B (2:17)

Where people sometimes go ahead, reserve currencies.

A (2:20)

Yeah, exactly. It's what people refer to as, quote, the international community. They're aligned with the Fed. They're basically often US Military bases Are there. They're kind of people who will be at the G7 or whatever, this overlapping list of countries. I think my disagreement with you, partial disagreement, is that if. If you look at China, if you look at Southeast Asia, you look at Riyadh or Dubai or even India, Russia and sort of Eastern Europe and then places like El Salvador, they're really not as Third World as people think they are. They've actually improved in some cases. They're not third World at. In the sense of, like, they have modern infrastructure and they have cars. You might disagree with. You might say collapsing economies or authoritarian governments, and the order captures it.

B (3:06)

Right, exactly. That's what I meant.

A (3:07)

So maybe just as a qualifier, many of those economies are not collapsing, but you might disagree with the government. Fine. Okay, great. So which is different. But it's also. It's just an important distinction. Right. Like, it's not like. Only like, wealth is distinct from government, if that makes any sense.

B (3:24)

Right, right. And if you think about Bitcoin as digital cash and digital gold, you know, depending on your country, one use case stands out over the other. Like, in a place like China, the digital cash part, where you can get around capital controls and you can have money that's not tied to your identity, is really important. Whereas in a country like maybe Venezuela, the gold part's really important because you want to escape inflation. And, you know, look, a lot of countries have both. But essentially my point was only a very small percentage of humans live in a country that's sort of protected from both. And that's, again, where you see most of the world's media is based there. Right. So the narratives that governments have been saying for almost 15 years now that bitcoin is wasteful and dangerous and useless is just a complete lie. It's the opposite. It's actually been dangerous to not use Bitcoin. Yeah.

A (4:13)

And I think I basically agree with you in the sense of especially in some place like Venezuela or like Lebanon, where the currency basically went to zero and bitcoin went vertical. Right. Nigeria, places like Turkey. Right. Turkey is an interesting one where so. So the other three, I feel, are very unambiguous. Turkey, you know, like, the thing about, like, politics being Byzantine in the Byzantines, you know, I can't. I can't figure out Turkey myself. I probably want to have someone from Turkey explain it to me, because when I fly through the airport there, it's actually very nice.

B (4:43)

Yeah.

A (4:44)

Right. And yet their currency is being, like, wrecked and so on. So that's an interesting edge case that I feel bitcoiners should understand better that I don't understand fully at the current moment.

B (4:54)

Right.

A (4:55)

Something about it. It's able to somehow seemingly operate even as it's got these crazy inflation rates. So I don't know what's going on there. Right. Or maybe, maybe it's actually going to bust or what have you. But something is, something interesting is happening there. But other places like certainly Venezuela, certainly Lebanon, certainly Nigeria, certainly many countries now a related thing that's happening is we have, you know, stable coins being legalized, right?

B (5:21)

Yes.

A (5:22)

And my thesis, and maybe you have some thoughts on this is just like local papers all went online and then they kind of lost against the New York Times, Wall Street Journal, Washington Post, which then lost to social media basically in terms of where do people check first they check X or they check social media first for news and this and then this is like second and third tier. And that took, that was a huge fight over 10 years because once these guys saw they were losing to social media, they pushed, but fought, fought, fought to try to censor and then the, you know, the pushback happened. So I think something similar will happen with lots of local currencies will essentially lose to USD and potentially other stable coins or basically USD backed stable coins and other stable coins. And then USD itself is not as good as bitcoin because, you know, USD is devalued by 100 million X against Bitcoin since inception.

B (6:10)

Right? Yeah.

A (6:11)

So very similar kind of dynamic where locals lose to global and the global loses to the Internet first. Do you agree with that as a general concept?

B (6:18)

I mean, look, I'm very focused on bitcoin, but I think bitcoiners need to acknowledge probably at least two use cases that come out of the wider crypto market. And one is obviously stablecoins. The other one, I really, I mean, polymarket is the other. Oh, interesting.

A (6:31)

Yeah.

B (6:32)

Those would be the two that I think are smash hits, I guess. Yeah. Now I would, I don't know if they're technologically innovative. I think they both are successful because of regulatory arbitrage. But the point being that I empathize with stablecoins as a humanitarian technology. I would want them if I lived in Lebanon or if I lived in Turkey or. I mean just think about Egypt and Nigeria are the largest country in Africa and the largest country in the Arab world and they both have lost. The currency has lost 75% of its value against the US dollar in the last three years. Yeah, that's almost 350 million people. So I empathize with why people want stablecoins. But. But ultimately what's really interesting if you think about it is that stablecoins kind of do the opposite of bitcoin in the end. Like they kind of enhance state power, they enhance dollar hegemony, they enhance dollar network effect, and they create almost like a new petrodollar effect where the stablecoin issuers are becoming the largest buyers of U.S. debt in the world. So last year the only people, the only institutions to buy more debt than stablecoin issuers together were JP Morgan and China. And this year it's probably, they're probably going to be number two and number one.

A (7:40)

Yeah.

B (7:40)

So they're really helpful for US government. And bitcoin is just solving a different problem. Like they don't ultimately solve the same problem. Like bitcoin is unconfiscatable, unstoppable, it's going to have improving privacy over time. It's 21 million, it's scarce. And stablecoins are guaranteed lose money coins. Like as you pointed out, like they're losing money every year and the ones that have done dominated the market are centralized and they get frozen all the time. So while stablecoins I would argue are a humanitarian technology, Bitcoin is freedom technology. And I think there's a big distinction.

A (8:17)

Totally. I totally agree with you. But just to talk about that just for a second, I actually think of stablecoins. You can separate them into fiat coins and flat coins, of which a fiat coin is just a mirror of an on chain. Basically it's an on chain version of an off chain fiat dollar.

B (8:34)

Okay.

A (8:35)

And then in theory you could have a flat coin which was an asset which was stable against other assets. But.

B (8:41)

Right.

A (8:42)

In practice it's very hard to have that because let's say there's a scarcity of tomatoes. The price of this will rise against that. Right. So very difficult. You're going to have to sacrifice. Like in theory you could do some balancing, whatever, against a basket of goods and keep the price table. In practice, very, very difficult to do so because those goods, you know, could fly. Okay, but so when we think of it as a fiat coin though, then you're right. It's just a projection of these governments on chain. The question is, what is the medium term consequence of that? I think it is on net beneficial for freedom. And my argument is once it's on chain, it's swappable. And when it's swappable, then you can exit. And because you can exit, you have.

B (9:23)

Greater jurisdictional choice, no argument with that. But that's because they haven't done shotgun KYC yet. The moment and what tether and what circle do you fundamentally are at odds with the world's financial system as it stands, which is built on control and surveillance. And there's going to be a moment in the near future. Who knows, maybe something does. Someone does something terrible with stablecoins, that's all over the news. But as soon as you start to get KYC on chain with the big centralized issuers, which I just think is a matter of time, then, you know, things get very complicated and I don't. They lose the value. Like the main value that I care about with stablecoins is someone in Lebanon or in Turkey or wherever Argentina, who doesn't have a US bank account can have a US dollar on their phone. It's like a euro dollar in your pocket. Really. I mean, it's amazing. As soon as that's taken away, you know, the whole system changes. I guess the one thing that you could bank on maybe is that if you take that away, the whole stablecoin machine slows down and the US government needs the stablecoin machine to grow. Kind of interesting. Right?

A (10:25)

So, so I actually, you know, as CTO of Coinbase, actually launched USDC on the Coinbase and one of the big things was, you know, do you have white list or blacklist on chain? And just to explain what that is, basically white list would mean every single address has to be KYC before you can send or receive to it, which is essentially the same as the wire transfer system off chain. Right.

B (10:51)

That's the fear with Bitcoin also.

A (10:52)

Right. The alternative to that was you just have KYC at the entry and exit points where you're trading USD for, for USDC or vice versa. And in exigency you have the ability to freeze or seize if there's like a lawful court order and so on. So it's like a terrorist group or something like that. Right. That was, that was, that was at least the theory of it.

B (11:15)

Right, right.

A (11:16)

And now obviously the ability to freeze and seize is not something that exists in Bitcoin. Right. But on balance, I think that did. Then there's other aspects where you can program with it, you can send much smaller quantities and so on and so forth. So on balance, I think it was an improvement from a technological and freedom perspective.

B (11:31)

Yes.

A (11:32)

Given, you know, I'm, I maybe relative to most people, I'm an ideologue. Relative to you, I'm a pragmatist. Well, but you're actually fairly pragmatic, even in your own way. Yeah, that's right.

B (11:43)

Well, but how would you look at this? So we have like, let's say stablecoins 1.0, which are tether and circle. Let's just say as a approximation, 95% of the market.

A (11:51)

Well, USDC center and Tether. Yes, go ahead. Yeah.

B (11:54)

USDC and USDT.

A (11:55)

Yeah.

B (11:56)

All right, now we're going to have the second wave which are going to be made by large corporations that are much more, you know, like strike. I don't think they're going to succeed. You don't think they're going to succeed? So tell me what, why not?

A (12:04)

Because they're trying to do. Look, nothing. By the way, I, if stripe people are watching this, I like them, they're good people, nice people. They, they're very competent in what they do. But there's several reasons I am without calling out stripes thing or whatever.

B (12:19)

You know, there's several companies trying to do this.

A (12:21)

Several companies trying to do this. Why am I very skeptical as to whether they'll succeed? First is they just don't understand crypto. They understand Bitcoin. And what that means is from a DNA standpoint, for example, you need incentives for people to adopt. The, these things are already at huge scale. You know, like there's, there's a technical adoption, there's a program adoption, so and so forth. For example, if you have like. Okay, let's talk Libra, right?

B (12:44)

Yeah.

A (12:45)

Why? One of the reasons Libra didn't work, there's many reasons, but one reason is it was like a bank chain. Right. So it didn't have the transformative upside of adopting a new financial network that was critical to get millions and millions of nodes around the world to adopt it. Right. If there's no asset, there's no adoption. That's like one premise. The second premise is that these late comers usually don't viscerally get crypto in a deep way.

B (13:10)

Yeah.

A (13:10)

So they'll always nerf it in some way to make it more compliant and.

B (13:14)

Think that's a feature. To me, that's the key is the openness wins.

A (13:18)

Yes.

B (13:18)

And look, say what you want about Tron, which is the main blockchain that that USDT run, USDT runs on around the world and ironically is the main blockchain that I think most value goes over every day. With stablecoins, you say what you want about that blockchain, it's relatively open, meaning you don't have to provide your passport.

A (13:36)

To use It, Exactly.

B (13:37)

As soon as you cross that Rubicon, it just. I would agree with you. Like, I don't know where these are going if you have to like put your ID in.

A (13:44)

The thing is that essentially from a cultural standpoint, the late adopter is selected to be a late adopter. Because they're a late adopter, they're going to be more cautious, they're going to nerf it. They're not using assets for adoption. I mean, when I, when people tell me they're doing a stablecoin, because a lot of people say this, it's like I look at them and I say, okay, I'm interested only if it's taking some non off chain, like let's say some random country that doesn't yet have its fiat currency on chain. Yes, that could be worth doing a stable coin with, potentially. Right. Because that bridges those people into crypto and so it's fine. And then they can get into Bitcoin and so on from there. Right. So that could be worth doing. But most other people like stablecoins only make sense from a revenue standpoint when you have huge deposits. And, and even then, Tether is the.

B (14:33)

Most profitable company in the world. Well, per capita, yes.

A (14:36)

Yes. But then the question is like, are you making real returns right now? Tether actually, see, thing is, most other people who are buying US Treasuries are doing it with their own money.

B (14:45)

Right.

A (14:46)

You know, Tether is taking deposits from people and then they're able to get the returns. And so like, you know, would it, Would you, let's say you have a million USD of value. Would you actually hold it in USD today? I don't think you would. You'd want to hold it, right?

B (15:01)

Well, to be clear, Tether's portfolio is much larger than the 160 billion.

A (15:05)

I know, I know, I know. But what I'm saying though is that Tether is interesting where they're actually making returns on Treasuries. The most other people who are treasury buyers are not making returns on Treasuries.

B (15:17)

I agree.

A (15:17)

Because they're using their own capital to go and buy Treasuries, whereas Tether is using customer capital in a sense.

B (15:22)

So I guess one way to tie that part of the conversation up is just long term. I'm in this because I think Bitcoin separates money from state.

A (15:29)

Let's talk about Bitcoin.

B (15:31)

I really think it's important that we separate money from state because states have totally destroyed everything they got their hands on when it comes to fiat currency technology. So, and just to finish the thought, like, if you want to read an awesome scientific history of money, Lyn Alden's Broken Money really breaks this down. And the first two thirds of the book don't even mention bitcoin or cryptocurrency, but they basically talk about how money has become. Has been on a track evolving from a tool of relative freedom where you can kind of do what you want, and commerce with each other. And over the last hundred fifty years, it's evolved into a tool of control and surveillance. And finally we have a new track where we're evolving the money and making it better and moving away from that towards freedom. And, you know, that's what I'm here for. And you know, when I go to a country like Malawi, I went two years ago and 16 days after overnight 44% currency devaluation. It was just so horrifying to think about the fact that the government could just press a red button in a, in a democracy and just immediately steal from everyone en masse. I think that's a crime against humanity, but crazy.

A (16:31)

It's funny, like, you know, Milton Friedman has this line, inflation is taxation without legislation. Here that run before.

B (16:37)

Yeah. I mean, but you know, overnight devaluation of such magnitude, Americans are relatively unfamiliar with. The last time we had that was FDR.

A (16:44)

Yes, yes. And that was the six that was going from. It was like $35 per ounce to $20.67.

B (16:51)

Exactly.

A (16:51)

Yeah.

B (16:52)

20 to 35.

A (16:53)

That's right. And so that's a lot. That's a lot.

B (16:56)

And actually within a few months.

A (16:58)

Within a few months. That's right. McReynolds, who is one of the dissenting justice on the Supreme Court.

B (17:02)

Yeah.

A (17:02)

He said, you know, today a dollar is 60 cents, tomorrow might be 30 cents, the day after might be 1 cent. He was completely right. That's actually what did happen. You know, but. Go ahead.

B (17:12)

But, but no, I mean, but I mean, again, the average person on this planet has lived through something like that much more recently, whether they be in Peru or Hungary or, I mean, so many different countries have had crazy hyperinflations over the last 50 years. And you know, one of the stable coins don't really fix that because ultimately these stablecoin issues are going bankrupt.

A (17:27)

I agree, I agree.

B (17:29)

The dollar is at least, I think.

A (17:30)

A stable coins as a bridge to the future. And from a pragmatic standpoint, I think it's good that they exist. But then we want to get to Bitcoin.

B (17:38)

So do you think they hasten the evolution towards a world where bitcoin is a more dominant currency. Or do you think they slow that?

A (17:44)

Hasten. Absolutely interesting. Absolutely hasten it. And for example, I mean, first of all, lots of people buy bitcoin with stablecoins. Just that alone is a huge thing.

B (17:52)

Right. That's the.

A (17:53)

And. And it like, I mean, almost every crypto exchange for crypto. Crypto trades is denominated in stablecoins or in bitcoin.

B (18:01)

Yes.

A (18:02)

And so like just, just that alone out there is basically everything, you know, much of the crypto economy. And this is basically why I would call myself, me a bitcoin polytheist rather than bitcoin maximalist. Because I do believe that that whole crypto economy eventually leads people back into bitcoin.

B (18:17)

Okay, Right.

A (18:18)

In the sense of they'll try X, Y, W and Z and they'll say, you know what, let me save in btc. That's actually hard currency. That's right. And so there's something to that from a pragmatic standpoint. Go ahead.

B (18:29)

I'd like to believe that the. The one area where we might encounter some problems is laid out in a book called the Bitcoin Dollar by a guy who used to edit bitcoin magazine named Mark Goodwin. Interesting.

A (18:40)

I was going to write a post on exactly this. I didn't. Nobody says a book that come out.

B (18:43)

It's interesting. So he looks at the petrodollar and how the US was floundering with the dollar in the early 70s. We were. The dollar lost more than half of its value versus the German mark in just a couple years. And then we found a way to tie the dollar to energy purchases. So you need oil. Guess what? You got to eat US dollars. So he looks at that and how that's really helped prop up the dollar. And now he's looking at stablecoins as essentially the infrastructural on ramp to bitcoin. You want bitcoin, maybe you need these, maybe you need dollars. I mean, it's. It's kind of true. Right. Like a lot of people around the world who have. Who want bitcoin, a lot of them have to get some kind of dollar banking or neo bank relationship first.

A (19:24)

Yeah, but. But Tether's location in El Salvador may turn out to be I am ex ultra bull.

B (19:31)

But like just before we move on, that's, that's a little scary. Like if they're tying, if they found a way to harness bitcoin to power the dollar, the way to defeat that is very simple. Pay me in bitcoin. Just to finish, we just went to Thailand, and Thailand's installing this new system where they're going to try and harvest Bitcoin when you arrive, if you're a Russian tourist, you'll be able to give them Bitcoin or I think, a couple other different cryptocurrencies, and then you get essentially the cbdc, which you can buy anything in the country with. So that's kind of the fear. As we move in that direction, the solution is merchants in Thailand accept Bitcoin and then you can just sidestep that whole process. For me, yeah, Bitcoin's all about. I understand Bitcoin's a great savings thing. It's the best savings technology we've ever seen, et cetera, et cetera. I get it. I have no issue. You want to buy an etf, but I think its ultimate value for humans is as payments. So that's kind of what I'm most interested in down the road.

A (20:31)

Sure. So right now, bitcoin can do about the transaction volume of fedwire. Right? On.

B (20:37)

On chain.

A (20:37)

On chain, yes. Right. So my view is basically that it is infrequently you have infrequent onchain transactions. And I know we'll. We'll probably disagree on, like, how feas. How, like, functional lightning is. And so it's sort of fine.

B (20:52)

Okay.

A (20:53)

But I think that the scenario that you described is actually a victory in the sense that.

B (21:00)

Which scenario?

A (21:01)

Well, basically, bitcoin is accepted everywhere. And you can. Everybody. I mean, we're kind of already there. Bitcoin's already, in a sense, the global reserve currency because it is, like, for many people in many places, they would want one BTC more than the equivalent in a block of gold.

B (21:19)

And that's going to just expedite from here.

A (21:21)

That's going to expedite from here. Right.

B (21:22)

Yeah.

A (21:22)

I think gold is. Gold is also making a comeback, by the way, if you've seen the charts. Right.

B (21:26)

Yeah.

A (21:27)

I think gold is becoming the currency of the state, and bitcoin is a currency of the network.

B (21:32)

Yeah. Just for the listeners, like, we just mentioned that gold used to be worth $35 an ounce.

A (21:37)

Yeah.

B (21:37)

It's now 30 $500 an ounce. So let's just say that's a great way to measure the actual value of the dollar over time.

A (21:44)

So. So Justice McReynolds was completely right.

B (21:46)

Yes.

A (21:46)

Where he said It'll be worth one cent because it's like a hundred. Like a 99 devaluation. Right. Over less than 100 years. Right. So the. Okay, so coming back. So.

B (21:56)

Yes.

A (21:56)

Now, one thing I want to talk to you about is so any. Uncheck your financial privilege.

B (22:02)

Yes.

A (22:04)

What your take on your intended market for it are people who are in relatively wealthy countries who just don't understand the problem Bitcoin solves because they are.

B (22:15)

Right, yeah. And I also wrote a book called Hidden Repression, which is about basically how the IMF and World bank loot poorer countries.

A (22:22)

For the purpose of that.

B (22:23)

Yeah, I mean. Well, basically in a nutshell, the IMF and World bank were set up as part of the Bretton woods system in the late 1940s as the US and its allies prepared for a new economy that they would control. And in the same meetings in New Hampshire that it was decided that the dollar would play the role of the global reserve currency instead of the Bancorp, which is what Keynes and the others wanted. They decided that the US would also house headquarter and control by different means the world's lender of last resort, which is the imf, which is intended essentially to bail out countries that can't meet their trade requirements anymore to keep the machine going. They didn't want to see the Autarky of the 1930s. The World bank was supposed to fund development work that private capital didn't have an appetite for. So at the beginning, these two institutions were benign and arguably did really well in digging out Japan and Europe from a lot of. Of infrastructural disaster. The problem is once they started get getting going, what you had was the end of colonialism, essentially in name at least, and the birth of a new kind of colonialism, which is debt colonialism, which is what I talk about in my book, which is what the IMF and World bank do. They create debt traps for these countries. And how that works is because you need dollars for everything. Paying back your debt, getting oil, getting fertilizer, buying planes from Boeing. If you're Ghana, the CD doesn't do any of that. You cannot use the CD to pay back debt to the IMF or to buy oil or to buy an airplane. So the only way to get dollars for many of these countries has been to borrow them at a high interest rate. And then what happens is they can't pay it back. And the IMF who's, who's essentially whose assets at the end of the day are on the balance sheets of, of Western banks would rather just make another loan than shrink their balance sheet. So this is the mechanism we've seen over the last 70 years. And it's why a country like Bangladesh has gone from, in the 1970s, an average foreign debt of something like 100 million to today, 100 billion. That doesn't track with the population growth. It's become completely untethered. So if you look at the debt of developing countries, even though that might be a misnomer, many of them are actually deindustrializing what you see is a debt trap. And in dollar terms, it just keeps going up and up and up and up. So what I was looking at basically is from a human point of view, there was no escape in the 70s and 80s, like when Volcker ripped up interest rates to near 20% and then proceeded to essentially destroy a lot of the. What was then called the third world. Third world debt crisis, where maybe 20 million people were killed as a result of the structural adjustment policies. In the 80s, you know, there was no escape. If you were in Peru, what were you going to do? What's really interesting today is like, at an individual level, you can escape. You can go into Bitcoin, like, no matter where you are. And, you know, interviewing people in all these different countries and learning that they're starting to turn to this is very inspiring. At the beginning of the book, I have a little saying that says for the victims of development, they may never get the justice they deserve, but they make it a way out. And I think that that's the exploration of that book.

A (25:27)

So I'm going to ask you a question that. Because that's. That's interesting. It's interesting frame. So to roughly kind of you. I'll play it back. And so let's say the IMF is for, in theory, bailing, and the World bank is for building. Right. So IMF is for bailouts.

B (25:42)

Yeah, right.

A (25:43)

In theory.

B (25:43)

Right.

A (25:43)

For bailing people out. And the World bank is for building. So the World bank is almost like. Well, it's debt, but in theory, almost kind of like equity investment in the sense of it's supposed to build a dam.

B (25:52)

It's supposed to build a dam or something.

A (25:53)

It's supposed to build a dam, Exactly. Then you have more tax revenue and then you can do things with it and so forth. And the Marshall Plan, which was at least one of the conceptual precursors to the World bank, you can argue that it did work or what have you.

B (26:05)

Right?

A (26:06)

And because it did rebuild Western Europe and you had the German economic miracle. And so do you think these were good institutions that went bad or.

B (26:15)

Okay, I mean, good. I mean, I think even in a Bitcoin standard, you could have these institutions. It's just because the west can create money much more cheaply than, than other countries. They become predatory.

A (26:26)

So, but that's, that's a very useful way of thinking about the reason is like what the US did post World War II, I think is still underappreciated in the sense of the, the relative mercy. So I mean, because you had to control experiment. The Soviet side was incredibly vengeful, you know, and the Western side was, you know, relatively, you know, like, like positive towards, especially towards Japan and so on and so forth. And Germany, many countries that had been conquered were just turned into like basically total slaves, like by the, you know, by the Soviets. But so the Western system, like Japan did come back, you know, West Germany did come back. So there was like, you know, South Korea also got built up. Vietnam, you know, well, Vietnam, you can argue they did it more on their own. Right. So there's some version of this. And even actually after the end of the Cold War, Eastern Europe did get rebuilt. Right, right. And it did. Its economies did improve. That's why I'm poking one question is shifted.

B (27:20)

So what you see is in the 60s, it starts to shift. So I'll give you two examples of projects that are very stereotypical of the World bank and the IMF. Since the 60s, on the world bank side, they would do something like this. They would make a loan to a country, maybe Mauritania, for a bauxite mine, and they would make a loan to build train infrastructure, the mine itself, and that's about it. Meaning, like they would, the local government would get the money to build all this, which by the way, they would hire companies from the creditor nation. It's called a double loan. So let's say France loans a million francs at the time to the Mauritanian government. Well, what does the Mauritanian government do? They immediately spend a million francs hiring French companies. So you watch the money go out and the Mauritanians still owe principal plus interest. This is called the double loan. So this was happening all over the world. So, you know, every loan that would go out, in many cases, you know, 80% of the money would come right back to the, to the, to the lending nation or more. So this kind of thing was happening and that infrastructure wasn't helping the people of that country, it was just helping us get that box out of the ground into our economy and maybe the local nation would get a cut. So that became like a stereotypical World bank loan throughout 70s, 80s 90s at the same time the IMF, who likes to say they, they aren't political, they don't get involved with politics. I mean they backed the worst dictators you can imagine. I mean it's like a laundry list. Mobutu, Portillo, Marcos, Mingistu, the ccp. You know, just think Saddam. So I mean you could go 50 dictators wide on a giant mosaic and they backed them all. And you know, this undermines their, their argument that they're out there to like bring stability and good to the world. So you know, that's where I started my journey and I was like, why are they bailing out all these crazy dictators? Like why is Sisi, who's responsible for the biggest massacre basically in the last 10 years of unarmed civilians? Why did he get $3 billion, why did he get $3 billion bailout? And guess what he does as a, as a condition for taking that money, he imposes a massive currency devaluation and raises taxes on Egyptians and cuts key subsidies, which is again this is what's been happening for the last seven years.

A (29:37)

So now they've got something new that they're doing in Egypt for example, deal with, with the UAE for ros.

B (29:45)

Now, now the sands are shifting because you have China doing something similar with its own credit and, and the Gulf countries, but guess what, they don't print the reserve currency. So it's a very different, different dynamic. But, but in any event, but they.

A (29:57)

Seem to be doing well, right? Like in the sense of, or rather.

B (30:01)

Somehow getting a return on their investment.

A (30:03)

Yeah, that's right.

B (30:03)

China I would say definitely the Middle east, definitely the Middle Eastern countries, yes.

A (30:07)

So what's interesting about that is I think this is part of a broader and interesting phenomenon which is in theory the US and more generally the west has the greatest business model of all time because it can just from one standpoint, it can hit a button and literally print a trillion dollars which is like selling as I've said before, like a thousand dollar iPhone to a billion people is very hard to do. Trillion in revenue. Forget about in profit, right? And forget about how much effort it would take you to get that. And you know how many like, you know how many factories you need to churn out a billion phones and so on. So the, despite having, or perhaps because of having the greatest missile of all time, they are out competed by others because they're very poor at allocating the capital because they, the energy required to actually go and build a productive world. It's gradually grad, gradually dissipated like all of that printed money could in theory be used to build bridges and do productive things. And so. But in practice, because there was an effort that led to the results, didn't build the sinews and so on and so forth.

B (31:13)

I think over the last couple of years, I think you're onto something. But like, generally speaking, going back 50 years, it would be a mistake to think that they're like useless or corrupt or inefficient. If you look at the capital flow of the world, it's really amazing, actually. So starting in 1982, capital has been drained from poor countries to the golden billion. And it started small and now it's several trillion a year. So despite this idea that we help poor countries or we give them aid, it's the opposite. We're draining tons of capital out and that's debt colonialism. And my hope with Bitcoin is like, that individuals can escape from that. And I just don't see stablecoins fixing that.

A (31:52)

Here's a question.

B (31:53)

Yeah, go ahead.

A (31:54)

You know, like during the mortgage crisis, there were a bunch of bad loans that were made.

B (31:59)

Right.

A (31:59)

And many of them were made on the basis of, oh, we will help these poor people discriminate against people, or what have you. And actually turned out to be bad for both parties and for everybody else because a lender would make a loan to somebody who couldn't repay it, that person would default, yes, ruin their financial livelihood, but it would also in bulk break the bank. And then everybody who is a bystander to that transaction, who, let's say was, you know, I don't know, selling services to that bank, was doing so in part on the bank having good financial condition, which was based on these transactions were material.

B (32:34)

Yeah.

A (32:35)

So that guy also got wrecked.

B (32:36)

Right.

A (32:37)

And so it was something where the bad loans were in some sense predatory, but also stupid and self destructive because they couldn't be paid back. Everybody was trying to consume or earn more than their means, in a sense. Right. Like where these people were buying a house that they couldn't afford and the lender was trying to juice their numbers of revenue.

B (32:59)

But what happened to those? The US government ended up subsidizing the market.

A (33:02)

Yes.

B (33:02)

Which is the same thing it does with all these crazy loans to dictators. You're right.

A (33:06)

So the, the government came. The US government came and printed 787 billion and bailed out a lot. And which was at the time this insane thing that was like, oh my God, now they just hit a button and do it.

B (33:15)

Every deal. Six, six plus trillion dollars of government and mortgage debt on the balance sheet of The Fed.

A (33:20)

Exactly from 08. Exactly. Right. But. And so this side got bailed out and this side really kind of didn't. Right. But the thing about it is, okay, so maybe you can't analyze it in the absence of the backstop. Right. But it was so the fourth party, the government came in and diluted everybody down with dollar inflation to bail these guys out. I guess an interesting question is, I guess what I'm getting at is, was that evil or was it stupid? And here's my distinction, right? The distinction is like, I think of good as helping somebody else without concern for oneself. Smart is helping somebody else while also helping oneself. Okay, evil is harming somebody else while helping oneself. And stupid is harming somebody else while also harming oneself. And are their actions actually evil or are they stupid?

B (34:07)

Well, there's. First of all, who's they? Right? So most people who work at the IMF and World bank or even whatever, the Chinese development banks, they're not evil. They don't. They think they're doing good. They don't even know the full outcome. I would almost argue that these are outcomes of our way of life in our system as opposed to like evil conspiracy plans. I don't think a bunch of people got together and said, oh, let's create debt colonialism. No, it just was sort of an outcome of what we were doing over time. And that's why we need paradise.

A (34:33)

Has it worked out for anybody, in your view, besides Western Europe, Japan, South Korea?

B (34:38)

There's like a couple examples of a country that takes this kind of debt and is able to pay it back. Get out. I mean, I mean, India is a good example of one that was kind of tried to stay away and, and has done reasonably well. Whatever, you know, your view of India, like, you know, a lot of the work they did, at least post 1990, you know, has been done without that. Previous to that, there was crazy World Bank.

A (35:01)

Yes.

B (35:01)

To India that did insane things, like unspeakable things. That's a great Sir And Galli coalfields.

A (35:07)

Yeah.

B (35:07)

Stuff. Look that up. It's insane.

A (35:09)

So that's a great graph to make. What were the other examples that you thought where it worked out well or reasonably well?

B (35:14)

Well, I mean, I'm saying it didn't work out well. I mean, we literally. The IMF loans to India in the 70s were premised on the sterilization of men. So.

A (35:19)

No, no, I'm not saying, like, I agree.

B (35:21)

More recently, yes, they've Been doing okay. I mean Korea is a famous one and there's very little, I mean most of them have been catastrophic in my view in terms of. Yes, yes, it's true.

A (35:31)

I want to, I want to, I want to just. Steel man. The other side of it.

B (35:34)

Yeah, the steel man would be like, okay, well, like Indonesia is richer generally than it was, you know, 40 years ago, which is true. My argument would be it'd be a hell of a lot richer if its currency had become devalued by 99%, which is what has happened.

A (35:47)

Interesting.

B (35:48)

It's like the, the, I was just there. The rupiah was, was, was worth like, you know, 40, 40 rupiah to a dollar in the 60s today because they've chopped off a bunch of zeros. It's 16 million per dollar. Think about that. So yes, it's true, they've done decently well. But guess what? If they're, if all their resources weren't being drained to Japan and to, and to Europe and America in that way, they'd probably be as rich as we are. You know, it's just something I think about a lot and I'm like, look, now we have a peaceful way for people to get out. So what I want to get to two things. What am I doing personally and with HRF on this and what does this mean for America? So just very briefly, ahrefs getting involved because you know, we help people under difficult political climates who don't have the same access to court systems and NGOs and media outlets like I do in America. And you know what, like they're never going to have a good CBDC in those countries. It's like, maybe in America you could have one, but like not, not, not in Togo. Right. So they need open, permissionless, open source money that's decentralized, that their government can't control. So we promote education, infrastructure, tooling and community building across all of the world for that. And we deploy about a million dollars in bitcoin every quarter to do that. And we've done more than 300 grants to different organizations and individuals since 2020. And we're going from there. It's really exciting and it's amazing to see the impact. I just visited sites that we've been supporting in Bali and in Chiang Mai and in Bangkok. And it is so cool what people are doing with bitcoin out here. I mean from, there's a system in Thailand for example, where like basically you can pay any merchant with bitcoin, like you can just have a Moon wallet, like a totally, you know, non kyc wallet on your phone and you can have some bitcoin. And what you do is you scan the code of the merchant and you. What's happening is you're sending a lightning payment and there's a literal person on the back end who's paying the Fiat and taking the lightning. And it works. It's really amazing. So there's all these cool systems that are now allowing people to live in bitcoin. And like in Kenya, there's one called Tando. You live in bitcoin and you can pay any invoice in the country, including a cab driver, and they get m Pesa immediately. So you're seeing people design these really cool ways to get people to get out. So that's what we're focusing on is like the pay me in bitcoin element, like, how can we make bitcoin freedom money around the world? And then like the second part, and we can then react to that is. And what I really want to talk about is America. Like, I really think that the dollar system, the fiat system, is not ideal. I think it's done some good things like dollar hegemonies. Obviously, it's great to have one common language for the world of money, but it's got a lot of downsides and it's been very predatory. And I really think that a bitcoin standard would be awesome for America because it would, it would serve a lot of the good things that the dollar does, global network effect for money, et cetera, et cetera. But it would also not be so predatory and it would be great for us vis a vis our quote, unquote rivals, right? Because at the end of the day, I think that if you have money that provides you free speech, private property and open capital markets, guess what? That's what America's DNA is. But the Chinese Communist Party, for example, or North Korea or whatever, they're based on confiscation, censorship in closed capital markets. Like they're fundamentally incompatible, I would argue with bitcoin from that point of view. So I think, just to conclude that, I think the founders of America would have loved bitcoin. Like Jefferson, Washington, they didn't even want a central bank. I think it is patriotic to want to improve our money. I think it's patriotic to be critical of the dollar. And I think we should head towards the bitcoin standard. And I think it'd be great for America and it'll be a real struggle for, for more centralized regimes. Because if you live In a country where the people have power over the government, you should have nothing to fear from money. That's giving power to the people. So that's kind of the rest of what I want to lay out.

A (39:43)

Interesting. So I do agree that, like, in a sense, BTC and CCP are at two opposite ends of the spectrum. Like, in a sense, total freedom, total control.

B (39:52)

Yeah.

A (39:53)

They would pose it probably as total anarchy and total order or something. Right. Just I always try to at least give, you know, their.

B (39:59)

Yeah, they tried to ban mining because it wasn't harmonious on the 100th anniversary of the CCP.

A (40:03)

That's right.

B (40:04)

That's right.

A (40:04)

So the. My one question I have for you is one of the things I'm most interested in is, and this is what I work on all the time, is bringing the Internet into the physical world.

B (40:15)

Yes.

A (40:15)

Right. So the same, like, ultimately what bitcoin is, is voluntarism. It's consent. Right. And it's in a sense, in the deepest sense, you know, democracy is about the consent of the governed.

B (40:25)

Yes.

A (40:26)

And all of the superstructure of election this and poll that and so on and so forth is just a way of sort of quantifying, measuring and channeling that consent of the governed into something.

B (40:36)

Right.

A (40:37)

And so the withdrawal of consent is exit, you know, or it can be voice and so on and so forth. And so bitcoin reflects digital consent. Like, do I consent to be here or not? You know, like if you. If you disagree with this fiat currency.

B (40:53)

Or this policy now, exit.

A (40:54)

Exactly. Right. Okay. So bring that consent into the physical world, to me means voluntary opt in societies.

B (41:02)

Okay.

A (41:02)

Communities, cities, and perhaps eventually countries, starved societies and potentially network states. Right. I think we have Internet companies like, you know, Netscape was arguably the first modern Internet company. We now have an Internet currency, Bitcoin. And what I think about a lot are Internet communities. For example, Bitcoin beach in El Salvador.

B (41:19)

Right.

A (41:19)

Or some of the things you're talking about, like the shops here and there. So, like, to know your thoughts on that, like, you know, bring this stuff into the physical world. What do you think about that?

B (41:27)

Yeah, we need more than just bitcoin. So the bitcoin communities are really cool. I mean, I visited a ton of them. They tend to pop up where there's been, you know, a difficult history. Fiat currency. Oh, that's interesting.

A (41:38)

Okay.

B (41:38)

Yeah, yeah. Like, they tend to be in places where the money doesn't work very well or where, you know, like bitcoin. Chiang Mai is a community that's. That's built in many ways because of Burmese refugees who don't have a bank account in Thailand. So they've learned how to use bitcoin. And when the earthquake happened earlier this year, it was impossible to use the US dollar to help people who were trapped and starving. We were able to run a bitcoin fundraiser and help people. I mean, so it's just so frustrating. You know, we get again and again, this bitcoin's useless. I mean, it's the stupidest thing. I mean, it does things that the dollar just cannot do. So many things. I have a big piece coming out in the Journal of democracy in about 10 days. 8,000 words on a blow by blow of human rights defenders adopting bitcoin around the world because it's the only thing that'll work. So I'm, I'm, I'm bullish and I'm following that. But ultimately we need other systems to help bitcoin achieve its, its, its goals. And, and two, I, I, I have two that I'll posit to you, maybe three. One is for sure Noster, which I understand is like not getting the adoption speed that a lot of people would hope, but it's not.

A (42:42)

There's a client damis for Noster.

B (42:44)

Yeah, there's a lot of great ones. And look, I would argue to you that it's not having a lot of adoption maybe. I mean, I think it's great. I, there's a couple hundred thousand people on it. Like I have 50,000 followers. It's great. I get. There's no algorithm. I choose the algorithm. You know, it's cool. But the reason it's not doing what for Caster or Blue sky is doing is because it's not like a VC product. It's an open network and it doesn't have a company. So it's like the early days of bitcoin. It's hard. It's like hard if you have no one who's willing to give you 50 million or 100 million to do growth.

A (43:13)

Right, Jack, in theory. Well, Jack is kind of, he's doing bitch at now. Right, Right.

B (43:18)

So Jack invested, but invested is the wrong word. He gave a lot of money to open source developers working on Nostr.

A (43:25)

Right.

B (43:25)

But they're, they're not like coordinated necessarily. They're all just working on the project. But if you have Noster, like, for example, like if people look me up on Noster, they can permissionlessly zap me, which is like, just instead of reposting my stuff or liking it, they could send Me, Bitcoin immediately, boom. And it's so cool to think about this from a, from an activism perspective, from a political perspective. I mean, it just means that it's just completely different when you can send micro amounts of money to people. I think it's really what the Internet was designed to do. But we need something better than bitcoin. And Lightning. I mean, even in Lightning's wildest dreams is not going to be what you buy coffee with in 20 years in the bitcoin world. That's where E cash comes in. You know, look, it was created in the 80s. It's an awesome technology that does full private payments that are instant and they can work offline. But it didn't work very well with fiat money as the base. People figured out though that it works really well with bitcoin as the base. So you have two implementations now, Chash with bitcoin. Yeah. You have Cashew and Fetty Fediment and they both are awesome. So when I shop now abroad, like.

A (44:24)

Just explain that with that. It's like you deposit some BTC effectively and then you essentially have.

B (44:28)

Into a Neo bank.

A (44:29)

Yeah.

B (44:30)

And.

A (44:30)

And then you essentially. It's help and spoke our.

B (44:32)

You get an IOU that's fully private that the bank can't selectively censor and doesn't know what's happening until you go to redeem it. And the way they're connected is all these mints. Basically Lightning's like the central nervous system for what's going to happen. So you have all these mints and custodians. You also have exchanges, you have ecash mints.

A (44:51)

So that is potentially scalable because basically you have one on chain. Bitcoin transaction.

B (44:55)

Yeah.

A (44:56)

You store it up at a bank that's then issuing IOUs that are backed by Bitcoin. They're not IUs, but they say digital IOUs they are.

B (45:02)

I mean they're credits.

A (45:03)

Yeah, they're credits.

B (45:03)

That's right. But basically you have, let's say mints, you have exchanges, you have custodians.

A (45:07)

And the difference is in the modern era you can actually sum up those digital I use and compare them to the proof of reserve.

B (45:12)

For example, you can cryptographically make it so that people know that they're going to get rugged. Yeah.

A (45:17)

So the reason that's. Go ahead.

B (45:18)

But yeah, just. And then you also have payment pools. So like people are coming out with new stuff for bitcoin, like Spark that David Marcus is working on Arkansas. You're going to see a lot more and Lightning is the central nervous system. It's the clearing layer for all that stuff. Yep. So it's not what I used. Like I'm. I was wrong. I thought lightning was going to be like five, six years ago. I thought lightning was just going to be like what we would buy coffee with. You could do it today. It works well. But not in 20 years because lightning ultimately is tied to. On chain, opens and closes of channels.

A (45:45)

This is new stuff.

B (45:45)

Okay, Yeah, I changed my mind. I tried to be Bayesian. Yeah. But what I'm saying, I didn't want.

A (45:49)

To poke you on it. That's why.

B (45:50)

But I mean, I think I'm much more bullish on lightning than I was because now I figured out what it's going to do. It's going to be this clearing layer for all the different pools. So let's say you have a cypherpunk mint and then you also have a coinbase account, which kyc. But then you also have like an arc payment pool or a spark address. Guess what? They all talk to each other instantly by doing a swap over lightning. That's how it works today. Like, so when I. When I went shopping in Bali at the Indonesia bitcoin conference, I bought a T shirt. I used ecash that was on my phone. The merchant didn't get ecash, they were paid in lightning. But like it left my phone and it was swapped by a lightning service provider instantly. And there's money to be made there. So there's all this infrastructure being built and it's just cool that I can go around the world and I can spend fully, fully private money and the merchant gets bitcoin. We're seeing some cool stuff. So that's really interesting. And then the last piece would be. So if you have bitcoin, nostr e.

A (46:45)

Cash, bit chat and payment pools and then bitch. Okay, right.

B (46:48)

Well, I mean basically the e cash piece is what's needed for ultimately, I think, like buying coffee. Like you're not going to be on chain or lightning. What's my point? Maybe the other stuff pans out, but we'll see. But bitch's also really interesting because now we can do offline communications that are connected. So for example, like if we fire up bit chat right here, whoever's in this building basically can, can be. Can all of a sudden we can, we can, can talk to each other and we can trade e catch notes.

A (47:16)

So the hard thing, the hard thing, that bitch head is cool. Just to explain, it's like, it's like.

B (47:20)

A grid of the World.

A (47:21)

Yeah, it's a grid of the world, I think, where if I get it right, it's. I don't know the exact grid size, things like 10km by 10km or something along those.

B (47:29)

Oh, no, it's way smaller because it mainly uses Bluetooth.

A (47:31)

Okay.

B (47:31)

So it's like a couple hundred feet fine. But then they can daisy chain fine. Yeah.

A (47:36)

So you have Bluetooth to Bluetooth totally local on Internet chat. The hard part about something like this to me is you need to have a very large critical mass in one location for that to work. Like, it actually has to be like within a building, for example. But normally what happens with any Internet app is it signs people up around the world like this, which are all very distributed. C log on to the app, open it, they don't see anybody to talk to, so they've got a critical mass problem where they need to be launched at a conference or launched at an event or something like that.

B (48:15)

I'm with you. So three days and it's still buggy. And I mean, Jack Vibe coded it a month and a half ago. So it's like. And then a friend of mine named Kale Vibe coded the Android version like we are, we are doing this because we have Vibe coding.

A (48:27)

Now, I'm not being critical, I'm just saying.

B (48:29)

But I'm just admitting that it's that they're buggy and it's early. But last week, I think it was Thursday, 50, 000 people downloaded bitch at in Nepal.

A (48:41)

And that's interesting because it might give like some offline.

B (48:44)

Yeah, let's say you're in a protest and all of a sudden Internet's gone. I mean, I guess it's useful. The second country, 10,000 deadlines in Indonesia, that was that day. And then the US was like 7,000 downloads. Just to give some sense. Yeah, this thing is moving. So it's like, it's very interesting and.

A (48:58)

It'S interesting backup plan. Yeah, like, like it's like a flashlight when the power goes out.

B (49:03)

It took me a while to see what Jack was doing here. It's not just a backup plan. It's that it connects via Noster, basically. Like, and when you have Internet, all of a sudden you have this global censorship resistant network. It's interesting vision.

A (49:17)

It is, it is. The thing about it, which is funny, it's kind of a merger between the old physical carry a message to somebody.

B (49:25)

In the new and the new. Right. And the last piece I'll say is what's cool is. So for example, you fire up bitch at. You can then take your, your E cash wallet. Let's say I have some money on my e cash wallet. I can create an offline invoice and paste it into bitchat and then you can claim it. And we don't have to have any Internet for that. And that's really neat. Like you can send money with no Internet. That's cool. I mean, and I guess it's not that crazy because just now I had no cell phone service here and I bought something at Starbucks because I just used tap pay. And really all that is is it's my phone giving a number to the other person. E Cash works the same way. Like the payer doesn't need Internet in ecash, so you can do some really cool stuff. So my point is there's like a constellation of technologies growing around bitcoin that are making it very powerful now. It doesn't compete right away with like, maybe the ease of stable coins for some people, but it's, it's growing, man, and it's very exciting to see. And we're, we're doing what we can to push that out because ultimately, you know, I just think again, having experienced and talked to people who live through these insane devaluations, I just think that's one of the world's thing worst things that happens in the world today.

A (50:28)

So actually kind of already happening. The dollar's devalued 50 against gold.

B (50:32)

It's like Covid.

A (50:34)

It's valid 75 against Bitcoin since 2023. And it's value 50 against gold since, I think, in the last two years.

B (50:40)

Right? Yeah.

A (50:40)

So that's actually all. I mean, it's happening. One of the weird things is this thing.

B (50:44)

It's. It's.

A (50:44)

It's happening in front of us.

B (50:45)

It's happening in front of our eyes and.

A (50:47)

And yet it's like a train that's accelerating and you just don't perceive it because you're in it. You know, so why don't we.

B (50:54)

The last thing I'll just say is just like a lot of people again, ah, bitcoin's useless. I can't understand why you'd use it. Right. So I was interviewing these Cubans in 2020. They were using bitcoin. They were converting their pesos, which were at the time trading about 30 to a dollar, into bitcoin. Okay, so since then, bitcoin's gone from $5,000 to $120,000.

A (51:14)

Okay.

B (51:15)

Amazing. The peso, the Cuban peso has gone from 24 per dollar to more than 400 per dollar. So when people say, bitcoin saved my life, it's real, and it's happening all over the world. And I just. It's funny to me that a lot of people we probably know in our social circles would say that's nonsense, and it's true. So some people just kind of have to open their eyes. I just want to check their financial privilege.

A (51:40)

Amazing. So get your two books. We'll put them on screen.

B (51:43)

Yeah. Awesome. Thank you.

A (51:44)

Welcome. And let's work together for freedom.

B (51:47)

Amazing. Thank you. Thank you for support for bitcoin. It's been important.

A (51:50)

Great. Thank you. Yeah. Ten years together, actually.

B (51:52)

I know, man.

A (51:52)

Right? Yeah. It's been a while. Good stuff. Okay, talk soon.

B (51:56)

Talk soon.

A (51:56)

Great.