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Coin Stories with Natalie Brunell
Matthew Pines: Global Monetary Chess Game of Bitcoin, Gold and the U.S. Dollar
01:25:05
In this wide-ranging conversation, Natalie Brunell is joined by Matthew Pines, Executive Director of the Bitcoin Policy Institute and advisor at Skywatcher, to discuss how Bitcoin is influencing U.S. policy and the global financial order. Topics...
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- [00:00]
Matthew Pines
And so in my mind, like a clever counter move would be pivoting to digital gold while China anchors on legacy gold. And if we can graph that digital gold emerging system, which is only $2 trillion right now, 10% of gold's market cap, then I think you could actually get, you know, one up on China. So we might actually only be a few years away. Say it's five years away from another 10x or 20x on Bitcoin that gets it to parity with gold.
- [00:27]
Coin Stories Host
Hey, everyone.
- [00:27]
Natalie
Welcome back to the show. Joining me here at Rumble Studios is Matthew Pines. He's the executive director of the Bitcoin Policy Institute and an advisor at Sky Watcher. Something I want to learn more about. Matthew, thanks so much for joining me. I can't believe you haven't been on the show yet.
- [00:41]
Matthew Pines
Longtime listener, first time guest. Appreciate you having me.
- [00:44]
Natalie
Well, thank you so much. Well, let's start a little bit with just what's happening in Washington, D.C. with Bitcoin. It seems like we've made a lot of progress, and yet there are still people out there saying, well, why don't we have this strategic bitcoin reserve yet? Eric Trump recently just mentioned it. We're seeing signs that it might happen. But why isn't. Why isn't the government telling us how much bitcoin it actually has and then maybe telling us plans to buy more?
- [01:06]
Matthew Pines
Yeah. Kind of step back and kind of lay out the signpost. Right. So since Trump came into office, he had a number of campaign commitments. He gave the speech back in Nashville last summer committing to establishing a digital national stockpile. He came into office signing two executive orders, one establishing President's Working Group on digital assets, and then a second one specifically creating this rigid bitcoin reserve as well as a digital asset stockpile. Action shifted to Congress, where stablecoins were top of the agenda, the area where it felt like there's more political momentum and more potential bipartisanship. So they did their cram homework to get genius across the line. They had that signing ceremony over the summer. Shortly thereafter, they released the President's Working Group and digital asset sort of study report, effectively that laid out the administration's policy views across the whole waterfront of digital asset policy issues, including at the very last page, the strategic bitcoin reserve. And then it went to August recess, and now they're back, and the priority legislative agenda item is market structure. So clarity is the bill that's occupying most of the political attention. Folks were ambitious earlier in the year that maybe they could reach compromise agreement on language and get that across the line early in the fall, it looks less likely to be the case. This is probably going to extend at least into the winter. I still would peg it as more likely than not that something like Clarity is going to pass. The relevant piece of that for bitcoiners is, you know, it's going to establish rules of the road for token issuance. But one of the key pieces that we want to make sure get added into that bill is the Blockchain Regulatory Certainty act, which would basically give protections for open source software developers. Right. So they're not considered money transmitter. They don't have to get my transmitter licenses. And so that's like a critical protection. We want to make sure it gets gets built into these packages. The word on the street is basically if then, if market structure gets passed, then more political attention can be brought to bear on the streets of bitcoin reserve. Now, the SBIR is I think, a fundamentally different sort of policy and legislative topic than these other crypto initiatives in the sense that it's somewhat nonlinear.
- [03:03]
Interviewer/Host Assistant
Right.
- [03:03]
Matthew Pines
The government traditionally doesn't change their approach to monetary reserve assets very often. And when they do, it's usually as a result of converging political and geopolitical conditions where they kind of have their hand forced. We saw in the 60s the London Gold pool and then other stress on the gold peg took years before it reached a crisis point. And then Nixon had to essentially rug the monetary system over weekend at Camp David. I view this SBR essentially as Chekhov's gun has been put on the table and we're sort of an act one and everyone kind of knows it's on the table, but everyone's sort of pretending it's not there. And I think just the plot has to evolve before you get to Act 3 when some conditions change and now the gun is picked off the table and is used in the plot. And so it's a lot happening behind the scenes of folks in the national security domain are very interested in the concept of an sbr. But right now kind of the distribution of political capital between say Treasury Department, the White House, the Pentagon, the intelligence community, other kind of key political stakeholders in Congress have not aligned right on exactly how to handle something like the sbr. And so in that like divergence of opinion, it's kind of install mode and there's other priorities that they want to push. And so a lot of it comes down to how much is the public going to clamor for one, give us an inventory of how much bitcoin do we actually have? You said you were going to do that. I understand it took a while for them to do that inventory. There might be other reasons why that they don't want to say. And then are you going to commit to adding.
- [04:36]
Interviewer/Host Assistant
Right.
- [04:36]
Matthew Pines
And what are these budget neutral means of potential acquisition that have been identified? What progress has been made? My understanding is that it's actually quite more technically difficult than they thought to do the budget neutral acquisition. The main kind of mechanism that we had identified at Bitcoin Policy Institute that we viewed had sound grounding in law and was very feasible and reasonable was using the Exchange Stabilization Fund, which is a sort of a slush fund for the Treasury Secretary established by the Gold Reserve Act. And you can interpret the existing statutory language, I think pretty fairly. You just have to structure the transaction in the right way to acquire Bitcoin. Again, it's a novel, creative interpretation, but requires kind of legal opinions inside the Treasury Department to be willing to take that next step. And that's why they've been unwilling to kind of be that creative or be that novel or take that precedent to its conclusion. So they're kind of in, let's study this a little bit more. Let's take some time. And so that's kind of the process that's playing out. The last point I'll say is Patrick Witt, who is the new Beau Hines at the White House, the Executive Director of the President's Working Group on Digital Assets. He comes from the Pentagon, so his previous job was as the acting director of the Office of Strategic Capital, which is this new and newly important office inside the Pentagon, basically charged with strategic investment in critical technology sectors. And they have recently appropriated up to $200 billion in mostly debt, maybe potentially equity investment authority in critical technology sectors. And so he's now kind of, he was, he was dual hatted as Beau Hines understudy as well as taking a role in the Pentagon. And now he's, his full time role is at the White House essentially as the leading policy coordinator for digital assets. And so and then we have a different lens now that the White House is looking at digital asset policy through which the first, I'd say six to eight months was fundamentally making good on campaign commitments. And then now I think it's shifting a bit more to the strategic national security discussions. And those by definition are not going to be as public and those are going to be a bit more, they're going to take a bit more time for all the different pieces of the puzzle to come together. So I'd say I'm not expecting massive acquisitions from the US Government to occur imminently, but I think the Overton window has now dramatically shifted and the next year, two years, I think we're going to see the government become much more deliberate about how it approaches its Bitcoin policy.
- [07:07]
Coin Stories Host
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- [08:49]
Natalie
Wow, there's so much to unpack there. Okay. Bitcoiners love to talk about game theory and it's clear that the government has prioritized stablecoins. Recently we've been hearing international figures from places like Russia talking about how the US almost is trying to put to put in place a strategy to maybe wipe out the debt through things like stablecoins and Bitcoin, maybe that there's a strategy to sort of maintain dollar dominance through this new technology. So can you talk a little bit about that? Is there a plan in place? Because we're so far in debt, we have a massive problem. We need demand for these U.S. treasuries and stablecoins are the perfect buyer and to essentially keep our hold on the monopoly over money around the world.
- [09:30]
Matthew Pines
Yes. I'm not sure how much of it was a master plan. I think most US government policy is kind of reactive to available conditions and usually things evolve independently and then the government realizes, oh, this is something that they can take advantage of and then they accelerate it in that direction. And so that's what happened with Stablecoins Was it kind of was this organic free market phenomenon that sort of sort of grew like kudzu around the world kind of crypto Euro dollars. There was a demand for kind of dollar like tokens to intermediate bitcoin trade and then the emerging digital asset economy as well as help with cross border payments. And once that infrastructure was established, once that market was, was, was, was sufficiently broad and deep, now it became relevant for national strategic policy. When it's you know, $1 billion, it's really not that important. But now it's 100 billion, 200, 300 billion. Well now it starts to take on potentially strategic dimensions. I think Treasury Secretary and other national officials have realized that there's kind of a mutual alignment between expansion of stablecoins, expansion of the dollar network. More and more individuals around the world will choose to hold their kind of cash balances in dollars relative to local currencies. And then if you can regulatory require those issuers to reserve those crypto tokens with treasury securities. Well now we have a new buyer of our debt. Especially in the condition where because rates are high and we don't want to have to keep rolling over our debt at high levels, you can force short term issuance via certain maneuvers from the Treasury Secretary on how they decide to push debt into the markets. Then you have basically a balance sheet that you force to absorb that. There's kind of this alignment between growth of stablecoins, growth of dollar network, growth of demand for our short term debt. And that's not like a panacea, it's not like one weird trick to solve our fiscal problems, but it basically allows them to kick the can, right? If they can essentially expand the size of stablecoins trillion, 2 trillion, maybe $3 trillion over the next three to five years, which is what sort of the Treasury Borrowing Advisory Committee estimated Secretary Besson has thrown similar numbers out. Well, that's a meaningful contribution to how the government is going to need to finance itself over the next few years. So it relieves that marginal pressure on them. And so in the end, politics is about not solving these strategic questions all at once. It's about kind of buying yourself more time. And fundamentally, Secretary Besant, his job security is like, can he keep the US government financed without having a bond market revolt and without triggering instability in the financial system? And so I think they see this as a geopolitical tool and also sort of a macro and financial stability tool, but it's too small to really play that role now. So that role can only be played if they actually grow the stablecoin market. And so they actually have to implement Genius. And so this is where it gets under the hood of onshore versus onshore issuers. What sorts of kind of a regulatory regime is going to be treated as equivalent? And I just note that Bohainze is now essentially going to be leading up a unit of Tether, issuing essentially a tether token in the US Kind of be the genius compliant kind of onshore version. Again, this is just a sign that this convergence of kind of the frontier crypto world and the like US government kind of green lit kind of sanctioned world are kind of merging together.
- [12:51]
Natalie
So Tether is now the 18th largest holder of US treasuries. And Paolo recently tweeted that he's buying gold, bitcoin and land to hedge against darker times that are coming. What does that say to you? What should people know?
- [13:07]
Matthew Pines
Well, it's interesting, right? We're in an environment, I think this is no surprise observation of acute geopolitical instability, domestic political instability, technological change, and sort of a sense that the future is much more uncertain than it had ever been. And that means that there's risk scenarios that were say, tiny percentages that are now slightly higher percentages. And if you're individual with capital, if you're exposed to lots of different sources of both geopolitical risk, technological acceleration as well as you have an ideology that says we want to decentralize power, you're going to look at these converging forces in the world and you'll be like, this is problematic. Generally speaking, when you have geopolitical instability, it tends to centralize control, especially in the large powers. We have great power rivalry. China versus US tends to subsume all other dynamics and it wants to pull in power to the core to be able to impose their will on the periphery and to win a great power competition. And that means little guys usually get squeezed out. They usually get subject to more state level coercion. And so if you have a vision of decentralized power, well, you're going to look ahead to be like the trend lines here are not encouraging. Both the geopolitical drivers as well as to a certain extent, the logic of AI, the logic of mass surveillance is all about centralizing control, centralizing power. And so you'd want to look to find are there technological ways of kind of carving out a space for free freedom in this emerging area and mitigating these tail risks, mitigating tail risks of either geopolitical conflict, social unrest, as well as the rise of what you could see already kind of emerging both in the east and the west of techno authoritarianism. So I think part of this vision of techno liberalism is about decentralizing power, giving folks more autonomy, more control over their money, more control over access to frontier capabilities from AI and the ability to kind of insulate themselves from these, from a world with higher volatility and more shocks. So that's, I think, the world that institutions are preparing for. It's a world that nation states are preparing for, large companies, farsighted individuals are preparing for. And it just is about giving those tools to everyone. Like right now, if you are a country looking ahead, you're trying to be as sovereign as possible, right? But it requires power to essentially claim that sovereignty and to actually acquire the resources to under, to undergird it, right? So if you look at the Emirates as an example, they're trying to convert right now a large amount of like financial capital, you know, trillion to $2 trillion in sovereign wealth funds, into energy sovereignty, compute sovereignty, where they get sort of those leading edge chips, localized AI sovereignty, so they get the intelligence running on those chips and then monetary sovereignty diversifying into gold and Bitcoin. And so the Emirates is a good example of kind of building the sovereign stack from the bottom up in terms of energy, compute, intelligence and money. A lot of the great powers already have that right. Us, you could say already has that. China probably already has that. I think there's a certain vision of the world where we want that for everyone. Everyone ideally should be in the limit. You can imagine this ultimate kind of thesis playing out. It's like imagine everyone has a fusion reactor in their basement powering a GPU cluster that stores your own data, that locally hosts your own frontier models that connects to your bitcoin node that Runs agents that run your own business. That's the ultimate vision of digital sovereignty in the 21st century. Right now, that degree of sovereignty is, I think, reserved for a handful of countries and maybe some multinationals. I think the vision, the project that I know BPI and others are pursuing is to try to push that level of sovereignty down as far as we can.
- [16:42]
Natalie
The geopolitical scene, I think, is so fascinating right now because you have the net producers of the world brics essentially starting to settle more in gold that floats in different currencies. And I think we are recognizing that the current system, as it is with the dollar as the global reserve currency, is not sustainable. And other countries that have maybe more leverage than we would like them to at this point, because we've hollowed out so much of our industrial base, they are turning to alternatives because across the world, people have lost faith in the dollar due to inflation.
- [17:11]
Interviewer/Host Assistant
Right.
- [17:11]
Natalie
We just print these paper promises. We exchange them for real goods and services. If that system is going to end, where does bitcoin play the role? Because it seems to me like things are actually moving more toward gold right now. Central banks are buying gold. So I know that we're having this action when it comes to stablecoins, but where is bitcoin going to rise in all of this?
- [17:33]
Matthew Pines
Yeah, I mean, in my mind there's maybe a descriptive take and there's a make a prescriptive take, right. I can maybe do my predictions and I could give my, like, my. What I would like to have happen. What I would like to have happen is for, like, I'd say the constellation of countries that abide by a certain set of values, right? Like liberal democracy, free market capitalism, commitment to human flourishing, and kind of the strength of civic bonds.
- [18:01]
Interviewer/Host Assistant
Right.
- [18:01]
Matthew Pines
Like we want to have technology and national policy, like, support that. So in a certain sense, the monetary system is like the dark matter of society, right? Intermediates everyone's life decisions. It sets kind of the contours for what's possible for individuals, businesses and countries. And so these abstract policy discussions ultimately are what kind of frame everyone's life choices. And I think we're going to. What I would like to see is some sort of synergy between the existing system, which has its pathologies and has its vulnerabilities. Right. So the treasury dollar standard that sort of underpinned US imperial hegemony in the last 75 years has reached the diminishing point of marginal returns. It's now probably creating more harm than benefit for national power as well as for our Everyday individual scope of possibility, increasing wealth inequality, the political pathologies that result and just the instability of democracies in the West, I think can be traced ultimately to the problems with our money system. So, so if we could adapt our money system, I think it's not like all is lost for the dollar. I think it's about shifting the structure of the system so you can preserve the network effects but mitigate some of the pathologies. And so grafting Bitcoin and a stablecoin kind of emergent technology to the legacy system could be a way for kind of the west to kind of get a renewed lease on life.
- [19:17]
Interviewer/Host Assistant
Right.
- [19:18]
Matthew Pines
As our sort of authoritarian rivals in Eurasia are pursuing a more 19th century style monetary system, kind of return to kind of hard power politics. Great power kind of, you know, if you can't push back, then you're going to be, you're going to be a tribute.
- [19:35]
Natalie
Conventional power projection.
- [19:37]
Matthew Pines
Exactly, exactly. So kind of a gold based, commodity based, geopolitically anchored hard power system. And I think ultimately that's like, that's going to be incompatible with the technological acceleration that we're going through. Like gold failed for a reason.
- [19:51]
Interviewer/Host Assistant
Right.
- [19:51]
Matthew Pines
Hard to settle. And so it's kind of as a stopback, right, that China has been using as a strategic weapon against the legacy dollar standard. And so in my mind, like a clever countermove would be pivoting to digital gold while China anchors on legacy gold. And if we can graph that digital gold emerging system, which is only $2 trillion right now, 10% of of gold's market cap, then I think you could, you could actually get, you know, one up on China.
- [20:15]
Interviewer/Host Assistant
Right.
- [20:15]
Matthew Pines
Like another 10x of Bitcoin from here. Seems like a lot, but In Bitcoin's history, 10x is kind of a pretty standard thing. So we might actually only be a few years away, say it's five years away from another 10x or 20x on Bitcoin that gets it to parity with gold. In which case China's 10, 15 year project of hoarding gold would be sort of rendered a bit moot because now we've acquired the dominant percentage of this emerging gold reserve asset. And so it has to kind of monetize through a volatile path along that way. But I think there's an end state here where you could have kind of two competing blocks that are essentially separate spheres. They have their own sort of geopolitical domain, they have their own commodity trade based domain, they have their own tech stack. China has their own AI tech stack that they're trying to export around the world, we're trying to export our vision of a certain tech stack. And so the failure mode would be they just become two authoritarian competing systems. I think ultimately if that's the case, then ours is going to fail because we cannot out authoritarian the Chinese, we cannot out totalitarianize the ccp. The only way we're going to win is if we embrace the essential ethos and competitive dynamic that has allowed us to dominate these sort of frontier technologies in the first place. And so that's the risk I see is if I think it ultimately will be self inflicted if we kind of lose the mantle of leadership, if we don't kind of align ourselves to these emerging trends and allow them to kind of reinforce our existing values, then then we're going to be in trouble. But I think we have kind of this moment in time right now to make those right choices.
- [21:49]
Natalie
There seems to be so much at stake. And you alluded moments ago to the wealth inequality, just this growing sense of economic resentment. Charlie Kirk, who so many people in my audience really, really admired, he said on a show that he believed the debt was radicalizing young people.
- [22:07]
Coin Stories Host
Do you think that that's true?
- [22:08]
Natalie
To some extent. And do you worry about the social fabric within our country? Because it seems like we would need a sense of unity in order to achieve the goals that you mentioned, to embrace something like Bitcoin to help us maybe enter a new golden age economically.
- [22:25]
Matthew Pines
Yes, I think it's tragic what happened to Charlie. And I think that observation speaks to, I think an observation most people share now, which is that it's harder to come climb the ladder of prosperity. The sense if you're a young person saddled with either credit card debt, student loan debt, maybe you can get to a decent paying job in a city where you're paying high rent, you try to date and get married, try to have kids, and then you realize that just the cost burden associated with that, whether it's childcare, trying to buy your first house, those sort of basic next steps on the wrong are just impossible to reach. And when that happens at scale to an entire cohort in a society, you get, you get to a dangerous position, you get folks that get angry, get alienated, and then all it takes is a handful of percentage points of that population to get trapped by distorted ideologies. They want a culture or community of belonging where it validates their identity. It gives them some other mission in life they can achieve when the normal missions that are usually inculcated by society at Large the pro socialist kind of paths that we try to lay out for people. If those paths become untenable or seen as deceptions or manipulations, then you get a counterreaction. You get folks that want to break the system, that want to attack the system violently. And that's a dangerous mode for society to go into. And so, yeah, I think it's a cautionary tale right now for our current political order is just that sense of insecurity by a large set of the population, even as you have this technological acceleration that is painting visions of a golden age just around the corner. So we kind of are sitting in this very kind of contradictory mode totally where you both look ahead and you can see visions of civil unrest, of stochastic terrorism, of geopolitical conflict, of an ever kind of declining standard of living, health care, insurance costs, unable to afford a home, declining birth rates. These are kind of the modes of kind of doomerism that I think have a hard element of truth to them. And then you have, I think, a techno optimist strain that also has kind of some data points pointing in its favor, like the rate of improvement of AI Right now obviously there's chatbots that people use. But I think just around the corner we could be seeing real scientific discoveries, like life changing discoveries in medicine, in fundamental science that ultimately, right, if you want to move civilization forward, you want to create more abundance, more possibility, more resources for people to do more with their lives with, you need to create more ways of generating wealth. And I think our society is going to face this acute choice in the next three to five years. Is that potential of these emerging systems, does it get hoarded? Does it get locked up? Does it get kind of directed by a tiny select few? Or does it empower the entire civilization and just transform the possibilities for everyone in that mind? That's what shifts minds, that's what sort of shifts societies in a very different direction is you get new modes of economic production, new wealth, and then that is a surplus that can raise the entire society. So I kind of have on each shoulder, right, I see both the sort of the doomer kind of failure modes in our near future, but I also see kind of these trend lines, these accelerating sort of techno optimist abundance futures. And it's like, all right, we're kind of in this hinged moment where we need to make sure we're choosing the right path, right? Is that meme of the bus, right, or the meme of the two different paths? This is kind of the path we need to kind of steer towards Coinstories.
- [26:11]
Coin Stories Host
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- [27:59]
Natalie
I think what concerns me is that we already are so divided. I mean there was a recent poll that frankly kind of terrified me where 56% of some of the respondents said that they would. They think that political violence, murder in fact is justified. That's, that's wild to me. I mean that's like a, that's getting into just good and evil and, and so, so many people are feeling left behind, disenfranchised. We know that the treasury for example, it's, it's they're gonna need a print. Like they're going to need a print. They're going to need to issue more debt, they're going to inflate the dollar, destroy purchasing power, and asset holders always get bailed out. So, I mean, what is the hope? The only one I found is Bitcoin, frankly. And I know it's not a be all, end all, solves everything overnight, but when so many people are left behind and the system has crushed them, and they will always print and so they'll destroy the dollar first before allowing Great Depression 2.0, what else is the solution?
- [29:00]
Matthew Pines
Well, I think we've been living in a bit of like a hall of mirrors world, right, where most people's interactions, their political views, their social interactions, their commercial behavior is mediated through algorithms, right? And so it's a screen, it's a pane of glass. And when that's the dominant mode of social interaction, it takes on sort of an air of unreality, like it's a video game where your public avatar is just like a character and you can kind of change out views like you change out skins in a video game. That doesn't seem real. It doesn't seem to have real life consequences until it does, right? And so we're sort of seeing this kind of snapback, right? So you can kind of live in a fantasy world up until you get hit in the face with either a pandemic, a war, a financial crisis, a political assassination, and all of a sudden everyone wakes up and be like, oh, it's a real world. There are real consequences here. It isn't just sort of a video game where I can kind of like, you know, talk smack and kind of be an avatar on a screen. So I think it's good to have folks grounded because you can get lost in those fantasy worlds. And when all of society gets lost in those fantasy worlds, especially ones that are algorithmically manipulated, well, then are you really a free person? Are you just being kind of led by the nose here? And so I think Bitcoin is a good example of a digital system that anchors to reality, right? That it actually has proof of work, that you can't just sort of print imaginary bits on a screen and sort of get people to believe it long enough. And just as we've seen with financial systems, you can have fictitious capital, all of a sudden get woken up by reality, and then all of a sudden it's sort of the roadrunner looking down, right? And then the financial system realizes, oh, wait, the things we thought had Value actually are worthless and you get a financial crisis and we have to print trillions of dollars. So I think like this sort of mode of living in delusion, ultimately you have to get to ground truth. You have to get to real physical constraints. And if you want to move society forward, you have to try to change those physical constraints. So right now our limited constraints are our brains and our bodies and what we can use those things to do things in the world. So planes, trains, automobiles, data centers, fusion reactors, these are things we have to build to transform what human beings can do and create. And ultimately human civilization is about doing more with less, right? Creating more inventions and exploiting what nature allows us to do. Ultimately, it's like creating new physics. In my view. What's going to get us out of this is new physics. We're stuck in the 20th century physics. We're stuck with the sort of basic modes of energy production, of transportation. And we've been sort of retreated to this world of kind of digital innovation, which has gotten us pretty far. And maybe now kind of the end result of that digital innovation with AI can actually come back into the physical world and actually help us understand can we make fusion work? Can we radically transform our understanding of what we can kind of create in terms of technology? And if you can do that, then I think you can solve lots of other problems, right? Like if you can cure most diseases, if you can make the cost of energy go almost to zero, if you can unlock the potential for human beings to move around the world, to expand out into space, I think one that has hard material transformation in terms of our economy. But I also think it has a collective social reorientation towards the future, towards growth and possibility and hope and promise, as opposed to kind of zero sum. Everything is going to crap and I got to get mine before somebody else does. And that is a negative feedback loop for, for a society. So you need to break those feedback loops. You need to create new potential that unlocks discovery ultimately that you can transform into technology. That's my hope, is that we could be close to unlocking some of those new discoveries. And then if you can anchor those to the collective welfare of society, then I think you can get out of this potentially destabilizing equilibrium that everyone thinks that we're in. Thinks it's irretrievable. I don't think it's irretrievable. I think lesson at Bitcoin is actually that you have to go to the hard ground. Truth. Physical constraints are ultimately what you have to build from technology.
- [33:13]
Natalie
Seems to be moving so fast, especially now with AI. And I think a lot of people are a little bit nervous about what the future will look like and how connected we're going to be to these machines. Can you just share your own personal outlook and it could be what you think will happen versus what you really want to happen. A lot of people are nervous about quantum computing. That's like the number one risk that I'm hearing from doubters of Bitcoin is, oh, they're not sure about quantum because things are just going to accelerate faster and faster and something can break. And I mean, there are people debating knots versus core right now. And that's like, you know, this massive conversation and so much drama. If we have to fork Bitcoin to quantum resistant, is there going to be consensus there? I mean, just. Can you touch on all of that?
- [33:55]
Matthew Pines
Yeah, there's a lot there. So the two points on AI and then connected to Bitcoin and then quantum. So I think what most people see with AI are sort of business models that are getting really good at generating frontier capabilities from essentially a basic understanding of how to scale some already known technical breakthroughs. But they just have to grow the size of these models, grow the compute infrastructure enormously. And it looks like that's going to have a pretty high return on investment if they can get to a certain scale, in which case it's going to be repaid back by essentially displacing a lot of currently valuable economic functions. Right. So the premise behind these massive valuations, the massive capex that's being invested, Oracle's 40% pop in a day, is essentially we will be able to automate large swaths of the current economy.
- [34:43]
Interviewer/Host Assistant
Right.
- [34:43]
Matthew Pines
There's trillions of dollars of potential TAM in being able to automate through AI models and various other sort of agents, back office functions, admin insurance, etc. Which will have a knock on effect for a monetary system.
- [34:56]
Interviewer/Host Assistant
Right.
- [34:56]
Matthew Pines
If you have to all of a sudden pay out a lot more unemployment benefits, well, guess what? The 6 to 7% structural deficits that we're in now go to 10, 12% pretty quickly and you're sort of in a de facto UBI world. So there's an immediate link between potential labor displacement in the next three to five years from AI and sort of the fiscal response and then obviously the liquidity response. I also think that the business incentives right now for frontier models is to again kind of capture that economic tam, which is all about essentially creating really good substitutes for human labor at different parts of the skills ladder at the top of what you could say the skills ladder of humanity is like scientists, right? It's like unlocking the next frontiers of discovery that create again. We discovered nuclear energy had good and bad applications. We discovered the foundations of computing that transformed our human civilization. We understand the structure of reality. We can understand technology that we can use to fundamentally transform our civilization. So if we can get to the point where these models are generating new discoveries, then I think you could dramatically transform the economic possibilities without necessarily having this massive job displacement or maybe can mitigate some of the impacts because you can create new industries at the same time that existing industries are being somewhat eroded in terms of their human labor requirement. So that's like an unknown. Which one's going to happen first? Do we get like the drop in white collar worker plus the self driving car plus the automated sort of factory robot, in which case large swaths of human labor becomes fundamentally obsolete? And you compress the displacement that we saw in the industrial revolution, which took 100 years, you compress that down to 5 or 10, and the political consequences of that could be hard for current institutions to manage. And so if you don't have some other way of either distributing those surpluses or creating much more surpluses, then the political reaction could be very damaging. So that's like a challenge that we're going to have to face. We are going to face it in the next three to five years, I think, and it's going to have spillovers to Bitcoin directly. I think the lesson I draw from the Bitcoin side of things is that you have to come up with new things. Bitcoin is a friendly new thing that took these existing predicates, cryptography, the emergence of the Internet, and some basic understanding of computer science and some special tricks to create a new thing. It wasn't like he just Satoshi invented Bitcoin out of nothing. The basic ingredients had to be there, and you mix them the right way with clever human genius, and then boom, you have this fundamentally new thing. And I think that's. I never want to lose that lesson. Because if we can create enough of those sort of basic new predicates and human potential plus AI can allow us to combine them in new ways, then boom, new things can come out of our imagination. So that's like the optimistic case. Quantum computing is another subset of this, right? Because humans are getting better at doing more and more difficult things. And quantum computing is one of the most difficult things we've known that it's theoretically possible for 40 years. But no one's ever been actually able to build a cryptographically useful quantum computer. We know from the math that there are algorithms that if you had a sufficiently powerful quantum computer, you could run an algorithm that allows you to decrypt the encryption that underlies what secures your private keys. So this is the concern in Bitcoin community that we could be making sufficient progress in the next few years on quantum computing. And there's lots of investment going in both the public and private sector that maybe it's three years away, maybe it's 10 years away, but it's plausible enough now that we could get to the point where someone might develop a computer that could crack a private key. And I think that started to have that conversation in the Bitcoin community about what to do about that.
- [38:39]
Interviewer/Host Assistant
Right.
- [38:40]
Matthew Pines
And so I was actually at a symposium in Presidio with a bunch of Bitcoin developers and quantum computing experts a few months ago just to do a deep dive on this. And so the TLDR is there are a number of different potential solutions. There's no one weird trick. And ultimately it's not just a technological solution. Like we know there are post quantum encryption schemes that you could migrate current addresses into that would be resistant to a quantum attack. So there are ways of making Bitcoin quantum resistant. It's more the political governance question of how do you actually get Bitcoin, which is just this amorphous blob of people that run Bitcoin nodes and hold bitcoin institutions, et cetera, to decide to shift to a new scheme, as well as what to do with the addresses that can't shift. So what to do with Satoshi's addresses, what to do with maybe a few million UTXOs that are just dormant, what do you do with those after a certain time, Jamison Lopp has his proposal, which is we collectively agree that those can no longer be spent effectively. A hard fork or a soft fork, depending on how you interpret it, effectively making those coins unspendable. Maybe there's a way you could reap, you could prove that you have control over them and get them back to be a spent condition.
- [39:59]
Natalie
So it's not finders keepers with the best hacker.
- [40:02]
Matthew Pines
Well, so that's the trade off, right? This is ultimately not just a technical question, but like a philosophical question of like, what are these core commitments to what you think Bitcoin is and what are you willing to accept in order to stick to those commitments? Right. So if you accept that Bitcoin supply is what it is. And that, not your keys, not your coins, is the final arbiter of what Bitcoin is and always shall be, then if someone develops a cryptographically useful quantum computer and uses that to crack an address with large amounts of Bitcoin in it, then that's theirs.
- [40:35]
Interviewer/Host Assistant
Right.
- [40:35]
Matthew Pines
Fair is fair. Right, sorry. They got a quantum computer before you did and you didn't migrate your addresses. So that's the free market.
- [40:41]
Interviewer/Host Assistant
Right.
- [40:42]
Matthew Pines
And so people have, I think, a principled attitude towards that. Other folks take a pragmatic attitude and say, if that were to happen, the market effects would be so risky that it would impose unacceptable risks to the whole network. Especially if you have circumstances where large institutions hold large amounts of Bitcoin. I just think it's more of an understanding of the shifting political economy of Bitcoin now. So, yeah, it's a fascinating topic. I think the quantum question is interesting not just because of its technical components here and understanding all the very smart people in Bitcoin coming up with novel encryption schemes, ways of using taproot to deploy different schemes on different leafs. So there's lots of smart people coming with lots of clever technical solutions, and I think that work should be supported, should continue. But it's a philosophical question and a governance question in the decentralized system that we call Bitcoin. Of, okay, well, when push comes to shove, if there is an acute perception of immediate threat, which there isn't now, but there could be, or there could be something that happens that people perceive as a threat, then it might trigger mass action in a way that isn't as coordinated as it should be. So I think my upshot of all this is that it's better to start early, talking about these sorts of things, not jumping to conclusions. And I think the knots debate is maybe you should draw a lesson of it's better to do this in a way that's about where you have those discussions over core attitudes and philosophical debates upfront. And then you understand what the technological solution space is, because those are very different attitudes. Sometimes people mix different philosophical positions from technical solutions and they often want to conflate one for the other. And you're not sure, okay, are we fighting over the right way to do something? Are we fighting over why we're doing that thing in the first place?
- [42:36]
Natalie
Yeah.
- [42:37]
Matthew Pines
And, you know, there's no ruler on high that's going to dictate, you know, what's going to happen. But the more people are engaged, the better. I think this is also a beneficial potential Development with AI is that, you know, bitcoin is a complex system and being a bitcoin core developer requires like a lot of technical skills, a lot of time and energy. If you want to follow the technical debates, follow the mailing list. You got to like, you got to be, you got to spend a lot of time and it's kind of hard and not everyone's up for it. And so I think one of the promises of AI right now is basically you could now be a participant in that debate and understand what's happening and be able to engage with it, I think. So that's positive, right? You can decentralize the ability of folks to understand what these different bips mean, what the trade offs are, how to understand how to engage and not just defer to whatever your favorite podcast or Twitter influencer says. You should think just you now have the tools to come up with their own independent view of things. I think that's good.
- [43:35]
Coin Stories Host
Yeah.
- [43:35]
Natalie
And then the best part is every node can cast its own vote. I've heard some people say that they think Satoshi came to us from the future.
- [43:44]
Matthew Pines
I mean he might as well have, right? I mean it was certainly a far seeing set of observations. One thing if you, I would encourage folks to at least skim the president's working of digital assets report and they start every chapter with quotes from, from mostly Satoshi and the bitcoin early days. And you realize a lot of the debates we have now, a lot of the hypotheses that are now potentially being real were very much like observations that Satoshi and Hal were making early. So they had a view of the future, whether they were from the future, but they had uncommon. But we'll see. I mean I think if I was David Bailey or somebody else who was highly leveraged bitcoin and I go five, 10 years into the future and they leverage that new trillionaire status to invest in breakthrough technology. It would be to invest in time traveling orbs to go back and make sure bitcoin gets created. And we're on the bitcoin timeline.
- [44:51]
Natalie
Well, the reason I asked is this touches on some things I've, I've seen you discuss in other interviews, like consciousness, you know, whether we kind of live in a simulation. I would love for you to share maybe your views because this is something I really never thought about before I entered the bitcoin community. But there are a lot of bitcoiners that think about this. They are fascinated with whether, you know, there's extraterrestrial life and whether We've been in contact with it. I've learned about Fermi's paradox. These are not conversations in every circle. So are we living in a simulation?
- [45:24]
Matthew Pines
Oh, wow. Okay. We're going to go deep into the metaphysics here. Yeah. So my background was in physics and philosophy, and I was always attracted to these fundamental questions, right? Like, what's the structure of reality that we call physics? Like, what's our mathematical model of reality? And then how do we interpret that mathematical model? Like, we have entire disciplines of physics, in particular metaphysics, ontology, epistemology, to understand how we know what we know and what exactly. When we say the world is X, what does that mean? Or when we say that there is a certain physics model that we think is provisionally true, what does that tell us about the picture of the world we have in our heads? And so we have a bunch of tropes in popular culture about simulations, about other interpretations of New Age spiritualism and consciousness that have kind of all blurred together. I'm ultimately, I try to ground myself and the rigorous discipline of physics and philosophy, which is you have to be able to understand what the words that you're using and how to interpret them very carefully. Yeah. And I think, stepping back, we're in this weird moment in time where a lot of the fundamental mental models that we use, the frameworks we operate in, the political frameworks, but also the scientific frameworks, seem to be ill fit for purpose. We had maybe a certain set of consensus understandings of reality, both at the political layer, what was the political bargain, the social contract, as well as at the metaphysical layer in the 20th century of we're going to build engineered systems, physics is going to tell us everything we need to know. And in Western society, we kind of pushed aside and kind of pushed behind the curtain the kind of other aspects of reality, like what it is to be a conscious being, and traditional modes we would sort of carve out into purely spiritual kind of religious domains. I think other traditions in human cultures didn't make that of an explicit split. Goes back to Descartes in the 1600s. It was like we have the realm of the spirit and the mind, and then we have the realm of matter. And we can describe the world with mathematical models and we can make predictions. And society was able to do a lot with that mode of dividing the world up. But that was just almost like a. That was like we had to split the world for the purposes of being able to carve out certain domains.
- [47:37]
Interviewer/Host Assistant
Right.
- [47:38]
Matthew Pines
And we can develop models that we can start Building things with useful things. And then we have this other domain of human experience that we just kind of have been left hanging in Western societies with. And so I think we're in this moment of kind of reconvergence of traditional, what you might call spiritual understanding, or at least taking consciousness seriously, taking first person subjective experience very seriously, as like an ontological thing. You can't just rule out from your description of nature and our very successful way of understanding the world through physics and math. We have to find a way of pulling those together in a consistent way. I think as we do that, we're sort of finding that the way of interpreting experience and way of interpreting the physical world require a fundamental transformation of what we think is possible and what's around us. And maybe if we're going through this process of both intelligence and consciousness maturation, developing new technology, especially technology that's going to rapidly accelerate, maybe others did the same journey and got further along. And so maybe that's a feature of our environment that we haven't been aware of until recently. And so this is where I think we're in this mode of phase transition, culturally as well as politically and scientifically, where it's difficult when you're in the phase transition because things seem disordered, unsettled. Everyone wants to try to guess at what the final settled state's going to be, but they're chaotic. The new thing hasn't quite formed yet. I think we're seeing that set of phase transitions take place simultaneously across both the geopolitical order, the social and political order, the technological order, as well as the scientific set of frameworks at the same time. And that makes it very, very hard for people to try to get a sense of what's happening and where it might be going. You're getting things like UAPs being taken very seriously at the same time that we're building quantum computers and that people are expecting AGI just around the corner, maybe even superintelligence. At the same time, people worried about US China, war and emergence of all sorts of new radical social sort of movements and political change. And so it's just hard for people to get their heads around. And these things that are a bit more outside the aperture of kind of accepted discourse are just too much, because people are dealing with a lot already. But that doesn't mean they're not there. It doesn't mean that we're not going to have to potentially deal with them and that they won't become an increasingly salient feature of our discourse in the next Few years. That's like a long way of saying things that you thought were outside the Overton window have a tendency of coming in. I think Bitcoin is a good example of that. Where it was considered fringe, you know, somewhat drug money, the province of anarcho capitalist libertarian fever dream. And then it just sort of progressed and now it's, you know, the President of the United States saying, we want to be Bitcoin superpower, right? And we want to be bitcoin capital of the world. Like, okay, that's a pretty dramatic rapid shift. I think AI is a similar thing where 10 years ago, the prospect of having AGI, artificial superintelligence systems, things that could potentially be misaligned with humanity or could rapidly transform our civilization again, like step function, jump in. And what it is to be a human was like the realm of like niche blog posts, you know, the kind of the Eliza Yakowski, the folks on Less Wrong Kind of sci Fi nerds, Nicholas Bostrom. And then we've seen like a pretty fast progression from those sorts of out there conversations. Are now very much at the center of all the tech, you know, elite discourse, like Elon and Sam and all the major frontier lab directors, politicians. They all now very much see this in the near horizon as this pretty fast takeoff scenario potentially. That's a lesson that I draw, which is never discount things that are currently on that fringe from moving pretty quickly into the center.
- [51:32]
Natalie
Okay, I want to ask you about UAPs, but you brought up so many really interesting themes that I just want to touch on and pull some threads. Cause I feel like as I get older, I just. I question our origins more. I question, you know, what I believe happens after we die. I've met so many fascinating people who are brilliant, who are scientists or engineers, and they're actually people of deep faith. They think that God engineered things because we have such perfect order. And if someone wants to explore some of these ideas more, what's the best way to do it? And do you have some of these same thoughts and questions?
- [52:07]
Matthew Pines
Well, I mean, it's ultimately like a deep question, right? We're humans with limited capacities, right? Like we have limited time, limited energy, limited ability to understand what's happening in our lives over the limited window where we exist, right? And so you have to first have a sense of humility about everything, right? That I'm just. I'm a brain inside this skull trying to understand the world that I'm in.
- [52:31]
Natalie
The brain's a computer. It's being programmed.
- [52:33]
Matthew Pines
It's enormously powerful. And you could maybe make the case that the brain right now is the most interesting kind of complex object we know exists in the universe, and it's capable of creating a world for everyone. I assume you have one. I can't prove it, but I'm pretty sure you do. We exist as unitary subjects in the world. That's a root fact about your existence that you can't ignore. It's the basic predicate for your being. And that's where everyone starts. And then you want to understand, you want to understand why and how. And these basic questions, and that's. These are urges that have pushed humans in these different directions, both the religious tradition as well as the scientific tradition. And there are different modes of trying to understand kind of the mystery of existence in the first place. This is the core kind of set of human questions. And I think it's not an either or of do you adopt a kind of purely pragmatic scientific attitude, the kind of traditional empirical rationalist mode, or you adopt kind of a more philosophical, religious, spiritual mode? I think ultimately it's about understanding that there is a limit to your current understanding. So the empirical rationalist way of modeling the world is very successful. It's developed science that we are building and will continue to transform our civilization with. But there are limits to what questions that sort of mode of understanding can answer. And so if you only pursue that line, you're essentially putting off the table all these more fundamental questions and that people want answers to. So if you're not trying to answer those questions, people can come up with their own answers.
- [54:02]
Interviewer/Host Assistant
Right?
- [54:02]
Matthew Pines
And I think this is about having a dialogue and actually understanding that ultimately these are the questions that people want answers to. They don't just want to build fusion. It'd be great to build fusion. It'd be great to build a room temperature superconductor. It'd be great to take knowledge of physics and apply it to the world in a way that allows us to do wondrous things and allow the human flame of consciousness to just, you know, expand into the cosmos. Like that's, that is a great good to aim at. But you also need to provide meaning, right? There has to be like a purpose to why you're doing that, right? If you're just designing fusion, okay, great. You clever, clever, clever monkey. Created fusion, right? Like why? What is human society for ultimately? And this is a much more abstract question. I think it's one that, now that we have these tools, potentially again requires first order agency like Maslow's hierarchy of needs Right. Like ultimately, if you're scraping by, you can't afford rent, you can't put food on the table, or you're subsumed by political conflict, you're never going to climb, you're never going to be able to take time out of your day to think about these questions. So I think my hope is that if we can use the gifts of technology that we generate through applied understanding of the world to allow everyone to move up that ladder, that then I think we will have a much more pluralistic way of trying to understand these questions and then reach kind of convergence on potential answers in a way that isn't conflict driven. Isn't like my creed is true, therefore I'm going to murder you. Right. It is. Oh, we all understand. We're all implanted in this reality somehow. And as long as I'm not trying to desperately fight over the water or the food or the territory, maybe we can put our heads together and come up with a better answer here. That's kind of my hope is that we can kind of get everyone up to a level and also use these tools to allow people to ask these questions in their own way. Now of course, the failure mode is the current set of models that we have are really good. They have a lot of endogenous power. You can give them physics problems, you can give them really deep medical questions, and they can be enormous uplifts for our capability. But they can also be like narcissistic mirrors that trap people in delusions, that become tools of mass scale manipulation. And so the core power is there is a question of how do we apply it? Do we apply it for abundance, discovery, innovation, or do we apply it for manipulation and large scale suppression? And I think that's not a technological question, it's like a political question, philosophical question, like what sort of world do we want to build?
- [56:44]
Interviewer/Host Assistant
Right.
- [56:44]
Matthew Pines
I think as an ethos embedded in bitcoiners, a lot, which is we want to build a world that's about truth seeking, that's grounded in reality and that ultimately doesn't trust a single source of truth. It's a process of discovery and peer to peer interactions that you get truth.
- [57:02]
Interviewer/Host Assistant
Yeah.
- [57:03]
Coin Stories Host
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- [57:25]
Natalie
That's why I love what Michael Saylor says about Bitcoin almost being the singularity. That's like ushering us into this new dimension. And we can do things like verify, like it's the true verifiable money that can't be corrupted and is accessible to everyone. But for some reason, one of the that you said made me think of that meme where it's like the universe and then there's an arrow pointing and it's like you're here worrying about, you know, picking something up today or you're late for an event. We're just so small in this massive universe. And I know you've gone viral for some of your UAP conversations. I have a tough time knowing what to believe sometimes. I think it's all a psyop to distract us because they're trying to control us. But then I'm like, maybe there is evidence. I mean, how can we be the only life forms, right, that exist? Can you talk about what we currently know? And are we going to get more information on this in the near future?
- [58:17]
Matthew Pines
I mean, ultimately, it's a scientific question, right? Like, the prospect of intelligent life being not a unitary phenomenon in the world has been a question that we've been asking ourselves since we discovered other planets and since we discovered that there's other solar systems and we discovered there's other galaxies and that the universe is huge. And so it's always been like an empirical question of just, okay, the universe is big. There's lots of places that life could be other than us. The question is like, well, how close could there be other life? Is it a galaxy away? Is it multiple solar systems away? Is it multiple planets away? Is it right here?
- [58:52]
Interviewer/Host Assistant
Right?
- [58:52]
Matthew Pines
So that's just an empirical question of one, is there life in the universe? And then if there is, like, where is it and how close is it to us? And so it's just like drawing that line, right? And it seems like we have an inbuilt kind of cultural taboos where if you ask that question and the implied distance is really far away, it's completely normal scientific question. Searching for technosignatures is now a major prospect of current astrophysics and observation. Can you detect signs of civilization, or at least intelligent life, or just life itself through biosignatures, technosignatures, certain ways of observing the way planets transit a star. That's a normal scientific question right now, right? We even had some like, interesting, like provisional observations in that Direction like I think it's K21b, a planet not too far away that you know, has interesting signatures of its sort of chemical composition in the atmosphere. Which right now we only way we understand how those sorts of chemical ratios can be generated is through processes that we would observe as biological on Earth. So that's like a provisional biosignature.
- [59:59]
Interviewer/Host Assistant
Right.
- [59:59]
Matthew Pines
Okay, so that's interesting. We now have asked this question, can we detect signs of life on other planets? And we're getting close to the answer being yes.
- [60:08]
Interviewer/Host Assistant
Right.
- [60:08]
Matthew Pines
We just had the other week NASA announced that we found what would otherwise be considered evidence for life, that we found that same sort of again sort of chemical signature in rocks on Earth. We found that on Mars. Again like pretty credible biosignature. So now the credible biosignature being light years away and is now the next planet over from us. So maybe we're okay. Maybe life isn't as hard for the universe to create.
- [60:33]
Interviewer/Host Assistant
Right.
- [60:33]
Matthew Pines
Maybe it's not as rare as we thought. So that's like again a scientific empirical investigation going out into the world and trying to ask what are we looking for when we're trying to find life. And then that bridges then ultimately to like when you ask the question, is there intelligent life on planet Earth besides US technological civilization? That's when you get into the realm of taboo, the realm of kind of UFO lore and kind of the whole multi decade kind of set of sci fi tropes around aliens, et cetera. But for me it's almost just a scientific question where you're just like adjusting the parameter from really far away to really close. And I think if you just pay attention to the political process playing out, it's very clear that the topic of UAPS is taken very seriously by the US government. We've had multiple government agencies issue study reports. It's coming up as a function now of political debate inside the Senate for the National Defense Authorization act on something called the UAP Disclosure act to kind of again formally review the information the government might already have on this subject and then to make a recommendation to the President to disclose that to the American public. And so this is the sort of transformation of this topic from being a realm of kind of taboo, somewhat cultural fringe, to being very much at the center of the national leadership, the intelligence community, the political class in dc. It just hasn't quite diffused out to the rest of society, the rest of our social and political order. I think that process is going to take some time to be able to ask these questions without Kind of the fringe of taboo. But ultimately it's a scientific question, right? Of like, are we going to actually apply our new tools of discovery, both our astronomical tools as well as tools that we might not have created yet.
- [62:10]
Interviewer/Host Assistant
Right.
- [62:10]
Matthew Pines
To understand what's around us.
- [62:11]
Interviewer/Host Assistant
Right.
- [62:13]
Matthew Pines
And think about the trajectory that we're on as a civilization. We're building these general purpose intelligence systems that will rapidly amplify our ability to discover new things about the world. We have understood only maybe a sliver of what there is to know. And the physics that we've uncovered in the 20th century has allowed us to do crazy things. Quantum mechanics, general relativity, nuclear physics. We know that's not the final theory of physics. We know that's not all that there is that we can discover. And so if we can create new physics models, new understanding of what's possible, maybe we can build things that we wouldn't have thought of as being possible. We can actually build a sci fi technologies in the not too distant future. And therefore this idea of being able to transit other star systems or explore the universe won't be as crazy as we think.
- [62:57]
Interviewer/Host Assistant
Right.
- [62:57]
Matthew Pines
It's just unlocking new physics unlocks potentially orders of magnitude new power to do things, to travel, to generate energy, to maybe even explore other degrees of freedom in reality. So these are all live empirical scientific questions. These are not questions of kind of storytelling and conspiracy, Right? I think that's been the predominant mode of discourse. Is this guy leaking this and this person telling this, and it's all stories, it's all human beings, government, psyops. Again, that's all part of the lore. And I think it's important to pay attention to those sorts of things to understand what's driving the conversation. But ultimately for me, these are empirical questions. You can apply the tools of science and you can potentially be inspired by apparent anomalies to build new things. And that's ultimately what we want to do as a society.
- [63:50]
Interviewer/Host Assistant
Right.
- [63:51]
Matthew Pines
And so I think we're in this mode of, if you're. You can sort of try to advocate for government transparency across lots of different domains, which is good, your government works for you, Right. Ultimately, there's important reasons the government does things in secret to preserve national strategic advantage. We have developed, you would expect pretty advanced capabilities that we need to keep secret so that if there is push come to shove, conflict, the American way of life endures. So that is a critical national security prerogative. You might imagine there might be other things around that kind of core nucleus of secrecy that you could disclose to The American public. It's just hard to do that. And you need a political process to play out to have that, to have that happen. And so that's one path is essentially government led disclosure and kind of management of this subject. And there's just independent discovery.
- [64:41]
Interviewer/Host Assistant
Right.
- [64:42]
Matthew Pines
The world is the way the world is.
- [64:44]
Interviewer/Host Assistant
Right.
- [64:44]
Matthew Pines
If there are exotic objects or if there are demonstrations of advanced technology, would be good to verify that, to actually collect data on it, to actually understand, you know, what's possible technologically and to bring science into that.
- [64:58]
Interviewer/Host Assistant
Right.
- [64:59]
Matthew Pines
And not be this sort of he said, she said cone of sort of rumor and innuendo because you're ultimately never going to make any progress in that regime. Right. You need to be, you know, be rational and be like empirically minded.
- [65:16]
Natalie
Well, just to be direct. Do we have physical evidence of spacecraft or biologics from outside of this planet?
- [65:23]
Matthew Pines
Well, I mean, I don't know 100% for certain myself. Right. I've never touched such a craft would be great. But I mean I just look at what the politicians are saying. I think the Congress has passed or the Senate has passed legislation previously that indicates they have reason to believe that there are quote, legacy programs that retrieve technologies of unknown origin. Which is kind of a suggestive piece of language. Which is why it's really good for again to have formal processes to get to the bottom of that.
- [65:59]
Interviewer/Host Assistant
Right.
- [66:00]
Matthew Pines
It's kind of the worst of all possible worlds to have a piece of legislation say something like that and then you're kind of just left hanging. Why would they say that? What does that imply? So you get lots of government officials coming out saying that's true, that there are retrieved materials of exotic origin and known means of beyond known means of human manufacture. That's the specific language that's used more.
- [66:28]
Natalie
Advanced than what we can produce.
- [66:30]
Matthew Pines
Yeah, I mean, so the technical definition in the law of technologies of unknown origin and you can read it, it's public very lawyerly definitions to be like we want to make sure we're referring to this and not a Chinese drone or whatever. Right. It's like a very specific technical definition. Non prosaic, non sort of unattributed object. And it is craft, debris, ejecta, materials, parts, et cetera, et cetera, demonstrating technology or capabilities beyond any known means of human manufacture.
- [67:04]
Natalie
Fascinating.
- [67:04]
Matthew Pines
That's again, they put the definition there. It doesn't mean that there's any underlying truth to it, but it's suggestive for Congress to think that it's worth writing into law. So yeah, I Think we're in this very ambiguous zone right now, which I understand is quite frustrating for everyone, because it's like yes or no, right? Ultimately, that's what people want to know. And I think even if the government comes out and says yes, it's like, ultimately it's going to be like, well, show us the beef. And I think the upstream implications are fundamentally, this is about what we think of our civilization. And it's kind of ironic. In certain domains of discourse in the AI community, it's become pretty much well accepted that we're on the verge of a fundamental transformation, that the emergence of artificially general intelligent systems, potentially superintelligent systems in different domains that could become collectively super intelligent across every human domain, are not that far away. Three, five years maybe, which from a certain perspective gives imbues like an eschatology. It's like there's kind of this looming event horizon, this kind of characteristic event or phase transition beyond which everything will be different, right? And you have my observation, actually thinking about both the Bitcoin, the UAP and the AI communities is they both have a similar kind of collective psychology and kind of mythos in Bitcoin. It's a niche subculture that became much more socially like prevalent. And they have a vision of the future that has this kind of redemptive event, right? Hyperbitcoinization, where me being the out group will be redeemed, I'll have the grand I told you so moment, my bags will be pumped, and then the no corners will sort of have their comeuppance. So there's this near future events. It's just always around the corner where hyper bitcoinization is going to be the thing that redeems me for being a bit countercultural, a bit on the fringe in the AI community. It's the same idea of in the near future, we're going to have this exponential, this takeoff, this emergence of radically intelligent systems that will just produce breakthroughs and will transform our society fundamentally. And that we may even stand relative to those such systems as we might in past days envision. Standing relative to gods, right? That's kind of the prevailing mythos in a lot of Silicon Valley culture. And then the UAP community has the same sort of like trope, it's kind of disclosure, this near future event will be what will redeem me socially and also kind of give me that kind of grand revelation, right? The truth will sort of finally descend upon me and I will have the vindication for holding to this sort of out group fringe of belief for such a long period of time. And I think it's an attractive mythos for everyone because it gives this sense that this grand prize is just around the corner. You'll either be financially redeemed, you'll be existentially redeemed, or you'll be technologically ascended. And it doesn't mean that they're wrong. It just means that those are very attractive modes of belief and collective social belief. And I always try to step back and be like, okay, well, I don't just want to be swept up in this sort of, you know, swirl of mass behavior, but I also find it very interesting that all three of these sorts of separate tracks are on this kind of similar trajectory.
- [70:29]
Interviewer/Host Assistant
Right?
- [70:30]
Matthew Pines
At least they believe they are.
- [70:31]
Interviewer/Host Assistant
Right.
- [70:32]
Matthew Pines
The bitcoin community at the same time thinks that hyper bitcoinization is just around the corner, five, ten years away. The AI community thinks that AGI, ASI is just around the corner. The disclosure UAP community thinks that again, we're just around the corner. So I don't know what's the root cause for that. It just could be a feature of where we are in a technologically driven society where these sort of beliefs can rapidly spread and congeal and interact in dynamic ways, or it could be just, yeah, this is actually what's happening and we're just in for a wild ride in the next few years. So that's kind of my view is I don't have a prediction on the future, but I've just now noticed enough of these very separate domains of discourse and social activities as well as that are increasingly political. All three of those I know, are the subject of intense political and national security focus. The national security community very much paying attention to what's happening at Bitcoin. They're very much paying attention to what's happening with development of AI, and they're also very much paying attention to what's happening in the UAP topic. And so from the outside world, or if you find yourself in one of these different, you know, camps, that's what you pay attention to. You live and breathe that. You're very much processing the day to day news cycle and where we are on that potential curve, I've somehow been able to span all three of them and start to look at the commonalities and also looking kind of behind the curtain at how folks with very serious national security responsibilities, they can't just be caught up in whatever sort of podcast hot takes, right? They actually have to make hard national security decisions in the collective national Interest. And when those folks talk to me and we have very serious conversations about all three of these subjects, then it tells me that this is not just like a figment of imagination or collective delusion. There's some underlying, real structural process that's happening here that's very significant across all these different topics. I don't understand exactly how they might interact, but yeah, it's how I want to be prepared for what's coming next. I also want to help make sure that we're making the right decisions on these, because one feature when you're on an exponential is small changes can be quickly magnified. So if you make bad decisions, you can have those bad decisions quickly amplify to bad outcomes. So I think we're in this moment where if you take seriously we're on the beginning part of this hockey stick, then there's an enormous amount of leverage as well as political and sort of moral urgency to try to do what you can from your own perspective, to shift things in what you think is the optimal trajectory. So that's what motivates me across all these different topics, is just, again, try to understand that if we're in this moment of acceleration or potential disruption, there's positive disruption and there's negative disruption. And as much as possible to steer towards futures where we get positive disruption, we get positive transformation, and we get broad broadening of our collective capacities and understanding, that's where we need to go.
- [73:21]
Natalie
Well, that's a good place to start to wrap up. Do you think being based in Washington, doing the advocacy work you're doing, that we're moving in the right direction when it comes to, let's say, the empowerment of the individual and adopting Bitcoin? I mean, specifically with Bitcoin Policy Institute, this is what you've chosen to focus on. Are we moving in the right direction and should people be confident that maybe hyper bitcoinization is coming?
- [73:43]
Matthew Pines
I think it's two things right. For me. There's number go up, ultimately is the. Is just like the macro variable. And then there's freedom go up, which is maybe an orthogonal variable.
- [73:51]
Interviewer/Host Assistant
Right.
- [73:52]
Matthew Pines
Like you can imagine, quote, success from some perspectives is just. Bitcoin is fully legitimated as an asset class. It's institutionalized. It's in everyone's 401ks. It's 5, 10% of most portfolios, and it's on its way to monetize, reaching parity with gold. You know, from a certain just purely financial perspective, a lot of people would call that, you know, success. But if that Happens and like, you know, non custodial software developers are still being thrown in prison. If essentially a bunch of, you know, publicly traded incumbents have regulatory moats and no Bitcoin innovators can compete. If the actual ability to use these systems to promote peer to peer commercial transactions and development of more innovative modes of economic interaction, that falls, then I think it's a failure.
- [74:41]
Interviewer/Host Assistant
Right.
- [74:41]
Matthew Pines
So I think ultimately the secret of Bitcoin's success has been able to kind of link those two together, right. Link human greed to freedom promotion technology. But it's not inevitable that those will remain mutually linked.
- [74:58]
Interviewer/Host Assistant
Right.
- [74:58]
Matthew Pines
And so there are definitely, I think, concerns from the Tornado and Samurai developer cases. Those are very much case specific issues BPI has helped support through Zach Shapiro's work on the Peer to Peer Rights Fund, the pro bono support to those defendants. But ultimately it's about, you know, the Blockchain Regulatory Certainty act, again, trying to get some of these protections in law. So I think it's not inevitable.
- [75:24]
Interviewer/Host Assistant
Right.
- [75:24]
Matthew Pines
You could see, you know, the political and geopolitical leadership and decision makers deciding, yeah, like we want Bitcoin to be, you know, increasingly monetized. Reserve asset number go up, people, the whole Bitcoin will feel like they're winning. But ultimately I think that if that's all that happens, then I think it's a strategic failure. Because the whole purpose of having such a technology is to promote, I think fundamentally a way to empower individuals.
- [75:51]
Interviewer/Host Assistant
Right.
- [75:52]
Matthew Pines
And that's going to be increasingly important.
- [75:53]
Interviewer/Host Assistant
Right.
- [75:54]
Matthew Pines
As we mentioned earlier. Right. This natural trajectory of technology is inherently centralizing. And so we're going to need tools like Bitcoin to kind of buttress individual liberties, individual rights. And that's, I think, an inherently nonpartisan thing. I think, you know, the shoe is always on the other foot.
- [76:13]
Interviewer/Host Assistant
Right.
- [76:13]
Matthew Pines
There's always a sense of political power being weaponized against opponents. And in democracies it's about having checks and balances. And importantly, we're going to need technological checks and balances, like technological constraints on concentrated power and mass surveillance and systems of control that fundamentally sort of abrogate what we think is a core human right.
- [76:33]
Interviewer/Host Assistant
Right.
- [76:33]
Matthew Pines
Individual, individual freedom. And so that's, that's the battle here. I don't think it's inevitable. I think it requires active engagement, not disengagement. It requires like using your political voice and not just retreating to the exits. Do you live in a democracy? Take advantage of that fact. You can participate and you can talk to your lawmakers and you can become a staffer. One shout out is, I'll say. BPI is launching a new program, Congressional Research Fellowship, essentially, so we can identify and recruit bitcoin policy experts and we can matchmake them to congressional offices. And there's actually quite strong demand for that right now.
- [77:13]
Interviewer/Host Assistant
Right.
- [77:13]
Matthew Pines
So if you are, you want to get engaged in the political system, you know, want to work for 12 months in Congress, like apply, go to our website and yeah, you can work in a. And we're getting inbound from both Republicans and Democrats that want to have policy experts right now. The crypto portfolio is essentially, you know, usually, you know, one among many, among some legislative aid. But actually having somebody with dedicated technical as well as policy expertise, understands the technology, understands where it might be going, just giving really good advice to the elected representative is invaluable at this moment. So that's pretty low hanging fruit. We actually haven't even done 10% of. I think what you could do is just basic level education inside Congress. They're busy people. Lots of other competing priorities for their time and attention and just being able to come and talk to them. We try to do a lot, but like a 30 minute meeting here and there. But if you have someone dedicated who's in that office every day, help answer questions and make introductions, it's very valuable. So really excited to launch that project and just kind of help educate D.C. and you know, again, it's always Rome wasn't built in a day here. And so I think people have very high tie preference. This is all about shifting things on the margin that will have strategic implications down the line.
- [78:37]
Natalie
I mean, we've made a lot of progress, so I feel hopeful because of that. And thanks so much for all your work, Matt. It's fascinating to talk to you. I could speak with you for hours. The UAP stuff sort of out of my wheelhouse, but also just fascinating. Where do you want to send people?
- [78:51]
Matthew Pines
Yeah, I mean, check out btcpolicy.org, we've got a lot of our research from our fellows on there, as well as some of these, these new initiatives. We'll be excited to launch our physical office in D.C. pretty soon. So we'll be able to host gatherings, host folks both from inside the bitcoin world, bringing them to D.C. as well as taking sort of traditional D.C. folks and introducing them to bitcoiners.
- [79:14]
Interviewer/Host Assistant
Right.
- [79:15]
Matthew Pines
So we're excited to kind of open that bitcoin embassy later this year. So be on the lookout, follow our work and yeah, thanks for all the support and thanks for having me why.
- [79:24]
Natalie
Do people call you a spook?
- [79:26]
Matthew Pines
I don't know. I mean, I mean I did do a bunch of classes. I worked for the government. So I had 10 years as a consultant for the government where I helped them think about emerging technology, worst case scenario planning. And so I had clearances, I did classified work, I spent about 10 years doing that. And I got to the point where it was just like the lifestyle of working in a skiff, which is where you have to work is not that tenable. When you have young family, you're dealing with government shutdowns. I was a mid level manager and you're dealing with government contracting officers. And so the interesting aspect of the work quickly became kind of subsumed by the sort of management, bureaucratic annoyances of the work. And so I left from that career as a government consultant to become director of intelligence for a private sector consultancy doing geopolitical and cybersecurity consulting. So I've had lots of different hats. It's kind of weird how they're all kind of converging. My physics and philosophy background, master's in public policy and philosophy, 10 years essentially as a government consulting on emerging tech and sort of worst case scenario planning exercises, technology assessment and then private sector cyber geopolitical analysis. Coming in to lead Bitcoin Policy Institute at this sort of very unique moment as we're trying to, as it's becoming more geopolitically relevant. So yeah, it's kind of a very. I wouldn't have planned that career by any means. It's just how it's evolved. And that just so happens to now in this moment of the national security component, the emerging technology component, but also my deep commitment to liberal values and sort of understanding things from a philosophical perspective is not just doing a thing for the sake of one particular objective, but trying to think about how these things stitch together. So I don't know if that makes me a spook. I'm a spook.
- [81:11]
Natalie
Well, you're fighting for Bitcoin really in the belly of the beast. So I promise this is my last question for the folks out there watching this who literally have the majority of their life savings in Bitcoin. Is your message to them you're good?
- [81:26]
Matthew Pines
I mean, it's everyone's risk decision. I mean, I would say I think I'm very bullish on Bitcoin over the long term. I think everyone is in their own financial position. Right. If you're 22 and you can just YOLO, go for it. If you've got families and Mortgage and you gotta save for college and you've gotta deal with retiring elderly parents. It's about what you have to maintain your obligations to your family. But no, I think we talk macro. But my macro thesis is pretty simple and this is kind of warmed over at this point. We're in a structural environment of fiscal dominance. We're going to have to keep liquidity conditions pretty high both for, you know, financial stability concerns. We have to roll out over all this debt. We have to, you know, reshore. We have to do a lot of state, state directed capital investment and we have to you know like ensure the stability of the social order. Which means, you know, continued variety ways of distributing cash to people, especially as AI starts to displace things. And then there's a political incentive just to keep, keep things, keep, keep asset prices high. So like all of that structurally means I think Bitcoin will be higher 5, 10 years from now, much higher than it is right now. But it's going to be a volatile asset as it monetizes. I think ultimately it's going to just emerge as another gold like asset in the global system. So something like gold parity doesn't seem like a crazy end state for me, at least in the next five or 10 years. But lots of other things could happen along the way.
- [82:56]
Interviewer/Host Assistant
Right.
- [82:56]
Matthew Pines
I think there's going to be lots of other transformative change to our technological order and our geopolitical system. Where for me it's always about optionality. Bitcoin for me was always the thing that provided me the most optionality. It provides essentially a way of kind of navigating and hedging instabilities in legacy system. And you have once in a many generation monetization of a new asset class. It's going to be highly volatile, but I think it's not going to go away.
- [83:26]
Interviewer/Host Assistant
Right.
- [83:26]
Matthew Pines
I think that ratchet has now firmly moved. You know, it's now just a matter of time before more institutions, more cyber wealth funds start to go from this kind of 1 to 2% allocation up to 3 to 5% allocation. Once they're there along the path, it probably takes them to 5 or 10% pretty soon. And then it's just like part of the portfolio, right? And then I mean for me the bearishness is like bitcoin starts becoming like that. Interesting, right? I mean it will be really interesting to bitcoiners but ultimately its success will just be, it'll just be another thing. It'll be another portfolio component of everyone's, of everyone's asset sort of asset holdings, and there will still be bike shedding and all sorts of interminable disputes around what software people are running on their nodes, but I think that trajectory is pretty well baked in.
- [84:12]
Natalie
Well, fair enough. That made me feel very, very bullish. I guess maybe in the same way that the Internet took off, we won't have Internet podcasts, and maybe we won't have bitcoin podcasts anymore. But no, I hope we do. Matt, this has been great. I have to have to have you back on to share another hour or so with you soon. Thank you so much for joining me.
- [84:30]
Matthew Pines
Thanks for having me.
- [84:31]
Coin Stories Host
Thank you so much for checking out this episode of Coin Stories.
- [84:34]
Natalie
Make sure you're subscribed to the show.
- [84:35]
Coin Stories Host
So you don't miss any new episodes, and if you can, turn on those notifications and leave us a positive review, they really help the show grow organically with new listeners. We have a free weekly newsletter. You can sign up@thenewsblock substack.com this show is for educational and entertainment purposes only. Nothing should constitute as official investment advice, and you should always, always do your own research. I'm always open to feedback and guest suggestions, so please feel free to reach out@info talkingbitcoin.com I'll see you next time.