Speaker 1: Hello, and welcome to another episode of The Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy Hallway. Tracy, I don't
Speaker 1: want you to take this the wrong way, but you know, no,
Speaker 1: I know, but I kind of feel like of the
Speaker 1: two of us, you kind of are a little have
Speaker 1: try to think how to phrase this in a polite way.
Speaker 1: You have like a little bit more like no, no,
Speaker 1: it's not that bad, but you have like a little
Speaker 1: bit more like sort of crankish conspiracy theory minded sympathies
Speaker 1: a little bit conspiracy. No, no, a little bit. But
Speaker 1: I am don't even know the problem is, I'm surrounded
Speaker 1: by conspiracy theorists and I like to be fully informed,
Speaker 1: so I listened to what they have to say. That's
Speaker 1: that's it. I'm I'm a depository for conspiracy theory. But
Speaker 1: like you kind of like are into gold and silver
Speaker 1: and you kind of hate the Fed a little bit,
Speaker 1: and you kind of believe that there's bubbles everywhere, just
Speaker 1: a little bit. I'm not saying like full on, but
Speaker 1: you're like sort of like you're like kind of curious,
Speaker 1: like you're you're open to it. Right, this is like
Speaker 1: scandalously libelous. I don't like gold or silver. I keep
Speaker 1: getting given it for my birthday and I end up
Speaker 1: with it. I think the FED has done a reasonably
Speaker 1: good job, although I certainly have some advice for them
Speaker 1: on how to proceed. I do think the corporate bond
Speaker 1: market is overvalued and there may be some trouble there
Speaker 1: in the future. There those are my opinions. So the
Speaker 1: only reason I brought this up because even though I
Speaker 1: do feel like you're a little more like crank curious
Speaker 1: than I am, I actually think that on one topic
Speaker 1: you're a little like more skeptic goal than I am
Speaker 1: within this whole like the crank role. What's that? Digital currencies? Yes,
Speaker 1: I would agree with that. Yeah, Like I feel like
Speaker 1: you're pretty like deeply skeptical of them, and you're like
Speaker 1: kind of the view that they're all scams, and I'm
Speaker 1: like pretty skeptical of them and think they're mostly scams.
Speaker 1: But I'm not like as entirely negative on them as
Speaker 1: a conceptually as you are. Wouldn't you say that's fair? Well, so,
Speaker 1: I have some problems with digital currencies, but as a concept,
Speaker 1: I think they're really really intriguing and what I like
Speaker 1: is when people basically get up and say the only
Speaker 1: reason for digital currencies to exist is because of regulatory
Speaker 1: arbitrage purposes. Like, if we can start from that basis
Speaker 1: and just be honest with ourselves, then I don't necessarily
Speaker 1: have a problem with them, but I still think they
Speaker 1: are going to face some massive, massive challenges. Okay, that's
Speaker 1: fair enough. Well, today, I'm actually kind of hopeful that
Speaker 1: in our converse station today, which obviously at this point
Speaker 1: everyone's figured out, is going to be about Bitcoin and
Speaker 1: perhaps other cryptocurrencies, that actually we might be able to
Speaker 1: arrive at a place where we uh see see things
Speaker 1: from a similar perspective. Okay, Um, I'm willing to have
Speaker 1: my mind changed, so I'll be interested in this one.
Speaker 1: I think that's optimistic. So you mentioned that you're kind
Speaker 1: of believe that maybe there's a niche for cryptocurrencies and
Speaker 1: some sort of regulatory arbitrage, and I would argue that
Speaker 1: you could slightly accept that and broaden it a bit
Speaker 1: if you sort of think of cryptocurrencies as not just
Speaker 1: regulatory arbitrage per se, but in allowing people to engage
Speaker 1: in transactions that maybe big governments or big corporations you
Speaker 1: wouldn't want them knowing about, or maybe they wouldn't allow
Speaker 1: you to do. It's kind of of the same category
Speaker 1: such as illegal transactions, well some of them, but even
Speaker 1: you know, illegality can be either moral or immoral, depending
Speaker 1: on the country, in the law and context. True, and
Speaker 1: this is something we did touch on with Joe Carlson
Speaker 1: a while back, like the idea that what's deemed illegal
Speaker 1: in Venezuela might actually, you know, in other countries, be
Speaker 1: deemed necessary for survival, and people are using bitcoin in
Speaker 1: order to survive. Yes, right, So today I'm very excited
Speaker 1: because we're gonna be talking to a guest that really
Speaker 1: ties these concepts together. His background, or at least's current position,
Speaker 1: is not what you would expect from a sort of
Speaker 1: typical crypto guest or sort of bitcoin believer. Our guest
Speaker 1: today is Alex Gladstein. He's the chief strategy officer at
Speaker 1: the Human Rights Foundation, and he talks a lot about
Speaker 1: the sort of intrinsic connection he sees between bitcoin and
Speaker 1: human rights. Al Right, well, let's bring Alex and Alex
Speaker 1: thank you very much for joining us. It's a pleasure
Speaker 1: to beyond thanks for having me so like I said,
Speaker 1: you know, we we talked to a fair number of
Speaker 1: people in the crypto world from time to time. Most
Speaker 1: of them are in roles that are sort of crypto specific.
Speaker 1: Maybe they work for a VC fund, or maybe they're
Speaker 1: just an investor, they're a software developer. You have something
Speaker 1: that's sort of a distinctly different perch, I would say
Speaker 1: than many of the people who are interested in this
Speaker 1: space talk to us. Just first of all, what do
Speaker 1: you do? What's the Human Rights Foundation? And when did
Speaker 1: your interest in uh digital currencies arise? So? The Human
Speaker 1: Rights Foundation is a nonprofit charity based here in New
Speaker 1: York City that I started working for in two thousand seven,
Speaker 1: and the mission of the Human Rights Foundation is to
Speaker 1: help promote freedom and human rights and closed societies. So
Speaker 1: we work with people who live under authoritarianism around the world,
Speaker 1: and by our internal metrics, about of people live under
Speaker 1: either a partially or fully authoritarian regime. It's about four
Speaker 1: billion people. So the kind of people that I'm talking
Speaker 1: to all the time are struggling against various injustices in
Speaker 1: places ranging from North Korea to China to Saudi Arabia
Speaker 1: to Burma to Russia to Venezuela. To Cuba, to Zimbabwe, etcetera.
Speaker 1: And it's kind of from their perspective that I learned
Speaker 1: about why money not controlled by the government would be
Speaker 1: really useful. Um. So my perspective is just very different
Speaker 1: from most people, I would say, even from the general
Speaker 1: human rights community, because I have this particular focus on
Speaker 1: trying to help people who live under authoritarian societies where
Speaker 1: you know, they don't have independent media, independent courts, They
Speaker 1: can't sue their government, they don't have an e f
Speaker 1: F or an a c LU to donate to, they
Speaker 1: can't write not bet in the newspaper. Um. You know,
Speaker 1: their ability to hold their government accountable is like almost
Speaker 1: non existent. So what these governments tend to do is
Speaker 1: closed down the bank accounts of people they don't like,
Speaker 1: or um hyper inflate the economy, or you know, just
Speaker 1: basically steal or sees or confiscate funds from organizations that
Speaker 1: are critical of them. So in this context, bitcoin is
Speaker 1: very interesting. So walk us through the exact use case then,
Speaker 1: because you're talking about very authoritarian regimes that have almost
Speaker 1: complete power over their domestic population. So I'm curious to
Speaker 1: what extent does bitcoin actually help those people offset the
Speaker 1: power of the state. Sure, and I'll get into a
Speaker 1: couple of examples, but I do want to make a
Speaker 1: plea to to the listeners that this matters for everybody
Speaker 1: generally speaking. This is what I'm about to say, is
Speaker 1: not a conspiracy theory. Money, the kind of money that
Speaker 1: you use every day, is transforming from a bearer asset
Speaker 1: into a surveillance and control mechanism. That's not a conspiracy theory.
Speaker 1: Meaning the money that I use when I use, whether
Speaker 1: it's we chat, if I live in China, perhaps visa here, etcetera, etcetera,
Speaker 1: like the the way that I do transactions is becoming
Speaker 1: increasingly controlled, surveilled, etcetera, moving away from a society where
Speaker 1: it was okay um and widely accepted to use basically
Speaker 1: anonymous money in the form of cash, like in fifteen
Speaker 1: twenty years, no one will use paper or metal money.
Speaker 1: So I think that this transition is the core of
Speaker 1: the matter and is why having bitcoin uh and what
Speaker 1: will be built on top of bitcoin in the future,
Speaker 1: which will be like basically hopefully private payments will be
Speaker 1: something that can save us from essentially either like Big
Speaker 1: Brother or surveillance capitalism. Now that need is much more
Speaker 1: cute obviously in a place like Iran, or China or Venezuela.
Speaker 1: So I'll just give you a couple examples. So, in
Speaker 1: Iran today, due to both American sanctions and financial controls
Speaker 1: from the Mala's, it's impossible really to send money from
Speaker 1: the West into Iran if you have family there to
Speaker 1: help them. Right. So I know someone who's um living
Speaker 1: in London. She's Iranian and her partner's father is very
Speaker 1: sick in Tehran, right, so there's no way for them
Speaker 1: to send money, uh to help this person's father. However,
Speaker 1: they can use bitcoin, So within twenty thirty minutes, uh,
Speaker 1: they have a non k y C Bitcoin account, meaning
Speaker 1: it's not connected in any meaningful way to their identity.
Speaker 1: The bitcoin appears on his father's phone in Tehran, and
Speaker 1: then he uses like local exchanges to turn it into
Speaker 1: real and get medical assistance. So this is like a
Speaker 1: really interesting and I think important way to show that
Speaker 1: like this can be a lifeline. Obviously you heard from
Speaker 1: Jill on a previous episode about how some Venezuelans are
Speaker 1: taking advantage of this as well. Some people are earning
Speaker 1: money in bitcoin and circumstances where they couldn't earn money
Speaker 1: like if they live in Iran or Venezuela, for example.
Speaker 1: I've seen some uptick in Palestinians using bitcoin, both in
Speaker 1: Gaza and the West Bank. Obviously there's quite a bit
Speaker 1: of uptick in places where the economy is creating, like Lebanon, Argentina.
Speaker 1: There are organizations in Hong Kong which are starting to
Speaker 1: get their bank accounts shut down, right So, for example,
Speaker 1: there was an activist organization recently that that got its
Speaker 1: HSBC account closed for political activities. Well, they can't stop
Speaker 1: them me from donating bitcoin to them. And probably the
Speaker 1: most important civil society organization in Hong Kong, or one
Speaker 1: of them, is the Hong Kong Free Press, right, So
Speaker 1: the Hong Kong Free Press has been accepting bitcoin donations
Speaker 1: for a while now. It's been very very helpful to them.
Speaker 1: So when you're on the front lines of freedom, I
Speaker 1: believe that even today, like it's sort of infant state,
Speaker 1: as a technology, bitcoin can be extremely helpful. So obviously
Speaker 1: there's a lot to explore there. I just want to
Speaker 1: talk a little bit more about, as you say, you're
Speaker 1: seeing it happen on the ground, because there's a lot
Speaker 1: of people and this is kind of something that we
Speaker 1: talked to with Jill Is. There's certainly a lot of people,
Speaker 1: and I'm sure you come across them who like to
Speaker 1: pontificate about how bitcoin can help people in emerging markets
Speaker 1: or whatever, all while sort of you know, sitting in
Speaker 1: there we work space in San Francisco or whatever, without
Speaker 1: actually having interactive They usually talk about why some other
Speaker 1: cryptocurrency can but sure, right right exactly, or the one
Speaker 1: that they're working on, the one that they're working on
Speaker 1: is going to be great for right payment, cross border payment.
Speaker 1: To be honest, there's a lot of whitewashing space. Somebody's
Speaker 1: working on some new token project and they're like, oh,
Speaker 1: they come to me and they're like, this has happened
Speaker 1: numerous times. Uh, you know, we're working on this new token.
Speaker 1: Do you think you can help us, like find a
Speaker 1: use case somewhere? And I'm like, no, this, this, this
Speaker 1: is not what you know, that's not what in terms
Speaker 1: of like you're really seeing it, you know, it's is
Speaker 1: it more than just a sort of isolated case here
Speaker 1: and there, Like what are you actually seeing on the
Speaker 1: ground in terms of how so example, for example, I
Speaker 1: know a guy his name is Mo he's an entrepreneur.
Speaker 1: He was born in Aleppo, Syria. Now, of course he
Speaker 1: lives in London, but he does some like translation and
Speaker 1: creative work. His company does this stuff, and there are
Speaker 1: people inside Syria who still work for him. So he
Speaker 1: pays them in bitcoin and they use Facebook groups to
Speaker 1: turn the bitcoin into Syrian money when they need to.
Speaker 1: So in that case, the Syrian money is like a
Speaker 1: disaster from like its perspective against the dollar, for example,
Speaker 1: so they keep it. Actually they actually use the bitcoin
Speaker 1: is like their checking their savings account, and then they
Speaker 1: withdraw it essentially via these like peer to peer groups
Speaker 1: into the local currency when they need to spend it. Now,
Speaker 1: of course that's a fringe example. There are not that
Speaker 1: many countries in the world that have uh, you know,
Speaker 1: inflation that high. But it's we're talking tens of millions
Speaker 1: of people across different hemispheres, right from Venezuela to South
Speaker 1: Southern Africa to the Middle East. So it is something
Speaker 1: that is making a big difference I think for many,
Speaker 1: many people, and it won't matter as much to people
Speaker 1: who live in New York or London or Tokyo in
Speaker 1: the near future because we have stable economies it's easy
Speaker 1: for us to get credit, we can get loans, are
Speaker 1: you know, financial system works pretty well. So people kind of,
Speaker 1: I think, gloss over the real value in bitcoin. So
Speaker 1: when I talk to human rights activists about this, I
Speaker 1: think it's very similar to encrypted messaging in many ways.
Speaker 1: Like the average person in New York City probably doesn't
Speaker 1: need encrypted messaging, or maybe they do, but but generally speaking,
Speaker 1: they probably don't think they do same thing with bitcoin,
Speaker 1: and they probably don't. But the average person and maybe
Speaker 1: Zimbabwe or in Iran may really need encrypted messaging because
Speaker 1: they're trying to talk to their family or a loved
Speaker 1: one who is, you know, in an opposition political party
Speaker 1: or whatever. So I think both encrypted messaging and bitcoin
Speaker 1: are our tools that are vital for people who live
Speaker 1: under very difficult political environments, but whose value may not
Speaker 1: be so easily understood by people who live under open societies. Okay,
Speaker 1: well let me pick up that thread just on the
Speaker 1: point of the value. Is the value more that you
Speaker 1: have payment processing that's basically done by a decentralized entity
Speaker 1: and allows you to get money into and out of
Speaker 1: a country, or is the value that bitcoin is supposed
Speaker 1: to be anonymous and therefore untraceable. Like which one of
Speaker 1: those things is more important from your perspective? Right, Well,
Speaker 1: bitcoin is pseudonymous, um, but it is much better than
Speaker 1: and as a payment. For example, if you're trying to
Speaker 1: of aida uh someone looking at you that then using
Speaker 1: something that's linked directly to your identity. It's not ideal,
Speaker 1: and there's a lot of work that needs to be
Speaker 1: done in bitcoin to make it more private. Um. But
Speaker 1: that works being done, and it's very interesting. But what
Speaker 1: I would say are the couple of main use cases.
Speaker 1: Number one is like sanctions breaker, I guess we could
Speaker 1: call it. So you're being prevented from accessing the international
Speaker 1: financial markets for some reason, probably not your fault, Like
Speaker 1: the average twenty three year old Iranian entrepreneur. She didn't
Speaker 1: do anything to not be able to buy an iPhone.
Speaker 1: She didn't even vote for her leaders. It's a dictatorship,
Speaker 1: so why should she be punished? Right, So, these people
Speaker 1: get to access goods and services from the outside world
Speaker 1: because of bitcoin, because it breaks sanctions. The second one
Speaker 1: is more like the example I gave with Syria, is
Speaker 1: as like a sort of confiscation resistant parallel savings account
Speaker 1: like the Syrian government just has no clue that these
Speaker 1: people have this bitcoin. They have no reasonable technical way
Speaker 1: of figuring that out, and they can't confiscate it. So
Speaker 1: for the longest time, you know, the human with more
Speaker 1: violence have been has been able to just like take
Speaker 1: the money from someone else. Now that you can be
Speaker 1: like clever about it and hide your private key, either
Speaker 1: you know, somewhere on your phone or written down somewhere,
Speaker 1: or even memorize it, we have now an asset that
Speaker 1: is like much much more confiscation resistant. So there's censorship
Speaker 1: resistance is important. The confiscation resistance is really important, and
Speaker 1: over time, the privacy aspect of it, as it becomes
Speaker 1: more mature, will be very important, especially for people, you know,
Speaker 1: in kind of advanced economies that don't want all their
Speaker 1: data being like sold to the data markets. So that's
Speaker 1: that's perfect because that's where I was going to go next.
Speaker 1: You said at the beginning, and I agree with you
Speaker 1: that it's not a conspiracy theory to say that money
Speaker 1: is transforming from a a bearer assets something that I
Speaker 1: can just hand to you and nobody knows about it,
Speaker 1: to a sort of tool of you know, one might
Speaker 1: put its surveillance capitalism, or at a minimum, just sort
Speaker 1: of this series of credits that are being easily viewable
Speaker 1: by corporations and government. And when I talked to or
Speaker 1: hear from people in the West who are like extremely
Speaker 1: negative on bitcoin, and there are a lot of people
Speaker 1: who are and think it's just a Ponzi scheme. I
Speaker 1: do think this is one area where people haven't fully
Speaker 1: thought through the implications of well, what happens when literally
Speaker 1: every payment they've done. And I watched the debate this
Speaker 1: summer between the head of bit Max, Arthur Hayes and
Speaker 1: Noril Rubini and no Rubini he just at one point
Speaker 1: got up and he was yelling and he was like, well,
Speaker 1: you know, if these people can use we Chat and
Speaker 1: Apple pay, why do they need bitcoind And we're just
Speaker 1: all laughing, because because that's that's why you don't want
Speaker 1: all of your payments to be controlled by a single entity.
Speaker 1: You know, it's just a matter of financial freedom and
Speaker 1: sovereignty and privacy. And I say that as a person
Speaker 1: who's pretty progressive politically speaking, I don't think this is
Speaker 1: some radical line rand thing, like, I think that this
Speaker 1: is something that can actually be a great equalizer and
Speaker 1: can allow hundreds of millions of people excess in a
Speaker 1: permissionless way to a savings vehicle that they currently don't
Speaker 1: have access to currently. If you're, let's say, in a
Speaker 1: lot of the situations I'm looking at, how do you
Speaker 1: save money you buy sheet metal or cows or something
Speaker 1: like that, this gives them an electronic way to have
Speaker 1: something that's that's confiscation resistant and and parallel, and is
Speaker 1: much more liquid in some cases. I mean, the only
Speaker 1: reason I'm more excited about bitcoin now than I was
Speaker 1: a few years ago is because the ability for you
Speaker 1: to exchange it into fiat is on the rise. In
Speaker 1: almost every major urban city in the planet. Even in
Speaker 1: cartoon you can you can sell your bitcoin for Fiat. Today,
Speaker 1: Bitcoin on its own is not very useful to people
Speaker 1: because they can't buy things with it, and I think
Speaker 1: we'd be naive to think that that's going to change
Speaker 1: anytime soon. But as a bridge between moneies and as
Speaker 1: a way to connect people, um in a very quick way,
Speaker 1: in a permissionless way, in a censorship resistant way. UM,
Speaker 1: It's it's really shining. I would say, So can I
Speaker 1: pick up that threat? Because I I agree that the
Speaker 1: transition to digital pay months is going to cause all
Speaker 1: sorts of privacy issues and also potentially hardened financial inequality
Speaker 1: because people are only going to get you know, served
Speaker 1: up products and offerings based on their own transaction history
Speaker 1: or browsing history or whatever. But my question is, isn't
Speaker 1: the problem with the company or the platform that you're
Speaker 1: actually transacting with. So for instance, if I go to
Speaker 1: Amazon and assume that Amazon could accept bitcoin, and I
Speaker 1: buy a book, a subversive book from Amazon, and I
Speaker 1: pay in bitcoin, isn't the problem still that I'm buying
Speaker 1: through Amazon versus you know that I'm using bitcoin? Correct?
Speaker 1: So right now, the way to get around that is
Speaker 1: to use the gift cards. Gift cards are very important
Speaker 1: part of the world economy. A lot of people, of
Speaker 1: course in America something like Americans are underbanked essentially. Um,
Speaker 1: I was not eve enough for a lot of my
Speaker 1: life to not understand when I walked into a Walgreens
Speaker 1: or CVS that the gift cards weren't for Christmas gifts
Speaker 1: there for people who don't have bank accounts, how they
Speaker 1: make electronic payments. So we have this kind of like
Speaker 1: a legal and moral um precedent right now that like
Speaker 1: using cash to buy gift cards and buy things on
Speaker 1: Amazon is totally fine, and we want to hold on
Speaker 1: too that We don't want to let that get taken
Speaker 1: from us. We need that. So I would argue that,
Speaker 1: like what I'm seeing is the birth of something that
Speaker 1: may work, which would be private payments on top of bitcoin.
Speaker 1: In the same way that like Visa is like a
Speaker 1: layer on top of the US dollar, it's like a
Speaker 1: credit system on top of the dollar. You can think
Speaker 1: of Lightning as a credit system on top of bitcoin.
Speaker 1: So what I'm potentially seeing because Square is like heavily
Speaker 1: invested in this and has said that it's a matter
Speaker 1: of when not if that they will like release this
Speaker 1: into their cash app. At least Jack Dorsey said that
Speaker 1: maybe six eight months ago that you'll be able to
Speaker 1: use what is basically an anonymous gift card to buy
Speaker 1: stuff at the Whole Foods and Starbucks and Amazon in
Speaker 1: the next year or two using this technology called Lightning.
Speaker 1: So it'll debit from your account, the merchant will see
Speaker 1: the money. They won't know anything about you. They won't
Speaker 1: know your last transaction, your name, your address, and it's
Speaker 1: fine because they didn't need to know that stuff and
Speaker 1: that's not how it used to work, and you know
Speaker 1: that was the way things were. And I think it's
Speaker 1: like an aberration historically that when you pay for something
Speaker 1: today you reveal all this information about you. Do you
Speaker 1: think it's weird? How something that I think is weird anyway?
Speaker 1: I don't want to put words in your mouth. Is
Speaker 1: there are a lot of people tech critics, many of
Speaker 1: whom are tech journalists, who really sounded the alarm these days.
Speaker 1: Is picked up over the last few years about the
Speaker 1: incredible power, influence and data that Facebook, Amazon, etcetera have
Speaker 1: of our lives. Like every day you pick up the
Speaker 1: New York Times and there's some article about how awful
Speaker 1: these companies are. And yet I feel like the mainstream
Speaker 1: tech critics are still like pretty dismissive of bitcoin and
Speaker 1: still think it's like this like weird sort of on
Speaker 1: ran Silicon Valley project and not really putting two and
Speaker 1: two together as you're putting it. I mean, look, if
Speaker 1: someone creates something better that does what I'm describing and
Speaker 1: gives us essentially digital cash that allows me to pay
Speaker 1: for things that I need to buy in my life
Speaker 1: without disclosing all this information about me, or like you know,
Speaker 1: slur rendering all my liberties. I'll be all about it,
Speaker 1: but you know what this is. It is what we have.
Speaker 1: This is the only way to make a digital payment
Speaker 1: without a third party. This is why the coin is
Speaker 1: such a revolutionary financial technology is that it allows two
Speaker 1: entities you know, on the Internet to exchange value without
Speaker 1: a centralized payment processor. And and that was the big deal.
Speaker 1: And that's why, said Toshi nakamotos invention is so so revolutionary,
Speaker 1: and and that that is what I think allows us
Speaker 1: to start to think about a parallel way of doing
Speaker 1: things as opposed to relying on all these third parties
Speaker 1: when we do digital transactions. Why people haven't figured this
Speaker 1: out yet, I'm not sure. I mean, it's quite um.
Speaker 1: It takes a lot of open mindedness, let's put it
Speaker 1: that way to like kind of look at this and
Speaker 1: be like, well, maybe bitcoins part of the answer. Well,
Speaker 1: by the same token, you know, you mentioned that your
Speaker 1: own views politically tend to be more on the progressive side.
Speaker 1: What is the reaction to it among fellow human rights
Speaker 1: activists in the West that you deal with at work
Speaker 1: or other human rights organizations? Do they do? They typically
Speaker 1: of the same initial reaction, that's mostly like sort of
Speaker 1: like I rand, it's weird because for many years working
Speaker 1: in the human rights space, we didn't even think about
Speaker 1: money or currency at all as as relevant. And I
Speaker 1: remember this vividly. I invited a Zimbabwean opposition leader named
Speaker 1: Ivan Mauire to speaking an event a couple of years
Speaker 1: ago in San Francisco with Jill Carlson actually, and we said, hey,
Speaker 1: do you want to come talk about hyper inflation? We
Speaker 1: just want to do an event on hyper inflation and
Speaker 1: kind of allow people to understand what it like. And
Speaker 1: he said sure, and he and I asked him to
Speaker 1: come and prepare some remarks on what he saw as
Speaker 1: a Zimbabwean happened in his lifetime economically, and he's like,
Speaker 1: no one's ever asked me to do this before. I
Speaker 1: thought that was kind of strange. But when he got
Speaker 1: on stage and he started talking, he took out a
Speaker 1: necklace that he was wearing under his shirt and it
Speaker 1: was the nineteen eighties and Babwean dollar, and he was like,
Speaker 1: we all wear this, all the activists, and not all
Speaker 1: of them, but a lot of them as a symbol
Speaker 1: of what our economy used to be. Is fascinating, and
Speaker 1: I just think the money and currency we use is just,
Speaker 1: for whatever reason, in a different hemisphere or blocked off
Speaker 1: from what we think of his human rights. So for
Speaker 1: many many years I didn't even think about it. Like
Speaker 1: I saw Mark Anderson's New York Times article about bitcoin,
Speaker 1: which I still think is one of the better explanations
Speaker 1: of what it is, and that kind of put it
Speaker 1: on my radar. But it was until a couple of
Speaker 1: years later that that someone I knew who worked at
Speaker 1: one of these UH mining companies bit Fury, was like, hey,
Speaker 1: we should like maybe get human rights activists to learn
Speaker 1: about this. That I started to really dive in and
Speaker 1: then it it just sort of it went from there.
Speaker 1: But the human rights organizations today MSTY International, Human Rights Watch,
Speaker 1: if you just searched the word bitcoin, you won't find it.
Speaker 1: It hasn't gotten there yet, even even e f F
Speaker 1: and Wikipedia, which did receive bitcoin donations for a while
Speaker 1: and then like they you know, early on, and then
Speaker 1: they got rid of it, and now they're kind of
Speaker 1: becoming more warmed to it. I would say even the
Speaker 1: digital civil liberties organizations are really like UM have position
Speaker 1: themselves to be very skeptical of it, which I think
Speaker 1: is uh is a mistake. I think they should be
Speaker 1: open minded to it. So we're not there yet with
Speaker 1: with human rights organizations. They just haven't. It's not that
Speaker 1: they're like really against it, they just haven't really realized
Speaker 1: that this is going to be really key. So money
Speaker 1: has always been entwined with with the notion of the
Speaker 1: sovereign state in many ways. So do you worry that
Speaker 1: in arguing that bitcoin or some new digital money technology
Speaker 1: can successfully bypass the state and create a sort parallel
Speaker 1: um payment system. Do you worry that by arguing that, uh,
Speaker 1: you know, you'll make it sort of more likely or
Speaker 1: it will become inevitable that governments eventually cracked down on this.
Speaker 1: Of course there will. I mean we're seeing that now.
Speaker 1: I mean, look, I think bitcoin, properly understood and manifested,
Speaker 1: uh will be a much greater threat to authoritarian governments
Speaker 1: than democracies. I think there's ways in democracies for citizens
Speaker 1: to have like back and forth and negotiations with their
Speaker 1: elected representatives, and we could come to agreements like, for example, hey,
Speaker 1: maybe it's cool that like unders dollars when you make
Speaker 1: a payment digitally, it can be anonymous, that's fine. But
Speaker 1: you want to buy a house, you want to pay
Speaker 1: for tuition, you want to get a big loan by
Speaker 1: a weapon, whatever, maybe you need to provide I d
Speaker 1: But to me, this is like something that we could
Speaker 1: actually negotiate in a in a in a democracy, especially
Speaker 1: when like the United States, where we have a history
Speaker 1: of like cash being like an important American value. In dictatorships,
Speaker 1: I think bitcoin is gonna be much more um of
Speaker 1: a problem because they won't want to give up their
Speaker 1: control over money. So I mean, obviously I think bitcoin
Speaker 1: separates money from state and I think that's going to
Speaker 1: be a really big problem for authoritarian systems because of
Speaker 1: the way that they kind of seize most of the
Speaker 1: money in the economy and and and then do things
Speaker 1: that the population probably wouldn't be so hot on. And
Speaker 1: of course this happens in America. We just saw how
Speaker 1: much money did our government, or at least my government
Speaker 1: spend on wars in Afghanistan in interact something absurd. I mean,
Speaker 1: I didn't choose for them to do that. So, like
Speaker 1: super long term, if I'm thinking utopian, I suppose I
Speaker 1: would say that like an economy that's more based on
Speaker 1: this kind of asset would hopefully prevent that kind of
Speaker 1: um excessive spending that would lead to things like police
Speaker 1: states and and unnecessary wars. But that's that's very far
Speaker 1: into the future. So within the US or within the
Speaker 1: Western developed context, one of the memes that you heard
Speaker 1: early on is that bitcoin is useless except for buying
Speaker 1: drugs online, and maybe that's it, And some bitcoin defenders
Speaker 1: had like, Oh, that's really unfair. But I still kind
Speaker 1: of think it's fair in the sense that the properties
Speaker 1: of bitcoin that make it easy or possible for someone
Speaker 1: in Iran to send money to their a link relative
Speaker 1: to get health insurance or to get healthcare, the properties
Speaker 1: that enable that transaction, which most people think are good,
Speaker 1: are the same properties that allow people to engage in
Speaker 1: truly illicit things in the West, like buying drugs. There
Speaker 1: was also a big bust recently of a child pornography
Speaker 1: ring and there were some bitcoin related payments. How do
Speaker 1: you sort of address the fact that there is a
Speaker 1: neutrality in some sense to the technology such that we
Speaker 1: could sit here and talk about all the great things
Speaker 1: that allows people to do for freedom, but also in
Speaker 1: theory it makes doing very bad things also possible. Yeah,
Speaker 1: I mean, I think it's really similar to the debate
Speaker 1: about encryption. UM law enforcement may say in Britain and
Speaker 1: Australia honestly, which you're turning into the biggest predators of
Speaker 1: private information, which is bizarre given that their democracies. But
Speaker 1: they're basically trying to say, well, if you guys want
Speaker 1: to have like peer to peer messaging that's encrypted, we
Speaker 1: want to be and we want to be in the room,
Speaker 1: you know, we want to be like the third party,
Speaker 1: which is which is crazy. We need that ability to
Speaker 1: communicate privately and it doesn't mean we're doing bad things.
Speaker 1: There's some studies that have been done. So there was
Speaker 1: like an m I T based study that looked at
Speaker 1: bitcoin activity. I think it was a study that was
Speaker 1: done last year and they looked at it about two
Speaker 1: percent of all the transactions they viewed as criminal pertable
Speaker 1: laws of the United States. Now that's very low. UM
Speaker 1: from what I've seen, about nine percent of the U.
Speaker 1: S economy is like quote unquote black market are illegal
Speaker 1: and the average O E C D countries like is
Speaker 1: what I've seen. So I think over time, the amount
Speaker 1: of bitcoin being used for illegal stuff will probably kind
Speaker 1: of flow up and and even out around what. But
Speaker 1: I don't think the way. I don't think the medium
Speaker 1: um where the type of money we use will make
Speaker 1: people any less evil or good is my general gut feeling.
Speaker 1: And I think it's again it's like we need it.
Speaker 1: Like if we don't want to live in a society
Speaker 1: where all of our behaviors and movements and transactions are
Speaker 1: controlled and where we cannot criticize or descent or protest,
Speaker 1: then we're gonna need the version of digital cash. The
Speaker 1: example that was so vivid I saw this summer was
Speaker 1: that Hong Kongers were starting to use cash to buy
Speaker 1: like metro cards so that they could go into the
Speaker 1: subway system and then exit without being spied on, because
Speaker 1: if they went and used their like I D Linked
Speaker 1: Octopus card to do so, their employers could figure that
Speaker 1: out and then fire them. And you need to be
Speaker 1: able to protest to hold your government accountable. This is
Speaker 1: like something really important to democracy. So right now the
Speaker 1: Hong Kongers are able to do that because they have cash,
Speaker 1: But fifteen years they won't have cash, So how are
Speaker 1: they going to protest? Especially in an urban environments. This
Speaker 1: is another reason why I think digital cast is just
Speaker 1: so vital to democracy. I would just basically say that,
Speaker 1: you know, financial privacy is essential, essential to a healthy democracy.
Speaker 1: I would ask people to show me other options. I'm
Speaker 1: certainly open to it, but like bitcoin plus second layer
Speaker 1: technology that makes a private seems like the best one
Speaker 1: right now. So the trope for technology is always that
Speaker 1: it starts off well intentioned and then at some point
Speaker 1: sort of becomes terrible. Why would bitcoin not be the same.
Speaker 1: And the reason I bring that up is because, like,
Speaker 1: for instance, we saw China outlaw bitcoin very very early on,
Speaker 1: and now within the past few months, China's central Bank
Speaker 1: has come out and said they're exploring the idea of
Speaker 1: doing their own digital currency. So how would we ensure
Speaker 1: that bitcoin or other digital payment technology doesn't become opted
Speaker 1: by bad actors or used to bad ends. Yeah, that's
Speaker 1: a great question. Um, I think we need to separate
Speaker 1: the technologies here. So I would compare what you just said,
Speaker 1: comparing like bitcoin, which is like open source, censorship resistant,
Speaker 1: decentralized money that nobody owns or no one has, you know,
Speaker 1: authority over comparing that with what the Chinese are going
Speaker 1: to build, which is going to be highly controlled, highly survailable.
Speaker 1: I mean, I think my personal view of what they're
Speaker 1: end goal is is to replace the M zero inside
Speaker 1: China with something that's trackable, get rid of paper metal
Speaker 1: money entirely. I view these as like as different as
Speaker 1: um signal and UH and we chat Like. Yes, they're
Speaker 1: both digital currencies, but they're very very different kinds of
Speaker 1: digital currencies. So I think we just need to to
Speaker 1: bear that in mind. But it could go wrong. Yeah,
Speaker 1: Like my destopic view of bitcoin would be much like
Speaker 1: the original open Internet was perverted into like these like
Speaker 1: kind of siloed data collection mechanism like Facebook and Google, etcetera. Uh,
Speaker 1: and that original promise of connecting us all privately was betrayed.
Speaker 1: I think what could happen with bitcoin. The what I
Speaker 1: think is most reasonable as a worst case scenario is
Speaker 1: that all of the exchanges and places and marketplaces that
Speaker 1: we go to exchange bitcoin and turn it back and
Speaker 1: forth into Fiat become surveillance points, and then it becomes
Speaker 1: not very useful. Well, I was I was going to
Speaker 1: go exactly there. It seems like you could envision a
Speaker 1: scenario in which the government really does crack down on
Speaker 1: making sure that every entryway into bitcoin is very heavily
Speaker 1: compliant k y C, A m L. You have to
Speaker 1: give over tons of information or illegal like THEE. And
Speaker 1: so that's my next question. What if one day the
Speaker 1: government was like, you know what, you can't banks, Bank
Speaker 1: of America, Wells Fargo, Charles Schwab, you can't make transfers
Speaker 1: to coin base, you can't make transfers to etcetera. Whatever.
Speaker 1: And the industry is still not that big, so you know,
Speaker 1: they're probably not gonna have much leverage to fight back.
Speaker 1: Do you worry about that? And could the ecosystem still thrive?
Speaker 1: Could it still be as a liquid if Western market
Speaker 1: regulators just said, you know, you're not allowed to deal
Speaker 1: with this. I mean, look, I think government's it's strange. Actually,
Speaker 1: once you have a full comprehension of what bitcoin kind
Speaker 1: of makes possible, it's bizarre that they haven't tried to
Speaker 1: kill it more aggressively. That's what I think. It's really weird,
Speaker 1: and I think over time they're going to regret it
Speaker 1: in a big way. Lationship. But but let's just for
Speaker 1: a second imagine that governments have all done something they've
Speaker 1: never been able to do. A plus of all agreed
Speaker 1: that we're all going to band bitcoin whatever. Okay, so
Speaker 1: the price really tanks, it becomes um something that's much
Speaker 1: harder to get obviously, but even so, let's say I'm
Speaker 1: in China five years from now, and it's become completely
Speaker 1: very difficult to to get and I can't use there's
Speaker 1: no more cash in China, so like it's very difficult
Speaker 1: to to buy or sell. I mean, I could still
Speaker 1: invite my friend over to my house and he could
Speaker 1: help me with homework or something, and I could pay
Speaker 1: him on we Chat for helping me with homework, and
Speaker 1: on the side, using two non k y C wallet's,
Speaker 1: you know, he could have sent me bitcoin. Like, I
Speaker 1: don't think you can get rid of it. I think
Speaker 1: it's it's open source software. I mean, it's it's almost
Speaker 1: like an idea. It's very hard to kill. So I
Speaker 1: think you can. You can damage the price, but ultimately,
Speaker 1: as long as the mining continues to chip away and
Speaker 1: process the transactions. And what's really interesting is that Cheese
Speaker 1: and Ping, because he's so authoritarian, what we're watching is
Speaker 1: some mining move out of China because it's too it's
Speaker 1: too strict, and it's decentralizing and going to other places.
Speaker 1: So as long as mining itself can be done, then
Speaker 1: I think the network will will survive um and and
Speaker 1: provide this very important thing that we I think we need. Alex,
Speaker 1: that was a great conversation and I really appreciate you
Speaker 1: joining us. Super fun. Thanks. Thanks Alex, that was really
Speaker 1: interest time. So Tracy, in the beginning, I sort of
Speaker 1: speculated that maybe this conversation would be one where we
Speaker 1: kind of saw eye to eye and maybe it sort
Speaker 1: of fit within both of our views on the space.
Speaker 1: But I'm curious if you felt the same way, because
Speaker 1: it felt like we kinda it felt like it kind
Speaker 1: of made sense. First of all, twenty or thirty minutes later,
Speaker 1: I still haven't forgiven you for calling me crank curious.
Speaker 1: But secondly, look, I'm totally on board with a conversation
Speaker 1: about the privacy threat posed by new technologies and specifically
Speaker 1: by digital payments. I just got back from China, where
Speaker 1: by the way, I had to register my I D
Speaker 1: in order to get on alley pay uh, and it's
Speaker 1: very very clear that every transaction on there is recorded.
Speaker 1: So absolutely it's a concern. I still have my doubts
Speaker 1: about whether or not bitcoin is the solution to it,
Speaker 1: and the big question I have, and this sort of
Speaker 1: gets to like old theories from international relations. The big
Speaker 1: question that I have is whether or not states are
Speaker 1: going to allow their sovereignty or their power to be
Speaker 1: undermined by this thing that is very clearly you know,
Speaker 1: it's almost explicitly stated in the white paper and the
Speaker 1: way cryptocurrency enthusiasts talk about it, something that is clearly
Speaker 1: aimed at undermining or bypassing their authority. I completely agree,
Speaker 1: and to Alex is a point at the end, if
Speaker 1: you think through the implications of this and actually just
Speaker 1: sort of like go several steps down the road, it
Speaker 1: is very surprising that any government is even in the West,
Speaker 1: has been as tolerant as they have. Not only have
Speaker 1: they not like really cracked down, like actually have like
Speaker 1: regulated futures and stuff like that that add liquidity to it.
Speaker 1: Like it's really weird because if you really think it through,
Speaker 1: and I almost wonder whether they will, um, you know,
Speaker 1: come to regret it, and you sort of wonder if
Speaker 1: cowt they're like cowed by this idea is like, oh,
Speaker 1: we don't want to stifle innovation. And someone came in
Speaker 1: and gave a presentation about blockchain, and they got am
Speaker 1: really excited. But it does seem like if you're really
Speaker 1: just sort of like follow the thread the clashes, you
Speaker 1: will you would expect them to intensify over time. So
Speaker 1: here's something you'll like almost two years ago to the day.
Speaker 1: And I hate to do this, but I'm going to
Speaker 1: refer to one of my previous tweets, So I tweeted,
Speaker 1: it's obvious regulators are going to end up regretting not
Speaker 1: acting on more and sooner. On the one hand, if
Speaker 1: it fails miserably, there are going to be burned investors.
Speaker 1: On the other hand, if it's a wild success, their
Speaker 1: authority or efficacy will be threatened. Like to me, it's
Speaker 1: so so clear they're going to regret this down the line.
Speaker 1: I completely agree. One other point that I thought that
Speaker 1: Alex made, which was really I find to be very
Speaker 1: compelling and a good question to pose to people, is
Speaker 1: if we can establish that there is something concerning about
Speaker 1: the end the fact that every one of our transactions
Speaker 1: will be traceable online with the trans with the trend
Speaker 1: we're going to. His point is like, Okay, maybe there's
Speaker 1: a better solution out there to digital cash bearer assets
Speaker 1: that allow me to pay you without person ce being
Speaker 1: able to see or approve of the transaction. But they
Speaker 1: certainly don't exist yet, and no one has really put
Speaker 1: forth a better, more compelling idea. Some people talk about
Speaker 1: central bank digital currencies that could be designed as cash replacements.
Speaker 1: That doesn't really seem like many central banks are enthusiastically
Speaker 1: embracing that right now, but it's certainly true. As to
Speaker 1: his point, it's like, Okay, well, like, if we can
Speaker 1: accept that it's a problem or it should be of
Speaker 1: a cold certa into society, then what do you propose
Speaker 1: as the better approach to enabling these kinds of transactions?
Speaker 1: And right now, I don't think many people have thought
Speaker 1: that question, or let alone come up with good answers
Speaker 1: to it. No, that's true. It feels like more people
Speaker 1: should be working on it. And the other thing I
Speaker 1: would just throw out is there's sort of a convenience
Speaker 1: aspect to all of this, which sounds terrible because we're
Speaker 1: talking about human rights. But what I mean by that
Speaker 1: is there are ways to bypass the system or conceal
Speaker 1: your identity currently, so Alex mentioned gift cards, of course,
Speaker 1: and then you know you have people in Syria who
Speaker 1: are using bitcoin and then exchanging it via a Facebook platform.
Speaker 1: The problem with all of those things is that it's
Speaker 1: an extra step in making the transaction and you have
Speaker 1: to put some effort into it. And the thing with
Speaker 1: all of the new digital payment systems like Ali pay,
Speaker 1: like we Chat, Venmo, whatever, is there's just really easy
Speaker 1: to use and really convenient, and people are willing to
Speaker 1: sacrifice their privacy for the sake of convenience, which you
Speaker 1: know is terrible in the long run, but you could
Speaker 1: see why people do it in the short run. And
Speaker 1: I'm not sure anyone has really come up with a
Speaker 1: response to you know, human nature. Well, I will, I
Speaker 1: completely agree, And I think this is also one of
Speaker 1: the key things to think about, which is that people
Speaker 1: look at the difficulty of using bitcoin and they compare
Speaker 1: it with PayPal or Visa or Ali pay or whatever
Speaker 1: we chat, and they're like, yeah, it's really it's really cumbersome.
Speaker 1: It's difficult. It's difficult for even season people. But if
Speaker 1: you compare it not to reach at, but compared to
Speaker 1: some other means for moving moving money in and out
Speaker 1: of say a repressive regime, think, for example, of the
Speaker 1: steps that people in China go to, or they like
Speaker 1: pay some junk at operator to take them to Macau.
Speaker 1: Then they play back around for several hours, lose a
Speaker 1: bunch of money doing that, cash out their chips et cetera.
Speaker 1: If you compare bitcoin to that versus we chad, suddenly
Speaker 1: Bitcoin actually looks like the more convenient thing. So I think,
Speaker 1: like a the convenience is a big detriment to privacy.
Speaker 1: But as more people perhaps feel they must have a
Speaker 1: censorship free solution or they must engage in a transaction
Speaker 1: that's not allowed, then you might, over time start to
Speaker 1: make the convenience case for bitcoin not by compared gets
Speaker 1: to Ali pay, but by compared it to something way
Speaker 1: more uh convoluted. Yeah, so all we need someone to
Speaker 1: do is to create a reasonably convenient method of bypassing
Speaker 1: the existing financial system without sufficiently angering the authorities so
Speaker 1: that they crack down on it. Good luck. But if
Speaker 1: if anyone has any better ideas, we'll have them on Yeah,
Speaker 1: tell us let us know. Alright, this has been another
Speaker 1: episode of the Odd Thoughts podcast. I'm Tracy Alloway. You
Speaker 1: can follow me on Twitter at Tracy Alloway, and I'm
Speaker 1: Joe Why isn'tal. You can follow me on Twitter at
Speaker 1: the Stalwart, and you should definitely follow our guest on Twitter,
Speaker 1: Alex Gladstein. He's at Gladstein. And be sure to follow
Speaker 1: our producer on Twitter, Laura Carlson. She's at Laura M. Carlson,
Speaker 1: as well as our substitute producer Today, our old producer
Speaker 1: who's filling back in for the day to for Foreheads.
Speaker 1: He's on Twitter at foreheads t and follow the Bloomberg
Speaker 1: head of podcast, Francesco Levi at Francesco Today. Check out
Speaker 1: all the Bloomberg podcasts under the handle at podcasts. Thanks
Speaker 1: for listening.