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If I could hope for but one thing for you, so you'd be curious in all that you do.

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Cause love like a flower just wants to grow.

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Oh, and knowledge like your heart just wants to be known.

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If you like, please subscribe.

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This is Bitcoin Study Sessions.

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Hey, welcome back.

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Today we're continuing on in the Satoshi Papers,

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Reflections on Political Economy After Bitcoin.

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Lucas and I have already discussed the introduction and the first chapter.

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Now we're moving on to the second chapter,

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and these are all standalone essays.

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this essay is

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Toward an Anthropological Theory

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of Money by Natalie Smolenski

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she is also the editor

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of this anthology and

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she was a co-writer of the introduction

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this

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Lucas and I were talking

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this anthology

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I mean it's aspiration is to

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be academic in

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nature in the sense of

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to aspire to academic standards

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to talk to academics

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to really have that level of scholarship.

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And the essay so far, the introduction, the first essay, and this essay,

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it definitely attains to that, which is excellent.

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The content here is extremely interesting, very thought-provoking,

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and difficult, but difficult in the best sense.

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There's so many ideas in this essay.

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I'm going to do what we usually do.

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I'm going to try to get kind of the broad ideas out on the table

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so Lucas and I can kind of hash out those ideas.

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Whenever I do this, I have to omit some interesting stuff,

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so don't think that the kind of circle is entirely closed in this essay

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just because of what you hear.

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I'm going to get out the stuff that I think is the most interesting,

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but there's a lot of stuff in here.

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This essay is also very, like, imbricated, overlapping, interlocking,

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lots of concepts, lots of definitions,

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and we're going to have to, of course, just kind of give a gloss on top of that,

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skip through it like a stone over what could be some very deep discussions in a lot of ways.

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I'll start with this quote that's like three quarters the way into the essay, because this

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is one of the big takeaway points that I want to really talk to Lucas about, and I want to get out

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here. The quote is, money in all its forms is the ever-evolving social answer to the question

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of what people want in settlement of debts.

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So we're going to come back to,

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we're going to circle back around

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to why this quote is so impactful.

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There's a lot dwelling in the definition of settlement

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and what people want in settlement.

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And that's going to be, I think, the kernel of the essay.

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But let's back up.

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How does the essay begin?

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So this Natalie Smolenski is an anthropologist by training.

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She's also an entrepreneur,

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but by formation she has an academic anthropology background,

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specifically the field of cultural anthropology,

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which within anthropology is where I have a definition here,

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but I seem to have deleted it.

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In any case, for a cultural anthropologist,

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they're kind of studying what in a well-rounded sense,

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like the institutions, the customs, and other things of people.

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And so culture in a broad sense, the anthropology that's going to study that type of thing.

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And this, towards an anthropological theory of money,

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is obviously regarding what money is in that sense for a cultural anthropologist.

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Anthropologists have had, Smolensky notes, a kind of hostility towards economics as a study.

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One anthropologist, she notes, even refers to economics as the anti-anthropology.

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Why?

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So economics has tended to be neutral regarding the ends or goals that people choose

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and to instead focus on the means that people choose to achieve those ends.

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So that is the basic idea of economics is that humans will tend to select the least costly means of achieving whatever end or goal they set for themselves.

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It could be a virtuous end, it could be what we would consider a bad end.

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So a person seeking to rescue penguins, if that was their end or goal, they would do it in the least costly way possible so as to rescue the most penguins and have the most resources left over for their other ends.

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or a person seeking to buy heroin would do it in the least costly way

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so as to be able to maximize the amount of heroin or other things in their life that they want to get.

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So whatever your end, however irrational or vicious,

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people economize rationally in selecting the least costly means for it.

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That's what economics proposes.

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Anthropologists have tended to discount the economic motivation

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in favor of motivations that kind of blend in values, you might say, or ends into the motivation.

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They have tended anthropologists to want to debunk economic ideas that they see as justifying capitalism and exploitation,

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assumptions such that individuals are self-interested or individuals act to maximize utility, things like this.

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this is also part of a broader methodological dispute between individualism and collectivism

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so economists tend to view human behavior as determined as determined by individual agency

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methodological individualism with individuals as the fundamental social actor anthropologists on

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the other hand have tended to view human behavior as determined by socialization social structures

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class, race, gender, kinship, age, things like language and myth. These things determine how

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people act, not kind of their own individual agency. Smolensky points out that this debate

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kind of oversimplifies that humans, on one hand, of course, are not atomized individuals, but on

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the other hand, are not sheer conformist to cultural norms and institutions. So Smolensky,

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as an anthropologist who is not afraid of economics has a lot to bring to this field here.

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And so this essay is very interesting. She does believe that individuals are cost minimizing,

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not utility maximizing. That draws from the economist Ronald Coase. People do have an

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economic motivation. They respond to scarcity by choosing the least costly means to suit whatever

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end they might have. So whether rescuing penguins or buying drugs or whatever, they seek to do it,

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humans do, in a way that minimizes costs. So far, then, that's kind of the general state between

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economics and anthropology. That's how the essay kind of kicks off, as well as Smolenski's kind of

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commentary towards maybe a reconciliation. In this essay, again, given the title, Smolenski is going

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to state her own anthropological theory of money or kind of theorizing towards a theory,

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one might say.

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Before stating her own theory of money from an anthropological point of view, Smolensky

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does kind of a literature review, but specifically an in-depth review of one anthropologist,

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the late anarchist anthropologist David Graeber, primarily from his book Debt the First 5,000

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Years.

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So Graeber does fit this mold of an anthropologist who was very hostile to economics.

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And Smolenski, he's a popularizer too, David Graeber was.

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He's a very good writer.

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I began reading Death the first 5,000 years.

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It's a thick book.

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I enjoyed it.

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I had to set it aside because I got busy.

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Very rich in discussing the anthropological record.

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And Smolenski does an excellent job here.

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She goes into depth getting his views out on the table so people can see that she's not misrepresenting what an anthropologist, what other anthropologists have said about money.

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In doing this, the kicking off point for this discussion of David Graeber is a canonical Twitter exchange between the computer scientist Nick Szabo, famous in the Bitcoin realm, obviously.

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maybe not obviously, but famous for Bitcoiners.

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David Graeber and others participate too.

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So it's just very interesting to read this.

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I'm not going to do the below-by-below recitation of this Twitter thread.

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Swalinski does, and it's beautiful.

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It's its own literary form, I think,

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to discuss how a Twitter discussion evolves.

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And she does a very good job.

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You go through all the highlights there.

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instead I'll just give

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kind of the highlights

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from a high level of

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Smolenski's summary of Graeber's view

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and then we'll move on to what Smolenski says

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is her anthropological theory of money

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so overall Graeber's position

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endorses state

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and credit theories of money

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whereas

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those theories end up

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justifying the state monopoly

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over money Graeber's going to

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end up calling for the state's abolition

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So let's pull that apart.

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So this is, you could say, consists of three claims.

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First, an ontological claim that money is credit or debt and not a commodity.

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So the state and credit theorists of money say money is just credit or a debt.

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It's an IOU.

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They go so far as to say things like, even if you use a gold coin, the gold represents

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It's an IOU credit and not the underlying value of the gold.

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The person accepts the gold coin not because they want to adorn themselves

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or use it to make advanced electronics or because they think other people want to do that,

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but rather because they just assume that others will accept the gold.

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Kind of a social or political convention in that sense.

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So that's the first claim, the claim that money is credit or debt.

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But the second part of Graeber's theory is that the historical claim that abstract systems of accounting preceded commodity money, which is just another way of stating that the unit of account function of money, the use of money to denominate the prices of things, takes precedence in Graeber's view historically over the store of value function.

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And that's kind of, if you read the essay, what's at the kernel of the Zabo and Graeber Twitter exchange.

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Third is the claim that true money is always a creation of the state, going back to the state and credit theorists that Graeber draws from.

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The idea here is that the state always defines which means of payments it's going to accept to discharge debts against itself.

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And the state is the biggest creditor, so it defines what money is.

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money again then is a political

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agreement. Up to this

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point with these three claims

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especially the first and the third one

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that money is credit and money is a creation of the state

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Graeber

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agrees with state and credit

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theorists on money, people like

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Mitchell Ennis

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Knapp and Keynes

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but this leads the

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anarchist in Graeber to

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further descriptive and prescriptive

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conclusions. Descriptively quote

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and I'm going to quote Smolenski describing Graeber

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He says, quote,

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of mutuality and respect. Smolensky does a very good critique of the different parts of this view.

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I won't go into that without going too deep. I think just generally she could say that I think

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most decisively for me she just notes how utopic this is to think that if you abolish money in the

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state you're going to get the arising of human economies without economic motivation. So now we

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move on then to Smolensky's

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anthropological theory of money

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or we might say her theorizing

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towards such a theory.

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The key point

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or the definition we might, well,

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money is a social institution

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and technology to enable

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us to reliably settle debts

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with the least amount of sacrifice.

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That's the kernel. Money is an institution.

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It solves a coordination

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problem by making

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cooperation cheap and

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defection expensive.

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If you want to go really deep into that idea, the last essay that Lucas and I discussed, What Satoshi Did by Bailey and Warmke, really goes into the game-theoretic background of money as an institution solving a coordination problem, specifically how Bitcoin can bootstrap from zero into a widely used currency.

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but here's the important part

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and this goes back to the quote

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that I kicked off this

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episode with

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money is an institution

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that allows us to settle

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debts, that's a key

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the quote I used at the beginning

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money in all its forms is the ever evolving

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social answer to the question of what people want

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in settlement of debts

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the purpose of money is settling a debt

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which is not the same

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thing as being paid

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So this is what I find to be a very interesting point that I think Smolenski is kind of unique in focusing on.

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Payment and settlement are different things.

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A debt can be paid, someone can give money or give something to try to pay for a debt,

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but the debt might not be settled in the mind of the creditor.

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The creditor might not be satisfied that settlement of the debt was reached through the manner of payment that the debtor gave.

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This is because settlement of a debt does require the satisfaction of the creditor.

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The debt is cleared ultimately from a psychological ledger.

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Satisfaction of debt, releasing that debt, settling it, is a moral sentiment.

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It is psychological, not legal.

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So this is a psychological process when debts are paid and settled,

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when settlement actually occurs through the satisfaction of the creditor.

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The debt might not be settled even if payment is made if the creditor, again, is not psychologically satisfied with the payment.

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When talking about this, another very interesting thing, Smolenski is clear that she means also non-monetary debts.

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A person who is injured by another person becomes a creditor in some way demanding satisfaction or compensation for that injury.

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A person who's hit by a car might get a jury verdict to compensate them, and that then might resolve a debt between the creditor, the person who was injured, and the debtor, the person who was driving the car, if the creditor does in fact accept that the jury verdict was sufficient.

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Another example one might give, it's a famous example, I forget the guy's name, but essentially it was a father, his child was groomed and molested by a child molester.

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That child molester was arrested, he was being frog-marched through an airport in handcuffs by the police, and the father came and shot him dead in the airport.

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The father did not think that there was any way that the psychological ledger would be rebalanced, that himself as a creditor being damaged through the molestation of his son, the only way to get satisfaction to the extent you ever can for something like that was to take the life of the person who did it.

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anthropologically then socially

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this is a key example I think

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a lot depends on creditors being satisfied

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because when people are not satisfied

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that a debt was settled

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when the psychological ledger remains

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unbalanced this leads to cycles

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of violence to blood feuds

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vendettas revolutions and even war

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people

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you know if there's not

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if they're not satisfied with payment

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can settle a debt an eye for an eye

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war in that sense

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is a settlement protocol between groups.

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So if a creditor does not believe payment is sufficient to satisfy,

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they can resort to violence, which can cause violence in return.

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To quote Smolenski, destructive cycle.

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It is a destructive cycle of violent ledger entries.

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I like that because we think of ledger usually in the dry sense

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as like an accounting book, you know, the different owing this, owing that,

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and then, you know, moving the entries around, modifying entries in a ledger.

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using numerical notations, but violent ledger entries.

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This really reinforces that the ledger is internally a psychological concept of reciprocity that humans innately have And I hope Lucas and I are going to kind of go into depth talking about that but to get the rest of the summary out a lot depends then on psychological satisfaction to an extent that society intervenes to prevent these cycles of violence

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That's why we have the rule of law to attempt to constrain violence by defining when a creditor should be satisfied, when they should accept payment and be satisfied with it and allow settlement of the debt and the clearing of the psychological ledger.

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but society's response then in itself needs to be psychologically accepted to satisfy that leads to

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a bigger point political legitimacy is a result of creditors in the aggregate being satisfied being

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overall satisfied that debts are being cleared so now we get to money money as a technology to

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reliably settle debts to satisfy people money is a technology to reliably settle debts to satisfy

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people. It arises then as a chimera or a contradiction. Money is the cheapest valuable

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that will settle a debt. This unites two ideas. So the cheapest valuable, they seem contradictory,

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but cheapest, remember we're talking humans are economizing individuals. They want the cheapest

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means to resolve something. So the cheapest valuable, to be the cheapest is for something

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to be sufficiently available to the creditor to have enough liquidity so they can actually pay it,

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but it also has to be the cheapest valuable so that the creditor will actually accept that

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they're receiving something of value. Somewhat contradictory sounding, the cheapest valuable

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must both have scarcity, value to the creditor, and availability be cheap enough for the debtor

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to acquire and transfer. Money then is a particular technology to achieve the characteristics of being

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this cheapest valuable that reliably settles debts.

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As a technology, it's a durable solution to a problem,

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this problem of reliably settling debts in the least costly way.

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It has characteristics that enable it to function technologically in this fashion.

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Value and scarcity, availability, durability, portability, fungibility, verifiability.

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Things like this that make something suitable for money.

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The tech enables the functions of money, the use of money to reliably settle debt.

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Um, in discussing this, Smolenski talks about the three functions of money, which if you

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read any of the literature on Bitcoin, you see these discussed a lot, store of value,

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unit of account, and medium of exchange.

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So money as a technology to reliably settle debts as a store of value, money needs to

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be able to retain or grow value over time because for creditor to be satisfied, they

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of course must believe that the thing that they are receiving now is something that they

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will be able to exchange in the future for something they want. It has to be a store of

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value in that sense at least. Unit of account, the ability to notate price is going to allow

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greater precision in transacting. It's going to make it the cheapest valuable. It's going to make

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it easier to use. As a medium of exchange, again, so medium of exchange defined in terms of

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saleability, the good that the most actors on the market actually want. So basically widespread

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Spread willingness to accept something leads to it being a medium of exchange and even allows something, if it's serving as money, to communicate value across social boundaries, which is useful for resolving debts because they often arise between groups of people and otherwise can lead to war if you can't resolve them through a technology that reliably settles debts.

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Money is technology, and here's an important part that's going to bring us back to Graeber.

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Money is tech, and tech does not require the state.

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So, Selinsky notes that the archaeological record justifies that monies based on commodities,

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things with use value, were adopted before there were governments issuing money,

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and there were also, even in modern societies, there has been money issued without government, such as by free banks.

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Yes, states can issue money, but they can't truly force people to consider it money.

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Because again, for Smolenski, money is defined as something that reliably settles debts.

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Whether a person is satisfied that a debt is settled is psychological.

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The state can't force people to have the psychological sensation of satisfaction that a debt has actually been settled.

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Indeed, when states issue bad money, creditors are often not satisfied. Then we see the decline of political legitimacy and rule of law if people are forced to be, quote-unquote, satisfied to accept payment of a bad currency that's not actually resolving debts between people.

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again that's what I take to be at least for me the key idea from key idea from this essay

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quote money in all its forms is the ever-evolving social answer to the question of what people want

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in the settlement of debts so Lucas I want to kick this over to you with that key idea in mind

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does that seem right that the purpose of money is the reliable settlement of debts in this

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psychological sense as clearing like the psychological letter ledger as a moral idea

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um and is there then that's the first part of the question second part

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is there a way that this ties specifically to the characteristics of bitcoin

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yeah um all right first off i gotta i gotta applaud that's one of my favorite intro summaries

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ever we're talking penguins and smack and um just really really enjoying getting into how we're

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digging into this. So the question, the question that you pose is, you know, what do I think of

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her definition and how does it relate to Bitcoin? So I love the definition because it's that useful

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type of useful type of thinking where it may not give a it may not give an answer in the

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way that I can now hold this in my hand, I can point to it on the shelf, I can definitively say

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that this thing is money and this thing is not money. But it gives the answer in the meaning that

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a cup is that which you drink water out of. It's not necessarily four and a half inches tall and

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three inches in diameter. It's that which you drink water out of. So you could drink water

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out of a hat, you could drink water out of a shoe, you could drink water out of a bucket,

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but in that moment, it's serving as a cup.

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It defines it by its function.

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Correct, yeah.

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Yeah, exactly.

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So I think that's a very useful way of looking at this.

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As you were talking, I know I'm going to take just kind of a slight meander, but I want

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to comment on some of the things that you said.

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But first off, and I do agree that this is one of the more important things she talks about, which is the distinction between payment and settlement.

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And when you're given examples of that, the first thing that I think of is a divorce settlement.

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So it's really not a divorce settlement.

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It's a divorce payment on the legal side.

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And then quite often you see that the divorce is not settled by at least one of the members of those involved.

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People get divorced and they carry that with them for decades, for the rest of their life sometimes.

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In the legal sense, they have been remunerated, they have been satisfied, but not in the moral sense.

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So I think it's really wise to look at this from the angle of separating the payment from the settlement, from separating the legal satisfaction from, say, the moral satisfaction.

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Brilliantly done.

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Smolenski does a bang-up job of actually coming at and talking about Graeber's theories in depth.

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I noted when I read this that most of the time when somebody says, hey, I'm going to talk about my thing, but before I talk about my thing, I'm going to propose the other side.

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I'm going to steal, man.

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I'm going to propose the other side and talk about that.

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They usually do that in a paragraph or a page.

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Smolenski spends 40 pages on this.

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Putting out Graber's series, I have a good understanding, I think, of where Graber's coming from, and I actually agree with a lot of the things he says.

333
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In the end, though, I think about it more like, and I hate to say this, but I think about it more in like, I don't know that there's a whole lot of usefulness.

334
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I'm sure there is, but I don't necessarily see the usefulness of the competing theories because in the end, both sides end up settling on the same type of money.

335
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So they both get to the same thing, but they do it from different theories.

336
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And to me, I think it's kind of like asking someone, why did you pick this house?

337
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Why did you pick this spouse?

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what is the one thing that led you to marry this person, that led you to live in this place?

339
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And there just is never one thing.

340
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It's not I fell in love with her eyes and the other person is saying, oh, it's the human.

341
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Yeah, yeah, go ahead.

342
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So, I mean, I think Graeber, so he draws from the state and credit theorists of money.

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They are trying to say that fiat money is what money is, that the state defines money.

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and that the state is the best social technology there is

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because it has created credit,

346
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which is like the definitional form of money

347
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because the state defines money

348
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and that's what they've defined as money,

349
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kind of circularly or something like that.

350
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Graeber then says,

351
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I agree with what you say,

352
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that yeah, the state defines money

353
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and therefore we have to abolish the state

354
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because money is shit.

355
00:28:08,120 --> 00:28:11,080
And I mean, like the Bitcoiner agrees in that sense,

356
00:28:11,080 --> 00:28:12,500
but it says, wait, wait, wait,

357
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we don't actually have to abolish the state because it turns out,

358
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and Spelinski's theory is this way,

359
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money is technology.

360
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Technology is agnostic from,

361
00:28:21,840 --> 00:28:22,900
it's separate from the state.

362
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It arises bottom up by group selection based on the characteristics of the

363
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thing as solving a problem,

364
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this problem for liably settling debts.

365
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And so it's like,

366
00:28:34,020 --> 00:28:35,760
Graeber's so close.

367
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He's like,

368
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he sees,

369
00:28:37,460 --> 00:28:38,520
like he just accepts hook,

370
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line and sinker.

371
00:28:39,200 --> 00:28:39,560
Unfortunately,

372
00:28:39,560 --> 00:28:42,100
what the state and credit theorist says about what money is.

373
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and it just discounts that money could be this bottom-up phenomena in the best anarchist sense, really,

374
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like separate from the state because he's so anti-capitalist, I think is kind of the undertone.

375
00:28:54,860 --> 00:29:00,140
Yeah, I think I would disagree that the state creates credit.

376
00:29:00,320 --> 00:29:02,600
I think credit existed before the state.

377
00:29:02,620 --> 00:29:03,320
Yeah, right.

378
00:29:03,420 --> 00:29:05,340
We've talked about this numerous times.

379
00:29:05,340 --> 00:29:12,080
Lynn Alden's book, I think, primarily talks about money as a – it began as like a social ledger.

380
00:29:14,220 --> 00:29:16,840
And Graver talks about this too, like favors.

381
00:29:17,080 --> 00:29:21,900
He looks at it less in terms of like payments and more in terms of like gifts and favors.

382
00:29:24,280 --> 00:29:30,140
And I don't – yeah, that is not a domain that is exclusive to the state.

383
00:29:30,180 --> 00:29:31,920
That existed prior to the state.

384
00:29:32,280 --> 00:29:35,000
It will exist long after.

385
00:29:35,340 --> 00:29:45,220
I think Michael Saylor is right now proving that credit-backed, you know, credit instruments, you don't need the state for it.

386
00:29:46,240 --> 00:29:56,300
You can just – although I do completely view what Michael Saylor is doing as a speculative attack on the dollar.

387
00:29:56,520 --> 00:30:02,140
So I say you probably couldn't conduct a speculative attack on the dollar without the dollar.

388
00:30:02,140 --> 00:30:05,380
So that's such a good point.

389
00:30:05,460 --> 00:30:06,020
You bring that up.

390
00:30:06,120 --> 00:30:13,560
The state and credit theorists, they are not it's not necessary to be a state and credit theorist to accept that credit has a function.

391
00:30:13,640 --> 00:30:16,820
And in fact, in high trust societies, credit works great.

392
00:30:17,440 --> 00:30:18,880
You can just like, hey, do me a solid.

393
00:30:18,980 --> 00:30:19,740
I'll do you a solid.

394
00:30:19,840 --> 00:30:31,000
If it's all kinship, if you're it's when you begin to transact internationally or between groups or in lower trust situations that commodities come into play because you want final settlement on the scene.

395
00:30:31,000 --> 00:30:32,380
by giving something with use value.

396
00:30:32,780 --> 00:30:35,440
I think the state and credit theorists,

397
00:30:35,580 --> 00:30:38,620
they don't just say credit is the preferred form of money.

398
00:30:38,740 --> 00:30:41,580
They say the state credit, fiat money,

399
00:30:41,980 --> 00:30:43,420
is the preferred form of money.

400
00:30:43,560 --> 00:30:45,400
So within a subset of credit,

401
00:30:45,880 --> 00:30:49,620
that is money which the state defines as extinguishing.

402
00:30:49,820 --> 00:30:52,480
The state's debt is credit in that sense.

403
00:30:52,480 --> 00:30:55,620
The state, like fiat money for the state credit theorists

404
00:30:55,620 --> 00:30:57,260
is what they define as money, something like that.

405
00:30:57,260 --> 00:31:04,320
there's a saying in sales that people do business with people that they know, like, and trust in that order.

406
00:31:04,320 --> 00:31:12,900
So I get to know you, I like you, and now I gain some sort of insight as to your character,

407
00:31:13,100 --> 00:31:15,860
and I trust you, and therefore I'm willing to do business with you.

408
00:31:17,620 --> 00:31:22,040
And what Bitcoin does is turn that entirely on its head.

409
00:31:22,120 --> 00:31:25,480
I don't need to know you, I don't need to like you, I don't need to trust you,

410
00:31:25,480 --> 00:31:38,080
Yet I can still do business with you as though you were my brother, as though you were my friend, as though you were a close acquaintance because I can trust the ledger and I can trust the money.

411
00:31:38,340 --> 00:31:49,700
So how does how does, you know, the second part of your question was how does Bitcoin fall into this and and where does it where does it kind of land in between those two theories?

412
00:31:49,700 --> 00:31:56,880
And Bitcoin is proving that money is what people say it is because it is displacing money.

413
00:31:58,420 --> 00:32:09,500
It's also in the sense of the example of, you know, there's not just one thing that you love about your spouse, about your house.

414
00:32:09,640 --> 00:32:12,660
There's also not just one thing that you love about Bitcoin.

415
00:32:12,660 --> 00:32:20,220
It wouldn't be as useful, people wouldn't use it if they couldn't subdivide it and reconstitute it.

416
00:32:20,340 --> 00:32:26,380
It wouldn't be nearly as useful if they couldn't carry it across borders in their mind or in their pocket.

417
00:32:26,500 --> 00:32:32,300
It wouldn't be as useful if they couldn't instantly send it to someone, anyone across the world.

418
00:32:33,620 --> 00:32:38,760
For all those reasons, it is the whole package.

419
00:32:38,760 --> 00:32:45,860
It is, you know, it's the perfect eyes and the beautiful body and the sense of humor and she's smart and she's, you know, all that stuff.

420
00:32:47,900 --> 00:32:51,260
You know, so how does Bitcoin fit into that?

421
00:32:51,360 --> 00:33:00,060
I think it kind of satisfies both theories except that I don't think it's an institution.

422
00:33:00,540 --> 00:33:02,740
I would balk at that term.

423
00:33:03,420 --> 00:33:06,760
And I don't want to split hairs, but I don't think of Bitcoin as an institution.

424
00:33:06,760 --> 00:33:08,580
I just think of it as technology.

425
00:33:09,140 --> 00:33:13,920
I don't think of a cup as an institution on drinking water.

426
00:33:14,040 --> 00:33:18,520
I just think of it as a technology that I use to drink water that enables that.

427
00:33:18,600 --> 00:33:19,260
That's a good distinction.

428
00:33:19,440 --> 00:33:23,780
I think that it would be like money is the institution and Bitcoin is an iteration of that.

429
00:33:24,440 --> 00:33:30,820
Bitcoin is like a particular technological solution to the problem of reliably satisfying debts.

430
00:33:31,080 --> 00:33:33,700
And so money is the institution that's going to do that.

431
00:33:33,700 --> 00:33:37,400
And then within money, there's going to be different technologies that arise that help us do that.

432
00:33:37,540 --> 00:33:44,720
Gold and fiat and credit, all these things have been like institutions of like the institution of money has utilized these.

433
00:33:44,840 --> 00:33:56,820
And you might say like the institution is something more abstract, whereas the actual things that are used by humans to instantiate that institution, you know, can be different material expressions, I guess.

434
00:33:56,820 --> 00:34:08,960
I do think that, so Graeber proposes that it's kind of like utility-based and that it has all these ephemeral qualities and stuff.

435
00:34:09,560 --> 00:34:14,740
And Smolenski talks about it from a cost minimization standpoint.

436
00:34:15,500 --> 00:34:21,300
And I'm wearing penguin socks today, so I'm super excited that you brought that up.

437
00:34:21,300 --> 00:34:30,680
I think it again it it Bitcoin does both of those things yes it's the cheapest way for me to transact

438
00:34:30,680 --> 00:34:37,300
but it's also the thing that fulfills all the utility that I want in a money so

439
00:34:37,300 --> 00:34:46,640
again it Bitcoin is all things to all people it it is the thing that everyone in the world needs

440
00:34:46,640 --> 00:34:49,800
and everyone in the world wants because it satisfies.

441
00:34:50,740 --> 00:34:55,460
They don't know that they want it, some yet, but it satisfies.

442
00:34:55,640 --> 00:34:58,880
It doesn't matter what your aims are, what your goals are.

443
00:34:59,640 --> 00:35:14,800
Even if you are the thing that is most opposed to what Bitcoin stands for because it outcompetes the product that you offer

444
00:35:15,820 --> 00:35:19,880
So say you're a country that has the global reserve currency like the United States.

445
00:35:20,220 --> 00:35:24,300
Even if you are that country that is currently benefiting from that,

446
00:35:24,920 --> 00:35:29,740
because of the things that we've learned about the Triffin dilemma primarily,

447
00:35:29,740 --> 00:35:33,660
where if you have the world's global reserve currency,

448
00:35:34,020 --> 00:35:37,180
there are second and third ore effects that are unavoidable,

449
00:35:37,320 --> 00:35:41,480
which means that you stop being a producer of your own supplies,

450
00:35:41,880 --> 00:35:45,340
you stop being sovereign, you stop being self-sufficient,

451
00:35:45,560 --> 00:35:46,680
you stop being resilient,

452
00:35:47,080 --> 00:35:51,640
and you become primarily an exporter of debt

453
00:35:51,640 --> 00:35:54,780
and an exporter of your dollars,

454
00:35:54,780 --> 00:35:56,280
and that's what you provide the world.

455
00:35:56,620 --> 00:35:58,460
So even if you are in that position,

456
00:35:58,460 --> 00:36:07,220
with that knowledge that we have now seen demonstrated over the United States most recently,

457
00:36:07,700 --> 00:36:13,600
Britain before that, I can't remember, Rome, all of these.

458
00:36:13,600 --> 00:36:22,840
Even if you are in that position, you can see now that it's not the position you want to be in long term

459
00:36:22,840 --> 00:36:25,140
if you have a long time horizon.

460
00:36:25,140 --> 00:36:33,900
And again, this comes back to a common talking point in Bitcoin, which is what is your time horizon?

461
00:36:34,480 --> 00:36:40,140
Are you maximizing for the next six months or are you maximizing for the next six centuries?

462
00:36:40,520 --> 00:36:52,000
Yeah, that's a good accounting of the characteristics of Bitcoin and why it's increasingly being accepted by people to settle debts that they have to clear their psychological ledger.

463
00:36:52,000 --> 00:37:00,920
I want to see if I can, um, nuance-ify that too with a quote from, um, Smolenski has a quote from

464
00:37:00,920 --> 00:37:05,140
Adam Smith, the theory of moral sentiments that I think does a really good job of like,

465
00:37:05,540 --> 00:37:11,820
so if, if, um, the satisfaction of debt is a moral sentiment, if it's like a psychological

466
00:37:11,820 --> 00:37:17,060
sensation we have, it's like a feeling, right? Like you can feel depressed, you can feel happy,

467
00:37:17,220 --> 00:37:21,080
you can feel like your debts are satisfied. You can feel like your debts are not satisfied. It's

468
00:37:21,080 --> 00:37:27,120
feeling tone. And so what is that feeling? We can describe feelings, right? So here's Adam Smith

469
00:37:27,120 --> 00:37:32,900
kind of, I think, helping us understand what that psychological sensation of the satisfaction of

470
00:37:32,900 --> 00:37:38,740
debt is like, so we can then look to see if Bitcoin, why Bitcoin might make us feel that way.

471
00:37:38,840 --> 00:37:43,560
So Adam Smith says in the theory of moral sentiments, we are delighted to find a person

472
00:37:43,560 --> 00:37:49,100
who values us as we value ourselves and distinguishes us from the rest of mankind

473
00:37:49,100 --> 00:37:53,760
with an attention not unlike that with which we distinguish ourselves.

474
00:37:54,520 --> 00:37:57,020
To maintain in him these agreeable and flattering sentiments

475
00:37:57,020 --> 00:38:00,740
is one of the chief ends proposed by the returns we are disposed to make to him.

476
00:38:01,020 --> 00:38:05,040
What chiefly enrages us against the man who injures or insults us

477
00:38:05,040 --> 00:38:08,080
is the little account which he seems to make of us,

478
00:38:08,080 --> 00:38:11,440
the unreasonable preferences which he gives to himself above us,

479
00:38:11,740 --> 00:38:14,900
and that absurd self-love by which he seems to imagine

480
00:38:14,900 --> 00:38:23,540
that other people may be sacrificed at any time to his conveniency or his humor. So like I, what I

481
00:38:23,540 --> 00:38:32,700
take from that is like the psychological ledger is like this thing of social reciprocity where we

482
00:38:32,700 --> 00:38:38,240
want to feel that other people are taking us into account, um, in almost a literal sense,

483
00:38:38,280 --> 00:38:44,360
talking about an accounting here as their moral equals that people are, or maybe not even an equal

484
00:38:44,360 --> 00:38:49,420
Well, this could happen in a society, a case society, but given whatever society you're in, the social context,

485
00:38:49,500 --> 00:38:55,820
that people are taking me into account in the way that's correctly weighted to that social context,

486
00:38:55,820 --> 00:39:04,740
that they're considering me as something that they have to take into account in the way they don't have to take into account a tree or a rock or a goat or something like that.

487
00:39:05,220 --> 00:39:14,320
And so the psychological ledger gets filled up with these insults, with the ways that people don't treat us in the way that we feel we should be treated.

488
00:39:14,360 --> 00:39:21,540
and then it can be cleared reliably by giving somebody

489
00:39:21,540 --> 00:39:26,680
money as a technology is a way to reliably clear that

490
00:39:26,680 --> 00:39:28,200
by giving them the cheapest valuable

491
00:39:28,200 --> 00:39:31,480
the thing that's valuable to them that they're going to accept

492
00:39:31,480 --> 00:39:34,740
but also like the most economical for me to give to them

493
00:39:34,740 --> 00:39:37,980
and I get you know Bitcoin we can say that

494
00:39:37,980 --> 00:39:42,020
it can be the cheapest valuable in that sense it's scarce

495
00:39:42,020 --> 00:39:46,420
and then also as you mentioned has all these other qualities that makes it easy to negotiate

496
00:39:46,420 --> 00:39:52,840
to other people and so once people you know if you're going to make want to make somebody feel

497
00:39:52,840 --> 00:39:58,920
that they are taken into account give them something that is absolutely finite right a piece

498
00:39:58,920 --> 00:40:09,100
of um the gabriel's horn to use jason lowry's metaphor that is bitcoin this finite but expanding

499
00:40:09,100 --> 00:40:11,100
in a sense type of thing.

500
00:40:11,180 --> 00:40:13,160
You're giving somebody a piece of cyber real estate.

501
00:40:13,280 --> 00:40:14,520
We can use all sorts of metaphors, right?

502
00:40:14,560 --> 00:40:16,820
You're giving somebody a real thing

503
00:40:16,820 --> 00:40:18,060
because it is finite,

504
00:40:18,060 --> 00:40:20,920
and the finiteness of it shows that person

505
00:40:20,920 --> 00:40:23,780
they are literally being taken into account

506
00:40:23,780 --> 00:40:26,560
in an incorruptible ledger,

507
00:40:26,660 --> 00:40:27,940
in the form of an incorruptible ledger.

508
00:40:28,620 --> 00:40:32,000
Yeah, and again, to quote Jason Lowry,

509
00:40:32,640 --> 00:40:34,240
you know, Bitcoin is the paradox

510
00:40:34,240 --> 00:40:36,380
that is a paradox.

511
00:40:36,380 --> 00:40:38,520
It's the paradox of all paradoxes.

512
00:40:38,520 --> 00:40:41,700
It's finite, but it's also infinite.

513
00:40:41,980 --> 00:40:44,160
It's finite in that there's only 21 million.

514
00:40:44,460 --> 00:40:51,460
It's infinite in that theoretically it can hold the entire wealth of the universe.

515
00:40:52,460 --> 00:40:59,740
It could hold a penny or it could hold every bit of wealth that's ever been created

516
00:40:59,740 --> 00:41:03,840
and stretch to fit that like Gabriel's horn.

517
00:41:03,840 --> 00:41:18,280
But, you know, this is where this is where it breaks the definition that's given in the in the writing where she talks about how money must be scarce, but not so scarce.

518
00:41:18,280 --> 00:41:27,460
Like it has to be scarce in that there's not a whole lot of it, but it can't be so scarce that there's not enough of it.

519
00:41:27,940 --> 00:41:31,280
Yeah. And Bitcoin is the thing that is scarce.

520
00:41:31,280 --> 00:41:42,740
scarce, um, but it is also, um, infinitely expandable. And so, um, you, and, and the

521
00:41:42,740 --> 00:41:48,180
way to think about that, I think is that it's also like, it's infinitely, um, it's infinitely

522
00:41:48,180 --> 00:41:53,520
subdividable. Um, you can, you can chop it up into little pieces, you can put it back

523
00:41:53,520 --> 00:41:57,180
together, you can chop it up into little pieces and do it again. So whether it's infinitely

524
00:41:57,180 --> 00:42:02,420
subdividable whether that's not yet yeah whether that would take a softer hard fork is something

525
00:42:02,420 --> 00:42:07,760
i've heard differing perspectives on yeah or different layers could subdivide in some sense

526
00:42:07,760 --> 00:42:12,680
different layers yeah yes i think it's different layers you know i i have this conversation a lot

527
00:42:12,680 --> 00:42:19,100
around here because there there are if this is your first time listening to this podcast i apologize

528
00:42:19,100 --> 00:42:25,580
um there are lots of shit coiners um that come through this place uh particularly right now we

529
00:42:25,580 --> 00:42:26,580
We have the Solano super team.

530
00:42:26,580 --> 00:42:29,240
This place being the network school, too, if you're the first time here.

531
00:42:29,440 --> 00:42:29,640
Yeah, yeah, yeah.

532
00:42:29,640 --> 00:42:31,200
This place being the network school.

533
00:42:31,940 --> 00:42:39,440
And so I have this discussion a lot, and we talk about optimizing for security versus optimizing for features.

534
00:42:39,720 --> 00:42:42,620
And Jason Lowery, Michael Saylor talk about this a lot.

535
00:42:43,180 --> 00:42:50,600
Michael Saylor, I love the way that he talks about it, which is like if you think about it from the concept of aeronautical engineering,

536
00:42:50,860 --> 00:42:54,940
you have to understand that any failure is a catastrophic failure.

537
00:42:54,940 --> 00:43:04,240
That in order to engineer something, it has to work every time under every condition without question.

538
00:43:05,860 --> 00:43:17,400
And the way that I like to think about it is I think about like Bitcoin as being a boat that was made to be entirely unsinkable.

539
00:43:17,400 --> 00:43:24,740
It's not fast. It has no chandeliers. It has no buffet. It has no swimming pools or dancing rooms.

540
00:43:24,940 --> 00:43:27,540
Yes, we shall call it the Titanic because it is unsinkable.

541
00:43:28,200 --> 00:43:30,340
Yes, but it will not sink.

542
00:43:30,340 --> 00:43:37,560
And we are reasonably confident that it will not sink.

543
00:43:37,660 --> 00:43:47,340
And in fact, if you were to think about Bitcoin as a ship, it would appear to be riding higher and higher and gaining in buoyancy throughout the years.

544
00:43:47,340 --> 00:43:54,300
in that it becomes more and more unsinkable the more value and wealth is put into it the more

545
00:43:54,300 --> 00:44:01,640
nodes are run the more miners are run and i think what satoshi did was he built the unsinkable ship

546
00:44:01,640 --> 00:44:08,160
and then he said cool now you guys you can put cup holders in it you can put stairs in it you

547
00:44:08,160 --> 00:44:13,080
want to throw an elevator in it go for it these are the layer two layer three layer four things

548
00:44:13,080 --> 00:44:18,540
that you're optimizing for features, you're optimizing for speed, you're optimizing for comfort.

549
00:44:19,200 --> 00:44:24,500
And the way that I think about the shitcoin community, primarily Ethereum and Solana,

550
00:44:24,500 --> 00:44:30,860
because they get the most notoriety, is that you built a ship that has a hole in it,

551
00:44:31,460 --> 00:44:34,900
and then you decided to put jet engines on it.

552
00:44:35,600 --> 00:44:39,660
And if you have a small leak, you will sink slowly.

553
00:44:39,660 --> 00:44:48,780
If you have a small leak and you go very fast, you will drive it into the ocean much faster.

554
00:44:49,260 --> 00:44:50,500
It creates a honeypot.

555
00:44:50,700 --> 00:45:08,720
So there are security flaws that are inherent, primarily that they have central authority that, yeah, maybe you can't just put Vitalik in a room and corner him and thump him in the nose a couple times and say, hey, I want all the Ethereum.

556
00:45:08,720 --> 00:45:14,240
but there is a number of people you could do that to, and it's not a lot.

557
00:45:16,400 --> 00:45:24,060
And so as these shitcoins gain in wealth, they also become a honeypot.

558
00:45:24,220 --> 00:45:25,360
They become a greater risk.

559
00:45:25,540 --> 00:45:29,020
They go faster, and they sink faster.

560
00:45:30,260 --> 00:45:34,300
They appear to be riding high in the waves, and then they'll crash down.

561
00:45:34,300 --> 00:45:45,080
And this goes, I think, for any sort of shitcoin, the United States dollar, the Nigerian Naira, whatever you want to think about.

562
00:45:45,440 --> 00:45:48,900
They are all of the same ilk and of the same breed.

563
00:45:49,180 --> 00:45:57,200
And so optimizing for security versus speed is the thing that I think separates what we have with Bitcoin here.

564
00:45:57,360 --> 00:45:58,540
I probably got off onto a look.

565
00:45:58,540 --> 00:45:58,820
No, no.

566
00:45:58,920 --> 00:46:00,080
I mean it's good to talk about.

567
00:46:00,080 --> 00:46:02,220
The Solana people were rude to me twice.

568
00:46:02,220 --> 00:46:04,200
So I'm just like holding a grudge.

569
00:46:04,420 --> 00:46:06,420
You're clearing the psychological ledger right now.

570
00:46:06,420 --> 00:46:08,180
I am clearing the psychological ledger.

571
00:46:09,880 --> 00:46:11,520
It's the airing of grievances.

572
00:46:11,760 --> 00:46:12,820
That's what to do, man.

573
00:46:13,260 --> 00:46:18,820
So there's one thing that I kind of left out of the definition as I streamlined the presentation, the summary.

574
00:46:19,400 --> 00:46:23,240
So – and I want to talk about this, the idea of a market.

575
00:46:23,500 --> 00:46:30,840
So this was an important idea in Smolenski's essay that's also very interesting and also very anthropologically rich.

576
00:46:30,840 --> 00:46:39,940
So in her definition of money, as I talked about it, the cheapest valuable that reliably satisfies creditors, she also adds in a given market.

577
00:46:40,160 --> 00:46:48,900
So the social context provided by the particular market in which the debt is being cleared is very relevant to talking about what type of thing is actually going to clear that debt.

578
00:46:48,900 --> 00:47:01,860
I mean, if the marketplace is how Lucas feels about people who are – how people are treating him as a Bitcoiner, then he can, in the marketplace, clear that debt by talking shit on them behind their back.

579
00:47:02,400 --> 00:47:03,200
Other markets –

580
00:47:03,200 --> 00:47:03,960
Still not clear.

581
00:47:04,200 --> 00:47:06,300
No, you got some more shit talking to do.

582
00:47:06,380 --> 00:47:07,540
I got ways to go.

583
00:47:08,300 --> 00:47:15,480
So markets, though, could be broadly then, for Smolenski, considered like spheres of exchange to kind of get away from the term of market.

584
00:47:15,480 --> 00:47:20,520
with many different limitations and conditions as to who can participate in which way.

585
00:47:20,600 --> 00:47:24,140
So some examples, the international markets, you have different nations,

586
00:47:24,280 --> 00:47:27,200
different players within nations and, you know, trading amongst themselves.

587
00:47:27,640 --> 00:47:30,540
But there's also like the marriage market, people seeking a spouse.

588
00:47:30,780 --> 00:47:34,540
And, you know, there's literal in some cultures like bride prices and things like that.

589
00:47:34,900 --> 00:47:36,040
There's capital markets.

590
00:47:36,040 --> 00:47:39,640
There's even like the county fair where a particular type of market,

591
00:47:39,860 --> 00:47:44,360
particular type of transacting parties, particular types of transactions can occur.

592
00:47:44,360 --> 00:47:49,580
some can't you can't buy a house at the county market the county fair um but you can buy tickets

593
00:47:49,580 --> 00:47:56,520
and go on you know a ride or something there's two general though types of markets in um

594
00:47:56,520 --> 00:48:03,620
smolensky's estimation prestige and mundane prestige are those like marriages political

595
00:48:03,620 --> 00:48:09,320
alliances inheritance legal judgments that usually use collateral that has like a certain solemnity

596
00:48:09,320 --> 00:48:14,340
to it um you know a marriage is not just something that you pay for with dollars or whatever if

597
00:48:14,340 --> 00:48:18,500
there's a bride price given, maybe there's a ceremonial rendering of a valuable object

598
00:48:18,500 --> 00:48:22,660
or something. Mundane markets are things that it doesn't matter, you just want to pay for

599
00:48:22,660 --> 00:48:25,760
them with whichever way, you want to buy your food, etc.

600
00:48:26,500 --> 00:48:29,920
The problem, so this is the kind of question I want to put back to you, and a part that

601
00:48:29,920 --> 00:48:36,800
I think is really interesting about, I mean, Graeber is not wrong in being concerned about

602
00:48:36,800 --> 00:48:42,720
exploitation through capitalism, broadly speaking, or through markets.

603
00:48:42,720 --> 00:48:44,560
I don't think.

604
00:48:45,300 --> 00:48:53,240
So the question then, like, a cheapest valuable, money is the cheapest valuable that reliably settles debts.

605
00:48:53,420 --> 00:48:59,300
I think one of the issues is that it tends to conflate or collapse all of these markets.

606
00:48:59,500 --> 00:49:07,180
Prestige markets are collapsed into mundane markets if the currency is the same, satisfying them in all the ways.

607
00:49:07,180 --> 00:49:13,240
marriage markets, bride price becomes something almost akin to like sex trafficking or even

608
00:49:13,240 --> 00:49:17,880
prostitution. You're just paying for it with the same dirty dollar you pay for your food with

609
00:49:17,880 --> 00:49:25,380
instead of, you know, some like morally freighted, like gift of ceremonial significance or whatever.

610
00:49:25,680 --> 00:49:25,760
Goats.

611
00:49:26,060 --> 00:49:32,980
Goats for sure, man. And so like Graeber's hostility to markets, I don't think is unfounded. It's not

612
00:49:32,980 --> 00:49:36,160
Graeber is like a leftist anarchist.

613
00:49:36,320 --> 00:49:39,780
There is, and Smolensky notes this in her essay.

614
00:49:39,900 --> 00:49:43,760
And Smolensky, if you listen to some of her interviews, like she began her anthropological

615
00:49:43,760 --> 00:49:49,280
studies thinking about, I believe, something like religious value and how that's truly

616
00:49:49,280 --> 00:49:52,600
a type of like incommensurable value with other types of things.

617
00:49:52,600 --> 00:49:55,060
It's a true prestige type of value, one might say.

618
00:49:55,580 --> 00:50:00,980
And so this, I'm going to quote Graeber here because I think this is a quote that gets some

619
00:50:00,980 --> 00:50:03,080
of these ideas out on the table in a nice way.

620
00:50:03,700 --> 00:50:05,000
Or no, this is not a quote from

621
00:50:05,000 --> 00:50:06,980
Graeber, it's a quote of course from Molenski's summary of

622
00:50:06,980 --> 00:50:08,860
Graeber. It is the violence

623
00:50:08,860 --> 00:50:11,020
of commensurability, what he

624
00:50:11,020 --> 00:50:12,480
calls calculation

625
00:50:12,480 --> 00:50:14,220
that is offensive to Graeber,

626
00:50:14,780 --> 00:50:16,800
of unlike things coming into

627
00:50:16,800 --> 00:50:18,920
contact, whether in war or

628
00:50:18,920 --> 00:50:21,200
economic exchange, and establishing

629
00:50:21,200 --> 00:50:23,420
shared languages of intelligibility

630
00:50:23,420 --> 00:50:25,520
that necessarily exclude

631
00:50:25,520 --> 00:50:27,420
the full hermeneutic

632
00:50:27,420 --> 00:50:28,780
richness of the worlds

633
00:50:28,780 --> 00:50:33,220
in which those previously incommensurable things originated.

634
00:50:34,060 --> 00:50:37,120
Again, that's the conflation of all these markets into this,

635
00:50:37,320 --> 00:50:42,240
like, just go out on the street and just buy yourself a can of Coca-Cola and a wife.

636
00:50:42,320 --> 00:50:43,060
It's all the same.

637
00:50:43,980 --> 00:50:46,920
So what do you think about this, Lucas,

638
00:50:47,080 --> 00:50:50,960
this, I guess, critique of the free market system

639
00:50:50,960 --> 00:50:53,660
as tending to reduce all things,

640
00:50:53,760 --> 00:50:57,880
the unit of account making all things accountable in the dollar

641
00:50:57,880 --> 00:51:01,420
or maybe even in Bitcoin, even those things which shouldn't be,

642
00:51:02,620 --> 00:51:04,540
or should things not be, I guess, that presumes.

643
00:51:05,820 --> 00:51:09,120
So I'm kind of stuck on what you were talking about

644
00:51:09,120 --> 00:51:11,140
with prestige versus mundane markets,

645
00:51:11,140 --> 00:51:13,620
because I was thinking of a metaphor with that,

646
00:51:13,760 --> 00:51:17,320
which was like, so I'm a fan of baseball,

647
00:51:17,900 --> 00:51:22,200
and in baseball there's the market for players,

648
00:51:23,100 --> 00:51:27,300
and in the market for players, they get paid in money.

649
00:51:27,300 --> 00:51:33,920
I would say that that is a mundane market where they exchange production for money.

650
00:51:34,400 --> 00:51:54,040
But within the game itself, it's more of a prestige thing where they exchange what is needed for prestige, for applause, for the encouragement, for the satisfaction of the people that are watching it.

651
00:51:54,040 --> 00:52:00,700
And the prestige of those people in the audience is what ultimately determines the mundane market.

652
00:52:01,980 --> 00:52:08,880
If you satisfy the people in the stands, then you will satisfy the mundane market.

653
00:52:10,720 --> 00:52:15,480
You know, I think that there's – yeah, it's really interesting.

654
00:52:15,480 --> 00:52:22,420
So think about a pitcher who is paid in the mundane market.

655
00:52:23,440 --> 00:52:32,540
His salary is paid based on his ability to get batters out, to not allow batters to reach first base.

656
00:52:33,160 --> 00:52:34,200
Yet in the game,

657
00:52:35,700 --> 00:52:53,560
there occurs an instance the inning before where an opposing player does something that is viewed to violate the violate the rules of the game um you know one one of them would be like trying to knock the ball

658
00:52:53,560 --> 00:53:01,100
out of a out of a defenseman's glove this is viewed as like a no-no you don't you don't do

659
00:53:01,100 --> 00:53:08,600
that. And so the next time that batter comes to the plate, the pitcher whose value in the mundane

660
00:53:08,600 --> 00:53:16,100
market is determined by his ability to get people out is now within the game valued in the prestige

661
00:53:16,100 --> 00:53:23,560
market by whether or not he's going to intentionally hit the batter in order to punish him for the

662
00:53:23,560 --> 00:53:29,040
thing that he did the inning before. And if he does so, then he will gain prestige among his

663
00:53:29,040 --> 00:53:42,940
teammates among the fan. And so these markets are separate. They are differentiable. Now, let's

664
00:53:42,940 --> 00:53:54,580
take a step further and let's interconnect everything. And on the scoreboard, we have

665
00:53:54,580 --> 00:54:02,220
the pitchers, not only statistics, but also his Bitcoin address. And we have the batter's

666
00:54:02,220 --> 00:54:13,300
statistics and his Bitcoin address. And now, much like Ivan Nakadonsky promotes, which

667
00:54:13,300 --> 00:54:18,560
would be the ability for people to exchange value for value, you do the thing I want,

668
00:54:18,560 --> 00:54:19,500
I pay you directly.

669
00:54:21,080 --> 00:54:22,820
And we're satisfied.

670
00:54:23,140 --> 00:54:30,440
We're able to do things that other people want,

671
00:54:30,600 --> 00:54:33,760
and we know that they want them because they reward us immediately.

672
00:54:35,220 --> 00:54:39,440
So in that instance, instead of prestige,

673
00:54:41,140 --> 00:54:46,740
the pitcher hits the batter, and now 10 million sats are sent his way.

674
00:54:48,560 --> 00:54:59,800
So I think Bitcoin, to answer your question after meandering through my trip down memory lane of swinging bats and throwing balls,

675
00:55:00,800 --> 00:55:04,040
to answer your question, how does Bitcoin fit into this?

676
00:55:04,040 --> 00:55:10,660
I think Bitcoin has the ability to, as elucidated by Ivan Nakadonsky,

677
00:55:11,520 --> 00:55:14,720
and look up his writings in Bitcoin magazine.

678
00:55:14,720 --> 00:55:23,980
for those of you who haven't been exposed to him or watch our interview with him on the Instant Settlement series.

679
00:55:24,780 --> 00:55:32,840
But Bitcoin has the ability to, I believe, condense that prestige and mundane market.

680
00:55:33,020 --> 00:55:33,760
Not entirely.

681
00:55:35,460 --> 00:55:41,300
You know, your wife is still going to want flowers rather than Bitcoin on certain days.

682
00:55:41,300 --> 00:55:43,160
But that's exactly the problem, though.

683
00:55:43,160 --> 00:55:50,160
those microtransactions that make everything now a part of the marketplace that you can get the

684
00:55:50,160 --> 00:55:55,140
pitcher to bean the batter because you can pay them directly to do it everything is now a market

685
00:55:55,140 --> 00:56:01,240
transaction the question i mean like the prestige and mundane question is what is sacred what is

686
00:56:01,240 --> 00:56:06,880
sacred anymore what cannot be paid for and so bitcoin might i mean we need to be cognizant of

687
00:56:06,880 --> 00:56:12,500
this the ability to do microtransactions in that sense might make might not be good and this is

688
00:56:12,500 --> 00:56:18,580
actually hinted at by Timothy Mays in the Crypto Anarchist Manifesto. So one of the

689
00:56:18,580 --> 00:56:24,240
originary documents of the kind of the culture that led to Satoshi and the creation, like

690
00:56:24,240 --> 00:56:28,680
the white paper, he says that, you know, there are going to be with the rise of cryptography

691
00:56:28,680 --> 00:56:35,340
markets for assassination. You're going to be able to pay people secretly in an anonymous

692
00:56:35,340 --> 00:56:41,220
or pseudonymous way to do things that are not good. And so these are problems to deal

693
00:56:41,220 --> 00:56:48,580
with maybe they're like they're better problems than the problems we have as a result of a

694
00:56:48,580 --> 00:56:55,520
surveilled currency for sure um which is endless war and the control of populaces but there are

695
00:56:55,520 --> 00:57:01,920
going to be problems that people i think need to have um a spiritual concern a spiritual and a

696
00:57:01,920 --> 00:57:07,940
broadest sense of their of like what is sacred to them what is not within the realm of market

697
00:57:07,940 --> 00:57:13,120
transactions, whether in Bitcoin or another currency, they're not going to reliably settle.

698
00:57:13,460 --> 00:57:20,040
Their psychological ledger is going to be resistant to monetary compensation for certain

699
00:57:20,040 --> 00:57:21,540
types of debts and other things.

700
00:57:21,660 --> 00:57:24,640
Maybe that's Marcel Maas talks about the gift economy.

701
00:57:24,840 --> 00:57:26,980
I haven't even read this stuff, but this is Molenski's site.

702
00:57:27,080 --> 00:57:30,460
This is evidently a key text in the anthropological literature.

703
00:57:31,140 --> 00:57:36,120
Maybe there are, you know, this more broad and ample idea of the gift is something that

704
00:57:36,120 --> 00:57:44,820
It's going to benefit Bitcoiners too as we consider like how much the reach of microtransactions should go.

705
00:57:45,120 --> 00:57:46,960
Or again, I tend to make it just individual.

706
00:57:47,520 --> 00:57:54,100
You know, you can always retreat from the market and make your life better by not letting people pay you to do things you don't want to do.

707
00:57:54,540 --> 00:57:55,800
There can be sacred things.

708
00:57:57,660 --> 00:57:58,660
I'm okay with that.

709
00:57:58,760 --> 00:57:59,620
I'm okay with that.

710
00:58:00,500 --> 00:58:02,740
So I want to think that through a little bit.

711
00:58:02,740 --> 00:58:10,820
Yes, there actually will be the enablement of a secret assassination, but also that will enable secret protection.

712
00:58:12,180 --> 00:58:25,000
If everyone, you know, okay, first off, if a whole lot of people want somebody dead, there might also be a whole lot of people that want that person alive.

713
00:58:25,000 --> 00:58:34,680
and it could also benefit them just as it would benefit someone to clear their psychological ledger to have someone assassinated.

714
00:58:35,460 --> 00:58:39,240
It could also benefit people to have someone protected.

715
00:58:40,180 --> 00:58:42,720
Go back to the baseball example.

716
00:58:42,720 --> 00:58:53,500
yes we could actually create a problem where we incentivize a pitcher hitting a batter and thus

717
00:58:53,500 --> 00:58:59,140
gaining prestige but also at the same time decreasing his team's chances of winning

718
00:58:59,140 --> 00:59:06,940
and so what are you at that point are you you're the fan that is fueling this are you a fan of the

719
00:59:06,940 --> 00:59:12,180
team's success if you're a fan of the team's success then ultimately you will want to do the

720
00:59:12,180 --> 00:59:19,200
thing that gives your team the best chance of winning. And so I think one of the things that

721
00:59:19,200 --> 00:59:27,720
when we look at new technologies, they are always, it appears, adopted by the illicit markets first.

722
00:59:27,720 --> 00:59:32,000
And they're adopted by the illicit markets first because the gatekeepers of the old technology

723
00:59:32,000 --> 00:59:38,380
have a middleman benefit to the old technology that they don't want to let go of.

724
00:59:38,380 --> 00:59:45,160
This is why Bitcoin was adopted first by people marketing drugs and stuff like that.

725
00:59:45,300 --> 00:59:51,100
This is why VHS was adopted by the porn industry first.

726
00:59:51,280 --> 00:59:54,580
This is why cars were adopted by moonshine runners first.

727
00:59:54,580 --> 01:00:09,780
These are things that are outside the established hierarchy wherein that hierarchy is an extractive benefit of being involved.

728
01:00:09,780 --> 01:00:23,980
And to make an end around of that with a new technology, it is always going to be adopted by people who are outside of the system first.

729
01:00:23,980 --> 01:00:27,360
but it eventually comes within the system.

730
01:00:27,360 --> 01:00:33,440
Now the sweet grandma who goes, you know, she has a car so that she can go to church and pray

731
01:00:33,440 --> 01:00:35,920
and go to the cemetery and lay flowers on the grave.

732
01:00:36,760 --> 01:00:42,220
And the sweet grandma has a VHS player not to watch Ron Jeremy,

733
01:00:42,480 --> 01:00:44,940
but to watch videos of her grandchildren.

734
01:00:44,940 --> 01:00:57,780
and the sweet grandma has bitcoin not to fund war and to fund extraction of value from an economy,

735
01:00:58,420 --> 01:01:02,800
but to make sure that she has value to pass on to her granddaughter.

736
01:01:04,020 --> 01:01:10,720
And so it's not who gets there first, but that is the signal.

737
01:01:10,720 --> 01:01:34,360
The signal is that I do believe that this is how I view technology now, is that one of the things that I look at for an affirming technology is, is it being adopted by people outside of the system who are viewed traditionally as criminals or illicit or viewed negatively in the eye of public society?

738
01:01:34,360 --> 01:01:57,180
Yeah, definitely. I just think we'll definitely keep the reservation in the back of the mind. Bitcoin has all of these great properties. And yes, as you know, it will be adopted for various purposes and possibly first for the reasons you give, but also just for your own personal, like your soul, whatever reach you give that word.

739
01:01:57,180 --> 01:02:03,120
like there are things that are not within the system and that should never be and don't accept

740
01:02:03,120 --> 01:02:09,360
bitcoin or any other currency for them find a place where your dignity draws the line and you

741
01:02:09,360 --> 01:02:14,560
know don't be in the batter if somebody pays you to do it and i was thinking when you said like we

742
01:02:14,560 --> 01:02:21,480
want our team to win not really you know there are worse things exactly than having your team win a

743
01:02:21,480 --> 01:02:26,860
game or lose a game right and that is for your team to be disgraced and so people don't want

744
01:02:26,860 --> 01:02:31,520
their team to fall into disgrace because their quarterback like beats his wife or something.

745
01:02:31,700 --> 01:02:35,080
They know people have, they want the team to represent the city and they want a feeling

746
01:02:35,080 --> 01:02:36,820
of pride in something.

747
01:02:37,940 --> 01:02:39,440
But yeah, cool.

748
01:02:39,620 --> 01:02:42,420
Yeah, it's, it's, but it's an, it's an in the moment thing, right?

749
01:02:42,440 --> 01:02:45,720
Where it's like, yes, today I'm feeling it.

750
01:02:45,800 --> 01:02:51,220
I want my pitcher to hit this batter, but tomorrow, the next day, the day after that,

751
01:02:51,220 --> 01:02:56,400
the day after that, if I just continue doing that, then, you know, if, if my, if I'm funding

752
01:02:56,400 --> 01:03:01,520
a predictive action that is, that is leading to the downfall of the team, then it's just

753
01:03:01,520 --> 01:03:02,620
not going to exist.

754
01:03:02,780 --> 01:03:03,520
Maybe at the end of the day.

755
01:03:03,760 --> 01:03:07,440
Like Robert, well, I was going to say, like, remember Robert Breedlove saying, you know,

756
01:03:07,440 --> 01:03:10,920
like, this is, this is what keeps us from fighting to the death over every ham sandwich.

757
01:03:11,260 --> 01:03:11,580
Yeah.

758
01:03:12,140 --> 01:03:14,840
You know, I, I think that, yes, it is.

759
01:03:16,040 --> 01:03:19,020
You want to satisfy that honor.

760
01:03:19,020 --> 01:03:19,260
Yeah.

761
01:03:19,260 --> 01:03:25,900
but there is a point at which satisfying honor no longer becomes fun um like yeah

762
01:03:25,900 --> 01:03:33,600
let's let's get a let's get a guy out we've hit 14 batters in a row you know right and maybe if

763
01:03:33,600 --> 01:03:37,200
you just want to hit batters maybe you're just more of a dodgeball fan maybe that's you just

764
01:03:37,200 --> 01:03:44,220
got the wrong sport so i'm a huge dodgeball fan dodge dips i've got it cool so the conclusion here

765
01:03:44,220 --> 01:04:10,100
I'm going to read the final paragraph of Smolenski's essay because it brings up one of the key points we haven't touched on that I think we should, which is this idea of political legitimacy coming from kind of a societal clearing of, or like a reliable clearing of debts among the aggregate of creditors in society, that political legitimacy and the rule of law begin to be threatened if these ledgers are not cleared reliably.

766
01:04:10,100 --> 01:04:16,060
So, quote, this is the last paragraph of Smolensky's essay, so be impacted.

767
01:04:16,480 --> 01:04:17,620
Let it flow into you.

768
01:04:17,700 --> 01:04:27,460
Quote, the moral ledgers in the minds of an aggregate of creditors within a market can accommodate widely elastic but not infinite debt balances.

769
01:04:28,040 --> 01:04:35,700
Once a sufficient number of creditors decide to collect on their debts, their collective action has inexorable force.

770
01:04:35,700 --> 01:04:45,280
These are moments of rupture and refounding and often the introduction of new forms of social organization and new forms of money.

771
01:04:46,240 --> 01:04:53,900
So again, I take the idea of this to be that the moral ledgers consider all the creditors in society.

772
01:04:54,560 --> 01:05:01,400
If money is not a good technology, if it's not reliably clearing debts, you're going to get rupture.

773
01:05:01,400 --> 01:05:05,820
You're going to get a refounding, to use a term Smolenski does from the introduction.

774
01:05:06,700 --> 01:05:10,160
You're going to get potentially a new form of money.

775
01:05:10,320 --> 01:05:13,020
A new technology is going to arise spontaneously.

776
01:05:13,600 --> 01:05:17,360
The creditors are going to use this new technology, regardless of what the state says,

777
01:05:17,640 --> 01:05:22,860
because they're going to clear their ledger whether the state wants them to or not.

778
01:05:22,960 --> 01:05:27,760
They're not going to, again, accept payment that the state is mandating that they accept

779
01:05:27,760 --> 01:05:33,340
if it's not actually reliably satisfying them and settling their debts.

780
01:05:34,180 --> 01:05:37,540
So, yeah, political legitimacy is at stake if we have bad money.

781
01:05:38,680 --> 01:05:40,840
Yep, absolutely, as it should be.

782
01:05:41,540 --> 01:05:41,800
Yeah.

783
01:05:43,160 --> 01:05:43,480
Cool.

784
01:05:43,620 --> 01:05:45,500
Well, any concluding thoughts?

785
01:05:45,840 --> 01:05:48,540
That's the conclusion of the essay.

786
01:05:48,860 --> 01:05:52,060
What's the conclusion of Lucas's perspective on the essay?

787
01:05:52,060 --> 01:06:02,240
uh smolinski is a writer whose words i have to read and then reform in my mind using

788
01:06:02,240 --> 01:06:11,680
simple farm boy words but i can condense them down into what makes sense to me she's a

789
01:06:11,680 --> 01:06:16,180
Brilliant writer with a large vocabulary and incredibly precise.

790
01:06:19,960 --> 01:06:25,260
The academic tilt of the way that she writes, and she is an academic,

791
01:06:26,040 --> 01:06:32,320
the academic way is not going to be, I think, immediately accessible

792
01:06:32,320 --> 01:06:37,720
for a lot of comic book readers and Twitter thread scrollers.

793
01:06:37,720 --> 01:06:54,880
And so I'm super glad that we did this essay because I think we were able to take these ideas and make them small enough for a mind like mine such that I hope that they're accessible for everyone out there.

794
01:06:54,880 --> 01:07:04,920
But I want to encourage everyone, as we do with each of these, these writings that we read, please join us in consuming them.

795
01:07:05,040 --> 01:07:17,460
Please join us in taking in the wealth of information and honor these authors for their contribution because they are doing a massive service to the world by sharing these things.

796
01:07:17,460 --> 01:07:25,060
And, yeah, again, a high five to you for picking out a fantastic essay to read, a fantastic anthology.

797
01:07:25,940 --> 01:07:31,980
I literally just picked out essay – yeah, I was going to say I literally picked out essay two after picking out essay one.

798
01:07:32,160 --> 01:07:35,380
And so surprise, essay three is the next selection.

799
01:07:36,820 --> 01:07:40,320
Chronology is one of my finest.

800
01:07:41,380 --> 01:07:42,920
But, no, I just want to – one thing.

801
01:07:42,940 --> 01:07:43,880
Nothing is not consistent.

802
01:07:43,880 --> 01:07:46,960
Smolenski has academic formation as an anthropologist,

803
01:07:47,060 --> 01:07:49,100
but she is, just so we don't slight her,

804
01:07:49,200 --> 01:07:50,020
she's actually a doer.

805
01:07:50,120 --> 01:07:55,800
I think she is an entrepreneur and does other things.

806
01:07:55,800 --> 01:07:57,940
So not that it's bad to be an academic,

807
01:07:58,140 --> 01:08:01,080
but she also is doing things in the world that are useful.

808
01:08:01,840 --> 01:08:04,140
So I think, but I found this essay useful.

809
01:08:04,300 --> 01:08:06,360
So I just want, one other thing I want to conclude on,

810
01:08:06,480 --> 01:08:09,140
I totally agree with you, Lucas, that continue the dialogue.

811
01:08:09,140 --> 01:08:11,180
If you listen this far or however far you listened,

812
01:08:11,180 --> 01:08:15,800
consider these ideas. What do you agree and disagree with?

813
01:08:16,500 --> 01:08:19,500
The authors of this wanted a

814
01:08:19,500 --> 01:08:23,700
Federalist Papers type situation where we are debating the possibility

815
01:08:23,700 --> 01:08:25,980
like what does a refounding look like? Is it necessary?

816
01:08:26,220 --> 01:08:29,460
Keep that debate going. Twitter

817
01:08:29,460 --> 01:08:33,880
as we see in this essay, the Zabo to Graeber

818
01:08:33,880 --> 01:08:37,680
internet Twitter is now like a canonical piece of

819
01:08:37,680 --> 01:08:42,480
literature in the Bitcoin tradition. So, you know, participate in those discussions.

820
01:08:43,780 --> 01:08:49,140
And also, I just want to note that I find like the idea, my concluding point will just

821
01:08:49,140 --> 01:08:54,420
be because I wanted to say this. I don't think I said it before. The idea of money as a technology

822
01:08:54,420 --> 01:09:00,420
that then means it's a bottom up type of thing that's adopted by people so that they can

823
01:09:00,420 --> 01:09:06,340
solve the problem in a durable way. This should unite left and right anarchists. This should

824
01:09:06,340 --> 01:09:12,960
bring a David Graeber on board with an ANCAP. And so I love when, like Bitcoin is not about left or

825
01:09:12,960 --> 01:09:17,000
right. It's about the middle path that we all have to take together if we want to survive.

826
01:09:17,600 --> 01:09:24,740
And this is, I think, a good way to, you know, walk them through these steps and take them beyond

827
01:09:24,740 --> 01:09:30,020
where Graeber foundered, which was the idea that, yeah, the state and credit theorists are right.

828
01:09:30,400 --> 01:09:35,380
Money is only an invention of the state. Therefore, we should get rid of the state and get rid of

829
01:09:35,380 --> 01:09:41,000
money and just hope that human economies spontaneously arise you can say that's a little

830
01:09:41,000 --> 01:09:47,700
bit utopic i follow you up until get rid of the money but and then just like have a vague plan of

831
01:09:47,700 --> 01:09:53,420
hope we actually do have a thing that spontaneously is arising from below that we can all coordinate

832
01:09:53,420 --> 01:09:59,560
on so that's where i would leave us that anarchists unite and whoever non-anarchists too but that's

833
01:09:59,560 --> 01:10:01,000
where we find ourselves.

834
01:10:02,120 --> 01:10:03,320
That's it, man. Buy Bitcoin.

835
01:10:03,760 --> 01:10:05,620
Yeah. Not investment

836
01:10:05,620 --> 01:10:06,580
advice, but also

837
01:10:06,580 --> 01:10:08,720
life advice.

838
01:10:09,760 --> 01:10:10,380
Right on.

839
01:10:11,180 --> 01:10:13,480
Alright. We're out. Thank you very much.

840
01:10:13,620 --> 01:10:14,180
Thanks, Lucas.