Jeremy Welch (4:25)

Jeremy, how are you, man?

Peter McCormack (4:27)

Doing well, doing well, Peter.

Jeremy Welch (4:29)

Good to hear from you. So I've been doing this beginner's guide to bitcoin. It's gone down really well, actually. Very popular. The average showdown lows are pretty high on this. People have really enjoyed it. And I've covered everything. I started with Andreas, where we did, why we need bitcoin. I've covered the Technicals with Shinobi. I've tried to steer people away from altcoins with Nick, but 15 shows in now and I've got two to go. And one of them I wanted to cover was the future of bitcoin. And I had to do it with you because I don't know if you remember the show where we did, where I think it was titled Bitcoin Changes Everything. I just felt like you were the right guy for it. So you ready for this?

Peter McCormack (5:02)

Awesome. Awesome. Yeah. Let's dive in. There's a ton to cover, loads to.

Jeremy Welch (5:06)

Cover, and I know we're dealing with the world of opinions here. It's kind of subjective and predictions are hard, but still, I think it might be useful to tell people like a little story has been. I met with you and Alex Gladstein when we're in San Francisco and you started telling me about all these books you've been reading. And so you're always thinking about the future and aren't you? And like predictions and what's been happening and you in your. The way I see it is that you see where bitcoin fits into this future.

Peter McCormack (5:35)

Yeah, Peter. So the future of bitcoin is really embedded in a kind of bigger set of trends, a bigger set of system changes. And Snow Crash is a great conception of where this future could go. Neal Stephenson himself, the writer, has a few other books. The Diamond Age is another one too. But beyond that, I think it goes a little bit beyond sci fi into something that. That just doesn't even look like anything that's in a book or out of a book. It's just something kind of totally new and totally unique. And bitcoin represents something a lot of old ideas in terms of hard currency. But with a lot of new ideas in terms of computation and predictability and auditability, open source tech and the future that comes out of that is something that's pretty exciting. And so I think that's what we were touching on is, is in that conversation with Alex is just that both the human rights implications and also just the kind of economic implications and then the kind of political and societal implications. So there's a lot to talk about on the technical side of bitcoin, but I actually think the next few years of bitcoin are going to be kind of boring. And that's actually a good thing, right? It's a good thing that things are boring. Like it's, you know, people are used to bitcoin. There's a lot more knowledge around bitcoin. There are some major changes coming, technical changes coming, even this year. So we've got the taproot coming up and schnorr signatures and some things like that. But I think the more interesting thing, and if you're talking about the future of bitcoin, it's really going to be a story of bitcoin being consistent and boring and stable and as a view as a technology. But then the world is changing around it with bitcoin being that stable. You know, how does the world politically, societally, everything else change as a result of that kind of rock of stability.

Jeremy Welch (7:33)

And one of the things, it's difficult to just look at the future without considering the past. And I think for me, with regards to you, it'd be good to understand where did it really click for you? Because we all have that kind of first time we hear about bitcoin. For me, it was a silk road and I started using it as a currency. But I would say it was probably three to four years after that where it actually started to click to me about the bigger societal impact this could have. Where did it really click for you?

Peter McCormack (8:00)

For me, it's been a, I would say it's been an ongoing thing. And this is kind of how I view, view several different areas of technology. The, the initial implications happened for me years ago. I mean, this is. So I was in New York City doing tech startups into 2010, 2011. I dropped out and I'd left Duke University a couple years before that where I was studying political philosophy and interested in some of these questions of capitalism and, and systems theory. And I went back to Duke. Like I went back around. This is, you know, 2012, 2013, 2014. And while I was there is when I really started digging into Bitcoin found it and read about it and then really started digging into the potential implications. And I think so I think that I had this context. I went through the financial. I was in New York City during the financial crisis in 2009 and I saw the, you know, firsthand. I wasn't working in the financial industry, I was working the ad tech industry. But I learned a ton of things around how the kind of big tech works at that time. And then I also had this experience to where I the most of my friends at the time coming from university, a lot of them were working at these banks. And so I heard a lot of kind of back channel stories from them. And then all of that then compounded to I had this break because we sold the company into Google and I stayed there a year and then I left and I went back to Duke to finish my degree and, and I had this, you know, I took a kind of a more of an independent study path where I was able to just go hang out with a lot of really smart people and also just study things that I wanted to. And it was during that time that I really dug in. And it was during that time that I really started to understand the potential implications. Even, you know, there's some stuff around even like the Triffin dilemma from, you know, very large problems with the global financial system that it has these implications on. Then there's also these kind of technology and local trust problems that it has these implications on. But a lot of it started to click then. And then I would say that the last really six years has been, that's crazy to say but the last five, six years has really been a kind of process of proving out that those things are real. So it's a, you know, the initial, the initial kind of learnings and the initial realization happened a while ago that the potential was there. But you know, in any kind of technology, in any kind of system, you have the understanding the potentials of that system and then you have it actually playing out and realizing that potential. And I would say the last, especially three or four years has been a lot of very fast realization of potential. And then that's where my view that a lot of these things are already hard set, right. So that's why the kind of bitcoin itself is going to be kind of boring. But everything around it is going to go faster and faster and faster in terms of how things change.

Jeremy Welch (10:47)

All right, so let's go fully big picture here then. What are the real potentials here? How far can bitcoin Take us, How far can it go? And when answering that, it would be good to answer where you think we are in kind of the lifespan of this. What are the things that you've seen, the key milestones that you think we've achieved so far?

Peter McCormack (11:06)

So I would say that one of the biggest key milestones is just broad based recognition of Bitcoin. And whether someone's pro or conversation, they're at least aware of it. And just the awareness itself gives an opportunity for that awareness to change from negative to positive. Not being aware of it and not being aware of the basic properties means that you're kind of still lost in this world of thinking that something like this can't even exist.

Jeremy Welch (11:32)

So let me just. Sorry, just to interrupt you. So I was at an event recently at Tone Phase one, and I was on a panel, moderating a panel, and it was called the Road to Mass Adoption. And one of the things I said is that I think we're already at mass awareness. And the reason I said that is everywhere I go, when somebody says to me, what do you do for a living? I have a bitcoin podcast. And almost never does somebody say, oh, what is bitcoin like?

Jeremy Welch (11:53)

Every.

Jeremy Welch (11:53)

Everywhere I go, everyone I spoke to has heard of it.

Peter McCormack (11:56)

That's right. Exactly right. So everyone's heard of it. And then the next step here is that, you know, we, we have to get people from just having heard of it to actually believing in it, using it. And we may be in a case to where most people in the world don't use bitcoin in a direct way. Maybe they use some other technology that's built on top of it, or maybe they have some limited savings around it, or maybe one of their family members actually has some savings in it and then they themselves use another currency, but everything will somehow interact with it going forward. And I think that that's the view is like the awareness is there. And then over time we're going to go through all of these tests and more and more of the global system, financial system, and kind of social systems are going to have more and more dependence on bitcoin.

Jeremy Welch (12:43)

Are you amazed it survived? And why do you think bitcoin is so resilient? Because I was looking through some of the things that have happened to it, you know, from trust in the technology to things like government crackdowns. We've got manukin now kind of hovering around it. We've had China ban it. We've had things such as the Silk Road and Mount Gox. Yeah, it is still here. It's still chugging away every 10 minutes, producing blocks. And despite all those things, are you amazed by his resilience or is that something you've come to expect now?

Peter McCormack (13:13)

I think that I am amazed by it. I think it's a similar. It's a similar thing to flying in a plane now, right? You fly in a plane all the way around the world. You take off, you land, you take off, you land. And it's become such a routine thing now that we don't even think much about it. But if you kind of step back and think, wow, I'm flying through the air, hurtling through the air at hundreds of miles per hour and carefully landing, it's a remarkable thing. And I think that we're at this point with bitcoin to where if you had asked me even three or four years ago, would we be this far along around awareness and this far along around even adoption and other companies building on top of it, I would have told you you're crazy. So I do think that from that perspective, it's blown out my proportions or my expectations. But I think that everybody's so used to it now that we still have a long way to go. So on the flip side, I also think again that we're just getting started.

Jeremy Welch (14:12)

Wow. So just getting started. So one of the questions I often pose to people when I'm traveling around interviewing is what is the purpose that bitcoin serves? And I tend to see two camps. There are those that talk about taking down the central banks and be in a brand new financial system. And there's other people who talk about having kind of private money. And I know it serves both, but I also get the feeling that if you prioritize one, it changes the approach to it. So, for example, if it's taken down central banks, I think the focus therefore is adoption, focusing on just ux, making sure people can get hold of bitcoin and use it easily. Whereas if you focus in on privacy and censorship, resistance, you maybe will tend to focus on other kind of tools and it kind of changes the direction of things. Where are you in this kind of spectrum of where you think bitcoin is focused?

Peter McCormack (15:06)

Yeah, I think that the reality is that many of these things are going to coexist more than they are. One is just going to rapidly usurp the other. Central banks will continue to exist for, I think, a long time. I think that they will evolve in their role and even bitcoin itself will be a tool in their kind of tool chest. But what will happen is you now have, because it is a global censorship resistant form of money payment system. You will have these pockets of. You can think of central banks as being a part of a kind of bigger state organization system, right, that governs people, governs businesses, governs things, governs borders, governs military. And you know, bitcoin is this, this piece of technology that can now be integrated into that or it can stand in opposition to that, you know, the things, you know, or people can build a totally new type of system, a totally new type of government kind of on top of Bitcoin and utilizing some of the, some of the key pieces, key features of Bitcoin. And that new organization can kind of stand in opposition to the old organizations. But the general point there is that I don't think that central banks are just going to go the way of the dinosaur. I think that they will evolve. And it's just if they hold their current path and they don't change and they don't evolve, then those central banks that just hold their current path are going to die. But the ones that do evolve, even in small ways will survive and will continue to grow. And these kind of totally new types of organizations built more natively to Bitcoin will probably do or probably survive the best. But it's still to see kind of what that may look like. But we're seeing the early days of that. But it's going to take some time for this to play out again. That's why I say we're kind of at the beginning of that.

Jeremy Welch (17:04)

How do you mean? We're seeing that play out now already. What kind of things are you seeing?

Peter McCormack (17:09)

Well, you've already heard of. So I think that probably the best example of that may actually be Libra. And I think Facebook gets a lot of flack for trying to build Libra. But I do think if you look at what they're trying to build, I think that it actually has. Libra actually has kind of, maybe the way to put it is like the best approach or the best mix of what a kind of future central bank. Or, you know, it's because it's programmable and because they're trying to build APIs around it. And because it's going to plug into the Facebook system, it's not as easy to just say that it's like a central bank because it is going to be this currency, but it's going to be, it's at least planned to be more open in both a kind of computing system and a monetary system. But I just think that Libra captures the same attitude of kind of what a central bank captures and the same directives to where Bitcoin is kind of something different. Bitcoin is just going to exist and it's going to exist even regardless of whether a central bank or a state human governance system wants to utilize it or not. It's just going to exist. It's just going to be out there. Right. And where Libra is this kind of digital money organization and this digital money approach, but they are talking about that they're going to have a basket of currencies and Bitcoin could be a part of that. Right? So if you want to look at stuff that's already happened or the adoption that's already happened in the early part of the curve, then a very easy example is Libra launches, there's a digital currency that's now a part of 2 billion Facebook users lives and Bitcoin ends up being part of that basket of currencies. That is a very real possibility within the next year or two and I think is a more near term possibility than say the US Government central bank somehow utilizing Bitcoin. But we have heard, I think it was maybe the Australian central bank, one of the other central banks from another country, I think it was Australia had actually talked about maybe even factoring in Bitcoin as a part of their asset holdings. So maybe we'll see some of the major central banks actually use it as an asset too, but we'll see.

Jeremy Welch (19:25)

And do you think they're the central banks that have got the most chance of survival? And then looking at the ones that you think might fail, what does a failing central bank mean?

Peter McCormack (19:36)

A failing central bank looks like a failing state. So if a central bank is just part of the state apparatus in which a country operates and the goal of a goal of a state should be to operate for the benefit of its people, government for the benefit of its people, its citizens, than a failing, a failing state. And you can go down the list of countries that have inflated away their purchasing power, their currency, Congo, you know, even Venezuela, we've, we've got, there's just numerous cases now. And Venezuela is an interesting case because now they've got the Petro. So they're trying to play this game already. And so maybe that, you know, we're, we're still, it's still in the early stages of that and maybe they see some success with Petro. But I think the Petro is actually an interesting case because effectively what they're Doing is they're playing the digital currency game, but with the gas as a backing, right. With their petroleum as a backing and they've called it the petro. And so you can see this world starting to emerge to where we've even talked about potentially a US digital dollar. But I think that that will be a little bit further off and who knows, maybe some central bank will even try to go back into a gold backed currency at some point. I think that no matter what the next five to 10 years, if you look at any global reserve currency, no reserve currency has lasted more than about 60, 70 years if I'm remembering correctly. So we've had a series of these global reserve currencies and the dollar has been the reserve currency for quite a while now. And we're actually past those numbers. And so it is, yeah, there are ways, there might be other cards that we can play, but at least right now I think that our reserve currency status is at risk. And so other countries are also going to be trying different things. A bitcoin backed central bank in some capacity may be part of that. A digital currency from another corporation that somehow has bitcoin at play could be a part of that. A resource backed central bank, you know, perhaps Venezuela is an example of that. With a digital dollar like the petro may be an example or maybe a third version of that. But what we have today with the US Dollar is we're effectively almost kind of petro and military backed. It's just with our alliance with Middle east and, and you know, the might of the US military is what's backing the dollar.

Jeremy Welch (22:11)

So you have countries as in El Salvador recently, they're dollarized. Everyone uses the dollar. There's no local currency that people use. So they're essentially giving up central bank in control of a currency in the country. They're relying on another country. Is it a big leap to move to a country that does that with bitcoin?

Peter McCormack (22:26)

I think that it's a big leap. It is a big leap for that to happen because the, and it would be more similar to just going back to a gold based or hard metal based currency. It limits, you know what you can do it, the ability for a country to just kind of print their way out of a crisis. It limits your. So it constrains, it constrains a country in ways that they can't just kind of make up their story, right, because they have a hard number they're constantly judged against. But in certain crises they still, there still will be flexibility. It's not like they're kind of locked into one path but it just provides this kind of extra measure. So bitcoin could end up serving like that. It's still, again, it's still very early and a lot of, you know, there's a lot of global awareness and I don't think it would shock anyone if something like that happened within the next five to 10 years. But I do think that it would scare people. Like, I think that a lot of people would think it would be very unpredictable. They're much more comfortable with the idea of something like gold. So I do think it would be a very, it's going to be an experiment. If something like that happens. It's going to be an experiment for sure.

Jeremy Welch (23:47)

So the more likely scenario therefore is a kind of gradual transition where similar to Libra being a basket, maybe a central bank or a government has bitcoin as one asset alongside maybe gold and dollar and others.

Peter McCormack (24:00)

Yeah, I mean a basket of currencies has been. This goes. So we have. The International Monetary Fund has special drawing rights SDRs. Using a basket of currencies has been something that most central banks or kind of global bankers, global governments are aware of and understand and would probably be more comfortable with and maybe even more comfortable than just going kind of fully gold backed. Just in the sense that it gives them more flexibility. It really becomes a kind of a battle for gold control. If you were to go back to a gold standard and so if you kind of went to a bitcoin standard, it would be a battle for bitcoin. Right. And there is a question of kind of how, what does that look like? What does a kind of battle for bitcoin look like in a bitcoin standard bank? It's kind of bitcoin standard central bank. And that's going to spark a lot of, you know, maybe that sparks a lot of innovation and just in terms of hashing power wars, you know, the world will look very, very different if something like that plays out. But it's not as far fetched as it used to be because again bitcoin is now everyone's aware of it. Many people are using it, many people are building on top of it. There's a Microsoft Team that's building an identity layer on top of it. There's a lot that's happening. It's just shocking how fast we've come in a very short time frame.

Jeremy Welch (25:33)

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Jeremy Welch (28:05)

There's also some social things happening right now and some political things that happen right now. So I've been traveling, as you know, I've been traveling a lot. I've been to Chile to cover the riots. I went to Venezuela. I've just been out to Turkey. I've been, you know, I've traveled to quite a few countries now. But there are some clear parallels. There is a growing left and right divide and a growing anger against inequality. And outside the politics here, whether you believe in socialism or capitalism, libertarian, whatever you are, what, what I don't really care about is your political identity in this point is that what there is this left, right divide and this rich, free, poor. And it's a growing divide and there's a growing resentment from people. And as I said, whatever the politics are, the resentment tends to be not so much of the divide itself, but how the divide occurs, how much corruption is there, how the people at the kind of bottom rung, especially in places like South America, which has a very small middle class, seem to. They feel like they've done their part, they've worked, they've paid their taxes, yet they are having access to less and less services. And the rich, again, richer and poor, getting poorer. Where do you feel like Bitcoin fits into that whole narrative that is, that is spreading globally.

Peter McCormack (29:16)

Yeah, so there's a lot embedded in what you just. There's a lot embedded and the points that I'll touch on. No, no, that's great. That's great. That's a great jumping off point. But there's a lot embedded there. And I would say that the, the few things to cover there. One is, is I've talked before about Bitcoin and really any currency. I mean, bitcoin is just this kind of evolution of currency and it's just better money, better currency. And when you get into what a currency ultimately is just as a, it's, I mean, it's just a communications medium, value transfer, communications medium. So I want to touch on that. And then I also want to touch on the, the idea of inequality and the idea of difference and kind of this, this political, the political battles that are happening, but this widening gulf and kind of, you know, how political systems work can touch on that a little bit. And then can also touch on the, this idea of corruption and growth and the middle class and kind of being furious at the fact that you're someone who followed the rules and you're getting screwed, the government or business interest or someone else is screwing you and what all that looks like. And I think the first two or three points are actually helpful to touch on the last one and what we're seeing with this middle class situation. So bitcoin as a communications medium and currency as a communications medium, when you get down to what a currency is, it's just a common language like that's an easy way to think of it. A good currency is a language that anyone understands and it's a language of exchange, right? So if, you know, I'm making apples and you're making corn and I want some corn and you want some apples, then we can do the direct exchange or we can actually have this medium of exchange. We can have a currency that sits in between us that is easy to trade with, right? And from that perspective, Bitcoin is really interesting because being open source and also not being controlled by a singular central party and also having all the stats, everything is an open system. Not just that it's open source, but even the running of the system, you know, you can, you can pay attention and you can see what's happening. It's just, it's just way more predictable. So in that, that simple, simple example of, of currency and just the ability to trade and exchange, you need to be able to speak the same language, right? And you also need to know that the other person that you're exchanging with is actually following the same rules that you're following. So if I'm, you know, I'm expecting that if we're using Peter dollars and I'm expecting the exchange rate to be 10 apples per Peter dollar and you're expecting the exchange rate to be 5 apples per Peter dollar, then you know, we've got some, we've got it. We basically have to arrive at a middle ground somewhere in terms of the exchange for, for the goods that we're about to make. But if you have this dollar that is giving off enough information and that is an open source system and also a kind of globally scaled, you know, the technology itself and operating the technology is also done in an open, transparent way with this open, transparent ledger, then what that means is, is that my ability to price, my ability to say and predictably say, well, you know, I'm going to price or I'm going to say that the Exchange should be 10. 10 apples per Peter dollar. And you have a higher incidence or a higher chance that we're going to be agreeing in terms of an exchange rate, if that makes sense. So it's critical to have this kind of like, open money that allows a system to emerge to where two people in two different locations with two totally different backgrounds can arrive at similar estimations. And so bitcoin at its core as a communications medium is remarkable because of that, because it just better than any other currency in the world. It has this trustability, this predictability, and anybody can check it any time of the day. We don't have to wait for quarterly Fed minutes and we don't have to wait for or emergency Fed action with this recent coronavirus every day. We can just look up the stats, we can learn as much as we want. And because of that, again, it provides this kind of base open communications medium. And what that means is that, you know, we. Anybody that's dealing in bitcoin actually feels like they're part of this kind of nation of Bitcoin in a sense. Like they feel like they're part of this community of bitcoin and they're already on this, this, this right. Communication level with the other person that they're dealing with, right? And so what that does is that, that literally, if we're talking about. Now jumping to the second point of talking about kind of inequality generally, what that does is it builds a bridge, right? So if we're talking about inequality, quality generally, and where that arises from, you know, people are just different, right? People, they live in different places, they come from different backgrounds, they're genetically and phenotypically very different. People are just different. And that's okay. Difference is like, great, right? It's like that's how we end up with, you know, someone makes metal music and someone makes classical music and someone makes pop music, and, you know, all this kind of, this, this array of different types of products in music and culture and, you know, that comes from the fact that we're all different. And that's awesome, but we still need this kind of common language to trade with and communicate with. And so what I would posit is that at least my kind of approach to thinking about the world and how this has evolved is that the history to date, we have been kind of locked in both information. And locked isn't like the perfect word, but we've been. I'll just say that we've been kind of boxed in or have been used in these information systems and money systems to date. That have been mostly regional, local or national, and have scaled with different types of money and different types of technology. And so one example of that is kind of like the history of newspapers that every city would have a major newspaper and everybody in that city would read, or a lot of people in that city would read the city newspaper every week and would kind of know what's going on in that city or that region. Now we're at. Instead of at city newspapers, we're at kind of national newspapers or even just global newspapers, right? But the Internet is the big kind of missing piece in this story of inequality and this story of difference. When you only had kind of one major information mechanism or one major, you know, you had a narrow set of radio stations, you had a narrow set of movie and music publishers, you had a narrow set of newspapers again, TV channels, radio stations. And now we have this, you know, the Internet, which is. Just makes it easy for millions of these things to exist. And so you have these fracturing communities. You have the. Maybe a good example of this is the. Not Vox, but what's the other. The publisher's name.

Jeremy Welch (36:34)

Buzzfeed.

Peter McCormack (36:35)

Buzzfeed, yeah. Like buzzfeed quizzes. There you go. Like buzzfeed quizzes are like a perfect example of this is that you have this. You have just millions and millions of these sub communities that can now exist because of the Internet. And the potential, I think, for all these sub communities was always there. The potential was always there. You had a lot of differences in between people, but because everybody was only using this newspaper or using this news channel or using this community, all these differences were getting smoothed over. But now because of the Internet, people can engage with people around the world. And they're like little hundred group of people that like some anime or some book or some music or whatever that is, and they can form these, these tiny little subgroups. And so you get these more and more kind of cultural manifestations that come out. And each of those cultural manifestations, that's. That's a difference, right? And so you. The Internet brings out more detail, more informational detail in the global populace. And that's the kind of root problem that ultimately has kind of resulted in a lot of the clashes I think that we see both in culture and politics and elsewhere is that the Internet is enabling us to kind of finally realize a lot of the idea differences that we've had for a long time. People are kind of finally comfortable saying, like, yeah, I believe this, or I believe that because of the fact that they can find other people too, that are a part of that community. They can engage with them, they can grow those ideas. So the Internet itself is part of the mechanism that's kind of expanded the range of possible ideas. So that's point number two. Point number one was, again, that kind of any good currency is a good communications mechanism is ultimately what it is that allows two people to trade and have a common language that they can trade in. And now point number two is with the Internet growing, you now have this massive, this massive engine that's creating differences between people, right? So that gets us to point number three, which you brought up, about the widening gulf in wealth and the widening gulf in kind of political spectrum, political views, political clashes. And then also even this question of middle class versus upper class and middle class, first off, like, middle class was largely created during the, the Industrial Revolution, kind of as a function of these jobs that were in factories and that were needed even for the kind of global system to work. But the middle class hasn't always been there historically. So you've had kind of multiple tiers of wealth, but the middle class hasn't always been there. But I'm just raising that point because it is a. Historically, it wasn't always there. There's no guarantee it'll stay there. But I think that the more important point here is, like, is with this new range and differences of ideas and cultures and everything else, it makes it harder than ever for us to communicate. It makes it harder than ever for us to politically organize. It makes it harder than ever to. It makes it easier than ever for people to actually make contact, but it makes it harder than ever for you to get kind of large swaths of people to be extremely highly engaged in communities. And so what's resulted in that is that you've needed, you've had politicians and others that have created this kind of outrage culture and political infighting as a way to, like, band people together through fear. And, you know, Bitcoin or good currency actually provides us a way out of that, because as a common language, you're already part of a group. So if you like, if you, if you participate in this common language, this common currency, this common community, regardless of what your belief set is or your political set, then you, you can communicate, you can trade, you can, you know, have friendly relations. So I know that's a, that's a, that was a long stretch to run through those three points, but I think that just, just leading all that up to say that, that the answer to, you know, this wealth inequality, the answer to, you Know, getting screwed if you're part of the middle class because you think you're playing by the rules, but it turns out that the rules weren't what, what you thought they were. If you have open money, if you have an open system, if you have Bitcoin and you have an open system to where communication is easier, to where, you know, the, the average middle class person can check Bitcoin, can look at basic stats, can make sure it's running just as well as the, you know, more wealthy classes or lower income classes. They can all do this, right? They can all understand and see how that money is reacting to world events on the same level. Then it reduces the opportunities or reduces the chances that there, there would be a, you know, some kind of a scheme going on to kind of hoodwink one of the middle classes, lower classes, whatever. Right. Like so, because it is a common communications mechanism, because it is a reliable, boring, stable asset and system that makes it easier or lowers the risk of being hoodwinked.

Jeremy Welch (41:45)

So it goes back to having the best form of money, but the open transparency allow. I think what you're saying is you can't hide the corruption.

Peter McCormack (41:54)

Yeah, you can't even hide it. Yeah, that's exactly right. Because it is an open system. It is harder to hide that because it is. Because of the censorship, resistance, it is harder to hide corruption just across the board. The existence of Bitcoin as a system, not just as money, but as a, you know, as a communication and computation system, money being a part of that means that it is harder to hide corruption. And it will be increasingly. I mean, you will have, potentially, maybe they'll have to. You'll still see, you'll still see some central banks, you'll still see corruption and other types of forms, but, you know, this particular type of corruption will be harder to run.

Jeremy Welch (42:34)

Yeah. And I guess added into that is that a lot of the corruption stems from the ability to control the money, to print the money as you need. We know with Bitcoin, that's one of the problems that you have to, you have to have a little more fiduciary responsibility.

Peter McCormack (42:50)

Yeah. But it's also, it's like, you know, it's not even just the money system, it's a legal system as well. You have, and there's an interaction between that where you have maybe certain parties that are politically immune from their actions and can be corrupt because they either have enough money or they have enough political clout, or they're a part of a, you know, they have enough force like they may be a part of a military in a certain country, or they may be a part of the legal function. Right. So there are several of those levers that you could have a tight hold on or be a critical part of that could give you some level of immunity which would enable you to run some corruption if you wanted to. And Bitcoin, by being this open system, you can't change it. You can't. You know, no party has that level or that ability to corrupt things. And if they do make any changes, it's immediately apparent. Right. So it's not. It's not. It doesn't say that things will never change or that there won't be attempts at corruption. But what it does say is that if that happens, that it will be able to be immediately detectable or near immediately detectable. And. And then that again, will kind of reduce the potential corruption overall. And I don't know exactly what that means in terms of how things would play out with the widening wealth gap. I expect that the. Or I suspect, I won't say I expect, but I suspect that the wealth gap will actually get wider over time just because of the way kind of capital systems work. But it's still to be seen.

Jeremy Welch (44:18)

Do you think this will change the nature of politicians and politics itself and the way the expectation of behavior will have from politicians? Well, I guess we have the expectation now, but we're always let down. But do you think this will change the nature of politics?

Peter McCormack (44:32)

Yeah, it definitely will. We're already seeing that some. I would say that one way to think about all of this stuff is just an open system versus a closed system. And what meaning, there is two things. One is an open system being just like something that's transparent, that you can see kind of how the system's running. Two, being in a closed system being something that's closed off, and you can't even see the rules. But there's another way to look at that in saying that an open system may have the rules on the surface, and the rules that you see are also the rules on how things actually work, where a closed system also could be something to where there may be some public rules that it appears that things work in a certain way, but in reality there's this kind of second rule set that's kind of hidden, and that's how things really work. And I would say that the politics of today, if you're a politician or if you're a governor in some capacity, and whether you're in China or you're in the U.S. we are in political systems currently where they are, even if they're democratic, many of them are still, in effect, kind of more closed systems. Not in the sense that you can't see some of the things that are going on, but in the sense that the things you see are not necessarily the real story.

Jeremy Welch (45:50)

Okay, can you explain that?

Peter McCormack (45:51)

Yeah, Well, I mean, let's just look at the financial crisis, for instance, right? You know, we can all see that money was printed. We can all see, you know, some of the details of, you know, what happened, but we have no idea what was set in back rooms. We have no idea the nuances of what happened in both at the governance level, some of the corporate level, some of the bailout level. We know that certain very few people went to jail. We know that, you know, based on the legal structure, that many people should have gone to jail, but they didn't. Right. And we have no idea kind of what those backroom situations were. Even though the public is being told, like, hey, this is good for everyone, and this is what's happened, there's some backroom understanding that if you were a part of one of those banks, then you really have the real knowledge as to what kind of really happened. And that's the story of governance throughout history is it's almost always been kind of two layers of one that's been more like the kind of, okay, this is the public story, and then one that's been below the surface is the reality. And this goes back to just even the allegory, Plato's Cave. But I think that ultimately any system, governance system, monetary system, anything to where the reality and the kind of public view are closer and closer and closer or are the exact same, that's a more open system, right? And in that more open system, you know, the closer those two are, and it could be a function of just the way the system is designed, the better, because you can't get away with as egregious of abuses. It's much harder for sociopaths and other kind of corrupt individuals to manipulate a system to where things are just much more open. And therefore people actually trust that system more and more and more. And so Bitcoin is one of those where, again, it's an open system, it's open source, but also just the operations of the system generally are easy to see. And it doesn't mean things that won't change. It doesn't mean people won't try to corrupt it, but if they do, it's very easy to detect that and see that and to see the kind of public story of maybe some of the core developers or someone else diverging from the reality of what you're seeing with the kind of underlying code and underlying behavior of the system. Right. So that fact of, like the story diverging from reality is harder to happen. And therefore talking about politics and talking about what you asked, I do think it will be harder for politicians to be corrupt. Doesn't mean they won't try. But at least in this area, it will be harder potentially in the future because of this.

Jeremy Welch (48:32)

Okay, just moving to a slightly separate subject, but I think it's aligned to this, is that the world's pretty weird right now, Jeremy. It feels like it's the weirdest time I've ever lived. I've seen that there are certain governments now who started to even try and clamp down on cryptography. They want full access to all our money, our information, our data. This real kind of dystopian future feels like it's encroaching right on us now. I think I saw a thing in the US where they're trying to ban all forms of cryptography. I'm pretty sure Australia banned it. I think the UK tried to in 2015. There's a lot of weird things happening right now. Add to that we have data hacks. I've talked about protests across the world. The real standout one for me was Hong Kong, where people actually kind of. Hong Kong protesters kind of won. You know, they actually got the Chinese government to back down. But there's a lot of really, really weird stuff going on right now. Do you see bitcoin as a reflection of that, or do you see Bitcoin as a. As a tool to support that? Or just both?

Peter McCormack (49:37)

I mean, it's independent of that, right? If anything, I would say that those things would have happened in some capacity. It's just that Bitcoin, actually, because what that's a result of. Oh, you know what? There was a third part of our discussion just a minute ago, which is basically the nature of economic growth, that we should factor into that, and this actually factors into this question, is that if the pie, if there's this kind of court trism, that I do believe that if the economic pie does not continue to grow, then you're going to get. A lot of bad things happen. If you. You end up in this Malthusian kind of cutthroat world where everybody's trying to get their piece, but if you're growing the overall economic picture, economic pie, then everybody can kind of have their. Slice their little piece of the growth. Right. So I don't think bitcoin is just this tool that was. Thanks Satoshi Nakamoto that was given to us in recognition of, like, okay, the world monetary system, the world governance system is getting really complicated. It wasn't. I do think it was in response to some of the corruption. But it itself kind of exists independent of that corruption. It may exacerbate and make that. I don't think that bitcoin itself is exacerbating and making that corruption faster, but I think the existence of that, of bitcoin means that people can now believe in an alternative or they can believe that something else is possible. Right. But the root of the problem really comes down to economic growth. If you have really strong economic growth, then population is generally much, much easier to manage. People are much happier. If you have stagnation, which is what I do believe that we're seeing in many economies in many areas around the world, and, you know, you're not growing as fast or you're not growing at all, then you're going to get major protests. You're going to get, you know, people can't feed their families and people can't even grow families, then people are not going to be happy. And that's going to result in more protests, that's going to result in more demands for more rights to. For people to eventually get those things back, that personal wealth back. And so bitcoin feeds into that. It may exacerbate it a little bit, but ultimately, like, that's the root problem. Is that. That growth problem.

Jeremy Welch (51:56)

Right. Okay. And, you know, kind of timely now we're going to potentially have a very serious problem economically. We have coronavirus.

Peter McCormack (52:06)

Sure.

Jeremy Welch (52:07)

So resulting from that, I guess if we do see significant impact on the global economy, we are going to see, you know, perhaps not even that. We're not going to see growth. We're actually going to see the economy shrink. So that could be a. Throw more fuel onto the fire, these types of protests.

Peter McCormack (52:23)

Yeah. So the weird thing about coronavirus, actually is that, you know, I mean, have you heard, have you seen any headlines about protests recently in Hong Kong?

Jeremy Welch (52:33)

Well, actually, I just read about one yesterday. They just started again. That was interesting that you should ask that because they had stopped, but, yeah, they've just started again.

Peter McCormack (52:42)

Well, we'll see how this plays out. But, you know, there were, and there are still some in Europe right now, but as coronavirus grows, you may actually see a limiter in terms of public kind of mass Gathering protests doesn't mean protests will stop. Protests may happen in other ways, but they're going to have to manifest themselves in a different way. But coronavirus is going to wreak havoc on the overall system. We've known for a very long time that another major virus was a risk to the global population. We've been connecting and interconnecting and moving towards this globalist system. And that makes the spread of virus, it makes the spread of capital and the spread of money and spread of trade much easier, which helps solve some growth if you can sell to more people. But it doesn't necessarily. Doesn't necessarily. But it also opens up this weakness which we have not seen majorly exposed, which is, you know, this potential of mass pandemic. So it is a real challenge that we now have this reality of. And I'll go ahead and call it a reality of mass pandemic. I know the World Health Organization has been like, hesitant, but I mean, it's a pandemic. It's everywhere. It's crazy. And I think that this is still very early in the process of coronavirus. I think it is going to change a lot of our lives, but it's not. A lot of people are thinking, oh, this will just be one of the flus, or this will just be the next few months. But I don't think that's the case. I think that this has been a risk for quite a while. It's been a potential for quite a while. We just haven't had it, you know, again manifest itself. And it's not going to go away now that it is now that we've seen it once. You know, I do think that, you know, coronavirus itself may just flare back up again. There may be a second or third wave of it. But I do think that in this more globalized world that this will continue to be a potential risk. So we're going to have to come up with new ways of doing things. And maybe that's social isolation, maybe we have some new cultural norms that come out or limits to mass conferences and mass events. But something's going to have to change to protect us from that while still enabling the growth picture. So it's going to be twice as hard now. We have to both maintain a growth picture, maintain more innovation, to grow the economy overall while still minimizing the risk of something like this. And that is going to be hard. And as more people face hardship, they're going to want to protest or they're going to want to find some way out and that will find. Either it's either going to be, you know, riots or it's going to be protests, or it's going to be. There's going to be something that happens. So whoever's in. Whoever. Whoever is in any kind of political office or leadership office in the next few years is going to be. It's going to be a real challenge. Real challenge for whoever's in office.

Jeremy Welch (55:28)

Yeah. So if somebody new has listened to this podcast and they've gone through the beginner's guide, most of the time they're going to be thinking that, look, this is a new form of money. It's a better form of money, perhaps a way to take down the central banks. But always with you, Jeremy, I'm always thinking much bigger. I'm thinking this is a complete change to society. Like that show we made. It changes everything. How do you get people to think beyond just being a change to money?

Peter McCormack (55:53)

I think that there's something that happens. It's hard to replace the actual activity the first time someone actually kind of holds their keys. Whether you do that on a Trezor or on, you know, we have key master multisig, and if you, you know, set up a multisig system and, you know, you realize that you have the ability to be your own bank, that itself is just a remarkable step. Now, getting people to that point is. Is. Is still a little bit of a hurdle. We're trying to make that easier at casa, but it's still a hurdle. And, and, but once someone has that experience, there is a light bulb that goes off, and it's hard to replace that by just explaining something. And unfortunately, I think that that's, you know, that it is going to take building kind of new experiences or having new things. It's going to. It's going to take. It'll take several more years for us to have some of these new technologies or new things that can result from a system like this before most people really understand it. And so it's not easy to explain. And I don't necessarily have an answer for you as to how to. To just, you know, get people to grok it immediately other than just, okay, you know, here, set up a key here, I'm going to send you some funds. You know, you just transferred $10,000 instantly, and it's very low fee and you control it entirely. And, you know, you don't have a lot of cash on you, and that's the most remarkable thing.

Jeremy Welch (57:14)

Yeah. Okay, so looking forward, you know, I did say this would be about the future of bitcoin. We've covered a lot of the political and social elements here. Just on a technology level, you said it's going to be quite a boring few years ahead. But what are some of the most important things coming for the technology of Bitcoin?

Peter McCormack (57:31)

The most significant is, is, is just taproot and you know, Schnorr signatures, near term improvements on, in terms of signing potentially. There are some privacy implications there that are important too. There are, you know, I think that more than the technology layer itself will be, you know, pretty boring. And that's a, that, that's a feature, right? Like that's a good thing that it's not going to change dramatically. But I think that you will see some of the systems around it change, the user interfaces around it, the way people use it. Again, you know, trying to get more multisig, more multi, you know, multiple key signing and easier key management. That's what we're spending a lot of time on. Then you have, I think that the hashing power conversation is going to be something really interesting over the next few years. You have more miners coming online, you have more technology around mining and some of those innovations are actually around power consumption or where you're sourcing that power. That's going to be an interesting story the next few years. But again, bitcoin is going to be boring and that's a good thing. And I always try to kind of package these nuggets into or bits of knowledge into easy kind of sayings. And two of my more recent ones are Bitcoin is going to be boring and that's a good thing. And the second one is kind of bet on Balkanization, which Balkanization just means kind of fracturing in terms of states and more isolation, more independence. And I think that that has implications for how bitcoin is structured and how mining will be structured and how some of those other pieces of the bitcoin system will be structured.

Jeremy Welch (59:20)

All right, so listen, look, nobody likes predictions, Jeremy, nobody ever wants to because you always get help for them. But just thinking ahead, like 1 year, 10 years, 50 years, where do you see bitcoin? And I know that's a massive question and don't worry, I'm not going to come back in 50 years and go, look mate, you were wrong. But where do you see it?

Peter McCormack (59:40)

Well, somebody will. Somebody will. But I think that the prediction game is a hard one and honestly it's kind of an unproductive one. And what I would just say is that it almost doesn't matter. I think that the thing that I can definitely predict in 25 years is the, that bitcoin will be around. I can predict that. I can predict that basically short of kind of collapse of Internet and power consumption and some massive, massive casualty event that results in just massive kind of catastrophic failure of a lot of our other civilizational systems, Bitcoin will be around, right? That's the one kind of thing, is that there is this kind of codependence, interdependence between bitcoin and between the kind of social and economic system and the civilization that we have. And so if that collapses, then sure there's a risk of bitcoin also collapsing. But as long as those two are alive like that, it's going to be around, it's going to be growing. In 25 years, even 10 years, the banking systems will have all changed and will have all realized and further internalized the reality of bitcoin. And so you will see some very different systems there. I do think that we're going to have, we'll still have some, we'll still have corruption, but I do think that we will at least see, I'll put it this way, I think in the next 10 years, and maybe even the next five, we will at least see at least one wave of kind of mass outing of corruption, let's put it that way, like, like on a kind of global scale. And whether that's tied to the current banking system or, or another nation state that's collapsing or something else happening, you will see these waves of corruption being outed. It doesn't mean that the corruption is going to totally go away, but just that corruption being outed means that some of those systems are starting to fail and that as a result those people are outed only after that stuff has failed. And so you'll get to. I do think that we'll see more stable systems long term. I think that we'll see a more peaceful future in a lot of ways long term as some of these things realign. But it's in that chaos of realignment that things are going to be complicated. On the bitcoin specific side, I do think that there's no way around people managing keys in some capacity. So that's something that, you know, again at CASA we've invested a lot of time in and we were doubling down on this year and Nick and Jameson are leading the charge this there. I'm serving as an advisor mainly. I stepped back again as a, for family health reasons, had a family member that got sick and, but on the key master side, I mean, we've been spending a lot of time, we just shipped some inheritance services, we just shipped some other stuff. I'm going to just go ahead and do a little shameless plug around casa. But I do think that usability around bitcoin is important, but just usability around key signing more widely is going to be really important for the future of bitcoin and the future a lot of systems and a lot of kind of personal data and personal wealth for people. So I do think that we will get to kind of mass adoption and mass thinking around key signing and key management. And I think that overall a computing experience is going to change pretty dramatically. I would predict it and expect that at least one of the major kind of faang type companies, you've got Facebook and in Google, Amazon, at least one of those will kind of go the way of Kodak and being, and losing a lot of market share or just totally collapsing or something. Just as again, I think all the computing stuff is actually intricately tied into the monetary system as well and how things work. And so as bitcoin grows, you know, again, companies are going to have to adapt too. So there's going to be a lot of activity. I think bitcoin itself is going to be relatively boring. That's a great, great thing. You know, bet on Balkanization and we're going to see more isolation and coronavirus is accelerating that. But overall I think the future is quite bright and, and I'm very optimistic for where things are going in terms of our, you know, personal wealth and family wealth. There's going to be a bumpy road to get there and, but we've all got to, you know, as bitcoiners and as one big community, we've all got to kind of band together and work together to, to build this better future.

Jeremy Welch (63:53)

Cool. And if people like what you've got to say, Jeremy, I'm going to recommend our other shows, but if you've got any like specific books or specific bits of literature you would recommend reading, you know, we'll throw snow, crash in there. But anything else you think people should take a read of?

Peter McCormack (64:07)

Oh, that's a, that's an interesting one. I, I mean sovereign individual is an interesting one, but I do think that one's kind of starting to get overplayed and there's a lot in there that's, you know, as much as there is in there. That, that is interesting prediction. There's a lot in there that's just kind of totally missed One that I have consistently recommended the last few years is Thousand Years of Nonlinear History. Just talking about kind of systems theory more generally. And I think that that is one thing that people can dig into a little bit. I mean, there is some density around that, but I think that thinking as thinking of all these things as kind of just systems that are either open or closed, more predictable or not, and are either resilient or not, or let's call it more or less resilient because the non resilient systems are typically gone pretty quick. But more or less resilient. I think the more you look at the world that way and just see bitcoin, it's not that bitcoin is the end all, be all. It's that bitcoin is just the most resilient thing that's out there.

Jeremy Welch (65:10)

Right.

Peter McCormack (65:10)

So. So it's going to survive. And I think that digging into any books or topics just in terms of systems theory and systems thinking, and again, one of my favorite ones is A Thousand Years of Nonlinear History is definitely something to try to invest in or wrap your head around.

Jeremy Welch (65:25)

All right, cool. Well, listen, always love talking to you. Usually prefer when we do it in person. It's strange to do it remotely. It's always a different experience. But always love talk to you about Bitcoin. Jeremy, you always get me super hyped about the future. So thank you. And listen, I wish you the best and I'm sure I'll see you again pretty soon. Well, hopefully it depends on all the travel stuff, but hopefully I'll see you soon.

Peter McCormack (65:43)

Yeah, yeah, we might be seeing each other. Get your VR headset. Jameson has been doing, I think they actually have. They're doing an MIT bitcoin thing with a virtual meetup. I think we're going to see a lot more of these kind of virtual meetups. So whether I see you in the metaverse, which is the space from Snow crash, the metaverse, or in real space, you know, either way, look forward to connecting. Thanks for having me on. And yeah, really interested to see where all this stuff plays out the next few years and everybody stay safe. I mean, all this coronavirus stuff is no joke. Everybody should be taking it seriously. So. But yeah, we'll leave it at that.

Jeremy Welch (66:18)

All right, man, well, good luck and I'll speak to you soon.

Peter McCormack (66:21)

All right, take care.

Jeremy Welch (66:23)

Okay, so what did you make of that one? This is the fourth time Jeremy's been on the show and every time it's been a monster. So you should go back and check the other shows. Out if you haven't listened to them before. But I knew I had to have him as part of the beginner's guide. And looking ahead at the future of bitcoin was the perfect show for Jeremy because outside of these shows, I've hung out with him a few times, we've had dinner, we've had coffee. And just hearing the way he thinks about the future and where bitcoin fits into the world, it's always interesting. He always blows my mind. Now listen, trying to predict the future of what bitcoin will look like in future, five, 10 or even 50 years is almost impossible. But I think it's clear that the future is looking pretty good for bitcoin. And Jeremy is bullish and I am bullish and world events. Just look at what's going on the world this year, man, it's been a crazy year. I think more than ever, you know, we need bitcoin and actually go and check out why we need bitcoin. But Andreas, if you haven't listened, if you have, go listen again. If you listen twice, go and listen to it 10 times. You know, we need bitcoin. Anyway, thanks as ever for listening and supporting the show. You got any feedback, you know you can email me. I do reply to anyone except morons who say stupid shit. So if you want to reach out to me, hit me up. It's hellohatbitcoindid.com and if you want to support the show, whatever you want to do, if you like the show and you think, you know, Pete, you do a good job here, I want to help you out, buddy. Please head over to my website.

Jeremy Welch (67:42)

It's what?

Jeremy Welch (67:42)

Bitcoindid.com Click on the Support section. It's all in there. Going lenders hand give us a review on itunes. Anything you do that can help. Anyway, we've got one show to go. It's going to be a monster. I cannot wait to get it out. It's going to be out Friday. Looking forward to that. Anyway, if you got any questions, you can hit me up. My email address is. Hello, what bitcoin did dot com.