Everything that your fiat teacher told you is lies.
It's just accurate to say that central banking is communist.
It's literally in the communist manifesto.
Therefore, pay more money.
The whole fiat game is misleading people by being imprecise,
so I'm just performatively doing the opposite.
We know that necessarily every fiat currency goes to zero eventually.
Can you have a true free market without a free market in money?
You just end up in this doom loop of like,
socialism causes misery and poverty,
both of which cause people to want more socialism to try to fix it.
They will never own a home.
They'll be paid shit wages because nobody can be bothered
starting a business and accumulating any capital in the first place.
Real estate is monetized so they can't afford anything.
So they just feel like they're on a hamster wheel.
They'll never get off.
Maybe we should just burn this down.
I'm pretty close to the sun so we could do the next one from prison.
That'd be fun, right?
Have you ever had anyone dial in from prison?
Alan Farrington, how you doing, man?
Welcome back to the show.
It's been a little while.
Yeah, thanks so much.
Yeah, you doing well?
Life's good?
Doing very well.
Last time we talked, I think it was right when Apple came.
I remember specifically Apple came out with that commercial
where they were basically crushing all the instruments
and all these great pieces of art and stuff
and shoving it into an iPad.
Oh, yeah.
a cultural review of that it's like just came back to me in the moment i i yeah i i completely
forgot about that but now you mention it yeah i remember us being all grouchy about that perhaps
perhaps perhaps a bit grouchy days yeah oh god they're taking away our art and our music and
everything and shoving it into one of their funny computer pads how dare they how dare they
oh man well good to have you back on i we were just chatting off uh off air about this and we
were talking about kind of the boy the uh the fiat system and how it just almost makes you feel like
you're taking crazy pills and you and sasha myers your your co-author from uh from bitcoin is venice
and from you guys have done a bunch of uh a bunch of writing together now obviously you just put out
a great piece called number go down and i think this is one of the things that people have the
they struggle with the most because we've been so you know fiat has been the water that we swim in
as fish and you know it's like what what the fuck is water uh and so this idea that deflation being
that it's been this boogeyman in the fiat system but actually when they talk about deflation
they're they're they're not really we're not using the same words to mean the same things
so to speak so maybe a good place to start out is just one of the things you talk about in this uh
in this piece is sort of good deflation versus bad deflation can we set the stage with that just
so that anybody who's tuning in saying deflation well i'd hate to have a deflationary spiral you
know just just we can put that one to bed at the start and kind of take it from there uh sure yeah
i mean we we made out this terminology to be clear it's it's meant to be slightly tongue in
cheek and that it's obviously not a very technically rigorous definition we we toyed
with like trying to neither are theirs to be fair you know what i mean like more academic
um but no we kind of like this in the end because if anything it a lot of what we're writing about
is uh you know economic jargon is kind of unavoidable and it makes it a bit dry in place
and so so landing on this i think we're we're pretty happy with and the reason we come up with
it is to, I actually don't think it's all that interesting in its own right. I think it's,
we used it as kind of a rhetorical tool to unpack what we expect the fiat objection to be,
to our overall argument that just deflation is good, right? I mean, that's basically the
entire essay, it's just deflation is good, actually. Everything that your fiat teacher
told you is lies. But we anticipate, so in setting out that, we think relatively straightforward
argument, we anticipate the fiat Keynesian objection of pointing to basically the only time
you ever see deflation in a fiat context, which is in the aftermath of a credit bubble popping.
And I'm a little wary of, I mean, we can dig into this in more detail if you want, if you want to
kind of pry on on you know for more specifics here i don't i again i'm wary of like drowning
in jargon right from the start and but i guess a decent summary would be like i your your audience
will know perfectly well and won't need me to explain you know why prices typically go up why
you typically have inflation under fiat um but it might seem a little counterintuitive that
you can actually have brief periods of deflation as a result of, as painful as it is to say,
this is like one of the only times if you want to invoke aggregate demand, it's like somewhat
meaningful without being completely silly, where the idea would be because everybody's just
insanely leveraged and the idea of a credit bubble being that you're just getting more and more
leveraged and you have more and more of the illusion of wealth without anything real kind
of substantiating it, that what it means for the credit bubble to pop is basically everybody being
forced to adjust to that reality all at the same time. And so people stopped spending because they
were on a path of spending that they thought was sustainable because they thought they had all this
wealth and then they realized they don't. So they stopped spending. But in the meantime, so that's,
aggregate demand goes down. But up until that point, all of their spending had been
facilitating and kind of creating the fake price signals to enable all kinds of supply.
And that's still there, right? Like all of this inventory is there waiting to be sold at the point
at which everybody realizes they actually don't have any wealth at all. And so that's the exact
set of circumstances in which you would see, you know, quote unquote, deflation in the sense of
prices going down, not really in the sense of the money supply contracting, because all of a sudden
nobody's buying it. You just have seemingly sustainable purchasing, and then everybody
stops. And then everyone who's selling things like, oh shit, well, we need to lower prices to
actually clear this stuff. And so that's like the exact window in which you might see it. But the
funny thing is, that's pretty much the only time you would ever see it in a fiat system. And so the
fiat economist explanation of this is basically getting the causation completely wrong. And
saying all of that, therefore deflation bad, right?
Like deflation is symptomatic of the bad thing happening
and therefore it itself must be bad.
And the only way we can cure this is inflation.
And then that comes full circle to,
even though this hasn't necessarily happened,
this could be like all hypothetical
or maybe you've had like one experience of it
or you point to, you know,
they always point to like the crash of 29
as the worst case ever of this having happened.
And we need to make sure that never happens again
kind of thing.
that's their justification for just always having inflation all the time it's it's uh yeah you don't
actually need to live through it necessarily you just need to follow their logic or their
illogic uh to get comfortable with well that must be avoided at all costs and so that's back to your
question that's uh that's what we somewhat jokingly mean by you know good and bad deflation good
deflation is what you would actually expect in a normal functioning system and bad deflation is
this one weird thing that can occasionally happen in fiat well right you have this one quote in there
that's that you know a lot of a lot of great zingers in there but they conclude that money
printing will avert hardship not seeing that it was money printing that created the capital
misallocation and balance sheet fragility in the first place and that's kind of the whole thing
right is that these you know these problems that they are warning about that must be averted
what they're describing are problems that have been of their own making in the limited in the
limited instances where they can even cite an area where this occurred right like people have
all these ideas about you know the the crash of you know of 1929 the great depression that followed
and all these things and then it's like you look you know it's there's like what you were taught in
the you know in your history textbooks growing up and then there's what actually happened and and
it's sort of like well what actually happened once you dig into it a little more you're like oh well
this narrative doesn't really make any sense at all anymore.
Like there was just, there was manipulation all along the way.
And then it reached, you know, reached ahead, right?
And then it blows off.
And then what gets blamed?
Well, it's actually the problem was deflation at the end of the day, clearly.
You know, the problem wasn't that we were, you know, just playing it fast and loose.
No, no, no.
The problem is this other thing that we will now use as a boogeyman for the next hundred years.
But it's just kind of crazy to me, Alan, that they've sort of gotten away with that.
Like, how is it that are people just so conditioned at this point where you've we've only you and I have only ever grown up in an inflationary world?
Right. Except for in certain areas where deflation, technological and entrepreneurial deflation, flat screen TVs are always the example everyone uses.
But like it because they're a great example. Right. They just keep getting better and thinner and cheaper at all along, even as everything else gets more and more and more expensive.
And so are we just so conditioned to expect prices to go up that we don't, you know, ride in the streets and overthrow our overlords for it? Hypothetically speaking, of course, I know, you know, don't want you getting arrested, you know, in the United Kingdom for these things.
I appreciate your concern for my, uh, my, my jurisdictional liability. Um, it's, I, I,
I don't know. It's, it's really hard to say. I mean, I'm wary of giving an answer that's like
unhelpfully, you know, pathologizes 99% of the, of the population. It's equally unsatisfying to
just be like, Oh, people are stupid or, Oh, people are brainwashed, whatever it is. I don't
have a good answer i whatever it is is i think more sophisticated than that uh to try to say
something positive i guess rather than just whining about you know everyone's dumb or everyone's
misinformed or whatever you know sneaky russian disinformation um the the goal with this essay
we can get into this a little bit more if you want and like how it feeds into uh future writing
that sasha and i are planning on um all with this essay is basically to you know we have a few like
snarky jabs here and there just because it's fun and it's like it's a bit dry otherwise but
it's it's sort of to assume that you don't really have any certainly no academic background in
economics as the reader but potentially not much of you know just just common sense right like an
ability to reason some real world experience uh but you know not not really asking a lot in terms
of like conceptual you know groundwork that you need to have you need to have you know had some
like undergraduate education or whatever like just just common sense as as common sense as possible
as first principles as possible and just guiding the reader through why why you would expect what
we're arguing for uh not in terms of some kind of grand sweeping theory but because i feel like
maybe that's part of the answer to your question that that fiat keynesianism whatever you want to
call it does sweep a lot of this stuff under the rug by virtue of grand sweeping theories that
you're supposed to accept even though you have no real world validation of it at all it just kind of
sounds good it sounds coherent even though it isn't um so avoiding that as much as we can and
and just trying to go you know i use the expression first principles a minute ago just going through
be like, okay, well, why would people behave this way? Having behaved that way, why would these
things happen? And, you know, hopefully, it's, it's coherent. Hopefully, it's, hopefully,
the reader follows the logic ends up agreeing with us. And then I guess the sneakiest part of
the whole thing is that, you know, we don't actually mentioned Bitcoin at all. But it's,
and it's kind of not really about Bitcoin, other than the implication being, well, therefore,
you should also like Bitcoin, right?
So that's the kind of the cherry on top of you.
If you do make it all the way through,
if you do follow all of this,
you ideally find yourself liking more than,
liking Bitcoin more than you would otherwise,
even though we didn't argue for that directly.
And then that,
I don't know if you want to get into this right away,
but that kind of then feeds into like
what the point of all of Bitcoin as Venice is
and how this is going to fit into
what we're planning there.
Yeah, I do want to get into kind of
what you're what you're playing a little bit too there uh maybe first just because there's a couple
things and for anybody you know you you can go and obviously read this full article it's available
on x they've got a great new feature now actually too where you can listen to it like they've got
grok just auto auto dubbing it which is super convenient like it's fun uh or sorry i didn't do
this someone else did it and i find it hilarious i think is is it google i think it's like google
notebook or something like that does i mean you can do it with anything obviously but you give it
some text and it makes a podcast for you about it someone did that and i listened to it i was like
yeah they get it that's good was it decent the the podcast that google generated i mean i guess
the thing is that i've i've known about this thing for a while and i've tried it on a whole bunch of
different inputs and so i sort of the the the initial wow factor is kind of gone for me like
i've kind of i've learned the format so i don't take it as i don't know seriously anymore but it
was like yeah i guess it's pretty good i think if you if you've literally never heard it before
as in something fed into this and then you listen to the you know the podcast
i put i'm for people only listening i'm doing like air quotes on my fingers
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better stack harder oh no i'm yeah i'm gonna have to try that out i mean i do i i this is a slight
digression but i i this stuff is very convenient to do these sorts of you know like whether the
summaries i think are like very convenient okay let me you know grok will generate a quick summary
for me right next it'll let me play the article out loud okay that's very convenient if i'm doing
other stuff in terms of like the auto-generated podcasts though it's like I'm you know I'm not
listening to a podcast just to like just to I guess have the the facts do you know what I mean
like I also want yeah I want to listen to the people that I know are behind that that's what I
I've always found this kind of confusing this google thing this I I'm sure it has I'm sure this
there's a product name for this that I'm just not aware of and I'll just call it the google thing
for now i've always been a bit confused by it because i'm not sure how you're supposed to use
it other than a joke like it's it's so obviously you know just not real like no one could possibly
mistake this for a real podcast it's almost like i think the intended impression in the listener
is that it's funny how good it is but it's in kind of uncanny valley territory right it's like you
would never think it's actually real but you're surprised that it is that good if that yeah but i
don't know what people are supposed to do with that like the only the only way i have ever consumed
this and now probably four or five different contexts or you know as derived from four or
five different source materials is just to laugh at it or like laugh with it like it's not that
it's stupid it's like yeah but i don't know what they're going for i don't know if they actually
want it to be funny i find it very funny yeah no no i i mean i do too it's like and it's gonna get
better obviously like these will continue to get more impressive but it's like right now the only
people who are like who if they heard this just as a one-off the only people who are going to think
oh wow that's like that's a real you know thing we're not thinking anything of are like the boomers
on facebook who can't distinguish you know like the rainbow colored rabbits jumping on a trampoline
you know and they're like wow where was this video taken you're like oh geez you guys are
you guys have no natural defenses against this like this is a this is a viral infection hitting
a new continent of thought and you are just about to be decimated by it.
Like it's digital smallpox blankets and you guys have zero defenses against it.
But, you know, we love you boomers, especially the Bitcoin boomers out there.
Okay, so digression aside, you know, one of the things I think that's so interesting about
all of this and about what you've already kind of set the stage for in terms of, quote,
good deflation versus bad deflation and just this misnomer of deflation generally as this
bad thing is you look at even stuff like that you know the two percent inflation target it's like
you know you you talk about being reticent right like right now you're talking about being reticent
to uh make up terms or use things that aren't you know uh you know that are not particularly accurate
but are useful to describe just because you don't want to make things up but it's like fiat
economists have no problem just making things up it's kind of like though it's kind of the whole
game right and i'm just curious is there is there any part of of modern fiat keynesian economics
that is actually true and real?
Or is all of this just sort of made up jargon?
Like, yeah, 2% inflation because New Zealand, right?
I mean, it's like, does any of this have a basis in actual fact
versus just theory that kind of sounds good
and isn't used to justify more printing?
I feel like I'm an entertaining person to ask this of,
but not a useful one I don think your audience is going to learn anything from me opining on this because the answer might be interesting though They might learn something in more of like a meta sense of
how to laugh at all of this without, you know, what the answer really is.
I've never studied economics in an academic context. I've just approached it, I guess,
as like a layman, as like a well-educated layman with decent experience in, well, Bitcoin,
obviously helps right all of the all the patterns of thought around bitcoin make you very skeptical
um i think the classic route there too even though for me it went the other way around but
nonetheless is is to then get interested in austrian school and kind of maybe somewhat
tangentially other you know heterodox schools um and and yeah just just an an assortment of
actually worthwhile real world experiences verging on academic in some senses but but
almost anything other than you know i actually took a class or like or got a degree in this and
i'm saying all that uh to kind of avoid answering directly because i don't really know directly i'm
honestly not sure what they like if you did an undergraduate degree in economics i'm really not
sure what you would be taught day to day other than the almost like the highlights of what makes
the least sense i feel like that's kind of what makes it to you know bitcoin twitter right and
like and and it bubbles up enough to to give rise to the two percent number and whatever other things
are particular and unlike money printer go burr and whatever else whatever can can attain meme
status uh because that's most fruitful for bitcoiners to debunk but in terms of like the
day-to-day of what they actually learn i honestly don't know maybe it's fine maybe it's just kind of
boring by comparison i'm honestly not really sure sorry no no no that's that that's fair uh you know
i i always know with you alan i need to i need to be very particular with my question because you can
be very elusive at times uh but okay i don't want to miss anybody this is exactly like you set it up
this way right that yeah yeah the whole fiat game is misleading people by being imprecise so i'm just
performatively doing the opposite.
No, and it works well.
It definitely works well.
I'm curious to, maybe we can,
and then I want to kind of get into where you guys,
you and Sasha are taking this in the,
let's say in the realm of your,
the larger Bitcoin is Venice universe and everything.
But can we talk a little bit just about this idea
of the paradox of thrift and some of these other things?
Oh yeah.
You know, just because again,
like some things that are perhaps misnomers purposefully
or accidentally so.
Can you dig into what that is a little bit?
So the paradox of thrift is confusing
because it's not a paradox.
It's more like, I guess, a thought experiment.
It comes from Keynes, but in the sense of actually,
you know, we say a lot of things are Keynesian.
This actually was proposed by Keynes.
I believe in the general theory.
I think it's like, you know, classic Keynes canon.
And it's sort of...
I think it feels plausible.
I think this sort of contributes to why people probably fall for it,
that it's not completely ridiculous nonsense that you can't follow
and then you're surprised why anyone believes it.
If anything, I feel like I get why people believe it.
It's only superficially plausible.
When you really dig into it, you can unpack it without too much difficulty.
But the idea of it being a paradox is that if you're thrifty,
i.e. if you save, right, then you are not spending. It's kind of true by definition,
right? You have to do one or the other. Or saving is almost a lack of spending.
And then if you don't spend, then nobody else is going to earn. And if nobody else earns,
then nobody's going to be able to work. And if nobody works, then no one's going to be able to
save in the first place so the the so-called paradox is that too much saving prevents the
ability to save like there's there is therefore in theory some optimal amount but then if you like
really poke at this from a fiat perspective that optimal amount gets lower and lower and lower and
really you shouldn't save at all you should just consume all the time you should just you know
boost aggregate demand and and it's a like again i think that seems plausible in the sense that a lot
of a lot of the claims on the face of it are not that controversial like if yeah if you're saving
you're not consuming but it's i think the reason it's tricky i i may be a little averse to to fully
unpack it now because that is kind of like the entire point of this essay that is to you like
an hour or something if you get wrong to read it um but the the gist of why it's wrong let's say
is that it's quite deeply confused about the causation of saving and spending it basically
assumes that uh spending causes savings or at least sets in motion a chain of events that results
in you being able to save when in fact that's almost exactly backwards that saving uh i wouldn't
exactly say saving causes spending that's a that's a bit kind of reductive but saving and investing
creates the uh let me think how much detail i want to do creates the uh the capital
that enables the productions of the goods and services
that it is even possible to then purchase
and then consume in the first place.
And even the way I'm sort of hearing myself speak now
and realizing you risk getting bogged down
and not that this is jargon necessarily,
but kind of more dense concepts than you maybe set out to.
And I think it's always,
we try to do this a couple of times in the article.
It's always good to step back and just remind yourself
that it really is as simple as
you have to produce before you consume.
Like almost everything comes back to that.
You can make it more complicated
if you want to make a more involved point
about like capital accumulation, say,
which obviously we do in the piece.
But that, you know, nothing more complex
you go on to say at all changes
the starting point of in order to consume something,
you have to have first produced it, right?
And in order to, I'm trying to think of it,
even more like if different terminology is even merited here but in order to um i guess in order
to demand you know there must first have been a supply or something something along those lines
but ultimately the the notion that if you save you are prevented from saving in the future
is just false and i know just wrong is almost exactly wrong it could hardly be
less correct yeah well and no i appreciate that that explanation of it because i think it's also
the like the important real world results of all this and of keens making these types of arguments
is that okay well you know because what i am saying as keens you know i'm saying you know
because what i'm saying is undoubtedly true and this paradox so exists and the only cure is to
spin up the money printer money printers good boy and set them to burr and like but that that's like
That's the whole thing. It's like all of these arguments being used in justification for monetary expansion, right?
For government stimulus, for more for more top down monetary and economic control.
Like that's really the the disastrous effect of all of these arguments.
I think they've seen jokes about this quite a lot.
I don't know if there's an exact quote that I should be memorizing when I'm citing this.
But I mean, I've heard him say this several times that a lot of the jargon and a lot of the kind of academic pretense of Keynesianism ends up being irrelevant in the scheme of there being a practical application, because the conclusion is just always the same.
Like, it doesn't really matter what they say in the middle. It's just window dressing to, you know, we have problem A that we explain it with B, C, D, X, Y, Z, whatever, blah, blah, blah.
But then, you know, therefore, print more money.
Like it's always print more money.
So it doesn't really matter what comes in the middle.
You may as well just get to print more money.
And then that's, you know, that's it over with.
Yeah, yeah, it is.
I mean, it is amazing.
Like, you know what the destination is going to be.
It just depends on what their journey to get there.
And that may vary slightly, but it's like, it's always just, well, I guess we got to print more money.
It's like they've got one button that they can push.
and they just need they need a some circuitous way of getting to that button no matter how
nonsensical it is and they will get there and then they will press it like that's
that's what happens.
Deflation is bad that's that's one it's one tool that they have.
Well and because the other side of that is the implication in in the statement that deflation
is bad is of course that inflation is good and necessary if deflation is bad then of course
inflation must be good it's the opposite of that right so then it must if it's good it
must be necessary so then that's again almost this moral justification you're saying like we
have to avoid the bad thing like we're doing this to save you and that's the thing is that obviously
there are you know many people asset holders are benefits beneficiaries of inflation right you know
and you know as people holding bitcoin we are beneficiaries of fiat inflation in terms of the
exchange rate but the problem is that the majority of people in the world are not you know are not
beneficiaries of it right like inflate and this is this is something maybe this is a way to tie
this into the uh the political a little bit because i've seen there just seems to be i don't
know if it's the algo feeding it to me or just the sad reality of the world but a resurgence in just
really smooth-brained you know neo-socialist takes out there these days and all of this all
you know we we need to we need more equality and the problem of course is that it's capitalism
that is causing the inequality yeah and then you know like you know i've i love the peter mccormick
saga, of course, and just seeing him just try to try to be very gracious with some of these
socialists. And then, you know, it just won't take him up on any of it. But this this idea that the
capitalism is the problem. The problem is all this greedy capitalism. And that's why we have
inequality. So we need to fix that by taking a reallocating this capital from the top down,
of course, to different people to make things more equitable, make things more fair or make
things more equal. But they don't ever talk about the actual problem, which is like inequality is a
natural thing. The question is, do we have more inequality right now than we naturally would?
And probably the answer is yes. But they won't address the fact that that inequality is ultimately
driven by the fact that fiat inflation benefits those at the top, those with the greatest
proximity to the money printer, the most. And I just don't know what it's, I mean, because if you
acknowledge that, then of course it tears your entire argument down, you know, from the base,
right? I mean, is there, can a socialist ever acknowledge that fact and still be a socialist?
Is that possible?
Hmm.
I honestly don't know because I,
it's funny you bring up like Peter McCormick
arguing with people on Twitter about this.
I haven't, at least of late,
I haven't seen him really go into Bitcoin, I suppose,
but even this entire argumentation around,
you know, fiat money versus even if not necessarily Bitcoin,
more sound money as being relevant.
like it seems like he's
for now at least
or in the context of those
arguments he's just sticking to basically
socialism versus I guess
what he calls capitalism
but because
he obviously does know
given who he is given why we're talking about him at all
of course he knows the difference but I don't
my hunch is that
he doesn't think he's
even going to get anywhere
moving the conversation to
being about the
properties of money because it's almost like the misunderstanding is deeper even than that it's
like these these people are they're not primed yet to think about something that that you know
nuanced in a sense and another thing that came to mind though i think maybe partly an explanation
for this is that um well in in peter's case this is obviously very focused in the uk where i i would
suggest the problem that you identified at the outset is a lot more exaggerated than it is
in the US. And so he has like more of an uphill battle to convince anybody of this,
that we've basically had so much, not only socialism, but ultimately, you know, as driven by
a fiat monetary regime where basically where you have, where this conflation around capitalism
is like, I actually understand it.
I have some sympathy for this
because what's presented to these people
as quote unquote capitalism
is really just fiat banking.
Like the biggest industry in the UK,
London more specifically, is finance.
The most prestigious thing to do
is either finance or something,
you know, derivative of finance
or downstream of finance.
And so that is what they see capitalism as being.
And you and I know,
I mean, there's a chapter in Bitcoin.
It's called, this is not capitalism.
So we can give, I think, a fairly decent argument
as to what the problems there are,
potentially not even mentioning Bitcoin.
But if the audience is interested enough,
obviously you can then get to that.
But these people can't.
Like they're so far prior to really understanding this
that Peter just has to argue with him
about socialism in the first place.
And the really tragic thing, I think,
is that this is why I'm saying
I'm somewhat sympathetic to this,
only somewhat, only a little bit,
is that you can see, given the circumstances they're in,
given the problems caused by partly socialism and partly fiat,
why they would be so mad about this.
Because with a very narrow focus on what tangibly are their problems
as opposed to intangibly all this grand theorizing,
it's basically that they just can't afford anything.
They see rich bankers and booming city trade
or whatever. I don't know exactly how they conceptualize it. And then they'll realistically
never be able to afford a home or something like that, which also goes to your point that that's
because of real estate being monetized. But again, you know the circumstances they're in that make
them feel that way, but you also know you're never going to be able to convince them that that's
what's actually causing their problem. And so you just end up in this doom loop of socialism causes
misery and poverty both of which cause people to want more socialism to try to fix it and like
how do you get out of that and that it feels like that's basically what peter spends all his time
arguing with people about that no it is actually worth trying to get out of it so like good for him
i guess i i can't really tell if it's working but he's fighting well it's it's such that doom loop
you talk about because it's like this idea that well i've been poisoned and in order to to stave
off this poison the antidote is just more poison like we just need to you know like like that's the
problem with it ultimately though is that it's like you see all this evidence and people like
rightly as you called out they have this conceptualization of what they think quote
capitalism is and maybe it's you know better to not even use it better to for us to start using
terms like you know free market right because maybe capitalism has too much of a has too much of a
like a stain on it in their minds already but it doesn't matter if you try to tell them like look
capitalism is good because they already know with beyond a shadow of doubt that capitalism is bad
and it's what causes their woes. And if you try to tell them, well, actually like the governments
that we have, like especially in the UK, but you know, creeping in the US, like what you have is
actually closer to socialism. Like you've got a huge amount of money being, you know, allocated
and misallocated from the productive people and allocated towards the nonproductive people. But
if you try to say that, they're like, nope, nope, that can't be true because socialism is supposed to
be the good thing. And if we just give the government more power, socialism will finally
work this time and it's like i don't know how i don't know if it's even maybe enough people can
be swayed where it's worth it and you know god bless peter for for doing the lord's work out
there trying to trying to deal with these people but i just don't know if it's possible for for
people who have ideas that are so deeply entrenched like if you can you teach an old dog new tricks in
this regard i don't i don't know the answer to that i don't know if people have just again dug
in their heels so far that there is literally no hope for ever convincing them like look
your entire worldview is predicated on a lie and because they've made this part of their identity
that's the other problem it's part of their identity that i am anti-capitalist that i am
pro-socialism because i'm a good person and good people and that's what it all comes down to right
it's tied into your identity that you are somehow virtuous you are somehow more moral you are
somehow more empathetic you are somehow more good i want to take care of everyone don't who wouldn't
want to make sure you know health care is a human right and all the and you're just like ah i don't
even know where to start. And the problem is that
to us, it's a really dumb message
because these things are just demonstrably
false. They don't even pass
basic muster. But they sound
really good if you only think about
them for like two seconds and you've never studied
history or economics, even
as a layman, or any of these things.
They sound kind of good, and they especially sound good
if you are struggling.
And you perceive that the source
of your struggle is this boogeyman
called capitalism.
I get it. I get why they're
at that point. I just don't know how we get people away from that.
Yeah, I mean, either. I don't know if you wanted me to be bullish on that.
No, no, no. I'm just like, no, that wasn't even a question. That was just like a fuck, man. I don't
know. It's tough. It's tough. But like, it's worth still trying, I think. And I think that
you can get enough people to embrace common sense to make it a worthwhile pursuit. Maybe speaking of
you know, embracing common sense.
Well, okay, I'll be a little bit bullish.
Yeah, go ahead.
I'll kind of shill our bags a bit too.
This is what I was going to ask you next, actually.
So that's perfect.
Yeah, that, I always hesitate to say,
I've probably even said it to you or said it on this show
that like, I don't want to tell people to buy Bitcoin, right?
I feel like that's a little bit kind of on the nose.
It's a bit crass.
I'm comfortable with things like, you know,
I feel like if you learn enough about it,
you'll probably want to buy it on your own.
but I feel like you have to want to buy it on your own, right?
You have to, if you're just doing it
because someone else told you to,
then you'll sell it because someone else, again,
told you to and you haven't really achieved anything.
You probably lose money.
But I think there's a way of tying that in that
I really do want to generalize it a bit beyond,
yeah, literally just shilling my own bags
and number go up to maybe something like
treating buying Bitcoin as indicative of,
say lowering one's time preference right if we want to throw out another one of our our memes
um that by what buying bitcoin would achieve you don't want to think of it as like a lottery ticket
to avoid this cycle of misery and poverty or whatever that's probably an unhealthy approach
to it you you want to think of it as a you want to understand that it is savings first and foremost
and that, you know, the reason that you save is to,
actually, I'm not even sure how to conclude that.
This is getting a little bit more kind of philosophical
than I was maybe intending when I started the ramble.
Do it.
You want to lower your time preference, basically.
Like, you want this to be part of improving your overall standing in life, right?
and ideally as paired with,
you know, building skills
that enable you to add value for others
such that you can start to be more independent,
start to have somewhat sustainable sources of income,
which potentially then go towards buying more Bitcoin
and so on and so forth.
Again, your audience doesn't need this as advice.
I'm trying to think how to best conceptualize all of this
other than just saying buy Bitcoin.
But back to your point about what do you do about it?
I think the more you can encourage this at the micro level,
the less we'll see of exactly the kind of problem
that you're identifying.
Because again, I really do have sympathy for someone who,
you know, especially if they've wrapped up
in all this kind of emotional, frankly, nonsense
about how good a person they are.
But ultimately it somewhat materialistic in that it derived from they literally can afford anything right Like the situation that the combination of fiat and socialism has caused for them is they will never own a home
They'll be paid shit wages
because nobody can be bothered starting a business
and accumulating any capital in the first place
to enable them to generate any income
from the productivity of their labor.
And then in the meantime, real estate is monetized,
so they can't afford anything.
So they just feel like they're on a hamster wheel.
They'll never get off and they've identified the fake boogeyman of capitalism.
Like, whatever.
None of this is permanent.
And it's not permanent at the macro level, but at the micro level of the individual making the decision.
If you can encourage the shift in mindset, as opposed to necessarily treating it as like you need to change their entire worldview, right?
like you need to give them a new philosophy of economics and politics and whatever else.
You can chip away in a healthier fashion by just trying to change their way of thinking and their day-to-day actions.
I think that's the bull case, that that route is both preferable, but I think more easily achievable as well.
I think that that's fair, and I would agree with that.
to play devil's advocate to it, I would say, you know, it's, it's difficult to get people to,
you know, if we're saying, you know, starting from, okay, if you start to understand Bitcoin,
you start to understand why savings is important, and you lower your time preference that you're
actually, you know, you realize the reason for savings, right at a fundamental level,
that that can ultimately lead to these other, these other changes in your belief structure,
right, because some of them necessarily follow from that shift in mentality around
what is saving, what is, you know, what is Bitcoin, what is money. I think part of the problem
more broadly, and again, I agree with that thesis of yours, and I know it's been true for me in
terms of my own journey down the Bitcoin rabbit hole, probably true for a lot of people listening
to this, that that learning about Bitcoin and maybe just coming for the number go up, coming
for that initial part of like, I want to have more money, and then going down that rabbit hole and
learning more. That's a journey so many have taken, myself included. I think part of the
difficulty is that it's, you know, maybe Bitcoin number go up just doesn't seem, maybe the number
doesn't go up enough for people that are looking for like, I need a 10x return by tomorrow. Like,
you know what I mean? Like, so it's so hard to start, you know, trying to get people to understand
the lowering of the time preference, the inclination towards savings, why Bitcoin is
such a perfect vehicle for savings, when it's like, well, they don't want us even learn about
savings they want to gamble and we see the proliferation of all these predictive prediction
markets we see is why crypto in quotes has been so uh powerful and pernicious is because people
they don't want to save wealth slowly they want to get rich quick and but it's like boy maybe you
get burned enough times and you finally come around to bitcoin i i i don't know but i i do
agree with that thesis more broadly that yes once you start learning about the need for savings why
it's important why you should lower your time preference how bitcoin fits into that so many of
these other things naturally follow you're going to start learning about how you know oh maybe the
causes of the pain that i've been experiencing are not from the things that i thought they were
from and that i've been always told that they were from maybe it's from these other forces that have
remained hidden to me uh for some time but yeah you know one person at a time right like every
That's why I do this podcast, because I hope that even one new person tuning in who makes them think about something a little bit differently, it can change your life.
It can completely change your life.
You can stop being a victim of the capitalist boogeyman and start being a value creator and a producer.
But it does take some time.
It takes some time, Alan.
I do want to ask you, you brought up Bitcoin is Venice earlier and what you and Sasha are working on and how this current number go down.
thesis article is is fitting into this larger narrative of what you guys have planned and what
you have going right now can you can you explore that a little bit yeah sure so we're we're doing
a second edition of the book uh which will be mostly just revisions it's not like version two
it's not like entirely new content uh it's it's it is a true second edition for the most part
but there will be some new content.
We're undecided exactly where we want to fit it all in.
But we've been working on this for quite a while,
as you can imagine.
This was kind of the priority in terms of thinking
that we'd sort of identified a gap
that we hadn't really covered the first time around.
And so we knew where we wanted to slot this in
as we were revising it.
We also wanted it to work on its own though.
So, you know, we were quite deliberate about releasing it in the way we did, not mentioning Bitcoin, for example, that that's partly derivative of where we expect it to go in in the book, because we also won't have mentioned Bitcoin by then.
But we want it to work as a standalone essay that, you know, very similar to what you just commented, right, that that hopefully at least one or two people find this or they get sent it or whatever.
And and ideally it changes their mind, but, you know, partly about inflation, partly about economics.
But as I alluded to before, because we don't mention Bitcoin, like maybe they then kind of come to Bitcoin on their own without us having to, you know, shove it down their throats.
So, yeah, so we wanted to work standalone and we'll probably do that.
I don't want to commit to this because we are on a relatively tight deadline in terms of knowing how much more we want to write.
We might do this one more time.
We might have one new completely standalone chapter that we release in, you know, maybe a couple of months.
um but they'll slot in and then the rest of it will be revised updated hopefully just improved
like i i very much think that i very much hope knowing partly what we've done partly what we
plan to do that the second edition will be better than the first i mean i'm not sure how that relates
to like do i want to encourage people to go buy it again if they already have the first one yeah
maybe i mean the new stuff will be online so maybe not it's up to them um but for for noobs uh
yeah would very much encourage it and actually bitcoin magazine have been have been great about
this there's there's some stuff i don't want to be i don't want to say now because i don't think
they so bitcoin magazine publish it that's the point of that reference um and we've been chatting
to them a lot more recently as we build up to like the plan for how we're going to publish this
um there's some things that we are discussing with them that they haven't agreed to yet precisely so
i don't want to say them now but i i think it'll be fine i think they'll go through and it'll be
it'll be really fun what we're able to do uh we do know though like the entire uh the deadlines
that were being set like the schedule we're working to is that they're going to publish it
at the next conference so nashville next year is when this will come out they'll also sunset the
first one so we won't be able to get the first edition anymore so for noobs very much nudging
them to get the second one and then also the interesting thing too um again i'll kind of dance
around this because i don't want to i don't want to promise things i haven't been fully agreed to
yet but uh interesting detail that uh bitcoin is venice you know the first one uh so far the only
one that was the first book that bitcoin magazine ever published and so they're kind of it almost
has like i don't know emotional or sentimental value let's say to them in the sense that
they're they're revamping their entire publishing effort and it's quite exciting how basically how
much more of a machine they have to drive this now like not know that they did anything wrong
last time just to be completely clear but it was kind of experimental for for all of us um very much
me and sasha included whereas this time you know all the things that i'm not quite allowed to say
yet are like really exciting ways that they're going to help promote it um and hopefully get it
to you know many many more normies than we did the first time around that's ultimately the goal
it's it's it's interesting too i was just thinking as you were talking about it like first of all i
mean the the the title of bitcoin is venice is is great right especially i think for bitcoiners it's
it's very much, even for non-Bitcoiners,
I think it's very, it's intriguing, right?
It's an intriguing title.
Do you think just because, you know,
you were also talking about, okay,
not wanting to mention Bitcoin, you know, right away,
or, you know, you haven't mentioned it,
but it's like, but it is in the title, right?
So, you know, like, it is kind of mentioned,
like, actually, you know,
as the first thing they see is part of that.
I mean, how do you think about that in terms of like,
okay, yeah, we want to bury the lead with the Bitcoin thing.
But then it's also like, hey, by the way,
the title is Bitcoin is Venice.
You know?
I haven't thought about this in a really long time,
but we thought about it a lot
when we were publishing the first time around.
Because if the audience is unfamiliar,
the point of Bitcoin is Venice, both editions,
I won't keep qualifying which one I'm talking about.
The point is that, first of all,
each chapter kind of works as a standalone essay,
which is more reflective of the way we wrote it.
It's not like we set out to write a collection of essays.
It's like a lot of the essays were written
and we were sort of cobbling them together
into something coherent.
But that does allow, for example,
like with Number Go Down,
we can just post it on its own
and it can get its own attention
and it doesn't need to be wrapped up
with the book necessarily.
But also that throughout,
the very few of the original ones
had much to do about Bitcoin anyway.
Some of them kind of mentioned Bitcoin in passing.
Some of them were...
obviously alluding to Bitcoin, even if Bitcoin wasn't mentioned.
And then others were clearly about Bitcoin.
But in terms of the content, I mean, I don't know the exact number.
It's quite a long book as well.
But I'd say for the first edition, probably like a third of it was actually about Bitcoin.
And it was mostly like the last third.
Because the real point of the book is it's an argument about,
it touches on what we covered before.
It's an argument about what capitalism is, like how you should think about capitalism.
So I don't know if it's not too pretentious, you might call that like philosophy of economics or something like that.
I mean, it just builds up and up and up to then getting to Bitcoin.
But the idea with that flow, and this is something that we're being even more deliberate about when we're revising the second edition.
The idea with that flow is to kind of try to convince the reader that they already believe in Bitcoin.
They don't know it yet, but they already believe enough things that when presented with the right perspective, the Bitcoin element should just click into paste.
And they should almost have like an aha moment of, you know, without even really being told that much about Bitcoin, like, oh, of course I believe in Bitcoin because I believe all these other things.
Like that's the, if that happens, that's success for us.
So that's, you know, what you should know about the book.
As to the title, though, we went back and forth on this a lot.
And I'm glad you like it.
I'm glad you think it's, I forget exactly what you said, but it's like it's an evocative title.
We only thought to use it because the essay, the original essay, which was called Bitcoin is Venice, but for like better reasons that, you know, makes sense in the context of what is being said in the essay.
That just was wildly more successful than we'd anticipated.
and it had kind of quite a good brand.
And the messaging of it was something that we felt,
I guess, did capture quite well the thread of the book,
even though, again, most of the book
wasn't really about Bitcoin,
but it's a fitting conclusion
to what everything else is in the book.
And then weigh that up with, you know,
some or other title that captured philosophy of economics.
I don't think anyone would care about.
We never had a good idea.
If you have a good idea now,
please tell me and we'll consider stealing it.
But we never had any good idea.
The way I've always joked about it
is that the title is actually clickbait, right?
Bitcoin is Venice is complete clickbait.
The subtitle, which is
Essays on the Past and Future of Capitalism,
that's actually a good description.
It's a terrible title, but that's fine.
They work well in combination.
So we've got the clickbaity meme title
that's evocative and it gets people interested.
uh it's not complete nonsense because it does reflect something that is eventually in the book
um but it you know it hooks you and then you you learn about economics by accident
i mean it is it's a one might call it a sly roundabout way perhaps you know way of educating
you yeah yeah that would be that would maybe be the other uh other title i would suggest but
That's a little too overdone.
You know what I mean?
That one's not quite as unique.
And Bitcoin is Venice, obviously,
is a ton of just like, let's say,
brand recognition now at this point.
I want to kind of loop back,
and I'm excited people should.
So what you're also telling me
is that people want to get the first edition of the book
as like a collector's item now.
Will that actually be out of print?
But I guess if that's, yeah,
that's a reasonable interpretation.
Yeah.
Just, okay, you heard it here first.
But, okay, so I do want to get back a little bit.
Yeah, one might say it's a scarce asset.
They're not printing anymore.
Oh, there we go.
But they won't be eventually.
There you go.
There's a defined supply schedule, one might say.
Hard cap on the supply.
Even more scarce than Bitcoin.
Yeah, exactly.
Oh, boy.
You know, Peter Schiff is going to be coming after you soon here, too.
I want to talk a little bit just about, let's say, let's talk more broadly about capitalism
and this idea that again we've kind of established that capitalism has become this boogeyman
it's very much become like this it's it's used incorrectly right or it's it's not understood
fundamentally yeah do you think you know the communists are always saying like well real
communism's never been tried has real capitalism ever been tried in a meaningful way i think that's
actually one of the better critiques of not exactly a bitcoin is venus but of um it's not
really a bitcoin thing it's sort of kind of this austrian i guess if you want to call it like anti
fiat line of argument about whenever everyone says you know this is not again this is not
capitalism is kind of a meme too just because we right that titles of one of the chapters but
but yeah well has it has it ever actually been tried um i think that that is
it's cute as uh as an attack but it's not entirely serious because the sense in which we are claiming
this isn't real capitalism is very very different from the sense in which the communists claim that
they haven't done real communism so in the case of uh fake communists my guess are like
aborted attempts at communism and it has in fact been the communists in charge and they mess
everything up and they want another try whereas in the case of what we're claiming is in capitalism
it's oh actually one other thing to say about communism that is sort of key as a contrast is
while it's happening they're perfectly happy to call it communism they never claim
oh this isn't this isn't going well until it's over and they failed and then they want to try
again and they want to call it the same thing again and they want to call themselves the same
thing again um whereas with the the analog of you know this isn't real capitalism we should try real
capitalism uh it's still the communists in charge they're just they're just calling it something
else this time and then the people who are outside who are complaining you know aren't complaining
about their own failed attempts they're complaining about the kind of um the oh there's definitely
like i'm blanking on the right expression for this it's like um like plagiarism almost of you
know stop using that word because that's not what this is like you're you're misrepresenting you're
you're falsely advertising what you're doing to try to get away with it right so it's it's a very
different um it's very different circumstances for the people claiming that it's not the real thing
yeah no that that's that's completely fair and it is very much like a kind of cute tongue-in-cheek
thing to say because it's just like the whole real communism has never been tried thing it's
just so absurd on its face you're like okay well if we're going to be absurd like you know i'll
throw this out there but i think one can make a a strong argument that again perhaps like
if we talk about capitalism in terms of talking about free markets it's like can you have an
a true free market without a free market in money like if you have a central bank who's able to set
the price of able to set the price of money you know then okay well that's something that like
Marx was all about a central bank for issuance of credit, right?
That's literally in the Communist Manifesto.
So how can you have a free market?
How can you have capitalism when something so foundational as the price of money
is set by a centralized bureaucratic institution?
I think that's a fair way to frame that.
Would you agree?
Yeah, definitely.
If anything, I feel like it nicely captures the difficulty that we have
in, I don't know if you want to call it education
or like just meme craft, I suppose.
Like whatever your means is of reaching normies
because I think it's, you know,
exactly as you allude to,
0.5 in the Communist Manifesto
was asking for the nationalization of credit.
We have since had that.
I mean, this was written considerably
before, considerably earlier
than any modern instantiation of a central bank.
and that is now virtually exactly what it does,
which means I think it's completely accurate
and not like, I don't think it's in any way
derogatory or overly rhetorical.
It's just accurate to say that central banking is communist.
The monetary system is in fact communist.
I'm not saying it in the way I've said communist
a couple of times before,
which is probably my bad for kind of confusing the two
for the sake of amusement.
but in this case, it just is communist.
And as you've just alluded to there as well,
money is half of every trade.
So can you really have, if you're looking for a free market
and you're finding that the money
that is lubricating the market is not free,
it's a perfectly good question to ask
whether you even have a free market in the first place.
But if you try to present any of this to a normie,
they're just not gonna have any clue
what you're talking about.
You're like, I don't think I've even done this.
So this is purely hypothetical.
But if you say, you know, our money is communist, right?
Like no one will know what you're talking about.
No one will even take you seriously.
Never mind, like actually recognize what it is you're pointing out about the money.
So it's tough.
It's tough out there.
It is.
And, you know, again, it's like, what do you mean the money is communist central bank?
In a communist utopia, there will be no money.
And we'll all be artists.
What are you talking about?
You know, like you can't, you can't even, it's like, oh, okay.
Like, I don't even know where to start with this.
Let me, let me ask you too, as we move forward in time, what are your opinions on whether
or not the various fiat systems that exist around the world, various fiat currencies
issued by central banks continue to persist even under a hypothetical, hyper-Bitcoinized
world, let's say.
I have my position on what this is, but like, let's go deep into the future.
Bitcoin is far more ubiquitous than it is today.
It's used in all sorts of different financial instruments as well.
Think, let a thousand micro strategies bloom or something like this.
But like, it's much more ubiquitous.
It's much more integrated.
It's much more commonplace.
Do governments slash central banks still persist in issuing their own fiat currency, one?
And then two, is there at least more, is there more, let's say, honesty in that issuance because there is a credible exit that is widely known?
Does that make sense?
I don't have a good theory.
I'm curious on what your theory is, actually.
Please say after I finish my ramble, but I don't have a kind of a base case for this.
I can imagine different scenarios,
but I think what they'll all come down to,
like the variables that I have no clue on that will predict which of these we end up in i think are probably effectiveness of education in general because i feel like that some i not been involved for long enough that i i feel like
i can say i'm a little bit disappointed that basically the more people aren't aware of the
stuff that we've been talking about for like 10 years or five years or whatever at this point
and it's not clear to me how that really fixes itself.
I feel like the trend is,
that's one thing I should qualify all this with.
The trends I think are inevitable.
So the point I'm making,
I think it's extremely unlikely that Bitcoin actually fails
even without being too precise about what that means.
But I am very hesitant to be like,
will this take five years or will this take 50 years
or will it take 200 years?
That I kind of don't know.
So one is education or like just spread of knowledge, like awareness, right? And then the other is the effectiveness of political or just like violence in general as a way of preventing the first one, right, as a way of preventing people from using it.
I'm not entirely clear on how effective that can be either.
So I can imagine a whole range of outcomes
on a whole range of different time horizons, to be honest.
I think, yeah, I think one of them that you alluded to
could well be we actually do keep central banking,
but it's massively reined in in terms of
there being a market-enforced expectation
of being backed by Bitcoin.
So there's significantly more,
significantly greater limits on credit extension that are kind of abided by by the market participants
because they they basically understand that there isn't really a lender of last resort anymore like
they can actually go bankrupt and including the central bank can functionally go bankrupt in a way
that isn't really true like that that could happen and i mean that would obviously be amazing like if
to even get to that be a massive improvement in in human welfare but even say that like that's
kind of tricky i don't want people quoting that out of context because that almost feels like
defeatist in a for for a for a hardcore bitcoin or to want to say like that is by no stretch of
the imagination hyper bitcoinization so you know should we accept that i mean probably not like no
we should we should keep pushing if you know if we get to that point then it's certainly not over
but nonetheless that would be that would be good and i i can see that as being somewhat plausible
um i guess yeah i mean the other end of the spectrum is obviously just you know there's no
central banks there's barely any there's no banks in the way that we know them now there's just
completely new flavor of financial institution and we are hyper bitcoinized but yeah i mean i
ultimately i just i don't know i think i i will rule out it fails like it won't go to zero there
won't be you know the price won't go to zero the after it will go to zero it will exist forever uh
i'm just very much on the fence about how long it'll take to have any particular level of success
but what's your theory though you said that you you have one i don't mean to put you on the spot
too much yeah no no no i and i i appreciate that so i mean mine is generally it also it completely
depends on what sort of time horizons we're talking about right and so like i you know because
obviously you know on a long enough time horizon you could be like okay well we all we know that
necessarily every fiat currency goes to zero eventually thus every fiat currency will eventually
go to zero yes more will spring up in their places but on a long enough time horizon if you take that
to its logical conclusion probably you would eventually have the complete extinction of fiat
currencies but i don't think that happens in our lifetime um yeah i don't know if that happened i
don't know if that happens in my in my children's lifetime even um and this is not me nacing
thinking you know saying like oh well bitcoin's not gonna like bitcoin doesn't need we don't need
every fiat currency to be extinct for bitcoin to have achieved what it needs to achieve like
bitcoin is actually already winning it's already succeeding it's already achieving what so many
people who have opted in who have taken that credible exit it's already doing what we need it
to do yeah now my other thought is like okay i think that and you brought this up exactly correctly
i think even within our lifetimes what we will see i think we will see many fiat currencies fail
i think they will start to fail uh at a greater rate i think they will also continue to spring
up though right i think they will continue to you know what i mean like it's not like the number of
fiat currencies that we have today is like that's the only ones that can ever exist and there will
never be any more created like no they'll keep making feel like even you know and it's like even
if the u.s dollar fails and by the way guys if the u.s dollar fails that means every other fiat
currency has failed like maybe a couple times over and been replaced like just realistically
speaking like you know you can say that the dollar is going to fail but like it's the it's
the skinniest kid at fat camp right it's the prettiest horse of the glue factory it's the
worst except for all the rest except maybe the swiss franc but you know like that's a that's a
different story. They're the only first world country that we have, as a Swiss man once told
me, which I thought was hilarious and maybe kind of true. But I think that we will see,
because more and more people realize, like the credible exit already exists, Bitcoin already
exists. It's a matter of how many people realize what that actually means for them. I think that
Bitcoin will, as it becomes more and more ubiquitous, I think that it will create more of a
check on unrelenting money printing because as you said the you know these banks will go bankrupt
central banks will go bankrupt and you know they there will be much much it'll be so far less
palatable to bail them out than than it has it's already not palatable right people already hate
that like you're only getting a couple more of those before people are like you know what
maybe we should theoretically i'm not speaking for myself i'm speaking uh for people in the future
Maybe we should just burn this motherfucker down.
You know what I mean?
Like that's, and not as myself, of course, but somebody, you could see somebody potentially
saying that at some point in the future, maybe many someone's.
So I think they continue to exist for our lifetime.
I think fiat currencies persist for our lifetime at least, but there starts to be much less
tolerance for mismanagement and said mismanagement will lead to fiat currency failures via hyper
inflation at an increasingly fast pace that's sort of and then on a long enough time horizon
maybe that stopped maybe maybe they all go away but i don't know but speaking in terms of my
lifetime maybe my kids lifetime i think we still see them but they are held to account a little bit
more that that's generally my thesis on this um i would be very happy to be proven wrong
enter a pure hyper bitcoinized world i'm just you know not sure what that time horizon actually
looks like you know what i mean yeah yeah same yeah so that's that that's my general thesis
um okay so i want to be conscious of uh of your time here as we move through
okay okay time and space i want to talk a little bit too about what you're seeing kind of okay let's
let's separate out from what we were just talking about uh not entirely of course because it is all
connected but what what you guys are doing with axiom um and sort of what you're seeing from from
that side of things are you good to talk about that a little bit without yeah yeah i mean
sensitive. It's more just
the stage where I think
it's going to be a little bit boring for your audience.
Let me ask it a different...
Yeah, maybe I can ask
a different question in terms of
what are
you looking at inside
the, let's say, outside of Bitcoin
just as the money. There is all the stuff
being built around Bitcoin, being built
on top of Bitcoin, being built to make
Bitcoin
more usable, to build products
and services around this nascent monetary technology what are you seeing what are you
looking at what are you keying in on in that in that general realm so i'd say the thing that we
are by far the most excited about is arc and i don't know how familiar you'll be or how familiar
the audience will be i also just be clear i'm not putting myself forward as an expert in this
and so i yeah i don't want to get into like a too much of a technical digression let's say
um but one neat way of capturing why we like it so much is that it feels like it affects basically
everything about the ecosystem positively like it it doesn't it doesn't necessarily
replace anything or like massively you know you don't swap in arc for something else and and then
all of a sudden everything's amazingly better but it's almost like the opposite in terms of the
the implication of like everything probably gets a little bit better because of this. I can give
some tangible examples in terms of like, I probably shouldn't name companies, but, you know,
opportunities that we're seeing where companies that we can invest in, but there's like the use
cases is a more interesting thing. So I think it makes lightning significantly better. And I think
we're quite rapidly moving to a point where people won't like a lot of the terminology that
people have got used to about making bitcoin payments is probably going to have to change
and to be clear what i mean by that not that like oh we're we're saying things wrong and we need to
learn a new jargon or whatever i think it'll be entirely natural i think it just will change
uh by virtue of the infrastructure itself maturing and and kind of one one perspective i guess would
be getting more complicated but also just being obfuscated away so the exact link that i have in
mind between arc and lightning is that i think a lot of payments will have many behind the scene
components that the users just won't need to care about and it may go beyond arc as well because
you can pretty seamlessly plug in uh like e-cash say on on top of arc and then the other side of
it might not even be arc it might be like spark say like a lot of lightning wallets are now using
spark is their back end and basically because on all of these you can do uh effectively htlcs is
kind of what they like that's like the linkage and that's the um the whole thesis i don't know
if you're familiar uh but roy scheinfeld i think it comes from a blog originally but um it's more
like the it's become kind of his own meme i think rightly so because it's it's a very powerful thesis
of lightning being the connective tissue i think that is the name of the blog lightning is the
connective tissue of the l2 space um but i think a lot of bitcoin payments like every day
and and importantly pure to pure payments as well you know we're not talking about like banks
clearing with each other uh will shortly become a lot more involved than people are used to talking
about them so it could be like you know any cashman to arc and then over lightning that then
pays uh somebody else using a lightning wallet but which is actually using spark or whatever like it
could become fairly complicated in a way that's like very interestingly mimicking the development
of fiat but with the obviously important difference that it's actually all self-custodial here or like
it's as you know i said you cash and i said spark it's like it's as self-custodial as the users
actually want it so as opposed to you know you make a visa payment and there's x many banks and
the network and the intermediaries and blah blah blah and like every single one of them is is a
custodian that takes fees and takes time and you're completely beholden to them and it's impossible to
send a payment in any other way to the person you're trying to pay you you have all the
intermediaries involved because they're you know they're they're they're they are adding value in
a limited sense of like they're creating the network for you but they're massively constrained
as to you know they have to operate within this this system of of it being impossible to self-custody
basically and you have to trust them um so in in our space though you you start to see this kind
of complexification and diversification of roles but strictly predicated on it being peer-to-peer
and it being opt-in i think that's really exciting and i think like ultimately this is kind of this
is maybe a more specific instance of just a general trend of like as it gets more normalized right
and as it moves away from the you know the initial hardcore believers who have all their
in group slang and whatever it to them it maybe feels a bit annoying that like the newbies don't
really understand what's happening but that's actually a good thing like if you if we if we
get away from oh i'm paying you on lightning and it's like a bolt 11 or like no normal people don't
give a shit how it actually works they just want it to work and we're getting quite close i think
to it just working which is pretty cool and so to come full circle i think art is key to tying all
of this together to improving lightning, but also to improving everything else that plugs into this.
So we're looking at it. I said I wouldn't name companies. I'm hesitant to name companies we
haven't invested in or haven't yet invested in. ARK Labs
we invested in a while ago, and they're driving a lot of this, and they're
just unbelievable. I think they're one of the most important
Bitcoin companies, if you want to think of it that way. What they're doing is the most
interesting, and what they're enabling is incredibly cool.
and basically for those that are not familiar and correct me if i'm wrong here but the the core idea
with arc is just that it's like whereas in lightning you have you have to open channels
you need various you know inbound liquidity that you need to manage and all these things
like arc you just kind of don't need that i'm very much simplifying right but yeah to go non-technical
there's no inbound liquidity there's no channels etc etc way of understanding the difference to
lightning is that you're kind of you can almost think of it as like and this is somewhat reflective
of how it was even created although obviously this is pretty over generalizing the you know
the process but in in in conceptual terms you start with lightning and you kind of yank it away
from being strictly peer to peer you set it up to be client server instead but what you're doing
is you're pulling away from the peers
or from the clients,
the channel management
and the always online-ness, right?
Basically, both of these requirements,
I don't want to go too much
into diversion of pros and cons of Lightning,
but I think it's more like,
this isn't an original thought.
This is widely understood at this point
that those two properties
are what make Lightning great for businesses,
but not so great for regular users
because nobody wants to run a server,
whereas businesses always run servers all the time.
It's not a problem.
And nobody wants to conceive of working capital management.
It's just not a thing that regular people do.
But again, it's the thing that businesses do all the time.
So both of these things are fine for businesses
and they're a nightmare for regular people.
And what ARK does is start with,
again, in very, very hand-wavy terms,
it starts with the lightning design
where everyone's a peer and everyone has to do that
and kind of yanks it apart a bit
so that you split out these roles of the server managing the liquidity and managing the online-ness
and the client just getting the vastly improved UX.
But the genius of it, crucially, is that this isn't just like Coinbase is my favorite L2 kind of meme.
It's engineered in such a way that it is actually a true L2.
So yes, you have the server, I think they want to call them operators now.
the architecture is such that you need that role but they're not a custodian you if you have an
arc balance it you can you self-custody this you can exit to real bitcoin without their permission
which is awesome yeah and i think that's such an important point around uh around all of this that
self-custodial nature of these things you were saying you know oh you know it's like the oh shoot
you know we accidentally just created fiat banking again like the meme basically you know but it's
But it's like, no, the difference being in the fiat system, you cannot custody money, self-custody money digitally.
You can't do it.
And even if you have physical money, which, yeah, you can keep money, you know, or you can keep, well, Federal Reserve notes in the U.S., you can keep those.
Like that's still, you know, that's still just a promise, right, at the end of the day.
So, you know, this idea that that is really this incredible thing about Bitcoin is that, you know, you can actually hold it.
tongue-in-cheek with this um i'll also shill my own you know content i guess for lack of
everything please if people have in the scene and they want to go look at the talk that i gave
at btc plus plus lightning in berlin i'm actually it's a bit tricky i'm not sure how to find this i
think i think it's on youtube i think btc plus plus have a youtube channel is it like i don't
have it it's not in my you know custody or whatever um but it's out there like it's gonna
be too difficult to find um i talk about basically how how ridiculous the the actual mechanics of
making a fiat payment are and so to your your point i mean i'm not meaning to like pick on the
terminology that you use but it is amusing folk at this that i think you said something like
you you can't uh self-custody digital fiat uh which is true but it it's true for an i think
an even more amusing reason than you meant,
which is that it doesn't even really mean anything.
It's not like there is such a thing as digital fiat
and it's just set up in such a way that,
oh, they can custody it, but you can't.
They don't let you touch it or whatever.
It doesn't even really exist.
It only exists as a bank liability.
And again, I'm wary of like,
it's a 30 minute talk.
I don't want to give the whole talk now,
but knowing where this is going and how stupid it is,
it's
if you're into this kind of thing if you want
some you're feeling
kind of masochistic I guess you'd go
watch this and learn just how
crazy it is and by implication
just how much of an improvement
arc slash lightning slash both
one other thing I just want to mention quickly by the way
sorry to be jumping around but this
came to me after I
after I stopped
my rant about arc and lightning
and then would you recall mentioning in the comparison to
to fiat
I think that it ties back as well to you asking what am I excited about. I'm surprised that people
aren't more excited by ARK, but I think I know why, or at least I have a theory as to why,
which is that the hype around Lightning was so intense and so spectacularly failed to deliver
that people are just jaded from that. And even that, I feel like I kind of have to qualify because
I mean, I think lightning is absolutely amazing. I get really irritated. And I say this in that
talk, by the way, that's why I remembered it. I get really irritated. People say, oh,
lightning sucks. It doesn't do this, doesn't do that. I think it's fair to criticize the extent
to which it was hyped up in, say, 2017 until like 21 or so. Like, I distinctly remember this. I
probably contributed to this myself, to be fair, that it was kind of presented as like, this is
the silver bullet for payments like this is how you scale bitcoin and this is why we won the block
size wars and it's over and we're just gonna win now i'm not sure if anyone said it in exactly those
terms but that was kind of the vibe um that obviously didn't happen and i think people are
really jaded and they they don't they feel like they don't want to fall for that again and so
they're very very skeptical which i guess is healthy but it's so it's just unfortunate because
I feel like it's kind of misplaced.
I'm also wary too,
because I don't want to come across
that I'm saying that,
oh, actually Ark is that,
but it's more like,
we should be more nuanced in all of this.
Like lightning is amazing
at these specific things.
It shouldn't have been hyped up
as much as it was,
but it should still be hyped up.
And then ditto with Ark.
Like it's amazing at these things.
It's also not perfect,
but it's great.
and it makes lightning even better and it makes bitcoin even better so you should be more excited
well and this is the beauty of layer twos also just a bit yeah but this is the beauty of layer
twos in general and interoperability between them right is that ability it's like yeah light
lightning for example like using lightning in a self-custodial way is not a great experience for
the vast vast overwhelming majority of people right it works well i think nor should it you
I don't even see that as being a problem, really.
I almost mean that's kind of equivalent to saying something like using Swift is a bad experience for people.
It's like, well, people don't even like it doesn't even make sense.
Like, why would why would it be a good experience?
And I kind of like I did that on purpose because I think where we're moving towards is and this is like a different perspective.
This is almost like forcing a fiat analogy to Roy's thesis, which has now become a little
more widespread, I think rightly so, that in the new paradigm that we're moving
towards lightning is kind of playing the role of swift i hesitate to push that too hard because
it's it won't be exactly the same and you don't want to take it too literally but
in terms of being like what how the value is right behind the scenes and you don't necessarily see it
but i mean back to your comment that uh that triggered me right this i think is kind of the
gist of like people even talking about the you know the user experience of lightning i think
Like, you know, maybe ARC's all for this,
but whatever it is that's all for this,
when this all improves,
you won't even think in those terms, right?
You'll have one, I guess,
when nobody knows how it works, right?
You just, you don't think of it as like,
oh, my channel management and lightning is like,
oh, I gotta go and fiddle with this and this and this.
It's like, no, I just send somebody money.
Like I send the money and it worked
and that's the end of it.
Yeah, no, I'm in total agreement.
Like, I think that's what you're sort of seeing
between like lightning arc spark like and then you've got e-cash on top of that you've got you
know like fediment as well as these other kind of layers and protocols on that can be used in
conjunction with or on top of these other protocols that are built on top of bitcoin and like that's
that's kind of the beauty of it but like you said it's like at the end of the day the goal isn't like
oh i'm using you know i'm using such and such layer two or layer three protocol to send i'm
I'm just sending you money.
And it just works.
And that's like, we've pretty much, again, the custodial,
as it stands today, the custodial lightning experience is excellent.
Like it's really, really excellent.
It is seamless.
Like you don't have to worry about, you know,
a $500 worth of Bitcoin payment like failing
because you don't have enough channel liquidity, right?
Like that, which is something like I had happened, you know,
like back in whenever it was like 2021 or 22, right?
Like it was more complex.
now they're just big fat channels, you know, between big fat lightning nodes and stuff just
works in a custodial way.
And if you want to use it non custodial, you can do that too.
But then there all these other again with Arc and Spark and everything It very heartening to see where we at right now on that medium of exchange side of things in terms of enabling that at a you know
so that people can stop saying, well, Bitcoin is so slow. It's like anytime somebody's,
and I still see people say that, I'm just like, dear God, like, do you know what year it is? Like,
if you just say that, you're just telling on yourself for having no idea what's happening.
Yeah. But, you know, plenty of those still out there. Alan, we're coming up on the end of the
time here i want to thank you for sharing yours with me excited to get the second edition of the
book what else do you want to show what else where else do you want to send people um i don't have a
huge amount of shell right now i mean number go down was the big thing we obviously we talked about
that at length people want to read it it's pinned on my i refuse to say x by the way i'm sorry it's
pinned on my twitter profile there you go actually jordan's going to be really fun i i don't my
phone's not here i can't show you but um probably wouldn't be that wise for the phone off the camera
either but i i haven't updated my twitter app on my phone in like four years at this point i'm very
deliberate about not updating it so like when you go into the update thing and you're like update
update update no not that one update update update and it's still twitter it's still the blue square
with the white bird that but that's literally the only reason i'm not updating it still works
like it still works fine that's actually mind-blowing that it's still like that they
haven't just deprecated that you know what i mean like i'm yeah boy we might have to cut this segment
out because elon's a listener to this show obviously and so you know i don't want him
getting any ideas well because every now and then i'm like i should really delete twitter on my phone
because it's like i i barely use it on my phone but the fact that it's there means obviously i
still can occasionally and i you know i kind of fall into that trap i i like to pretend i like to
kid myself that you know i have better mental hygiene and i can in fact just sit still and
wait for something and not doom scroll but occasionally i have to do it so i don't delete
it i don't delete it from my phone but but but one of the main reasons i don't delete it from my
phone is that this will end right like if i delete it and then i install it again i never getting the bird back so if it be the end of an era deprecated that would be very healthy for me because i could finally delete the app and then i be at peace that it that is incredible i cannot believe
you've kept that for that long that is truly that that is impressive you know you just need to just
thank you just get my phone save that phone save that phone for all time i want to know if like i
wonder if there's literally anyone else in the world there must be somebody somewhere but maybe
That's impressive.
I'll last them.
Yeah, that is, wow.
I was not expecting that fun fact at the end.
My mind is kind of blown with that.
I love it.
Well, Alan, thank you so much, man.
People should go check out Bitcoin is Venous.
Check out Number Go Down.
Go check out your other musings online on Twitter
that may or may not get you thrown in the slammer someday.
I don't know if you guys say slammer over there, what you say.
I don't know.
I don't say slammer.
I mean, I guess just jail.
I'm not sure if there's good Scottish slang for jail.
I've never been, so I don't know.
I'll tell you.
When I finally hit the tripwire, I mean, I try to be very, like,
I've definitely said things that could be interpreted as hate crimes.
I mean, they're hateful, for sure.
I'm just, I try to, my wife, she's speaking to me by this all the time as well,
that I try at least to be very careful to, like,
if i'm saying something that is verging on hate crime i say it in such a convoluted or pretentious
or like intellectual way that nobody's stupid enough to hate it would get it so like that's
how i get away with it but i'm i'm pretty close to the sun so could do the next one from prison
that'd be fun have you ever had anyone dial in from prison i i have not i have not um uh perhaps
perhaps someday.
But yeah,
this one simple trick
for not getting thrown in jail
for hate speech
is just make it super,
super insufferable
to get through
from a logical standpoint.
You're really convoluted.
Or actually another good well I say a tip If I end up in jail it obviously not a good tip But do it If it is like verging on proper hate crime territory do it entirely ironically And I have it This
isn't legal advice, but I have a kind of an amateur legal theory that you should get away
with it in that case because they can't really get you because they'd have to admit like if you
basically what I mean is that, you know, if you there's some, you know, hate crime point and you
say it completely over the top in the other way but obviously sarcastically right yeah in order
for them to treat it as a crime they have to argue that that's obviously wrong and they're like ah
yeah that's that's a nice way to do it we'll see if i stay out of jail i i i truly hope you do um
alan thanks so much for joining thanks to folks who tuned in on noster as well appreciate you all
And yeah, Alan, stay free over there in the UK.
I'll do my best.
All right, man.
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