourself too. You can begin to hold Bitcoin,
use Bitcoin, talk about Bitcoin. That encourages the organic adoption and encouraging that organic
adoption again makes an open system stronger, which is always a blow against closed systems
that want to encourage people to enter into their cloistered and closed realm.
so lucas i i wrote down a lot of questions from this article there were a lot of really interesting
points to to talk about but i kind of overall like this is the reason i wanted to read this
this is really our first incursion into africa like and i'm just i'll just go
state right out front i'm very ignorant of of the african continent and so i was curious
i mean i i don't i know you've been to morocco maybe you have more familiarity but
But is there some like insider fact or realization that you had either about Bitcoin in the African context or Africa in the context of Bitcoin that came out to you that was like, oh, that's interesting.
Or maybe even just to double down on something that I noted in the summary about Africa and Bitcoin or Bitcoin in Africa.
i think so being in morocco so i was in morocco two years ago and i i'm sorry i just want to
interrupt you already but i frame the question this way i just want to note that you can answer
that way i just want to note that um i think a lot of this article is primed towards sub-saharan
africa right um but it's still relevant what you're going to say about morocco so continue
Yeah, I mean, just because that's my only frame of reference on it.
So I was there for about a month, about two years ago.
And even at that time, I saw a lot of Bitcoin ATMs.
And I mean, like, noticeably a lot.
There were quite a few.
One of the things that I think was very consistent, I think, yeah.
one of the things that would be very consistent that you could apply from Morocco to the rest of Africa
is simply the lack of infrastructure, lack of transmission lines,
lack of development of energy resources.
And that really does open the door.
that opens the door for this Chinese Belt and Road initiative,
which, as I told you when I was reading this,
is just a, this is the Bretton Woods playbook
just being run by somebody else.
And now we're, we are observing this
and realizing that we don't really like that idea.
That's not a, that's not a good thing.
And not only is it the Bretton Woods playbook.
Can you describe what the Bretton Woods playbook is?
Yeah. So what China is doing, what the United States did after World War II was made basically an agreement with the majority of the world.
We will protect the trade routes. We will keep the peace. We will supply the dominant currency, the dollar.
In exchange for that, you give us your gold, we'll keep it safe, we'll house the gold,
and then we will issue dollars on top of that that will be good as gold,
which rapidly become worth less than the paper they're printed on,
but they start out with the sales pitch of good as gold.
so it's trying to bring together all these countries to have a common currency
the United States or whoever in this instance it's China
they get the benefit of exporting inflation
so they get to send their currency that they're printing more of for nothing
to other countries in exchange for goods, services, and natural resources that have a real value.
So they get all that for free.
They use military might in order to enforce it.
And the sales pitch, which is a really easy sales pitch, is to go to whatever party or person is in power
and say, hey, we will give you the ability to stay in power if you partner with us.
We will protect your incumbency.
And that's rarely in the interest of the people.
It's usually in the interest of the government.
And so you have an autocratic society in China.
They benefit.
you have the autocratic government in Africa
they benefit
and then you have the people who suffer
and the people suffer because they
they export their raw natural resources
or in this case what China is doing
is China is investing in these countries
to build out infrastructure
so that it's not raw materials
that you can actually have a finished product come out that then goes into their ecosystem.
And so they capture the value add because they are operating these companies.
These are the international companies.
So an example would be Pepsi goes into a little African village and says,
hey, we'll put a water pump in.
You guys don't have a water well.
We'll dig a well.
And then you'll have access to constant water.
You won't have to walk 10 miles to the river or wherever to get your water.
You can just get it out of the ground.
That's fine.
In exchange, we're going to build a bottling factory here.
And we're going to bottle this water.
We'll pay your locals a couple cents to work there.
And then we will take that water and we will go sell it in the U.S. market for $3 a bottle.
This is a real, by the way, that's a real example.
In that example that I'm noting, by the way, the village ended up getting one water hydrant that ran sometimes, not often.
But the bottling factory that filled the water bottles was constantly running.
there's too many temptations that exist
for this to operate
in the entrance of the citizens.
And so they have an incentive to look for
something different.
The time that I spent in South America
my host was I would say fairly in tune with what was going on and made the comment about how
Chinese companies Chinese government um specifically Huawei Huawei was everywhere
um had really begun a a full court press in order to become entrenched in those societies
and I remember this was two years ago that I was there a little less than two years ago I went there
right after Morocco and the comment at the time that he had because this was like the height of
the middle of the Biden administration the woke psychoticness all of the all of the DEI
insanity
and
during that time his comment was
I really hope that America gets
its shit together because
we do not want what China has to
offer and China has
the best technology in the world
when it comes to
being able to suppress and
oppress a population
and that's
like the cherry on top that they're adding
to all these autocratic dictators
that, you know, we'll bring in the cameras,
we'll bring in the tracking technology,
we'll also offer you our digital yuan
so that you can track money,
program the money to be used however you like.
And it creates a...
It's a very ugly look in the mirror, I think,
for the United States to see
what the Bretton Woods
playbook on steroids
looks like because the
Chinese are doing it at
a level that the United States
never was able to.
Yeah, we can't.
All the tech and all the
digital stuff. Right.
Move that in.
I think one of Kincaid's points is we can't
outspend, out
manufacture or
out authoritarian China.
Yeah. Yeah. And just we'd also if we wanted to, we couldn't at this point, maybe because of our lack of manufacturing capacity. But we also it's not what it's not our vision of the world. It's also like, the way we win, I think it's the most interesting aspect of this, the way we win is by. So what colonialism does is it saps sovereignty. And like, if you want to combat colonialism, and that now we we want to combat it, because it's coming from forces that we oppose the
China and Russia, if you want to combat a force that saps, that enervates sovereignty,
you need to find something that increases sovereignty, that empowers it. What does that
free and open systems that anybody can join that you don't have to use Pine's frame? Like,
in a global power competition, a global power network competition, it's a competition of like,
what network are you going to join? Are you going to join China's network that they preside over and
have choke point surveillance control over what passes through the network? Or are you going to
join a network that nobody controls that the United States happens to be on and using maybe
other countries are also on and using, but you can jump on yourself in a permissionless sort of way
and begin using an infrastructure that is not under surveillance control of another sovereign
nation. Free systems are systems that are intensely appealing. As you know, your host saying,
we don't want that illiberal authoritarian option. It's presenting itself to us as very persuasive
because it comes on the back of all of this investment. But if there is another option,
that's what people prefer. Kincaid says that Africans also at the citizen level,
at the individual level, prefer the liberal option, don't want CBDCs imposed on them.
And so how to give people the option, begin to organically grow and endorse the Bitcoin network.
So people of their own volition, even if an authoritarian leader or authoritarian ruling class in a particular African nation is captured by Chinese investment under Chinese influence.
If all the citizens begin to opt to use Bitcoin, that filters upward within a nation.
Yeah, and it appears that they are opting to use it because it's better, right?
There are vibrant Bitcoin communities.
Bitcoin Icasi, which is sort of like another Bitcoin beach modeled after El Salvador.
Orzetta?
so Bitcoin
is in
Mosel Bay
South Africa
and so they
what they did
was they went
through a
non-profit
called the
Surfer Kids
non-profit
and they
pay the
coaches
so there's
like coaches
that
coach
locals
to teach
them how to
surf
that's part
of the
non-profit
right
you know
do something
active and
fun
they pay
the coaches in Bitcoin and they also go into the community and they help the community
businesses get onboarded so that they can accept Bitcoin.
That was one of them.
There's a couple other examples I found, but this is not a, oh, there's four or five examples.
the author Ben Kincaid notes that he calls out specifically Strike, Jack Mallard's company,
for the work that they're doing in Africa to onboard nations at a time or very large populations.
I think one of the things I really admire about Strike as a company is that they are clearly, like Jack Mallers is wildly a patriotic American, and he is doing everything he can, I think, to advance adoption in the United States, but he's not sacrificing world adoption for that.
and is going out and demonstrating in other places,
in South America, in Africa,
the impact that Bitcoin can have.
And that's the low-hanging fruit, right?
These are the most heavily suffering populations
that they don't have 12% inflation or 8% inflation.
They have 80% inflation.
And they have far worse.
They have a greater incentive to change.
I think it's cool how we frame this, how the author frames this.
In the United States, Bitcoin is looked upon as a speculative store of value by many people.
In Africa, it is actively being used as a currency.
It is actively being used to transfer value specifically through the Lightning Network, through the Layer 2 protocol.
And it's just this is the low-hanging fruit.
This is the zone that is rife for that.
The conditions that there are more than twice as many transactions under $1,000 that occur in Africa than any other continent.
And so you've got these smaller transactions, more of them, and a monetary system throughout Africa, throughout all the different nations, that is ready to be upset because it has not served them well.
Yeah.
Yeah, so coming in there to do that is to build these.
So, I mean, it's a twofold aspect, right?
You've got companies coming in making mining deals in order to mine Bitcoin using stranded energy resources.
So a stranded energy resource, a waterfall 100 miles away from a population.
it's too expensive to build transmission lines in order to get the power to the population
and so what can you do well previously there really was no option for stranded energy
it was just there and people weren't using it but if you have bitcoin mining you take some
asics miners out there and you get a starlink connection and now you can produce massive
amounts of energy it was noted like virunga in uh in that national park in virunga they were
when bitcoin was 44 000 a coin they were making about 150 000 a month so it's you would assume
300 now um and and that goes to you know maintaining that you know maintaining that uh
that national park that the world's second largest uh rainforest you know this is where
this is where these endangered species uh the gorillas uh and and a number of other
endangered species call home and so preserving that um preserving that territory
instead of going to kind of like the nuclear option.
The nuclear option is allowing like oil mining
or oil drilling and natural resource mining
that comes in and destroys the environment and the ecosystem So Bitcoin providing in a way to monetize that stranded
energy that enriches these enriches these areas and then the the knock-on effect of that is
you know you're going to go out there and monetize monetize the hydroelectric power
of a waterfall or a dam
or something like that.
And
you can then build
out from there. You can build
manufacturing out from there.
You can build community out from there.
And Bitcoin can
then switch to being the
buyer of last
resort so that
you build a
capacity
for power and when
that capacity is not being used
you can still run it at capacity and Bitcoin miners will buy the excess power.
Yeah.
That allows you to be profitable, to always be basically checking the health of your system
to make sure that it can operate at capacity so that when you need those excess power draws
that you can go after them.
So, yeah, sort of the very rambling.
Well, yeah, I mean, that's I love that because you're I mean, you emphasize the way Bitcoin is driving all of these very material improvements, very real, physical, tangible, real world improvements in Africa that are increasing the prosperity of Africans.
And then Kincaid comes in and makes the additional observation that you then begin to have abstract improvements layered on top of that, improvements in sovereignty and freedom and the changing of ideals of people, really empowering nation states, which prevents them from falling under other spheres of influence and accepting colonialism that compromises sovereignty.
So Bitcoin improves Africa.
I wanted to ask you, how can Africa improve Bitcoin?
How can Africa drive innovation on top of or with Bitcoin?
And I'll mention a specific one that Kincaid mentions in the article.
And then I want to get your thoughts maybe on this protocol or just generally how the specific cultural conditions of a place can help drive innovative uses of Bitcoin.
So in this respect, Kincaid mentions the Fediment protocol.
The Fediment protocol, I'll give like a brief description.
I don't know it super well, but my understanding is it's a lightning-based second layer on top of Bitcoin.
So it's an open source protocol, and it allows for building essentially like a community bank on top of the Bitcoin base layer.
And so I've heard it described in this way.
So imagine you enter a theme park.
You pay your dollars into a kiosk to get like tokens that are then used to pay for everything in that park.
FedEmit kind of works that way.
You pay your currency into it and you get back a Chomian eCash token, which you can then trade around in the economy that's connected to that specific Fediment community bank.
Chomian eCash, that just means that you're getting a special token that's very, very privacy enabling in a way even beyond Bitcoin at the base layer.
so in this scenario the protocol holds bitcoin based on what you paid into it to get those
tokens that you can then use um and you can then redeem those tokens for what you paid into the
protocol so the benefit is um it's like a community bank where it's an intermediate
custodial solution between holding your own bitcoin or just having bitcoin on an exchange
and the kinkade thinks that this is very resonant with africa because um it like fediment allows for
community-based solution these the fediment protocol these community banks that are on top
of the bitcoin protocol the bitcoin is secured by guardians people designated as guardians of it
who have like a multi-sig arrangement so it takes for example like five of seven or whatever
people signing on to it to be able to access that Bitcoin. So communities then trust based
communities at the really local level can begin to have a community sort of bank on top of the
Bitcoin protocol allows you know, the ability for daily and private transactions in a very quick and
costless way. In a way, again, that people don't have to have a purely self custodial capacity.
so that's the fediment protocol that's the way that the fediment protocol and kinkade's estimation
is tied to the really like the sociology of africa in being very community and localized
community driven at the very local level so i guess my question is like like can knowledge
of the sociology of a particular area or society drive innovation and just like bitcoin interact
with, will Bitcoin interact with different cultures differently as it's adapted to different
uses based on how like specific cultures actually function?
Yeah.
Does that, if that makes sense is the question.
Yeah.
It makes me, it makes me first think about kind of the nature of how, how these societies
operate.
so
if you are
a village that is
located inside
of a country that has a
you know very chaotic
government
very inconsistent policies
you know
enforced kind of
at will whenever
you like
whenever the people in power like
not a strong
rule of law, I guess, is probably a good way to frame it.
So not a strong rule of law. The people
develop their own transaction
methods around that. They develop their own societies around that.
They actually end up creating very high-trust
societies. And this is what Kincaid
is referencing here in Africa, is that the
The village model, it is a high-trust society.
These are people that we have the elders,
and the elders genuinely look out for the good of the people below that they serve
because they have extremely close ties to them.
There's no separation.
They're not in Washington, D.C., sitting in an office and flying back every once in a while to campaign.
They are living right next to you, and you see them every day.
And there's really no, there's much less danger, I guess, of being taken advantage of.
And so the Fediment protocol, layer two protocol, you're right, that's a great way to put it, is basically we're going to put in our Bitcoin and we're going to appoint a number of stewards of that Bitcoin.
those stewards will have to make decisions together if they want to do anything with that
but when we put the bitcoin into our federated society into our fediment protocol
then what we are able to do is we're able to gain back the sovereignty of the ability to transact
individually without having a third party in between.
And the third party, even if it's not going through any sort of middleman,
the third party still exists if you're using government money,
if you're using money that's controlled by somebody else.
And so now you're using money that's not controlled by anyone,
and you're able to transact in a private manner.
I think this is a very important distinction about money that should be made, which is that money should be private by default and public by choice.
there is no reason
I don't think
why anyone can justify
that
MasterCard
or Visa
or Bank of America
or J.P. Morgan
needs to know
that I'm buying eggs
needs to know that I'm
paying my gym membership
needs to know that I'm going to a movie
etc.
and the argument is
Well, yeah, of course they don't need to know that.
What they need to know is when you're buying drugs, when you're hiring a hitman,
when you're plotting to blow up a building, right, when you're doing stuff like that.
And the counter to that is that it is a lot easier to track that stuff on-chain.
So you actually want that stuff to occur there.
Cash is the instrument of choice for fraud because it is very difficult to trace.
You know, you think about, watch the movies, and how do they trace the cash?
Well, they write down all the serial numbers, and then they go match the serial numbers when they get their hands on their cash.
And they say, oh, you have this cash, therefore you must have transacted with this person, and therefore you're all guilty.
Or they mark it with some sort of nuclear isotope.
and then they read it, like, oh, yeah, that's the cache that we marked.
That means that you have to be in the physical proximity to do it,
so it makes it very difficult to trace.
Chain analysis, on-chain transactions, much easier to trace.
And so it gives the power back to the people to be able to transact
without having someone in between taking a cut.
you can still tax people, but you can tax people in a way that is cooperative, that they actually
agree to be taxed instead of just implicitly being taxed solely by using that money. And so
this is not the tool of anarchy. This is not the tool of libertarianism gone rogue.
this is a tool that
really gets the best out of
your local governance structure
because it encourages honesty
it rewards honesty
it rewards fair play
and treating people
with dignity and respect
and stuff like that
so this
fediment system
fediment protocol
I listened to
a podcast by the guy who
created it.
So was it one by Obi Nwasu?
Yes.
So I think he is the co-founder of a company, Fedi, but not of the Fediment Protocol.
So he works in a company that does stuff with Fediment.
It's my understanding.
Well, what I was going to say was that I listened to this podcast and I did not understand it
very well coming up.
Yeah.
but I think you described it well, which is, it's basically, you go into the, you know,
when you're in the amusement park, you use the amusement park's tickets in order to get on the rides and stuff,
and so that's a way for communities to kind of keep their money in-house
while still allowing it to be decentralized money.
Definitely the best of both worlds.
Yeah, and that analogy is actually one that Obi-Wan Walsh uses
in one of his interviews too.
So for me, I've always heard fediment thrown around
but never really federated this and that,
not really understood its functionality.
But I dug into it a little bit and it's very fascinating.
And it's just very fascinating to the way that it graphs onto this African notion of, you know, trust at the community level, because there is a third party in the FedEmit protocol.
It's just that set of guardians that under a multi-signature arrangement signs off on the disposition of the Bitcoin that is held by that FedEmit, by that community bank, quote unquote.
But the point is that, like, you have to trust somebody at the end of the day.
Self-custodial, you have to trust yourself.
And maybe in the Fediment protocol, you have to trust the guardians, the elders, as you noted, like the community. But there is trust in communities for a certain set of people. And this harnesses that kind of sociological fact that people do trust the elders, the guardians of the community. And if they're the ones that are holding the Bitcoin overall, it's not an offensive idea for the people who will transact with that Fediment.
Another way to understand Fed and Mint kind of is break it down, federated and mint. So the protocol is minting, again, the money that you use, you pay in, they hold Bitcoin with what you pay in, and then it mints you a token. It's a federated mint, again, because it's all of these different people are running the Fed and Mint protocol, all these different mints that are secured by different groups of guardians that are holding their own amount of Bitcoin, etc.
So a very fascinating protocol and very fascinating the way that interacts with, again, this African idea, the village ethos that Kincaid describes.
And I wanted to get your thoughts, too, on so that's something that maybe Bitcoin can learn or can drive innovation on Bitcoin, something specific to African like sociology, ethnography, whatever.
So the other question I have, what can we learn from Africa as far as sovereignty at the local level?
So Kincaid kind of notes that in the United States, we have a sort of waning localism, maybe even like waning faith and increased centralization. To quote Kincaid, Africa is not only the future of humanity due to demographics and that its population is growing so quickly, but it may unlock the key to a democratic revival of spirit desperately needed in the lands from which democracy originally sprang.
so what do you think about that
is there a lesson that we can
or should learn from
the sort of vibrant localism
and strong community that
Kincaid describes as
currently existing in Africa
we in the United States
I think the lesson
is that
the government
when it becomes
all consuming
it starts to sap away and undermine the strength of the local community where people look towards
Uncle Sam and they look towards the um you know Mother Russia uh Uncle Sam Mother Russia
you know the homeland etc and you take a paternal view to your overlords kind of um where you
people become so disenfranchised of their ability to pursue that which is beneficial to them
that they stop trying and they start voting for the state to give it to them.
And so you do see, the United States is a perfect example of this,
how we've seen a drastic fall in civic organization participation over the last 70 years.
I think the height of it was, you know, like right after World War II,
where everybody was in the Boy Scouts or the Girl Scouts or your local 4-H club or, you know, something.
But the community was very strong.
and the community was strong because you needed the people in the community to survive you needed
to get along you needed to participate in order to be a part of that economy
as you have as we've advanced technology sufficiently and transportation and stuff so
that you know if you want to you don't you don't ever have to leave your apartment you don't ever
have to leave your house in order to get everything you need you can have your food delivered you can
have your clothes sent out for um for washing like everything can be done um on your doorstep
and so you have less requirement to interact in the community you go to africa and that's a totally
different situation there's energy there's very one of the things i remember about like morocco
was like there's no such thing as free water there's no water found ever um we went to like
fancy restaurants and even in fancy restaurants um waters water comes in plastic bottles and it's
two dollars a bottle um you know you don't get a glass of water with your meal for free um so
there's there's a lack of lack of infrastructure there's a lack of of supplies and um oh sorry a
lack of development and so people are still very intimately engaged with each other at that very
very local level yeah and he does you bring up the demographics you know africa is a very young
continent it is a very fast-growing continent in terms of its population and it is a
it's a vibrant place people want opportunity they want to work they want to do things and so
But there is, I do think that Africa is the prize going into this next 70, 100 years or so, where the lack of, like, everything is just opportunity.
There's opportunity with the population. There's opportunity with the chance to industrialize, create infrastructure, to get access to natural resources and refine them into end products.
And so there really is a Cold War 2.0 that's being fought primarily through monetary colonialism, or I don't know if it's monetary, but some form of post-colonialism.
And the United States has no choice but to run as far and as fast in the other direction of China as possible.
So China is offering the turnkey solution to having an entrenched dictatorship for a century that gives absolute power of control over the people to the leaders.
the author is calling for and and you know this is no revolutionary person this is no uh this is
no tinfoil hat wearing uh building my own nuclear submarine in my backyard lunatic this is a guy
who was a u.s diplomat for 15 over 15 yeah um serving in africa and um he is calling for
the United States to aggressively pursue
promotion adoption of decentralized protocols like Bitcoin because it gives the people of Africa the tools they need
in order to not be subjected to the Chinese level of oppression
and subjugation that the Belt and Road Initiative is currently exporting.
yeah
when you look at it that way
I think
I think you do really have to look at
Africa the same way that
Europe looked at the United States
it is a brand of opportunity
it is rife
with possibility
and potential
for growth
it will be a leader
and so
you want to be able
to like
I think the whole time through reading this, I told you at the beginning, I was framing this as this is China running the Bretton Woods playbook, calling it the Belt and Road Initiative, and us seeing it from the other side and not liking it.
Also not liking it because they're using our dollars to do it, right?
So they take our debt.
Oh, yeah, sure.
We'll buy your 4%, 5% bonds or whatever.
will just then repurpose them as 12%, 15% bonds in these other countries
and will capture the spread.
It doesn't really matter what the inflation is as long as you're capturing the spread.
So you're able to benefit there.
It really is a hard pill to swallow because it's a taste of your own medicine
and seeing that it's not going to work.
It's going to create something that is an extension of the Chinese oppression arm that will eventually, as he notes, put a military base on West Africa, which would be having nuclear submarines, whatever you want, right there, just across the pond, be able to really further expand the Chinese zone of influence.
At the same time, of course, that means the shrinking zone of the United States' influence.
So, yeah, it's calling for pushing more and more towards freedom, more and more towards liberty, democracy.
Using, by the way, using the terms that have been used against that, the environmental social governance.
governance yeah language that is in this paper in order to encourage it like hey guess what we
can go out there and we can drive sources of renewable energy that are clean and don't harm
the environment and they um they create opportunities for local societies to grow yeah
yeah using using that kind of uh yeah taste of your own medicine really uh to turn back around
When you look at Africa and what they are currently doing with Bitcoin, how they're utilizing it as a currency instead of a speculative store of value, I guess what do you see as the, is there like a tipping point?
Do you think that there is, I mean, I think we both kind of agree that this is inevitable, that Bitcoin itself is inevitable, that this is an idea whose time has come.
Nothing stops an idea whose time has come. But where do you see the biggest pushback, stumbling blocks, obstacles to exporting that liberal democracy model to African nations?
Yeah, I guess first, I wouldn't consider Bitcoin inevitable. I think that it's a very powerful idea in that if it's adopted organically, we continue to adopt it organically and don't try to stifle it and don't lead ourselves towards things like, you know, zero sum nuclear annihilation competitions or whatever, that it's going to win the day.
But I think I guess I don't want to say it's inevitable because it takes good people, you know, doing good things in order for history to advance in a good direction.
And we should never forget that. Bitcoin doesn't fix this. People using Bitcoin do.
And it's the people who have that will to advance in a good way.
so the tipping point i think it's like within africa an interesting part about this essay
is that the use of bitcoin is essentially everybody now gets a vote about what type
of future they want to see if you begin to use bitcoin you're saying i want to i want to inhabit
the future of a decentralized form of money that is global in scope, that is not surveilled,
and that does not have a specific choke point that my national government can control.
And so there's now this kind of global democracy where people are voting on the monetary system
that they want to have. That's the way that network competitions kind of work, right? The
network effects accrue based on how many people are using them. And so even in very authoritarian
countries that don't have strong democratic values, Bitcoin doesn't care. Bitcoin is permissionless.
People can begin to vote on the future they want. And African leaders, you know, or a leader of an
authoritarian nation state, including one in Africa, can say, even if they're not a democracy,
look, all the people are beginning to use this open source protocol as money, or people are
actually transacting in this, they are rejecting the CBDCs that we are offering them.
We're going to have to go either in the direction of incredible violence and state repression or seeing how we can begin to use this to our own advantage.
And then they're going to see, wait a minute, we can also begin to stack Bitcoin by utilizing the stranded energy, which we have in droves.
This protocol, this open system is actually in our benefit.
So the tipping point is this filtering bottom upward of people on the street using it because it suits them and then leaders beginning to see it suits us as well.
And then you have that sort of awakening towards the power of open systems in the same way that maybe we could say Cold War 1.0 was won by new ideas of freedom making themselves known across the Berlin Wall, making like the idea of rock and roll and blue jeans and these powerful, non-repressive notions of freedom of speech, freedom of thought, like those types of open decentralized protocols.
that is the free market
maybe those ended
Cold War or won Cold War
1.0, Cold War 2.0
resisting neocolonialism
resisting
authoritarian imposition
maybe that's won by people voting with their
wallet so to speak, voting with
the type of wallet that they want to have
Yeah
A lot of people wearing
Kansas City Chiefs Super Bowl
champion shirts
today that
were produced and not
used.
It's nice.
We've got a head start on exporting
culture because
Africa has for so long
gotten all of the
leftover culture from the United States
that wasn't used.
I don't
really know where else
to go with this other than to...
I had another question for you.
So this ties into, we're reading the network state right now by Balaji Srinivasan. So Kincaid's article kind of posits two threats to sovereignty, a threat, as you described earlier, a parental authority type threat from above, when something above the government tells the government how to function, compromising sovereignty in that way.
There's also the threat from below, the collapsing into isolation, the disintegration of our local bonds, a tech-enabled isolation.
People order everything off Amazon rather than going to the local farmer's market.
They meet people on Facebook rather than in person or whatever, interact that way rather than in meat space.
so the danger of isolation to bring in alexis to toqueville a quote that kincaid has from him
isolation quote hinders restrains enervates stifles and stultifies so much that in the end
each nation is no more than a flock of timid and hard-working animals with the government as its
shepherd so where does biology's idea of the network state fit into this is the network state
idea, a tech enabled isolation, because people are opting out of their local communities and
trying to join an international community of people that they feel more affinity to.
They aren't going to the local farmers market, they're going to the online farmers market
for the type of person that they are to interact with other people like them.
So, I mean, what do you think about that is the network state tech enabled isolation in
a way that is harmful to state-level sovereignty in the United States?
I think it's tech-enabled community. So the network state starts online, but the goal of
the network state is land, land, you know, last, but not never. So meeting these people online,
forming these online communities and then choosing to utilize the resources that they have
in order to create their own physical community where they do go to the local market,
where they do have the face-to-face, meet-space interaction.
This would not be possible without technology.
Those people would never meet without technology.
They would never connect.
And they are the people that are, they are not the vassals working under the shepherd,
the sheep working under the shepherd, needing guidance.
These are, I would say, by and large, shepherds of their own, shepherding themselves and joining
with others in order to lead their own society.
So what I see with the network state is that it's tech that enables action that otherwise could not be taken and action to build these vibrant, small, local communities that are really a model of that African village.
if you like if you watch the network state conference and you see the presentations by
by network state societies like cabin or cul-de-sac there's a whole bunch of them
there's something very consistent with all of them which is you see these people coming on not
coming there to talk about it and they're like you know here's what we do what we do is we we live
you know basically with our best friends we raise our kids uh together uh we teach our kids teach
our kids together um our our children play together we um we oftentimes provide our own food
we oftentimes um are self-sustaining in terms of energy um and so it i would i would i would
actually say it's it's the exact opposite of isolation yeah so it's tech enabled vibrancy
tech yeah um community uh yeah no i agree i think you're totally right i think that biology
notices that there is already tech enabled isolation and there has been the tech driven
maybe disintegration of local communities but he's looking for how to reintegrate using tech
and to connect to people and then make just, you know, move people around spatially until
they are around other people with whom they can have a common idea and purpose that will
allow them to form a durable and lasting community.
So I think you're totally right that, yeah, he is really savvy to these ideas of sovereignty
from below being compromised in certain ways in the United States and in many other countries.
and thinking about how to use networks to re-enable or enable the recreation of those.
Yeah, so that's...
Yeah, go ahead.
One more thing I was going to say.
It's, you know, these are built from the ground up off common principles.
These being network states?
Like these network states.
Yeah.
Of like, you know, principles of, or virtues of like sovereignty and self-sufficiency and resilience and self-reliance.
and so they they arise from the same substrate and therefore they somewhat resemble each other
so the difference right now is that i go to columbia i go to morocco i go to detroit i go
you know uh to copenhagen and i am instantly in a completely different culture that is very
foreign to me with network states you will go to the network state you'll you'll go to the the
cabin location in detroit the cabin location in morocco colombia copenhagen and you'll be in that
different location but you will be in a consistent culture with local flavor right so um i think it
really brings the world together.
I don't think that it dulls culture.
I don't think that it homogenizes culture.
I do think that it,
much like we talk about what the network state is doing,
which is kind of like when I was trying to,
basically trying to sell you on this idea of,
you know, you're not abandoning the United States.
You're not abandoning your patriotism and your values,
what you're doing is you're taking the best of that and then um you're letting something grow
from that you're taking you're you're trimming you're you're you're you're cutting off the
cutting off the toxic limb that is killing you um or trimming the branches in order to let the
to let the bush grow yeah and so yeah i think that i think that we we get to see like a vibrancy
and a flourishing of culture in a way that has been constrained previously.
I think that it does model the African village very closely.
Tight communities.
It takes a village to raise a family, to raise the child.
You've got local support.
And, yeah, I think that that model plays in a lot of different locations.
Yeah.
No, I thought this was a very fascinating essay that mixes sociology with technology and how each of those is a driver for the other, how those interact.
We think all too often of technology just obliterating or running through society and changing it, but not the ways that society steers the use of technology to fit people's needs and ends and purposes, which are given to us by our culture.
And so this is a fascinating way which we can, I think, use as a stepping board to also ask, how will the culture of the place where I live, how will that influence innovation on Bitcoin or how can I use Bitcoin to better enable the functioning of the particular society or culture I inhabit?
it. It's like the base layer of Bitcoin is this great technology for conserving value over time.
Additional layers on top are like social layers. How do we operate our society given this newfound
ability to conserve value over time? How do we interact with that base layer in ways that mimic
or recreate or empower the type of interactions that we have within our society, whether community
based or something like that? So I thought it was an awesome essay. I'm glad we read this. And again,
I'm so ignorant of Africa.
I like to have the reason to, you know, learn a bit more about it.
And Bitcoin is the perfect excuse here.
Yeah, I think in a lot of ways, I think we're intentionally made ignorant of Africa and left to think that it is, you know, nothing but this giant wasteland.
The dark continent.
Yeah, violence.
And there are aspects of that.
And how much they have been encouraged by outside forces is up to debate.
But one thing that we do, or a couple things that we do know for certain,
is that there is an insane amount of untapped potential.
There is an incredibly young, vibrant population.
And they will be making a very large impact on the global stage in the years to come.
So, yeah, it's a fantastic read.
This book that you have, that you're drawing these essays out from, is National Security in the Digital Age.
And this is just fantastic.
We're so used to the Bitcoin standard and hard money you can't quit and stuff like that.
But to hear somebody who's a diplomat write about Bitcoin as statecraft, it's so resonant with Jason Lowry's writing for power competitions between societies.
There are so many common themes as we go through this,
and I will tell you that I do think that Bitcoin is inevitable.
I think it's inevitable in the same way that the Internet was inevitable,
that once it was released, it was going to go wherever it went.
I suppose there are probably still some places that the oppression is great enough
that you can't have access to the internet,
but those are few and rapidly vanishing.
So, yeah, it's been a brilliant read.
More of this, man.
More of this Bitcoin estate craft.
Because the way that this is written,
people who do read along with us,
the way that this is written,
this was one of the best ones.
This is great.
Just using the terminology of a diplomat,
is fascinating to hear somebody speak about Bitcoin like that.
So, yeah, it was a welcome read.
Yeah, cool.
So National Security in the Digital Age,
Bitcoin as a Tool for Modern Statecraft,
published by the Bitcoin Today Coalition.
So check it out.
All right.
Sounds good.
Well, until next time.
See you.
See you later.
listen to, that's my brother, that's Christopher, please subscribe. It gets me one step closer to
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