Speaker 1: Pushkin. If you spend any time reporting on the world
Speaker 1: of cryptocurrency in bitcoin, then you're going to run across
Speaker 1: the name Molly White. She's a software engineer who has
Speaker 1: this website with fonts that looked like a dot Matrix
Speaker 1: printer made them in nineteen ninety seven. The site has
Speaker 1: a sarcastic title that I just love. Quote web three
Speaker 1: is going just great and is definitely not an enormous
Speaker 1: grift that's pouring lighter fluid on our already smoldering planet.
Speaker 1: End quote. All of that is her title. When I
Speaker 1: read that, though, I knew that for my next book,
Speaker 1: I needed to get Molly White on the phone. This
Speaker 1: is on background from Against the Rules. I'm Michael Lewis.
Speaker 1: Crypto has always had skeptics and critics, but Molly White
Speaker 1: is a researcher who really knows her stuff. She's consulted
Speaker 1: on federal legislation to regulate the industry, and she's an
Speaker 1: activist in small ways, such as persuading the Wikimedia Foundation
Speaker 1: to stop collecting donations via cryptocurrency. All that, plus her
Speaker 1: outspokenness online has put her in the line of fire.
Speaker 1: And we'll get to that. Welcome Mollie. So all of
Speaker 1: this is in service of this book I'm writing about
Speaker 1: FTX and Sam Bankman Freed. And I assume you kind
Speaker 1: of followed the media coverage a bit because you're interested
Speaker 1: in the space. What do you make of the public
Speaker 1: response to it all?
Speaker 2: I got very frustrated at one point, not too long ago,
Speaker 2: that a lot of the story seemed to be that
Speaker 2: Sam Bankman Freed was just a kid who got in
Speaker 2: over his head. That was a very prevailing narrative, which
Speaker 2: was really irritating to me as someone who is about
Speaker 2: the same age as Sam Bankman Freed and who you know,
Speaker 2: has a head on my shoulders. But you know, I
Speaker 2: have been happy to see that ftx's collapse did seem
Speaker 2: to precipitate a fair bit of skepticism in the crypto
Speaker 2: industry that maybe hadn't been there before. You know, there
Speaker 2: had been a series of collapses in crypto since you know,
Speaker 2: the spring of twenty twenty two, but they were not
Speaker 2: as significant in size as ftx's collapse. And so I
Speaker 2: think that ftx's collapse really helped to drive home some
Speaker 2: of the skeptical narratives that were beginning to emerge in
Speaker 2: the media in the.
Speaker 1: Very beginning, when bitcoin is created in what two thousand
Speaker 1: and eight, Maybe I can't remember.
Speaker 2: That, Yeah, two thousand and eight or two thousand and nine,
Speaker 2: depending on how you define created.
Speaker 1: And so so you encounter it, you get a sense
Speaker 1: of what it is. Most people who went through that
Speaker 1: process either became bitcoin fans, or like me, looked at
Speaker 1: it and said, I'm having no emotional reaction to this
Speaker 1: at all. You had an emotional reaction to it, like
Speaker 1: you start to get bothered by it.
Speaker 2: Well, that came a lot later after I originally learned
Speaker 2: about bitcoin. I would say, first, my first reaction was
Speaker 2: largely disinterested, because I wasn't trying to buy drugs on
Speaker 2: the Silk Road, and I wasn't interested in all of
Speaker 2: the sort of mad financial speculation because I didn't have
Speaker 2: altogether that much money that I was going to be
Speaker 2: able to put into something like that, and so I thought, Okay,
Speaker 2: that's cool. I hope they have fun over there, and
Speaker 2: then I went on and did my own thing until
Speaker 2: twenty twenty one or so, when it turned into something
Speaker 2: very different that was, you know, being marketed to every
Speaker 2: person who watched a football game or you know, read.
Speaker 1: The news and what bothered you about that?
Speaker 2: Well, I was annoyed at how it was being presented
Speaker 2: to people. The coverage, especially in late twenty twenty one,
Speaker 2: was enormously positive. It was all about, look at this
Speaker 2: person who at least a set of NFTs and now
Speaker 2: they can, you know, work as an artist like they
Speaker 2: always dreamed instead of having to have three jobs, you know.
Speaker 2: Or look at this person who made some wild bet
Speaker 2: on this you know, token that you've never heard of,
Speaker 2: and it went up ten thousand percent and now they
Speaker 2: are driving Lamborghinis. It was a lot of stuff like that,
Speaker 2: and it was a lot of reprinting of press releases
Speaker 2: from crypto companies who are promising that this was not
Speaker 2: only some way to get wealthy, but it was the
Speaker 2: future of technology and the web and society. And while
Speaker 2: we were seeing that, we were also seeing actual real
Speaker 2: life evidence of people who were getting taken for a
Speaker 2: ride by these same technologies. But it was not getting
Speaker 2: the kind of attention that you know, the feel good
Speaker 2: stories were getting, and so I felt like people were
Speaker 2: broadly being told that you should go invest in this,
Speaker 2: you should put your money into it, money that you
Speaker 2: cannot necessarily afford. To lose, which did not seem right
Speaker 2: to me understandably.
Speaker 1: So what do you do then, Like, when do you
Speaker 1: set yourself up as a bitcoin critic?
Speaker 2: Well, so I've been a Wikipedia editor since I was
Speaker 2: like thirteen years old.
Speaker 1: All right, stop, how does that happen? How at the
Speaker 1: age of thirteen are you editing Wikipedia articles?
Speaker 2: Well, it's the encyclopedia that anyone can edit, and I
Speaker 2: discovered that at about the age of thirteen.
Speaker 1: But little kids are supposed to be using the cyclopedia,
Speaker 1: not writing it. Well, but I saw that you could,
Speaker 1: and I was what's the first Wikipedia article you edited
Speaker 1: at age thirteen?
Speaker 2: I am pretty sure it was the article on unicycles,
Speaker 2: because at the time I was very interested in unicycles.
Speaker 2: I am kind of a person who attracts weird hobbies.
Speaker 1: I would say, So, you were interested in unicycles and
Speaker 1: you edited the article an article on Wikipedia, and it's stuck, right,
Speaker 1: you were able to do and actually function is an editor.
Speaker 2: Yeah, it's stuck for a while. I think it wasn't
Speaker 2: a very good edit by any stretch. But you know,
Speaker 2: there weren't all as many people sort of helping with
Speaker 2: quality control back then. You know, I started at thirteen,
Speaker 2: I sort of dabbled in it for a while, and
Speaker 2: then I became very active in it when I was
Speaker 2: in high school and have been basically ever since. And
Speaker 2: it's something I really care a lot about, and so
Speaker 2: my first instinct when I see something that I think
Speaker 2: is not being covered well is to go write the
Speaker 2: Wikipedia article about it. And so the first thing I
Speaker 2: did was I wrote the Wikipedia article about the cryptocurrency
Speaker 2: blockchain web three, because at the time, it didn't really exist,
Speaker 2: and so I started researching it, and I realized that
Speaker 2: what it was describing itself as was very different from
Speaker 2: what it actually was in reality, and it seemed to
Speaker 2: me to be being used as a cover for all
Speaker 2: of this sort of fraud and scams and if nothing else,
Speaker 2: you know, major financial speculation that was very dependent on
Speaker 2: the average person believing the story that was being told.
Speaker 2: And so that was when I became really skeptical. Then
Speaker 2: from there I started my website, which is web three
Speaker 2: is going just great, because I realized that what I
Speaker 2: wanted to highlight was all of these projects that were
Speaker 2: failing and scamming people or falling apart and people were
Speaker 2: losing money, and Wikipedia just wasn't the place for that,
Speaker 2: and that was when I really started to also research
Speaker 2: the sort of technology, the ways that both financial systems
Speaker 2: are working as well as the technological systems, and that's
Speaker 2: when I became even more critical and skeptical of cryptocurrencies
Speaker 2: in general, including bitcoin.
Speaker 1: Did you receive any blowback?
Speaker 2: Not initially, I think, because not that many people noticed
Speaker 2: what I was saying initially. But when I started the
Speaker 2: website and the website started to gain traction, I think
Speaker 2: people began at that point to sort of push back
Speaker 2: on what I was doing because, you know, to some extent,
Speaker 2: I think they saw it as a threat to their
Speaker 2: ideology to some extent.
Speaker 1: Absolutely, And I'm wondering what kind of responses you've gotten
Speaker 1: from from the religion.
Speaker 2: It's run the gamut to some extent. So a lot
Speaker 2: of it is you don't know what you're talking about,
Speaker 2: you don't understand the technology. Is very common. I get
Speaker 2: some people who are somewhat accepting of the stuff that
Speaker 2: I do, and they see it as a useful service
Speaker 2: as far as improving the technology, which I think is
Speaker 2: a very reasonable way to respond to criticism. I think
Speaker 2: technology criticism is critical for technology development. And then I
Speaker 2: often get a lot of very hostile responses, especially from
Speaker 2: the bitcoiners that are extremely sort of ideological, and they
Speaker 2: can be very aggressive.
Speaker 1: This is just an aside, But are those responses typically
Speaker 1: coming from men?
Speaker 2: Uh? Yeah, pretty much experience.
Speaker 1: Yeah, no, it is. I mean, it really is a
Speaker 1: male driven phenomenon, right, I mean that there are a
Speaker 1: lot of crypto bros. But there aren't a lot of
Speaker 1: crypto women.
Speaker 2: Yeah. I run into them. They don't tend to be
Speaker 2: into bitcoin specifically. They're often in other parts of the ecosystem,
Speaker 2: and they don't tend to be quite as aggressive or
Speaker 2: cruel as as the men are.
Speaker 1: So back to like you getting your mind around bitcoin
Speaker 1: and starting to criticize it, I wonder if you had
Speaker 1: the experience I've had where I mean I had people
Speaker 1: trying to get me to essentially endorse it, promote it
Speaker 1: all the rest from about I don't know twenty twelve,
Speaker 1: where people would say, coming, we're going to teach you
Speaker 1: about bitcoin, and each time they kind of had a
Speaker 1: different story about not what crypto was, but what its
Speaker 1: purpose was, like, what problem it would be solving, what
Speaker 1: its place in the world was. It kept changing. It
Speaker 1: was like a solution in search of a problem, and
Speaker 1: you never found the problem.
Speaker 2: That's all crypto is really is the narrative. And as
Speaker 2: long as they can find a narrative that is sufficiently
Speaker 2: compelling at any given point, then they can keep prices up.
Speaker 2: But it never actually fulfills those narratives, and so the
Speaker 2: narrative has to constantly shift.
Speaker 1: Hold that thought, and when we get back from the break,
Speaker 1: we'll hear about the many narratives of bitcoin over the years,
Speaker 1: and back with blogger Molly White as we go through
Speaker 1: all the promises bitcoin enthusiasts have made over the years.
Speaker 2: You know, the idea is that bitcoin was going to
Speaker 2: become the world's currency, was really popular at one point,
Speaker 2: and then people realize that, oh, it doesn't function as
Speaker 2: well as currency at all, and that's never going to work.
Speaker 1: And why not just explain why it doesn't work well
Speaker 1: as a currency.
Speaker 2: Well, when you have an extremely volatile asset, people don't
Speaker 2: want to just trade it around for you know, their
Speaker 2: rent or a hamburger. They want to hold on to
Speaker 2: it and hope that it goes up, or they want
Speaker 2: nothing to do with it because they're worried they're going
Speaker 2: to lose money. And so you know, in order for
Speaker 2: something to function as a currency, it needs to be
Speaker 2: relatively stable, which is absolutely not Bitcoin or the other cryptocurrencies,
Speaker 2: aside from the dedicated stable coins, which often are also
Speaker 2: not stable.
Speaker 1: But there's also a problem with its ability to just
Speaker 1: process transactions. If we're made to use bitcoin for all
Speaker 1: of our financial transactions, how long would it take to,
Speaker 1: like buy hamburger.
Speaker 2: Yeah, it does have issues as far as the speed
Speaker 2: of the network, and there are a lot of sort
Speaker 2: of proposed fixes to that. You know, they're trying to
Speaker 2: sort of band aid on top of the problem that
Speaker 2: Bitcoin is a very slow network, but the the fixes
Speaker 2: often introduce even more problems of their own.
Speaker 1: Right now, I can remember that was the first pitch,
Speaker 1: the twenty twelve pitch I got was it's going to
Speaker 1: be the world's currency. Like you can't trust central banks
Speaker 1: and you know they're always going to lean towards inflation,
Speaker 1: that the dollar in your pocket's not going to be
Speaker 1: worth as much tomorrow as it is today. And bitcoin
Speaker 1: doesn't have that problem. It's inherently deflationary, and that was
Speaker 1: going to cause people to want to use it as
Speaker 1: a means of exchange. Tell you a funny story. The
Speaker 1: first call I got, I was so intrigued. They said,
Speaker 1: come down to Palo Alto and there's some crypto entrepreneurs here,
Speaker 1: and they were actually some people end up being pretty
Speaker 1: prominent in the movement. Many of them went on to
Speaker 1: be very rich. And they say, come down, we're going
Speaker 1: to introduce you to Satoshi. And that was like, really,
Speaker 1: are going to get to meet Satoshi. Satoshi wasn't there,
Speaker 1: but they were trying to explain to me yet.
Speaker 2: I mean, maybe he was, maybe he was.
Speaker 1: Maybe he was right. And when I got out of
Speaker 1: the car in Palo Alto, I parked about a block
Speaker 1: from the house they told me to go to I
Speaker 1: could smell the weed from a block away, and I
Speaker 1: got there. They're all smoking dope. They're all talking about
Speaker 1: how this is the future. And I said, like, I mean,
Speaker 1: I can't use to buy anything, and they said, you
Speaker 1: absolutely can. We have a coffee shop just downtown Palo
Speaker 1: Atto that takes bitcoin. And so they put five dollars
Speaker 1: worth of bitcoin on my phone and we walked down
Speaker 1: to the coffee shop so they could show me how
Speaker 1: this was the money of the future. And I ordered
Speaker 1: a latte and fifteen minutes later, we're still trying to
Speaker 1: figure out how they're gonna do The coffee shop has
Speaker 1: said they'll take bitcoin, but like, nobody really knows how
Speaker 1: to do it. It's an unbelievable pain in the ass.
Speaker 1: I remember thinking, if for some reason bitcoin was the
Speaker 1: original currency and someone invented fiat currency afterwards, everybody would
Speaker 1: be screaming, hallelujah. You know, it's like, it's so much
Speaker 1: better that then. So that was the first thing it
Speaker 1: was supposed to do, and you're you're absolutely right, it's
Speaker 1: the narrative. What was the second narrative When that narrative
Speaker 1: clearly was not flying anymore? What replaced it?
Speaker 2: Yeah, there's also bitcoin as an inflation hedge, which you mentioned,
Speaker 2: the idea that you know that fiat currency is going
Speaker 2: to inflate into oblivion and so all of your dollars
Speaker 2: are going to be worthless, and so you should put
Speaker 2: them into bitcoin so that that doesn't happen.
Speaker 1: The way you would put it into gold.
Speaker 2: Correct. Yeah, Bitcoin as digital gold is a very common narrative.
Speaker 2: I also don't believe that has really held up. You
Speaker 2: typically don't want your inflation hedges to be enormously volatile
Speaker 2: in the way that bitcoin is. But you know, I
Speaker 2: think that generally speaking, it doesn't actually behave as an
Speaker 2: inflation hedge and the way that people would like it to.
Speaker 2: And I think a lot of people have started to
Speaker 2: acknowledge that bitcoin is not a great inflation hedge because
Speaker 2: it largely follows the market.
Speaker 1: But you got to make gold itself is weird. The
Speaker 1: whole idea that people sort of arbitrarily pick a thing
Speaker 1: and say that's going to be the store of value
Speaker 1: against you know, it is going to be measured against
Speaker 1: inflation or measured against that. People are going to treat anything,
Speaker 1: put anything in this role. So to me, in a
Speaker 1: funny way, that's probably the best story they've told that
Speaker 1: it could. If everybody arbitrarily agreed that this was the
Speaker 1: new gold, there'd be some hope there because it is.
Speaker 1: It does have this going for it. It's scarce, right,
Speaker 1: There's no risk that they're going to be some huge
Speaker 1: number of new bitcoin introduced that will inflate away the
Speaker 1: value of bitcoin.
Speaker 2: Not practically no, I mean, there's nothing stopping the code
Speaker 2: from changing in that way, aside from you know, societal
Speaker 2: belief among bitcoiners. But I think that practically speaking, it
Speaker 2: never will.
Speaker 1: Right, But there was a side argument similar to the
Speaker 1: gold argument. I wonder if you caught this narrative that
Speaker 1: it worked really well as an asset in a portfolio
Speaker 1: because it wasn't correlated with other assets.
Speaker 2: Yeah, that's the common one too, is that it's you know,
Speaker 2: totally divorced from stocks or whatever it may be. But
Speaker 2: that has all they're not played out to be true.
Speaker 2: It you know, very closely followed a lot of other
Speaker 2: asset classes.
Speaker 1: Yeah, no more more it moves with a Nasdaq, but more.
Speaker 2: Extremely Yeah, just swings further.
Speaker 1: Are there any other stories that sort of have been
Speaker 1: proposed and that either have fallen out of favor or
Speaker 1: that are still kind of floating around.
Speaker 2: I mean, there's a lot of use cases that it's
Speaker 2: proposed for. So a lot of people will say that,
Speaker 2: you know, bitcoin is brilliant if you are you know,
Speaker 2: sending remittances, for example, is a common one. Ye, people
Speaker 2: aren't doing that. They could be, but they aren't right,
Speaker 2: and it's broadly because you know, it's it's not great
Speaker 2: for that compared to a lot of other alternatives. I
Speaker 2: think one of the most compelling arguments that I've heard
Speaker 2: is the idea that bitcoin is a viable asset for
Speaker 2: people who are in really bad situations for whatever reason.
Speaker 2: So you know, pick your scenario. It could be that
Speaker 2: they're living under an authoritarian regime, or they are in
Speaker 2: a country where the FIA currency is actually hyperinflating, and
Speaker 2: so people can use it, you know, as a sort
Speaker 2: of one time escape patch where they can flee the
Speaker 2: regime using bitcoin or whatever.
Speaker 1: But it's but that's just a way to as a bridge.
Speaker 1: Bitcoin is a bridge to get.
Speaker 2: The hell out and into something else, right, And I
Speaker 2: also think that it isn't scalable in the sense that
Speaker 2: if you know, an entire population started to try to
Speaker 2: flee a country using bitcoin, it would pretty quickly be
Speaker 2: stamped down on. You know, we've seen that with the
Speaker 2: Taliban for example, when people started to use it for
Speaker 2: that purpose. But I also just think that the idea
Speaker 2: that like a bad solution is a better solution in
Speaker 2: a very bad situation does not actually make a very
Speaker 2: strong argument for that bad solution, right, Like, it's it's
Speaker 2: great that people are able to use it for the
Speaker 2: purposes that you know, they need to, but that doesn't
Speaker 2: actually mean that bitcoin is something that we should be
Speaker 2: broadly embracing, you know, for purposes outside of emergency situations,
Speaker 2: for example.
Speaker 1: Right, it's been funny to me to watch even the
Speaker 1: dark use cases being undermined, like money laundering, like or
Speaker 1: put it more politely, Bitcoin's great because your transactions are
Speaker 1: entirely secret and no one will ever know what you did,
Speaker 1: where the money went, and where and where it's going to.
Speaker 1: That turns out not.
Speaker 2: To be true, right, Yeah, that fell apart pretty quickly.
Speaker 1: I would I would love you to you to explain
Speaker 1: why bitcoin's maybe not the best way to launder money.
Speaker 2: So, anytime you send a bitcoin transaction, it's recorded on
Speaker 2: the Bitcoin ledger, which is immutable and goes back for
Speaker 2: the entire history of bitcoin, and it will never really
Speaker 2: go away. And so if you are trying to launder
Speaker 2: money or you know, transmit funds that are illicit, it's
Speaker 2: kind of the worst possible thing for that because, you know,
Speaker 2: law enforcement they don't even need a warrant. They can
Speaker 2: just go look at the ledger and the only thing
Speaker 2: that's really keeping it private in any sense is that
Speaker 2: they aren't able to connect your bitcoin address to your
Speaker 2: personal identity, which is something that may have been true
Speaker 2: in the earlier days when it was easier to obtain bitcoin,
Speaker 2: you know, you could set up a computer in your
Speaker 2: basement and mind some bitcoin and no one would know
Speaker 2: who had just done that. But that's not possible today,
Speaker 2: and so it's very difficult to obtain bitcoin anonymously and
Speaker 2: then to maintain that anonymity over and basically indefinite period
Speaker 2: of time, where if at any point it is connected
Speaker 2: to you, you are then connected to the crime. If
Speaker 2: I was a criminal, I don't think I would be
Speaker 2: choosing bitcoin personally for my money transmission.
Speaker 1: Let's take a quick break. I'm back with researcher and
Speaker 1: critic Molly White, who's generously agreed to talk to me
Speaker 1: on background for my next book, All about the World
Speaker 1: of Cryptocurrency. I asked her how she explains things like
Speaker 1: crypto and blockchain to folks who know nothing about such things.
Speaker 2: Like if they know what a database is, I'll usually
Speaker 2: say that it's just like a database that is stored
Speaker 2: among a large group of computers rather than the one
Speaker 2: single computer, and any activity that happens in that database
Speaker 2: is recorded permanently and publicly.
Speaker 1: Which is why this is not a very good tool
Speaker 1: for illicit financial.
Speaker 2: Activity, certainly not in my opinion.
Speaker 1: For a storyteller, bitcoin is a like a wonderful case
Speaker 1: study in the power of story. If you can make
Speaker 1: it believable for a bit and you can replace one
Speaker 1: story with another story and people don't really notice that's
Speaker 1: what you've done. It's kind of wild how the thing has.
Speaker 2: Sometimes in the same conversation. Actually, which I've noticed is
Speaker 2: like I'll be arguing with someone and I'll say something,
Speaker 2: you know, against what they've just said, and the argument
Speaker 2: will totally shift, even in sometimes in ways that totally
Speaker 2: contradict the earlier argument that they were making. It's very strange.
Speaker 1: Do you find yourself in these arguments?
Speaker 2: Often I avoid them for the most part. There is
Speaker 2: no end to the long line of people who think
Speaker 2: that they can just debate me into being a bitcoin maximalist,
Speaker 2: and it's like I only have the energy to argue
Speaker 2: the same thing so many times. On the one end,
Speaker 2: they're the true believers that are ideologues. They have no strong,
Speaker 2: you know, interest in the actual financial side of things.
Speaker 2: They just care about the you know, the principles.
Speaker 1: And what are those principles that they care about.
Speaker 2: It depends on the person. But you know, censor resistance, decentralization, immutability,
Speaker 2: you know, pick your poison, really and then on the
Speaker 2: other end, there are people who are solely interested in
Speaker 2: the financial side of things. They have no interest in
Speaker 2: the ideological side of things. They don't care if it's decentralized,
Speaker 2: they don't care if it's synonymous, doesn't matter. They just
Speaker 2: think that the price will go up and they can
Speaker 2: profit from that. And then I think most people are
Speaker 2: somewhere in between, and you know, the ideology is very
Speaker 2: useful as far as promoting the financial side of things
Speaker 2: and vice versa. I don't think there are that many
Speaker 2: people who are really the true believers, because I think
Speaker 2: that the belief system, you know, is actually fairly extreme
Speaker 2: when you get down to it, especially once you start
Speaker 2: talking about, you know, hyper bitcoinization, which is like the
Speaker 2: idea that bitcoin will replace fiit currency as this means
Speaker 2: of exchange.
Speaker 1: Are there still people who think that, absolutely, yes, we're
Speaker 1: there are these.
Speaker 2: People yelling loudly on Twitter, you.
Speaker 1: Know, Crypto Twitter is possibly the ugliest part of Twitter
Speaker 1: I've seen.
Speaker 2: Yeah, it's brutal, but they, unfortunately are people who have
Speaker 2: like some amounts of influence. I mean, there there were,
Speaker 2: especially as the banks were sort of having a crisis moment,
Speaker 2: there were very influential, wealthy you know, often investor types
Speaker 2: who were preaching hyperbic cointization. You know, there there's there was,
Speaker 2: It's a fringe belief, but it is not completely absent.
Speaker 1: Most of their kind of libertarians. Yes, uh so they're
Speaker 1: they're very suspicious of centralized authority and government. Probably didn't
Speaker 1: like their parents.
Speaker 2: So I think broadly the not to go all like psychoanalyst.
Speaker 1: But I think that please do.
Speaker 2: I think a lot of the ideology comes down to
Speaker 2: a fear of trust where people believe. I think that
Speaker 2: some people, just generally speaking, believe that people are good
Speaker 2: and trustworthy, and other people fundamentally believe that everyone is
Speaker 2: out to you know, screw them over and you can't
Speaker 2: trust anybody. And I think that bitcoiners tend to be
Speaker 2: that latter group of people. And that fear that you know,
Speaker 2: society could collapse and they're going to be all on
Speaker 2: their own and they need to stockpile wealth and you know,
Speaker 2: build a bunker and you know, prepare for this sort
Speaker 2: of apocalypse is somewhat common among the true ideologues in bitcoin,
Speaker 2: and so you end up with those types of people,
Speaker 2: you know, predicting the downfall of civilization and bitcoin as
Speaker 2: the way that they will emerge as the kings of
Speaker 2: the new civilization.
Speaker 1: You just described that quintessential bitcoin maximalist religious person. But
Speaker 1: then they blindly trust each other.
Speaker 2: To some extent. I mean, I think that a lot
Speaker 2: of them, do, you know, try to set themselves up
Speaker 2: in ways that don't require that trust. But I also
Speaker 2: think that there is an enormous amount of sort of
Speaker 2: detachment from reality that is required in order to believe that,
Speaker 2: you know, in this total dystopian future where the world
Speaker 2: has melted down and everything is on fire, we're going
Speaker 2: to have reliable internet connections and electricity providers to mine
Speaker 2: bitcoin with, and you know, we'll be able to just
Speaker 2: suddenly move over to using bitcoin for everything.
Speaker 1: I find myself, even if I can go with them
Speaker 1: as far as the world's going to fall apart, I
Speaker 1: find myself stopping before I get to the point of
Speaker 1: wanting to prepare for the world falling apart, because I
Speaker 1: just don't want to live in that world, right, I
Speaker 1: just assume not be here than being a Mad Max movie.
Speaker 2: Well, and if I was going to stockpile things to
Speaker 2: prepare for this world. It would not be bitcoins, be
Speaker 2: seeds and beans and you know things like that.
Speaker 1: Yeah, they're putting all their money into exactly the thing
Speaker 1: that's going to be the most useless.
Speaker 2: It's going to be the first thing to go to zero.
Speaker 1: Yeah, electricity. Yeah, I think you put your finger on it.
Speaker 1: That this idea of a fear of trust or a.
Speaker 2: Belief that trust is fundamentally bad.
Speaker 1: You know.
Speaker 2: That's the other thing that, like, the idea of trustlessness
Speaker 2: is very common in crypto, Like it's great that you
Speaker 2: shouldn't have to trust any intermediary often, you know, to
Speaker 2: to do your financial transaction or whatever it might be.
Speaker 2: But this is all built on the idea that trust
Speaker 2: is a bad thing for a system. And I think
Speaker 2: that society is built on trust, and that a lot
Speaker 2: of the trust that is built into systems like the
Speaker 2: financial system actually gains you a lot. You know, the
Speaker 2: fact that I can trust my bank, that means a
Speaker 2: lot in the financial system, right, it's a lot that
Speaker 2: I don't have to worry about the idea that I
Speaker 2: shouldn't trust a bank means that I also shouldn't you know,
Speaker 2: be able to reverse a credit card transaction. If someone
Speaker 2: you know steals my credit card number.
Speaker 1: I don't mind being ripped off occasionally being the price
Speaker 1: of trusting lots of people, and they are people who
Speaker 1: don't feel that way. I'm trying to remember it now,
Speaker 1: but Satoshi's original paper is sort of like one of
Speaker 1: the big themes is sort of like, we're going to
Speaker 1: build a financial system that doesn't require trust, right right. Weirdly,
Speaker 1: even with cryptocurrency, it quickly starts to build a shadow
Speaker 1: financial system that looks an awful like the real financial
Speaker 1: system without the regulators. But nevertheless, and in this system,
Speaker 1: trust is absolutely essential. I mean, you have to trust
Speaker 1: FTX that they've got your money in FTX. You know,
Speaker 1: all the exchanges are based on this. They're basically crypto
Speaker 1: banks to get born. So it's very odd that this
Speaker 1: technology that was designed to create a trustless world just
Speaker 1: ends up replicating a trust needing world.
Speaker 2: I actually don't think it's odd at all. I think
Speaker 2: it's completely predictable because you know, the reason that people
Speaker 2: decided to build FTX and all the other exchanges is
Speaker 2: because adding just a little bit of trust into the
Speaker 2: system has massive benefits. In a lot of ways. True
Speaker 2: trustlessness is so painful to interact with and to use
Speaker 2: on any basis. It's expensive, it's slow, it's it's just
Speaker 2: not a fun thing to have to deal with it.
Speaker 2: It's pretty predictable, in my opinion, that trust started to
Speaker 2: seep back in. But the problem is that as it
Speaker 2: seeps back in, you know, the safeguards that are built
Speaker 2: into those systems so that we can continue to trust
Speaker 2: them and that that trust isn't abused don't always naturally come,
Speaker 2: you know, right from the get go. It's not like
Speaker 2: banks first emerged with a full suite of banking regulations.
Speaker 2: Those were developed over years, years and years of painful lessons,
Speaker 2: and you know, it seems like the crypto industry is
Speaker 2: going through that same learning experience.
Speaker 1: Are you a trusting person? Absolutely, You're not generally wary.
Speaker 1: You don't trust people out your first step is to trust.
Speaker 2: I wouldn't say I, you know, blindly trust people. But
Speaker 2: if I run into someone on the street, you know,
Speaker 2: broadly speaking, I don't think the likely next move is
Speaker 2: that they're going to punch me in the face and
Speaker 2: steal my wallet. I take the same precautions as anyone
Speaker 2: in today's world where you know, if I get an
Speaker 2: email that promises I've just won five hundred dollars, I
Speaker 2: don't trust that. But I do think that people are
Speaker 2: fundamentally good and you know, work in a cooperative.
Speaker 1: Way, except on crypto Twitter.
Speaker 2: Except on crypto Twitter.
Speaker 1: This was great, and I hope one day I get
Speaker 1: to meet you in person, but I do I really
Speaker 1: appreciate the time.
Speaker 2: Yeah, absolutely, all right, take care bye.
Speaker 1: On Background is hosted by me Michael Lewis and produced
Speaker 1: by Catherine Girardeau and Lydia gene Kott. Our editor is
Speaker 1: Julia Barton. Our engineer is Sarah Bruguier. Thanks to our
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Speaker 1: composed by Matthias Bossi and John Evans of Stellwagon Symphonet.
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Speaker 1: show page. What did you edit on the unicycle Wikipedia page?
Speaker 2: I'm pretty sure that I added information about the existence
Speaker 2: of other types of unicycles. You know, so there's like
Speaker 2: the very standard unicycle, but there's also ones that like
Speaker 2: arement for going off road, and there are ones that
Speaker 2: have like really big wheels that let you go long distance.
Speaker 1: You know. An off road unicycle is to cycling what
Speaker 1: bitcoin is to money. It's sort of, it's sort of
Speaker 1: it's sort of like a solution in search of the problem.
Speaker 2: Absolutely