83. Bitcoin Maximalism, Altcoins and Satoshi with Pete Rizzo

In this episode Saifedean talks to bitcoin journalist Pete Rizzo about bitcoin maximalism, altcoins and Satoshi. They discuss objectivity in journalism, what constitutes a “neutral” stance on altcoins for journalists, and how bitcoin differentiates itself from other cryptocurrencies through its high degree of decentralization. They also discuss the role that Satoshi and his disappearance had in shaping today's bitcoin, and whether Satoshi was motivated by studying Austrian economics. They also discuss the late Mircea Popescu's underrated role in articulating and demonstrating bitcoin's immutability, resistance to capture, and sovereignty. In the Q&A session, Pete answers questions about potential attack vectors for bitcoin and explains his views on the likelihood of hyperbitcoinization.

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Saifedean Ammous: [00:05:07] Hello and welcome to another episode of the Bitcoin standard podcast. In today's seminar, our guest is Peter Rizzo, an Editor at Bitcoin Magazine, Editor-at-Large at Kraken cryptocurrency exchange and Founding Editor of CoinDesk, one of the earliest publications in the Bitcoin space. Peter has been around Bitcoin and writing about Bitcoin for a few years.

And in the last couple of weeks, he's published an interesting article called Against Cryptocurrency: The Ethical Argument for Bitcoin Only, in which he distills his years of experience in the cryptocurrency space in order to arrive at the conclusion of Bitcoin only, which listeners will know that we are quite partial to as a [00:06:00] conclusion.

He's arrived at it, I wouldn't say independently, but he's arrived at on his own. So I thought it would be interesting to discuss it as well as some of the other interesting work that Peter has done over the years on Bitcoin. Peter, thank you so much for joining us.

Pete Rizzo: Awesome to be here, excited to discuss the work.

Saifedean Ammous: All right. Can you give us a little rundown of first of all, what is it that drove you to write this article? You can like Bitcoin without having to alienate people who like shitcoins, but why go and stick your neck out to make this case?

Pete Rizzo: Yeah, fair question. So I've been a Bitcoin and cryptocurrency journalist, I think since that term was invented in about 2013 and I've continued to engage with those groups, even as my personal outlook on the industry technology, whatever your preferred nomenclature is, has [00:07:00] changed. And I think there's a couple popular conceptions that have really troubled me of late as I get deeper in understanding Bitcoin and spend more time studying it.

One of them is that it's neutral or agnostic to just focus on cryptocurrencies. So I think that plenty of people will be aware that the mainstream media really focuses on Bitcoin and cryptocurrencies as this "asset class", that they're all sort of stocks and bonds, that there isn't really much difference between any of them.

They each have a ticker letter and a number and these just go up and down and then this is something that is their default lens on the industry, right? So they come to the conclusion that if you have a stance on Bitcoin or cryptocurrency if you believe one of these systems is more viable, ethical, what have you, that is not neutral.

They have this assumed idea that 1. not having a position is neutral and that this is valuable. I think second they have this perception that the cryptocurrency market is an effective mediator between cryptocurrencies, right? That it's giving them some sort of [00:08:00] meaningful data about whether things are competing against Bitcoin or driving market share from Bitcoin.

And I think most people from Bitcoin maximalist perspective don't think that way at all. We don't gauge with these types of systems. You know, it might have different outlooks to what they provide. So really, I think that's what I wanted to chip away at. Obviously Forbes is a much different audience than other publications I've written for being much more Bitcoin or crypto native.

So I think, really I was keen to work with those editors to put that out because I do think that this default perception that it's neutral to just not have a position on cryptocurrencies, just as really troubling, especially when you begin to consider them as systems that have different attitudes towards user rights.

Or that they're designed in different ways and that these different designs actually are fundamentally different for the users of the systems. So really this was about calling attention to that and using that forum to put forward this argument that again neutrality, whatever you want to call it might not be as valuable as the mainstream [00:09:00] currently thinks it is.

Saifedean Ammous: Yeah and I think it's entirely an issue of framing. And so this is one of my pet peeves with journalism and why I try and generally not read a lot of journalism, because this attempt to manufacture neutrality and to present the journalists work as if it is objective truth seeking free from value judgements is in itself, I think, the most powerful mechanism for imposing value judgements on the work.

And I think on a societal scale, on a global scale, it's used to essentially impose a sense of narrative of what is acceptable. What is correct? What is not correct? What is beyond the pale? What is beyond acceptable? And you know, if you get to decide what is neutral and [00:10:00] what is biased, then, that's just another different, another way of deciding what is acceptable and what is not acceptable, what is legitimate and what is not legitimate, and it's a classic trick of modern journalism and modern propaganda.

I know this for instance, from the example of economics. The majority of economists will not engage with the Austrian school, will not discuss Austrian school ideas, because they'll just tell you what really matters here is, this is a fringe opinion, but what really matters is the mainstream.

And within the mainstream here are the accepted viewpoints and this is where all decent people stand. And if you're outside of that mainstream, then you're basically irrelevant to the discussion. But of course, all of that depends on how you define what is neutral. In the case of digital currencies, one of which I know we're going [00:11:00] to discuss the term and the problems we have with it, one way that you could define it, one way to think of neutrality is that there are all these assets out there, and they're all competing for market share. And you as a journalist or somebody who's writing, or somebody who's into this field, the professional thing to do would be to maintain professional distance.

Just like if you were an investor, you're very careful about how you talk about stocks, just because you hold Apple or Netflix doesn't mean you spend all of your day in your office job or in your journalism job or in your academic writing job pumping the stock or this you're not supposed to.

So in this regard, if you look at it this way, that there are all these assets and you're just picking one and you're not being neutral. I would argue that the only thing that's neutral in this is Bitcoin. Bitcoin is the only thing that's a neutral protocol and [00:12:00] everything else is somebody's proprietary Excel sheet basically.

Somebody's private spreadsheet and you're buying entries in somebody's spreadsheet. If you want it to be neutral, you talk about Bitcoin. If you want it to be not neutral, you would talk about all these proprietary currency and spreadsheet projects.

Pete Rizzo: Right? Yeah, I think that's a great way to put it. So I think that from a user rights perspective, Bitcoin is the most neutral. But when you look at a user rights perspective from cryptocurrencies, that's where you run into problems. But I think that by and large, the journalism community, and I think many other communities, the business entrepreneur community is guilty of this, the investor community, they've been very biased over the years towards a multi cryptocurrency environment.

Again, when I was really trying to establish this argument, I was also looking at what are the popular arguments for Bitcoin only? And many of these, [00:13:00] I've tried to put these hats on over the years, I've looked at these arguments, assess how I feel about them.

And I really got to essentially that from my perspective, I think there's only essentially four arguments for Bitcoin maximalism. One is economic, right? It's the best money. You look at the properties of money and you can see that Bitcoin is the best on that metric. You can look at the network, it's the most decentralized by some sort of metric.

You can look at the launch, there are conditions or Bitcoin that can't or won't repeat again. But the issue with some of those is that they're very comparative. So I think when we make arguments for Bitcoin on any of those basis points, it's not immediately clear to people why other cryptocurrencies aren't quite competing with Bitcoin on those areas. They may look at the cryptocurrency market as a way to validate that. Whereas from the user rights perspective, I think it's a lot more clear, right? I think Bitcoin is really the only system in which there is no majority that can collude to rescind your rights. And I think there's been powerful arguments made by this from the mainstream. I think Alex [00:14:00] Gladstein, Jimmy Song have done a great job with this argument, but I think the issue that I've had with that is essentially they only really go so far as to compare Bitcoin to fiat. So oftentimes when they're making moral or ethical arguments for Bitcoin saying that Bitcoin is a better system for ensuring rights than fiat.

And I think the more complex argument is why is Bitcoin a more as a rising and more ethical system for ensuring user rights, as opposed to other cryptocurrencies? Cause again, even when you make the worst cryptocurrency, you're copying a system that shares many of the same properties as Bitcoin. So I think one of the things that I wanted to do was, again, present this argument that I think has infiltrated and saturated the Bitcoin community, that Bitcoin has more moral, ethical more neutral than fiat monies.

But extend this to cryptocurrencies at large, because I think it's a more difficult argument. I understand the reasons why we haven't necessarily done that. There's a tendency to want to ignore or pretend that other cryptocurrencies don't exist but I actually argued that's less helpful.

So from the standpoint of [00:15:00] journalism, business, VC, those types of interests, they often see our unwillingness to engage on that subject as a sign of intellectual weakness or passivity. So if you're just making an argument against fiat currency, most cryptocurrency industry VCs, business people what have you, sure they support that argument.

They're are also against the fiat system, they're also building alternative. But anyway, so I think this goes back to the point that really I guess the point of this piece was to take an argument, which I think we know really well, that we want to compare Bitcoin as a more neutral system to fiat but also extended it to cryptocurrencies, which I think is a more difficult task.

Saifedean Ammous: Yeah, I think generally there's this idea that if you're into Bitcoin then a lot of people seem to have this idea that you're obligated contractually to spend every waking minute listening to every person who has a pitch about a new coin and explaining to them why [00:16:00] you prefer your Bitcoin to their coin. Unless you can convince them then you know, you're basically a coward who's running away from confrontation and conversation on this.

And you know, having been in this field for a while, you realize this is essentially a sales pitch that people use in order to get your attention and effectively digital currencies, I think the fundamental difference is, and to get back to your point on the ethics on the morality of it, ultimately they are private currency schemes and so they're owned by individual people and they are controlled by a small group. I don't think any digital currency can credibly claim that the group of people behind it cannot change the consensus rules. I don't think there's a single cryptocurrency that can make that claim.

So what you end up with is essentially people who just got together and made a [00:17:00] currency and now they're mining it and they're promoting it. It's as long as you don't have that reservation demand for people who want to hold it because they know it's neutral money, they can sit on it for 10 years and they'll know that their node and their private keys are going to work with the network.

Then you're engaging with somebody's own private, you could call it a private currency, you could call it Ponzi scheme, whatever you want. I tend to think of them as being very similar to the Ponzi schemes because there's no fundamental underlying demand and what they market as the demand for it is that, we're going to be able to use it for this or that, or the other thing, which does not require you to hold it because you can just buy it when you need to use it if that is the case.

So I think the issue of why we don't engage with altcoins is simply that engaging with altcoins is advertisement for [00:18:00] altcoins and for people who want into Bitcoin, the reason that I like to block very liberally and indiscriminately on Twitter is because everybody who's promoting an altcoin and a great way to promote your altcoin is to go to Bitcoiners because that's a big group, the biggest group in digital currency and go and talk about how great your altcoin is because that's pretty fertile ground.

Bitcoiners are already familiar with the basics of how a digital currency works. And so the pitch to the average Bitcoiner has a far higher chance of succeeding than the pitch to the average individual and therefore conversing with notable Bitcoiners and getting on Bitcoin forums is a great way to advertise in a digital currency.

And that's ultimately what all of these discussions are. The reason that I don't like to engage a lot is that there's an [00:19:00] infinite number of coins and there's an infinite number of people on Twitter who wants to tell you about their coin. And I only have finite time on Earth and spending it promoting those coins is not is not my idea of fun.

And I think for me, my interest in Bitcoin in particular only came about when I understood that nobody can control Bitcoin, before then it was just a curiosity. When it got to that point, that's when it became interesting. And so none of the altcoins have gotten to that point yet where they could claim not to be controlled and not to be easy to hard fork and change consensus rules.

And so that's why I think if you want to be neutral, you discuss the internet, but you don't discuss private companies on the internet. You talk about the technology on the internet. And for me, the technology is Bitcoin.

Pete Rizzo: Yeah, I think it's interesting, there are certainly very true aspects of what you just said.

Including that a lot of these [00:20:00] cryptocurrencies do have problems in terms of how centralized they are. I think, what I try to do in this article a bit and I received some criticism from Bitcoiners on this, is sort of make a steel man argument for cryptocurrencies. So I think oftentimes we can appear like overly attack-led and dismissive of these things.

But what is the steel man argument for cryptocurrencies? If it is true that no one can control Bitcoin, then what is the alternative that the cryptocurrency system is proposing and the closest that I can really get to charitably and again I like to emphasize charitably cause I think it shows how weak the argument is if you actually look at it.

I think in the best case scenario, people who are agnostic to cryptocurrencies, what they believe is that cryptocurrencies should essentially be able to change in any way that's desired by the majority of users and secondly, that this majority of people drive by the market should be able to make any decision up to and including rescinding other people's rights.

And I think this is where it gets interesting where you look at the cryptocurrency system as okay that is true, that is something that they broadly believe, that they essentially [00:21:00] should have some sort of, let's just be very charitable and call it democratic type decision making.

Saifedean Ammous: That's not charitable by the way, sorry to interrupt but you're not being charitable by calling it democratic here. But yeah, go ahead!.

Pete Rizzo: I understand, yeah. You're a monarchy fan if I remember correctly, but let's just again be very charitable and say, this is how these systems function.

Where the majority of users can make any decision where they want and then this becomes a moral or ethical decision, I think it becomes easier to see the issues with that. So I think I wrote in the piece and I've been trying to say with this and think about it, I think most cryptocurrency agnostics, what they end up arguing for is replacing government rights to money with the markets right.

You only have the right to your money in a cryptocurrency so as long as the market will tolerate your right. And I think that's really interesting to look at on a flat surface, because if you're not okay with governments being able to send rescind rights, why are you okay with markets being able to rescind rights?

So what is the actual difference [00:22:00] there? And I think that better highlights to me, what is actually unique about Bitcoin, which is that there is no one who can rescind your rights, the protocol works absolutely and you have an irrevocable right to money within the Bitcoin system that I just think does not exist in other cryptocurrency systems.

And I think once you get that point across, you can start to chip away at some of these, because again, as you were saying, the ultimate claim of most cryptocurrency proponents is that what they are doing is like Bitcoin, right? Ultimately they want to establish in your head that there is that similarity.

So I think for me, it went down that path of, okay steal me on the argument, what is the most charitable way you can view this? Seeing the weakness with that sort of charitable presentation. Again, why are you okay with the market being the vehicle by which user rights are now managed as opposed to governments and what is the actual advance there and then being able to put that sort of in an argument in the form of saying, okay what is this other system that is other than Bitcoin trying to achieve?[00:23:00]

Saifedean Ammous: Yeah. I think if I were to even be more charitable than you and make an even more generous steel man, I'd say there's nothing wrong with just letting the markets have choice over money because you have choice in the market. So let 10,000 currencies bloom. And if you like Bitcoin, if you like Litecoin, if you like BitConnect, you can get in on it.

And then if you don't like it, you can sell it out. And, if you make a good choice, get in early and then people can get in after you, then you can sell out at a higher price and that's just like any market speculation. So I guess you could say that, why can't money just be another good provided by the market?

And I don't have an objection to that. I don't have a. I don't have, I don't think governments should ban altcoins. I don't think people should be thrown in jail for making [00:24:00] altcoins but that does not mean that I think that is workable as an economist and I don't think it is moral.

I think it's very blatantly exploiting this nascent new technology that allows this enormous increase in money transfer around the world. The increase in the speed of money and the increase in the hardness of money, exploiting that in order to just essentially pedal Ponzi schemes that have no hope of capturing monetary premium, I think this is the key thing.

Where Bitcoin is going, Bitcoin can grow. Bitcoin's now currently around a trillion dollars, right? It can grow to $10 trillion. It can grow to a $100 trillion. It can be held on the balance sheet of the largest institutions. It can be held by anybody anywhere in the world and it can be held because of its monetary properties. [00:25:00] People hold it for as a cash balance. And there's a great article by Hans-Hermann Hoppe called "The Yield from Money Held" Reconsidered, in which he makes the case, and this is a heretic in modern mainstream economics, he makes the case that people hold money because it is a valuable thing.

Having cash on hand protects you from uncertainty, allows you to take advantage of future opportunities. So there is value in having cash, as opposed to having investments and contrary to Keynesian propaganda. This isn't something pathological, it's the germ of all civilization.

That's how all human savings and capital accumulation comes along. First people save and they don't consume. And you know, saving money is the purest most effective form of saving because money is the thing that is the most liquid in across time and across the future. So what Bitcoin [00:26:00] allows us is a digital money.

It's a protocol, it's a set of rules without a ruler. It's a set of neutral protocols that anybody can log into and nobody can change. If Bitcoin didn't exist, then I would say that yeah, and if altcoins was the only thing that we could do, proprietary currencies on the private market, then I still wouldn't find them very interesting, but I think they would be less illegitimate in my eyes because they're just competing with government.

But of course here in lies the problem. If Bitcoin did not exist, these currencies would not exist at all. The only reason I think they survive is because Bitcoin has made first of all, the functional aspect available so that you can actually move money around the world with Bitcoin.

And essentially we can think of [00:27:00] the entire cryptocurrency space as being a speculative asset built on top of Bitcoin. Ultimately the final settlement happens with Bitcoin because Bitcoin is the only way that you can really know that you own something other than just somebody else's balance sheet. So functionally it it rides the coattails of Bitcoin because Bitcoin is what allows international settlement.

And then I think politically and regulatory, it also rides the coattails of Bitcoin. If Bitcoin hadn't succeeded and survived for a few years and got to a point where killing it was too complicated for any one particular government organization to undertake or at least undertake successfully for all we know.

Once it got to that point, it became possible to launch all these other currencies. But I think the fact that Bitcoin exists as a neutral money means that anybody trying to offer you [00:28:00] their own proprietary money is really just off trying to basically score seniorage. The only reason that you would want to offer your own money when a neutral digital money exists, is because you're looking into the seniorage.

And if you look at all the digital currencies, pretty much if you've heard about it, if it's in the top 10, at any point, if you have heard about it, if it's made it into the major cryptocurrency industry publications, it only matters to do that because it has a small, very efficient group of people that are running the code, they're doing the mining, they're managing the software upgrades, they're upgrading the nodes. They run the majority of the actual nodes that are on the network. And most importantly, of course, and that's where cryptocurrencies have excelled, [00:29:00] the marketing. There's a giant marketing machine behind every cryptocurrency that has made it anywhere.

So you look at how it functions, you may not have, I don't have a problem with privately competing monies, I don't think it would be an issue if people wanted to offer their own currencies, in the sense that I don't think it should be illegal, but I think it's very immoral and I think it's you know, it's been tried all throughout history where people have tried to pass off something as money and has always ended in disaster.

You start off with people buying it. And then you end up with nobody wanting to hold onto it in the long run because it doesn't have that cash demand. Nobody wants to hold it as cash and so everybody ends up dumping it in the long run. And you know, the possibilities of digital technology mean that we can have these Ponzi schemes run for a very long [00:30:00] time because we're starting from a very small place and we're spreading, but I think ultimately there's no scarcity to individual altcoins because there's nothing that guarantees that their supply can't be increased in case of increased demand.

And then there's nothing to guarantee that the altcoins themselves, all of the supply of all of these privately offered monies. And this is really the reason why this will fail the market test is that the barrier to entry to making the next the next Bitcoin killer is very low.

We've had thousands of people successfully market the next Bitcoin killer. So obviously not successfully enough to kill Bitcoin, but successful enough for them to dump on retail suckers and to make a lot of money. And none of these of course is going to kill Bitcoin or kill each other. They're just going [00:31:00] to, they are going to kill each other, they're just going to proliferate.

Pete Rizzo: Yeah, I would say that breaking down what you said, maybe more for my personal view, I think most cryptocurrencies rely on a very finite series of comparative arguments. One, what they're doing is not Bitcoin, right? They want you to think that the technology is more expansive beyond what Bitcoin can do.

So oftentimes they're using a more finite definition of Bitcoin. Again, I like to do Bitcoin as a financial system that again expands exponentially with the development talents that is behind it. But oftentimes they're trying to get you to agree to a more finite definition of Bitcoin whether it's digital gold or something like that because they are not Bitcoin.

They're often using that as an excuse, I think, to take liberties with user rights. So they're sort of obfuscating that in order to have this great array of freedoms that they're offering you, they're saying, oh you can use these sorts of applications and all these sort of other things.

But they're often in the background, not really being clear that that really comes with a restriction on you being able to do [00:32:00] something within your system or even retain your money. You can see a lot of the recent, you know, centralized finance hacks. These are essentially situations where these centralized powers that are operating the systems will, recent example, make a decision to give out lots of money to people who then hold money.

And then as soon as they decide that wasn't a decision that they wanted, those people no longer have any money. So you can look at it as within these systems it's possible for some group of people to invalidate some users right to money. So then the question is like, how does that happen?

That has to happen some way because someone doesn't just lose access to their money without someone on the other end making a choice. And I would say maybe another part to add onto that is that oftentimes they're using, the people who are promoting these cryptocurrencies, they're using the USD market for their cryptocurrency to justify their actions.

So they're saying that because we took away these people's right to money, we chose to redistribute it and the [00:33:00] market for our currency went up, therefore it's good. It must have been a good thing that we did, otherwise the price of our cryptocurrency would have gone down.

I think that you have to look at the comparative arguments that are being made. And I think a lot of it is, what they're doing is not Bitcoin, because it's not Bitcoin, we can put users in a situation where they have less rights and we can then say that the cryptocurrency market validates us in some way.

Saifedean Ammous: Yeah. This really puts us back into the the kind of crux of the argument about people offering private monies. I think if people want to offer private monies, I think the reason this always fails and we always historically go back to gold as money, thousands of years we've had all kinds of governments and cranks and Keynesians and other kinds of crazy people mandate all kinds of crazy things as money.

And then [00:34:00] eventually that thing becomes worthless and we go back to gold. Because there is no value added in being a money printer. There is no value added in me being, I'll come and get the money that is made by me. There's no product differentiation in a sense that here my money works better than Peter's money because Peter's money is banana flavored, whereas mine is chocolate flavored.

It doesn't work that way. There are no flavors to the issue. The only thing that you're looking for is saleability. Is the ability to sell the money. And the only thing that proprietary money adds on is seniorage, that's the only edition.

Functionally speaking incidentally, I continue to say this and I still fail to see a single counter example, functionally speaking, you look at everything that takes place in all the entire cryptocurrency market and basically everything is private key, [00:35:00] public key, and a ledger of coins and you sign a transaction and the ownership of the coins moves from your keys to some other pair of keys, and that's it.

And that's basically how they all work, but then there's a whole bunch of junk put on top in order to make it look like there's other things going on and effectively, it's all kinds of different forms of financial engineering where, you sign this and it gets locked up and we lock it up and then we get more people to lock up and then the value goes up and you know, we pay interest on it.

And so people think that they're earning interest, even though there's no actual work being done anywhere with any of these currencies. Ultimately all that is taking place with money, the only thing that money does is just move from person A to person B, that's the only thing that money can do.

And the only thing that you [00:36:00] can add by providing a private money is seniorage. Which is something that is good for you, but it's not good for the consumers. And that's why on a free market money always goes towards the free alternative and by free, I mean the one that is free of control, the one that is the market's choice, the one that has its value determined on the market.

Pete Rizzo: Yeah, I definitely touch on that freedom of control. Cause I think the other thing that cryptocurrencies do is that they rely on misconceptions about Bitcoin's history and the nature of its control rights. So you'll see a lot of arguments, especially, after I published this article, I think there are a lot of people within the Ethereum community for example, who don't know that Bitcoin has chosen a path where we're not going to pursue hard forks as a technical change anymore.

Or they'll make arguments that, oh hard forks have happened in the past. Again, very debatable, probably not true. And to the extent that there were those cases, they were made for the extreme emergency continuing of the protocol and [00:37:00] not as a way to enact some new future and therefore remove the rights of some other users to money.

Again they rely on misconceptions about the past. Especially in my work, that's something I'd like to clarify because I think you know, some of those arguments can be very compelling, right? Because Bitcoin itself is a very dense technology that has a very dense history to it.

And I think a lot of those aspects that haven't really been brought to light in a way that people can really understand. And again, so you have the second and third order misconceptions that build up over time, so that even you have somebody who's working on the Ethereum protocol who doesn't even really have any real historical understanding of what has happened in Bitcoin.

I think it's even if the cat you're a casual observer at this point, you should be able to understand the basics about Bitcoin's development roadmap and how it functions, especially if you're building some sort of other system.

Saifedean Ammous: Yeah. And I think perhaps we should do a little bit of a recap of some of the greatest hits [00:38:00] of what makes Bitcoin Bitcoin and different from all the others.

So I think if I were to maybe specify it with one technical metric, it is that Bitcoin is the only one that is today. The latest block that just cleared right now is, you could mine that block and you could sync your node up to this block using the code that was the original specification that was introduced by Satoshi.

So Satoshi's code. If you try to run it today, it's slow. It's inefficient. That has a bunch of bugs and it's it's not great, but it's still syncs with the blockchain up until today. So the consensus parameters of the Genesis block are still compatible with the consensus parameters of the last block that we just had, 700,000 and something.[00:39:00]

And this is an enormous point of distinction between Bitcoin and the other cryptos. I shouldn't say the other crypto's between Bitcoin and the unregistered security industry that calls itself digital currencies is that the consensus parameters and all of these altcoins are trivial to change.

And most of them change a lot of things very regularly and they'll change them and they take pride in the fact that they change them because they don't even see the value in immutability. They think there's value in flexibility. And I think here the idea is that you're going to be doing all these apps.

We've heard about so many apps that are going to be built on decentralized networks. None have achieved commercial viability. So we've heard about so many prediction markets with their own tokens and their tokens were worth hundreds of millions, if not [00:40:00] billions of dollars at certain points, you've heard about all kinds of different supposed apps and products that are going to be built.

But ultimately none of these apps really requires the level of decentralization the Bitcoin has. And all of these apps are defacto centralized when they're on a, another digital currency. And all that you're doing is that you're just paying many, many millions of multiples the costs that you would get if you are using a more efficient centralized solution like AWS, which is essentially what you're doing when you're using one of the altcoins, because most nodes are run on AWS anyway.

AWS is already a choke point, it's already a central point of failure. And if you're using AWS, Amazon Web Services, if you're using them directly while you're cutting out one middleman of the team of developers that are just there and you're [00:41:00] saving millions, you're paying something like a millionth of the cost because it's much more efficient when you're running it on centralized computers, rather than many of these centralized computers, there's, there's no reason for thousands of computers worldwide to have to register your prediction market bet about who's going to win the next election or the next world cup or whatever.

These things can be done much more efficiently and effectively, and they are being done. The centralized betting market around the world is more if I don't know, tens of billions, maybe even hundreds of billions, if you think about sports betting online and all that stuff, it's an enormous market.

And, as usual with blockchain it's a solution looking for a problem. The betting industry is doing fine as it is. It doesn't need all this decentralized nonsense in order to function. [00:42:00] So basically you're compromising the immutability in search of novelty.

The contention that I make is that, if you want novelty, just go use AWS. It's as decentralized and much more efficient and much faster.

Pete Rizzo: I think my only point with this type of argument though, is that it's, I both agree with you, but think that it's highly easy to dismiss, right?

I think this is one of those things where speaking back to the Bitcoin maximalist arguments, I think we've argued a lot that the Bitcoin network is the most decentralized for events presented a lot of data for whether that's correct. And there even recently I think only the strong survive is a great example, a really lengthy papers about how Bitcoin centralization compares to the lack of centralization in different cryptocurrencies.

But again, It doesn't really get to the inherent divide here so much, because I think that one of the issues with us is still that from the cryptocurrency agnostic crowd right there, there are still, the way that [00:43:00] the cryptocurrency market functions appears to at least give these, so you're saying okay, Bitcoin is the most decentralized. The cryptocurrency agnostic argument to that is to look at the cryptocurrency market itself and say, okay your opinion isn't valid because clearly the market is validating it. Clearly the market has given some values of this product. And I think that's where it gets easy to refute these kinds of arguments where if you're someone who's biased generally to the fact that the cryptocurrency market is providing you with usable data, I think you're going to end up disagreeing with that argument.

Because it's not a matter of whether the arguments are true, it's a matter of framing, right? If you fundamentally believe that the cryptocurrency market is valuing projects and giving you some meaningful data about those projects, that you're going to listen to argument that Bitcoiners are going to make about network decentralization and you're going to weigh it against this other thing.

Where I think one of the interesting things for me when I'm trying to just parse out, [00:44:00] okay, what is it the Bitcoin maximalist believe and what is it that cryptocurrency agnostics believe? And just thinking about them as two different sets, right?

For Bitcoin people. And again, I'm curious to hear what you think of this claim. I think that for us, the definition of a neutral non-state monetary system, it exists within the domains of economics and computer science. It's not something that we look to the cryptocurrency market to validate.

We're not looking at websites like CoinMarketCap or Massari everyday and gaining some sort of understanding from it about our performance. In most cases we're completely discarding that information, but again, going back to the original part of this argument, I think when we're making arguments for Bitcoin maximalism, we do have to be conscious of this framing because I think in some respects no matter how well we can debate some arguments they're going to be discarded from people who are coming from this neutral perspective because again, a problem of lens, the problem with framing which is why I continue to go back to this idea of, I think Bitcoin maximalists, we've been very successful on the user rights [00:45:00] argument.

That does seem something that is innately appealing to people because it's very hard to be against people's rights and freedoms. It's a very unpopular position to take and in the case of journalism, the inherent claim of most journalists is that they're supposed to be biased towards human rights and freedom.

So I think the question that asks to these sort of groups who have become disengaged by these arguments. Again, that's not that they're wrong, and argument can be both a hundred percent correct and not appealing to someone. I think that's the case when some of these arguments about how decentralized Bitcoin is.

It's not that Bitcoin isn't the most decentralized, it is. But I think you have to take another step to bend that framing to the person. It is the most decentralized, therefore it is the best at ensuring user rights and therefore all these other systems are actually systems that offer people weaker user rights that actually don't protect those freedoms.

So therefore it's not neutral for you to hold your position that these other systems are competing against Bitcoin or that are good for whatever reason, they're just inherently different from this perspective. So again, I always go back to it from this lens perspective, [00:46:00] because again, speaking for myself, I was a member of the journalists class.

I understand how that group looks at things and I understand how they can be dismissive of things. And you know, I think it's just safe to say at this point that the arguments we're making, they're not penetrating very well and for whatever reason. It doesn't mean we can both be right and unsuccessful at making a case to somebody, I think is my point.

I think what the intent of this article was to take some of these arguments that I do think are very correct, but maybe just reframe them in a certain way. Because I don't think that the argument that Bitcoin is the most essential as other cryptocurrencies mostly run on AWS.

I think that argument can be a little bit complex, whereas Bitcoin is most decentralized. You have the most freedoms, your freedoms are absolutely guaranteed. And then every other cryptocurrency, your freedoms are actually subject to what your peers are, what this market or what these the small group of people think.

I think they're both inherently true for the same reasons. It's just, one [00:47:00] goes that extra step of saying here's why this actually matters to you. And I think that you know, I don't know, that's something that I wanted to point out in putting forward this argument is that I do think Bitcoin maximalists and I think Udi Wertheimer has done a lot of criticism recently of Bitcoin maximalism, some popular, some not, has been cognizant of this as well. I think we should always be trying to make our arguments better because our argumentation I think is important.

We can be right and maybe time will prove us right. And maybe none of this matters, but I don't know. It's still an exercise that I like to aspire to.

Saifedean Ammous: Yeah. I think the way that I usually present this issue of decentralization is more in agreement with what you said in that, the way I put it as that with Bitcoin, Bitcoin only has users. Bitcoin has only had the user since Satoshi disappeared and Satoshi's been gone for more than 10 years now. And that's perhaps a good [00:48:00] segue into the other piece of yours that we wanted to discuss. So Satoshi has been gone for 10 years and Bitcoin throughout those 10 years has continuously repeatedly, successfully caused massive emotional damage to people who thought they could hard fork it or change it.

It's just been an absolute wonder to watch as one ego after another shatter, like a little flimsy boat made out of little wooden sticks on massive rocky shores with heavy waves, smashing it into pieces.

This is what we've been seeing and of course the most notable and the most important one is in November, 2017. I think this is really the point that explains the difference. And you know, this isn't a popularity contest and I'm not out here to get points. And as you said, I don't care about [00:49:00] what happens on CoinMarketCap or what shitcoin Twitter is saying and what shitcoin influencers, what they think is cool in their local coin of the week competitions. Ultimately I think the real thing is, what really matters and I think this is what you see has been a message that has penetrated very successfully withextremely successful investors in the high net worth individuals, people like Paul Tudor Jones, Bill Miller, Michael Saylor obviously, Ross Stevens, they get this point and this is why they can go to their staff and to their investors and to their boards and to tell them Bitcoin is a technology.

It is not a company. We're not investing in a small team of [00:50:00] weirdos, we're investing in a protocol and a software. And we know that because as I was saying earlier, 2017, when we had the SegWit2x hard fork attempt, and I think this is an enormously important chapter in Bitcoin's history, the block size war.

We could argue about technical specifications as you said, and numerical metrics but all of that stuff is like arguing about whose ship is better when we're all docked at port. Doesn't matter. We can argue about whose paint job is nicer and whose aerodynamic design is slicker, but at the end of the day, when the storm comes, that's what matters. Can your boat survive the storm?

And Bitcoin has been through the storm. Now, the other altcoins have not even, well a lot of them have been through their own story. And I think this is the kind of thing that a lot of shitcoin apologists miss, which is there's 10,000 shit coins. And so if you pick the [00:51:00] best performing ones, you can find periods where the best performance have beaten Bitcoin, but for the vast majority of shitcoin investors, the money lost in BitConnect and Auroracoin and all these failed projects and all the Ponzi schemes.

That's what a lot of money has been lost and the people who lost that money don't go on social media and talk about it. They've moved on with their lives, or they're too ashamed to mention it. You know, when the storm comes, when the team in charge wants to take control, with BitConnect we saw what happened, and then one day they just printed a whole bunch of tokens, sent it to the exchange, cashed out.

And the coin went practically to zero and everybody who was holding the coin was left with nothing. With Bitcoin, they didn't even try and print new tokens. All of they did was try and change the the block size. And we had the manufacturer of the majority [00:52:00] of the hash rate, we had the majority of the hash rate, the owners of the majority of the hash rate, the mining pools, the majority of the mining pools.

We had basically all the biggest Bitcoin businesses, or at least the vast majority of big Bitcoin businesses. Exchanges, almost all major Bitcoin exchanges internationally in China, back when we had exchanges in China. China and Europe and the U.S., all of them got together, a lot of core developers, a lot of the most important developers and public figures of Bitcoin, Gavin Anderson in 2015 or 2014, I think it was the financial times that said something along the lines that he's arguably even more important for Bitcoin than Satoshi Nakamoto.

And for a while in 2013, 14, 15, this was a pretty common take. If the responsible people who are neutral on these issues understood and accepted that Gavin Anderson was more important than Satoshi. And Gavin Anderson was lined up behind SegWit2X.

Roger Ver, one of [00:53:00] the earliest Bitcoiners, Bitcoin Jesus. He was also behind it and he had a massive support of people behind him, and yet all of those people failed to change the consensus parameters. And this is where it's different. So this is why there's a very different quality of the money that goes into Bitcoin and goes into shitcoins.

With Bitcoin you see serious investors and serious institutional money coming in, with shitcoins you have people who are gambling essentially and they're looking to make a quick buck. You don't have people doing proper due diligence and Institutional investors that have arrived at the conclusion that, putting all this money in multi-billion dollar project that's run by a bunch of coders with no experience with finance or with even running successful coding projects is a good idea.

And the reason is [00:54:00] ultimately, as I was saying earlier with Bitcoin, everybody is a user with altcoins. You're a user and there's an admin and the admin is, they can do anything. Think of the model of Google or Amazon or Facebook. You're a user of Facebook, but there are admins and you cross the line, there are several lines and the lines keep increasing now, usually when you do something wrong on Facebook, you get removed from the platform. That's it, you can't use Facebook anymore. It's like that with Amazon, it's like that with Google, it's like that with altcoins to an extent. We've seen many altcoins do things like this over the years.

They'll reverse the blockchain as they famously did during the DAO hack. So they'll reverse the blockchain in order to stop you from using it according to the criteria that are there. And I think that's the [00:55:00] test of the question of decentralization in a way that is practical.

Pete Rizzo: Why do you mention that? Certainly part of my work is doing archival research on some of the events in Bitcoin history and I'm glad you mentioned the fork wars, cause that's where my own journey towards Bitcoin maximalism started. I was a journalist confronted with you know, the sort of warring groups between Bitcoin, right?

Everyone had different ideas of what Bitcoin should be. A couple of points that I would comment on that, one is that this is just evidence of how influential your work has been. I think back then, there wasn't really that much understanding of the economics of Bitcoin, right?

It was still early. We had only been through sort of one halving and I think a lot of the developers and people in Bitcoin certainly now benefit from a hindsight that didn't exist then. You had a lot of people who were approaching Bitcoin as a technology. And they saw Bitcoin as being something that was fundamentally benefiting from their human efforts [00:56:00] rather than the quality of the programming.

So I think you mentioned in the story that I did on looking into what happened when Satoshi disappeared. I think that was an attempt to look at, okay, what do we actually know about how Satoshi ran the projects? What can we infer from his time as a maintainer? How did user attitudes towards him switch over time and how did developer attitudes change.

Ultimately, I was able to get a lot out of that because you were able to see that even in Satoshi's time there was a growing understanding that there shouldn't be someone in charge, that users controlled the protocol and ultimately towards the end of the article it sort of ends with Satoshi was challenged during his own time as maintainer, right?

He did decide to take actions that were met with critical user feedback and in a few instances even, or in one particular instance there was even an actual attempt to reverse one of those changes. So I think you know, if you look at the Bitcoin users, Bitcoin users were early on really quick [00:57:00] to identify that this was a tool for managing their rights.

Against all others, including the people who were pushing out the code. There were some interesting comments from that time in that article that dig out where people really did see themselves as being in charge of Bitcoin and Satoshi as being secondary up until the point where I really think that towards the end of Satoshi's time on the project, there was a clamoring to move beyond him.

Because I think that the users collectively were keen to exercise their power and to do different things and do new things and to move beyond what even he thought was possible. But yes, I think you're right, that does end up metastasizing in different groups of people who didn't maybe have the backgrounds and specialties to leave this project.

You know, that sentiment then spilled out into other cryptocurrencies. You mentioned the DAO fork, the hard fork of Ethereum cryptocurrency. Again, something that I think a lot of proponents of alternative cryptocurrencies will try to sweep under the rug but a very formative [00:58:00] time in the history of not just Bitcoin but all cryptocurrencies. This was an incident where, you had a group of developers that again you know, agreed to ask the community, whether it was okay to rescind the rights of a user, so in the DAO hack example an individual used the smart contract, that smart contract happened to contain a massive amount of Ethereum that a lot of big people owned.

And there was such a clamor that eventually the developers were asked, should we change the protocol to undo this act. And I think even then, if I remember at the time, a lot of the discussion there wasn't like a weighting that I would put on the framing of that at that time.

There was a lot about, well what does the market want? What do people want? And there was very little discussion about, okay, is it ever okay for someone to invalidate someone else's rights? And I think that's how the Bitcoin community largely looked at that schism. So you can go back to the DAO fork and see that the Ethereum community thought that this was a [00:59:00] test that they could put to the market, they said okay, this individual acted badly, let's ask the market to decide whether or not he should still have access to his money.

The market decided to rescind that right. Within Bitcoin, I think there was a strong recognition again of this moral hazard, right? If you ultimately put the market in such a place where it's going to adjudicate user rights, are you actually providing a mathematical guarantee? So I think out of that, you have some interesting formative arguments developed for Bitcoin. A couple that I think that are interesting, they're put forward by Adam Back, one is that Bitcoin is a mathematical guarantee, the other one is that Bitcoin is apolitical money.

It is money where you can not be coerced by anyone in order to lose that money. And then even on top of that, any grouping of political actors shouldn't be able to then force you to do anything. So I think you get out of that whole period bringing it back to the theme of this conversation with user rights.

I think within Bitcoin, [01:00:00] the only way that I can articulate is I think you have the right to dissent in Bitcoin. In Bitcoin you have the right to reject a decision that the majority wants to enforce. In Bitcoin it's still possible for you to build coalitions. And in some way, I think resemble political actors, right?

So a good example would be the most recent software for Bitcoin that is up and coming, taproot. Many Bitcoiners want those advantages, many Bitcoiners want to use those additional smart contracting features. They were able to build a lot of support for that. Ultimately that support was put a flag in the software about whether people should update it to that new code.

Yet we still live in a time in Bitcoin where if you're a part of the minority that wants to not use taproot, no one is forcing you. Your Bitcoin will still be Bitcoin. There is no decision that you can make within Bitcoin where you will not have access to your money anymore. Most other cryptocurrencies again, going back to the historical examples look at that situation and they believe that is okay and those conditions where you [01:01:00] do not want to be forced by the majority, for you to then lose your rights.

But I think the way that you would articulate is that they forced you to appeal to the market for rights. In the instance of the DAO fork, what happened was, someone's rights were invalidated.

They appealed to the market and said, I'd like to continue having my money, Ethereum Classic was born, right? A whole market activity had to come together to support another network with these user rights. So I think you end up with a question that I would get at, which is in other cryptocurrencies, if you don't have the right to dissent, if you don't have that right, what is the outcome?

The outcome is that if you do dissent, you are punished. There is a cost imposed on you as a human being, continuing to have your rights. And again, I think this is a really crucial distinction because in Bitcoin, we do seem to have this right to dissent. And so as much as we want to praise technical upgrades like segwit or taproot, I think we have to even more broadly celebrate that within Bitcoin.

You still have the right not to use those [01:02:00] features if you don't want to. And I think that is a feature that we only see in Bitcoin and almost doesn't exist anywhere else in the cryptocurrency community.

Saifedean Ammous: Absolutely. And I think this touches on a deeper philosophical and political point that you mentioned in your article, which is that altcoins are essentially majority of hold whereas I would say Bitcoin is consensual. Bitcoin is based on consent. You download the software client and you buy the coins and you move them to your address on if you'll excuse the expression, that's not exactly how Bitcoin works but as a figure of speech, you buy the coins and you download the code and that's it.

That's your node that these are your coins and that network will be there and we have very strong certainty that nobody can force you to do anything you don't want to. There are people who have held Bitcoin for 10 years, 10 years ago they bought it. They put it on a wallet and in [01:03:00] 10 years the coins are still there.

They're still working and you come out 20 years later from your coma, the coins will still be there. And the consensus parameters will be there. This for me is what makes Bitcoin interesting because without this, you're just running a private database. You're playing with pretend coins on somebody else's database.

And I think the reason why this really makes no sense, why the coins only really offer seniorage is that in the digital world, the marginal cost of making an extra unit of money is zero. If you can hard fork a digital currency, you can 10x the supply with one line of code.

We made a hard fork and whoops, we don't have 21 million Bitcoins, now [01:04:00] we have 210 million Bitcoins and 180 million of these are in my wallet and the wallet of my friends who helped me run this decentralized system. The entire value can disappear.

And if you don't have this guarantee of immutability, then you don't have anything. You just have a wild, speculative bubble at a time of very easy money. At a time when lumber prices can shoot up, the price of everything is going up and everybody's speculating and GameStop and Robinhood and all that stuff.

You have these speculative bubbles blowing up, but in the long run, they're built on very flimsy foundations. But I don't begrudge anybody the chance to go and dabble. They can knock themselves out. [01:05:00]

Pete Rizzo: I think I've been trying to rephrase, it's interesting because you're saying that the seniorage arguments of it's just easy to print money, I think the way that I would maybe try to articulate that a bit differently is that I think within Bitcoin you have the right to a known money supply, you have the rights to a predictable issuance of that supply and you have the right to compete for that issuance.

And I think again, that's taking an economic argument and flipping on its head a little bit where, okay if you look at the Bitcoin list of rights, you've got the irrevocable right to money, you have this right to dissent from the majority. Now it's you have the right to a known money supply. You have the righ to predictable issuance, you have a right to compete to that issue. And then you look at the other cryptocurrencies and say, okay do they offer irrevocable right to money?

I would argue, as you alluded to, because they function via hard fork and political decree essentially no. Do they offer a right to a dissent? No, again for the reasons you just explained and do they offer the right to have known money supply, predictable issue and for [01:06:00] you to compete for that issuance? I think also, no.

But I think, again, that argument maybe speaks a little bit to the impact of the user, right? If you have a choice to join a system where you know the money supply, you know the issuance, you know that you can compete for it, if you want. There might be a cost, but you can. Are you going to join that system or are you going to go join a system where you don't have the right to know the money supply, you don't have the right to the issuance, that is also subject to political change, right?

The money supply and the issuance and your ability to compete for that issuance might also be subject to political change. So I think that's a way to maybe flip it on its head and say one of the qualities of these cryptocurrencies other than Bitcoin seems to be that they function by this.

And again, this is why I say it's obfuscated, because they claim to be decentralized but when you look at the decision making process, it functions via building political coalition. At the very least it has to function that way because again, some [01:07:00] thing has to be deciding on these decisions.

And the more there is a decision to be made, the more there is an influence on that process of the decision, which again is what sort of gives rise to that theme that we're talking about here, which is that other cryptocurrencies one, seem to be inherently political, but two, because they're inherently political, they're less able to confidently secure user rights. I don't know how you would make the argument that they actually do that.

And if they don't do that, how are they not different than Bitcoin? I think that's back to where we started, where it's getting rid of this neutrality argument. If they are cleanly and clearly different from the subject of the users, we're entering the systems, we need to stop considering them as being the same thing.

And I think most Bitcoiners, I think would agree that, I want to see Bitcoin taken out of this [01:08:00] neutrality argument here where things are just seen as this this crypto asset class market, all these crypto assets are the same.

And I think that's maybe how we chip away at it.

Saifedean Ammous: Yeah, that's a good point. Now I wanted to talk a little bit more about your work on Satoshi. What are your perspectives on Satoshi? You've studied closely his writings. So when you think of his contribution to Bitcoin and in particular, I'm curious about one aspect of things, this might be a little bit of an unpopular opinion I have, which is probably Satoshi was maybe not necessarily looking to build the Bitcoin that we have today.

I think in my mind and I think that a lot of the people that [01:09:00] sympathize with my views on Bitcoin would like to think that Satoshi was some Austrian economics nerd who had studied money and gold for many years and then went out and built an alternative for gold.

And while I think there's definitely an element of libertarian thought in his ideas that he does have an element of being anti-government and being for freedom. It occurs to me that the Austrian aspect of Satoshi's design was the product of good engineering, rather than familiarity with Austrian economics.

In other words, he built a money that somebody like Rothbard would have approved of, not because he read Rothbard and he wanted to build the perfect money, but because he was a very smart engineer who [01:10:00] looked at the issue of money and tried to figure out a design for how to make this thing work. And you know, it clearly made sense to him as any engineer would, that you don't need more tokens.

You don't need a token supply to continue to increase indefinitely. And in fact, it's more desirable for the supply to be fixed so that the network can have full auditability of all transactions so that we can know that nobody is cheating. And so even though I should probably be trying to talk up the other aspect of him, trying to portray him as just another hero Austrian economist like me who was out there to save the world.

I think, no he's not an Austrian economist. He's a coder, he's a programmer, he may have had a functional need for Bitcoin [01:11:00] for his business or whatever. But the kind of design parameters that he arrived at, I don't think they were motivated by a very thorough study of economics.

And as much as he arrived at the correct principles because he just thought about it from first principles.

Pete Rizzo: Yeah, that's a great question. I did spend a lot of time earlier last year just sort of diving into these Satoshi archives for the piece that I wrote on the 10th anniversary of his disappearance.

And I do think it's important to take a look at what we can know of Satoshi. Because there are certainly many things that we cannot know about Satoshi. To me, I've always wanted to strive to understand the things we can know. So I'd say first off there are some very remarkable things about Satoshi generally that probably don't get enough discussion.

One that I think first off, and I think this is something that I've really only gained an appreciation with time, it's really crazy that Satoshi never priced or sold Bitcoin. That these [01:12:00] were pre-market activities that sort of were encouraged as part of the system, but that he never personally did that. We actually only know of maybe one or two transactions that he ever sent with individuals. But again, I think the fact that he let the economy emerge organically is a real testament of will. Because I think one of the things that's interesting is you look at the first year of the Bitcoin project, there really isn't a lot that happens, right?

Satoshi releases a software on a forum mailing list. There's some initial excitement, but there's this really dead period in 2009, where you can look at the transactions day by day, you could go whole months where the number of days is larger than the number of transactions in that entire month.

So the Bitcoin network immediately is not a roaring success. But Satoshi is interesting because I think you can also look at him as an entrepreneur, right? Satoshi was willing and interested in doing things to promote Bitcoin and therefore he had to take different ads to the project.

So one of the things that he does is really formative at the beginning, he builds [01:13:00] the Bitcoin forums. He builds a place for people to talk about Bitcoin. And this is where I think a lot of the activity really starts where once people get together, they understand the idea, they start to price and trade Bitcoin and develop the Bitcoin economy.

That is a result of Satoshi. But I think it's interesting again, that he chose to let that happen organically. So I think that's one thing that I would say for him initially, is that really, that first period is I think, 1. remarkable for just sheer perseverance, right? Just the fact that he knew that he had created this thing.

And I think that's the other thing you can look at his early writings, especially his comments on the P2P foundation forum, he understands Bitcoin as an alternative to a central bank. You may not say it in those best words, but he appears extremely confident in the system. And I think in a lot of respects, knows that it should work.

So I think for someone to have the patience and resolve to wait an entire year before any other human being prices the currency that you've created, shows a lot of confidence, right? You have to have a lot of willpower. I [01:14:00] know that even as someone who creates things, you publish something online, you want that response from people.

If it doesn't come, you might go in your hole and just do the next thing. But Satoshi did endure through a lot of period where you would say that Bitcoin was not an overwhelming success. Yes, the network had hash rate, people were mining clients, but in a lot of respects, it was a nothing there.

There wasn't too much going on. So I think that's the first part I can say about Satoshi. I think the second part that you're absolutely right on is that I don't think Satoshi was an Austrian economist.

I think that he arrived at the design for Bitcoin through an engineering need. And I think that in a lot of respects, I think another thing that you said that's very true is that I don't think the Bitcoin that we have today, I don't view as being entirely the product is Satoshi. So one of the things that I'm really interested in exploring from my archival research is this question of how does Bitcoin become Bitcoin?

Certainly a large portion of that is owed to Satoshi but I do think he [01:15:00] leaves the other developers with really important unanswered questions without which us having an answer, Bitcoin could have ended up radically different in how it was constructed. So I think one of the things that you can look at through this article and its traces is Satoshi's more non-traditional outlooks and behaviors.

Things that Satoshi does today that we probably would have thought would be odd or behavior that we wouldn't necessarily encourage. He does over a period in 2010, starts to open up the project development. More people begin to collaborate with him and then what happens is that there's essentially this big exploitation of the code, right?

There's someone who figures out how to subvert his coding and print a bunch of Bitcoins in the blockchain. He ultimately rolls back that change. But he really becomes someone who, you can look at the later period of Satoshi, who moves very quickly to enact things unilaterally. Maybe without the sort of [01:16:00] review and the process that we have today. If I was to, going back to the theme of user rights in this conversation, go back to that kind of standpoint, I would say that today we accept that everybody within the Bitcoin system has the right to review and propose code.

And in Satoshi's time I'm not sure that was true. Satoshi oftentimes didn't publish his code for review and to the extent that he needed to users upgrade would just push that code unilaterally. So I don't think that Satoshi was quite aware of the moral hazard of him. I don't think he understood maybe as much as later users that there was, I posed this question as at the standpoint where Satoshi creates Bitcoin, does it really exist? Can a single human being create a decentralized money? Is that possible or is it an inherent contradiction?

And I think it is inherent contradiction at the point that Satoshi is the only Bitcoin user, I don't think Bitcoin actually exists. It can't because it's not decentralized. So I think with Satoshi, [01:17:00] you sort of have the sense of, I don't know how much Satoshi was cognizant of his own authority, so therefore he never really leaves behind a blueprint, I think, of how Bitcoin should be managed and then how Bitcoin should be upgraded into the future. Because again, he is someone who shows that he wants to take, because again with an open-source software this was generally how open source projects were managed.

They had a strong sort of maintainer dictator who was able to move unilaterally because he was viewed as the owner of the product, or the project. In Bitcoin obviously, that relationship undermines the value proposition of Bitcoin, because you can't have someone who owns that project.

Bitcoin is supposed to be a neutral monetary system, right? The fact that there is a individual person who can exert that much authority is an inherent moral hazard. So I think because of that, Satoshi is someone we can only really look to for so much, because I don't think Satoshi ever really figured out how Bitcoin would exist [01:18:00] beyond him.

And I think to the extent that, if you could look at it as time as developer, I think that he shows a weakness in understanding these types of changes, right? The classic example would be in response to the question, so one of the developers poses a question and says what if we do want to increase the block size?

And I don't think he's even advocating for it at that point, he's just saying okay, what if we have a change that's incompatible with consensus, what do we want to do with that? And Satoshi is like, oh we can always upgrade it later if we need to. So he leaves these sort of passages where he is deliberately vague.

And I think you actually have to look at that as a deliberately vague answer, because Satoshi is so specific, right?He's not someone who, as I'm doing in this response, leaves a lot of words about what he's doing. He's oftentimes very succinct and to the point. I guess I would say to the whole of the conversation, I think yes, Satoshi is someone who is very important to Bitcoin. I don't think he is someone I consider as Bitcoin's [01:19:00] full creator. I do think there were a lot of other participants to completing Bitcoin. I think a lot of respects, he left a very unfinished product, partly because I don't think he ever really had to consider his relationship with the thing itself.

And that, as time goes on, becomes the most problematic part. And I think a lot of other cryptocurrencies, they attracted people who were less keen to think about that process and the inherent moral hazards that came from having someone who had authority over the products.

Saifedean Ammous: Yeah. I think I generally agree with you on on a few things, but I see it a little bit differently slightly in that, I think no, I think because as I mentioned earlier, that his software implementation is still compatible today, so I think the Bitcoin that we have is Satoshi's Bitcoin. Where I think it has grown into something different from Satoshi's Bitcoin is in the [01:20:00] social aspect of it and the way that it is used.

In other words, the knife is still a knife, but it used to be used say for fighting, now people use it for cooking as well. So I think it is still the same Bitcoin, but I think what I was trying to get at, in my opinion is similar to what you arriving at.

I think the second most important thing Satoshi did for Bitcoin was his disappearance. He invented Bitcoin that's number one, number two was that he disappeared. And I think it's not so much that it was Satoshi's genius that made Bitcoin decentralized or a specific plan of his, I think it was his disappearance.

And I struggle to think that he just disappeared voluntarily. I think he is probably dead or incapacitated in some way and unable to join and participate in the network. Whatever the situation is, [01:21:00] I think that the cherry on top, more than just the cherry on top, like the magic sauce that makes Bitcoin work, the glue that holds the puzzle pieces together on the wall is the fact that Satoshi disappeared and then Bitcoin basically had to grow.

I made a famous metaphor in a talk once that went viral, which is Bitcoin was like Tarzan thrown in the jungle as a kid. Most likely not going to survive without adult supervision, but if it does survive, it's going to be a very strong monster. So I think it was his disappearance really that gave us the decentralized Bitcoin.

And I think if he had stuck around, I don't think he would have resisted the temptation to become the single point of failure in one way or the other. He would have been a centralizing authority, I don't think he would have resisted the temptation [01:22:00] and would have been able to resist because the ring of power was there and he was still there.

He would have been able to wear it. And he would have been able to, as you were saying, he did have some kind of executive personality. He wanted shit done in Bitcoin, so he would code it and he would put it out and he would change it. And I can imagine if he'd stuck around for another 10 years.

Think about all of the things that have come at Bitcoin, think about all the ideas and all the suggestions. I don't think if he'd stuck around, he would have done as good a job. He could've possibly resisted the siren song of interventionism as well as he has by disappear. And I don't know why he's disappeared or how, or who he is obviously.

But I think the disappearance is really the magic ingredient which no altcoin can recreate. You know, this is really the thing that And gave [01:23:00] Bitcoin this supernatural decentralization. And it's something that we've seen in action. We've seen Tarzan go into the jungle 10 years ago.

Here he is 10 years later, thriving, strong, happy, healthy. So he's survived 10 years of the jungle, and we know that his caretakers is not here. So I don't think any altcoin can recreate that.

Pete Rizzo: Yeah, I think it's tempting to describe moral consequences to action. But I think the tough thing about that is you really don't know what Satoshi's motivation was.

I think that's the interesting thing about Satoshi, the myth. Satoshi becomes this thing that we can ascribe all these different qualities to. So you have the idea of, if you're a child is growing up without a father, you're going to have, when you're younger these visions of Satoshi, as oh, my father must be out in Africa.

He must be helping all these people there, there's gotta be some reason that he's not [01:24:00] with me. He's this person of supreme moral consequence. So I don't know. I think it's a little bit tempting to see Satoshi in that favorable light which is one of the reasons why I've tried to go to the text and see what I can dig out.

And I think you're right. He did make the action, right? So you can also, while attempting to ascribe moral consequences to that action, actions can have moral consequences. In this case I think he did divorce himself from the power of the project. I don't know if it's totally true that he had the same attitudes towards user rights and freedoms that we had. Again, because he showed over the course of him being the maintainer that he was willing to act unilaterally, that he's supported positions, seemingly, that would act like that.

He encouraged other developers to come and take his place when he left. And I think that there's this one change towards the end of his tenure, it's an obscure kind of thing in Bitcoin history, but it's called IsStandard, right? So it's essentially this proposal that he enacts that just [01:25:00] disables.

So originally within Bitcoin, you had the right to accept any type of transaction. So today we're soft working in taproot. We're soft working in this new transaction type. Originally, there was no restrictions on transaction types. Satoshi seems to have assumed the transaction type just spontaneously emerged in the market and then the node operators would have made independent decisions to accept those transactions if they were economically consequential to them.

So again, why this is kind of an interesting thing to look at is, originally in Bitcoin, we have this idea that seemingly all the nodes can accept any type of transactions and any person who wants to create any type of transaction can also do that as long as it's economically viable. Kind of interesting.

And then when faced with the security problems that Bitcoin might face, right? This is a huge attack vector. If people can just create arbitrary type new types of transactions, that can lead to all types of extreme negative security consequences, and faced with the option to rescind this user freedom he does rescind this freedom.

So he actually an access policy [01:26:00] rule called IsStandard which again, restricts which transaction types we can arrive at, which is today why we need something like taproot. We need the developers to actually propose code that makes it okay for us to have a new transaction type. So does that give us maybe more color on Satoshi as someone in his thoughts?

I would argue yes. Because I think that from that decision, you can look at and see his reaction to what did he think of user rights and freedoms? To what extent did he prioritize security over those rights and freedoms? He seems to have made a decision prior to his departure that meets that criteria.

Therefore, maybe he isn't someone who was as biased towards free market, type activities as we would have thought. Maybe he was more willing to make sacrifices so that Bitcoin could endure and still be widely used. I think it's more interesting to think of Satoshi as somebody who had to make those [01:27:00] trade-offs. Because he was in a position where he did have to look at those decisions and we can look at the decisions that he made.

And again, I don't think that makes Satoshi good or bad, I think there is Satoshi, the maintainer that we can look at, we can evaluate his choices. I think to the extent that is something that we can do, I think we should do that, because I think it will make us more sympathetic of these things generally.

Was it possible for Satoshi not to understand things as well as we do today? I think, yes. That said, was he also a human being who, I've said this before, Bitcoin is a tremendous critique of the world. Like even whatever it is on the technology level, to know you as a human being are going to depart this planet having made Bitcoin, you have made a system that is going to dramatically reshape most human constructs. Great job!

So I think you can believe that and then also be critical or want to study his individual choices and then [01:28:00] have some nuanced view of them. Anyway, I support a nuanced Satoshi, I think is my opinion.

Saifedean Ammous: Yeah and that's what I'm getting at. I think time likely adds a nice sheen on actions that turn out nicely.

But I think perhaps in retrospect, what I'm trying to get at is that I don't think Bitcoin would have been this kind of anarchist, decentralized, immutable, users only, Austrian economics hard money, purely voluntary system had he been around. Not as a critique of him just as a critique of human beings, because we have no track record of human beings successfully managing to successfully run something while at the same time not placing themselves in charge. It's an impossible balancing act.

And I think [01:29:00] maybe it's a divine providence, maybe it's sheer luck. I think it was maybe his disappearance, and if he did do it then yeah, it would have been the most genius move. But I struggle to think that this was deliberate.

I think the Bitcoin that we have is different from the Bitcoin that Satoshi built in one main way which is that Satoshi is not here and that's maybe the most important magical sauce in this ingredient.

Pete Rizzo: I guess the only thing I would push back on that a little bit is that I do think this like rights management part is important, right? Satoshi didn't really leave a way, a very clear way for it.

Bitcoin needed to have some way to manage the threat of authority, if not authority itself. And this is where I do think that, and you saw this with the fork wars, the fork wars were essentially a huge drama about how Bitcoin should be managed, how [01:30:00] developers should enact technical changes and how those technical changes should be made with respect to user rights.

And again, I think the fact that Satoshi is so absent from that debate and that his, again, if you look at his record as a developer maintainer it's so unclear what his attitude was towards those things. This is where I would say I actually have a strong opinion on this, where I do think you have to view him as someone who didn't contribute to that.

And if he wasn't the central contributor to that, then I think the people who did put in place the structure we have, right? So Bitcoin is the only cryptocurrency where today it's designed in such a way where you have the right to dissent from the majority, that is like a profound difference.

And it's one that Bitcoin almost didn't achieve because there was so much political pressure for it to squash that right. So again, I've used Satoshi as someone who again, was unhelpful in leaving behind solving what was one of the central mysteries [01:31:00] of Bitcoin, which is how can a system be truly decentralized when it does have existing authority structures or benefits from authority structures that help propagate it.

And because of that, I think I'm more willing to say that, and this is viewed from the prism of the fork wars, where again, I think we really did come close to seeing Bitcoin become something different. I don't even know if that's the right way to phrase it, there was so much disagreement at that time.

And again, he was such an absent person from that debate just in that nothing that he had provided really added to it, other than his absence. I don't know. It's tough. You can argue it in all sorts of different ways. I think I ultimately come to thinking that the way we manage upgrades within Bitcoin is so different than the rest of the cryptocurrencies use.

The way that upgrade process ensures user rights is so different than other cryptocurrencies. And since Satoshi wasn't a principal participant in that I think he is [01:32:00] probably one of other contributors who I would say created Bitcoin. I think Bitcoin was created through a process of understanding that. I don't know if Bitcoin was completed by him.

Saifedean Ammous: Would you like to specify a few of these you think that contributed to this? Or would you rather leave them nameless? It's up to you.

Pete Rizzo: Yeah sure, happy to. So I can list people who I think that I've dug through the archives and think have interesting places within history. I think Greg Maxwell was one that I think contributed pretty greatly.

Adam Back I already referenced in this conversation. There are lesser people who aren't as well known, (???) is someone who's a really big contributor to Bitcoin intellectually. There's also Mircea Popescu who I wrote an obituary about.

Saifedean Ammous: Yeah, that was my next question.

Pete Rizzo: Has passed away earlier this year who I do think was really critical to this right to dissent for actually arguing, but then Bitcoin, the user needed to be able [01:33:00] to reject changes from the majority in order for Bitcoin to still be Bitcoin. I think Mircea is probably the most underrated, I think of anybody who contributed to Bitcoin. But I think that would be a short list.

This is something that through my work, I'm trying to approach the archives and identify people, but I'd say those four were a good cross section of all people who I think meaningfully contributed.

Saifedean Ammous: Yeah, well that's an excellent segue to my next question, which is Mircea Popescu. You were researching him before he passed away.

This is a Romanian Bitcoiner, early Bitcoiner who was pretty early into Bitcoin and built a bunch of Bitcoin companies and was living in Argentina or Costa Rica or between those two places and sadly this year earlier he was found drowned off the coast of Costa Rica.

Tell us a little bit more about him.

Pete Rizzo: Yeah, [01:34:00] fascinating character as I mentioned. I released periodically these sort of Bitcoin history type articles, my next piece that I'm working on is about the life of Mircea Popescu, he's a very interesting character within the Bitcoin history.

I think you can characterize in a lot of different ways. He's an early Bitcoin entrepreneur. He's someone who pushed the limits very early on of what could happen within Bitcoin financial products. He ran an exchange where, this was essentially a Bitcoin stock exchange.

And he becomes a prominent member during this period where it's funny to think about it now, but there was almost this sort of pseudo Bitcoin shitcoining type phase, where people were launching companies, they had whole stock exchanges, they were buying and selling shares of companies priced in Bitcoin.

They were batching these companies into ETF like products. There was, almost credit default type of products that were being sold on these things. So you have this amazing sort of period of financial innovation where Mircea emerges as someone who is unwilling to tolerate [01:35:00] scammers or people who don't meet his criteria for that.

So he emerged as someone who is willing to look out for the rights of users by making an exchange that's a bit harder to use. You needed to have a registered PGP key. You need to have a trust relationship with other members and it develops I think the social etiquette that has become really common in Bitcoin today.

We adopt more aggressive or assertive or acerbic attacks on scammers and use that to educate the public. So he was really formative in that. So early on with his exchange, both in how it was constructed it was a meaningful tell of what was going on at the time.

But also, in his social attitude, he did call out early projects like Ripple, which is now XRP and Bitcoin Savings & Trust, which was a huge Ponzi scheme that he rightfully identified as a Ponzi scheme that later collapsed. So again, he's really instrumental early on I think in establishing the social attitude. Later on he becomes probably the most prominent critic of [01:36:00] the Bitcoin coders, right?

So he launches an attack on Gavin Andresen was then the authority maintainer in the wake of Satoshi Nakamoto and really I think establishes this idea that it's okay to reject the authority of the developers. The developers were not some sort of best class who had this right to enact whatever changes that they wanted.

And I think again, he used this acerbic type attitudes to undermine their authority. To basically say, just because you're a developer doesn't give you any right over me, I have the ability to accept your code, my node gives me the ability to reject you.

And I think, during that period, he was pretty instrumental in a couple of things. One was this idea that the coin is sovereign, that by participating in Bitcoin, you were essentially using a financial system that is on par with other financial systems. And two, he was really early to see that you needed to run a node in order [01:37:00] to be a user of Bitcoin.

I think, during that period, there was a lot of struggle about who should be a user of Bitcoin, the same way that you know, did owning a web wallet make you a Bitcoin user, did having some Bitcoin on Coinbase make you a Bitcoin user? I think he was among the first people to see that no, you needed to actually run a node, you needed to be able to reject transactions, blocks, proposals from developers in order to exercise your sovereignty.

And I think through that period, he becomes a sort of a great villain of the early protocol days. And there are still to this day, there are developers who hate Mircea. They will not speak about Mircea. If you talk to them about Mircea, they will yell at you for bringing up Mircea.

They believe that he is not dead currently, that he possesses enough Bitcoin to raise an army, to take over small countries and that he is the worst person that you could ever think of and someone that they don't think kindly about financially empowering. I'll save the conclusion of that story, cause I think the third period is also interesting.[01:38:00]

He's a very interesting early thinker in Bitcoin in that, if you go back and you look at his writings, they were very iconoclastic at the time, very controversial and Bitcoin has certainly become more like he has described it. Bitcoiners, I would actually argue, have become more like him.

And I think because of that, he remains a somewhat controversial figure in history. But I don't think that makes him any less important. I do think he was important.

Saifedean Ammous: Yeah. I must say myself, he was enormously influential in my understanding of Bitcoin and I did thank him in The Bitcoin Standard.

And I think after his death that I was contemplating his work and I think when I was reading his stuff 2014, 2015, when I first came across him, it was very difficult to figure out what is actually going on there. His essays [01:39:00] are just...

Pete Rizzo: He's a terrible writer, which is the funniest part of that, because he's a very influential writer, but he's also terrible at writing.

He's like very laborious to read. There's like tons of references to other things, right? Yeah, he's just, hard to actually read.

Saifedean Ammous: Absolutely and I mean his essays are just enormous long diatribes with an enormous number of tangential references, obscure references to an endless number of films.

And it becomes very difficult to follow after a while because I do have better things to do than worry about 1980s Romanian pornography and how it explains Bitcoin. But if you do slug through, if you try and follow the references there's an enormous amount of value.

The more that I've been thinking about it, I think he was very instrumental, not just for me, for a [01:40:00] lot of people in clarifying this idea at Bitcoin, as you said if you run a Bitcoin node, that's it. You do what you want with your node, nobody can control you. And this, I think it was hugely important from a social perspective when people got to really understand and appreciate the value proposition of Bitcoin.

Because you know for somebody like me, up until I came across this weird character internet essentially proclaiming to be the emperor of Bitcoin and his only claim to power is that he's not going to change anything about his node while other people are going to change it. And him winning every time, that was what drove the point home for him.

I think Bitcoin was a curiosity for me and I didn't [01:41:00] quite get it and I didn't understand it. In my mind, Bitcoin was what shitcoins are up untill I read Mircea, I would say. Untill I read Popescu I thought Bitcoin was like what shit coins are like today. You've got a group of people and it's a group of programmers who are trying to reinvent money and it's just a matter of waiting for the inevitable accidental implosion to happen, accidental or non-accidental, or for the government to shut them down.

But when you hear people like Gavin Andresen and when you hear a lot of the early evangelists for Bitcoin, you will kind of get that feel. It feels a little bit like an activist project. If we're going to go and bring financial inclusion to people and we're going to be working on bringing down credit card fees, it sounds a little bit like a political campaign.[01:42:00]

And a lot of these evangelists have the attitude of let me explain to you why Bitcoin is great and we are going to need you to come and help us to make Bitcoin work. And Mircea has a completely opposite attitude of fuck you basically.

Fuck you and if you can run your own node and if you can go through all of these things, then maybe I can talk to you, but other than that, I have my own node that I'm sovereign. I have money that I can send all over the world, and I don't need to talk to any of the internet peasants.

And this kind of attitude, the idea that This was not a fun game, it was not a kind of political activism where a bunch of hippies are going to try and petition their way into introducing a fed substitute, that this is actually just [01:43:00] working technology that's out there. What this guy makes you realize in a very vivid sense because of his extremely shocking and aggressive and profoundly offensive style is yeah, it still works.

You can be the most politically incorrect asshole and it's not clear how much of what he was said, he used to say he actually meant, and how much of it was shock value. And I don't have strong opinions on that because my eyes just glaze over when he gets into these kinds of diatribes, but still the fact that he could, I think the most telling parts which you refer to is that in 2015, 16 and 17, as all these fork wars were happening, he basically by just continuing to post this regular bullshit on his blog, he basically won all of these wars against all the Bitcoin influencers and coders who had all compromised in many [01:44:00] ways.

In fact, if you look at all the early Bitcoiners, they were more or less all on board with SegWit2x. A lot of the early Bitcoiners, a lot of the influential Bitcoiners, whether it's the coders or obviously not all the coders, Greg Maxwell, Adam Back, but a lot of the entrepreneurs, a lot of the early hodlers you know, Roger Ver, a lot of those people, Gavin Andresen, they all went along with the SegWit2x.

And by any ordinary measure of power, popularity and traditional metrics of how things run in fiat world SegWit2x should have won and people like Mircea Popescu would have been left with nothing. And the fact that essentially his, one very interesting tidbit I think is that he had his own implementation.

He didn't use core software. He didn't use Bitcoin Core, use something he called The Bitcoin Foundation [01:45:00] client, which essentially,

Pete Rizzo: It's still maintained today actually.

Saifedean Ammous: Yeah, it's still maintained. It doesn't doesn't do SegWit, it doesn't do all sorts of things that Bitcoin Core does and he's been continuing to use this with little changes and his coins still work as well as anybody else.

I think for me personally, he was absolutely instrumental in understanding the fact that the big one is a technology. It's a technology where you are a user and everybody's a user and everybody's sovereign and there are no admins and we like to call it the cryharder, the underlying technology behind Bitcoin.

I think we could give Mircea Popescu credit for inventing cryharder as the underlying technology behind Bitcoin.

Pete Rizzo: Absolutely, and I think a lot of people who generally come from my disposition are anti Bitcoin toxicity. I happen to be a huge proponent of Bitcoin toxicity [01:46:00] as an ideology and movement.

I think Mircea Popescu's particular brand of it is probably the least explored and it's a sad thing because I think ultimately the cumulative impact of his work is that, I think Mircea, where he really celebrated was that you couldn't be disenfranchised in Bitcoin. I think that's what he really understood. And I think Bitcoin toxicity, as much as it's malignes this idea that you can be assertive, you can be aggressive, you can be offensive.

You can post pictures of pornography on your blog if you want. It was because you were part of a financial system where you could no longer be disenfranchised. And I think that Mircea, he attempts to invalidate Bitcoin on some level, right? I think he becomes a big bad for Bitcoin and he says okay, these people, I'm going to harass them, so they will want to destroy me.

And if they destroy me, they will destroy Bitcoin so therefore they can't. Did he go a bit power hungry in his celebration of not being able to be disenfranchised? [01:47:00] Probably. I think that's what makes Mircea's story so interesting. But, again, I just think that people have Bitcoin toxicity backwards.

I don't think they really understand where it comes from, because I do think ultimately it comes from the celebration that here within Bitcoin, this financial system, you have rights that no one can take away from. And I think that he maybe pushed that argument to the extreme, but certainly I think you can see just how influential that's become.

The people who have followed in his wake cited in your book and other places as well. To me, it's a foundational argument, it's a part of Bitcoin in that no one's been able to say otherwise, as you've noticed.

Saifedean Ammous: Yeah. And I think a lot of people come at this from a marketing perspective, wherein you know in fiat world, you have to put on a fake smile and tell people what they want to hear and get them to buy your stupid bullshit.

Because the vast majority of shit that people buy in fiat life is [01:48:00] unnecessary bullshit they really shouldn't be buying. So you need to go out of your way to market it for them. But in the case of Bitcoin, Bitcoin is not an iPhone. It's not a toy. It's not the toy that you want, it's the medicine that you need, as I like to say.

It's a lifeboat and lifeboats don't need marketing and people who run lifeboats, people who are responsible for lifeboats on cruise ships, they're not wasting their time on going around and telling people about how nice and inclusive and environmentally friendly the design of their lifeboats are. They know that if people need the lifeboats, they're going to jump on the lifeboat and their job is to just keep the lifeboats in good condition.

I think that there's something very deeply refreshing and honest about Bitcoin and about Bitcoiners that are just very upfront about this. [01:49:00] This is the difference between Bitcoiners and shitcoiners in that if you're into a shitcoin, you're promoting somebody's private project, you're promoting, somebody's pre mine.

You're promoting somebody who has an extremely high influence on the network and who can change the rules. But if you're into Bitcoin, you're promoting a neutral technology. You're telling people about something that can really benefit them, and that does not leave them beholden to anybody else.

And you know, I hate arguing on marketing people's terms because there's something far more important than whether a message is popular or not, which is truth. A lot of these a lot of these sophisticated shitcoin influencers who are constantly coming up with big brained takes about why we should be less toxic and why we should be more gentle.

It's like functioning on an entirely different level where in their mind, what is right is what is popular. There are people out there who don't think like that, [01:50:00] what is right is what is right and what is wrong is wrong and popularity can go fuck itself. So I think this is a character fault line between Bitcoiners and shitcoiners.

If you're the kind of person who thinks in terms of popularity are more likely to end up shitcoining then in Bitcoin. But the the reality is the people who go by popularity are the people who are loud about marketing. And they're generally the people who do in consequential bullshit things like marketing with my all due respect for anybody involved in marketing.

But the people that are actually out there for the truth, they're the Michael Saylors, they're the Paul Tudor Jones, they're the institutional allocators who are not going to care about all of these theoretical debates from an angle of [01:51:00] which one is nicer and which party is speaking nicer.

They're going to think about this boat when the storm hits, which is the best lifeboat when the storm hits? And it doesn't matter which lifeboat maker swears more, what matters is which life boat maker can make a boat that can get you to shore.

And that's really I think the point here, and I think it's such a pathetic display of weakness of character where people go around trying to police what other people are saying. Bitcoin is permissionless. You're not you do not sign a contract to behave by certain standards when you download the Bitcoin client or when you buy Bitcoin.

And you are not obliged to tell anybody anything that they expect to hear from you. If you are bothered by what somebody says, feel free to unfollow, mute, lock, ignore what they're saying, but I think there's something profoundly idiotic [01:52:00] and profoundly detestable about wanting to police what people say.

Going around and saying no no no no, we need Bitcoiners to stop saying this and they need to start saying that. There's no such thing as Bitcoiners. The vast majority of Bitcoiners aren't even on Twitter and there's no reason why you should be following or listening to people whose opinions you don't like or ideas you don't like.

The fact that there's such a concerted effort to try and police the way that Bitcoiners talk about Bitcoin, I think there's clearly an ulterior motive there, which is that you want to get Bitcoiners to become more accommodating and more accepting of Ponzi schemes.

Pete Rizzo: I think that's ultimately why the market of Bitcoiners has rejected that. I think how [01:53:00] I'd be more empathetic maybe to the cryptocurrency group is say that, I think that whole system appeals to them in the sense that it gives them, you can find the secret, you can figure out how to work this out, if the only you're intelligent enough only you're smart enough, if only you can build better than everyone else you alone can find the key.

And I think that's one interesting thing about the cryptocurrency system apart from Bitcoin. In Bitcoin you have to just accept the rules. I think that's what you've done well to articulate, Mircea did well to articulate unfortunately. You, by becoming subservient to Bitcoin by following the path of Bitcoin you can gain this greater freedom.

But I do think that comes at the cost of this other perspective, right? With the cryptocurrency class at large, where it does seem to offer this sort of great intellectual maze. I think the carrot at the center of that is an appeal to the person's own intelligence and excellence, right?

Because to believe that you alone can [01:54:00] go through all these cryptocurrencies and find the best for your portfolio, that you will avoid all the scams and you will pick only the right ones. You know, it does appeal to people who I think might be susceptible to those things, who aren't aren't as confident in others or are susceptible to paths of appeals to their own intelligence. And they want to be flattered by that type of process.

Saifedean Ammous: Yeah, I agree. Well, Stefano has a question for you, Stefano you wanna go ahead?

Stefano: Yes, of course. Hey Peter! Thank you, it was fascinating to hear about the history of Bitcoin. I'm somewhat new to the field, so it's good to learn about something from you. So my question is the following. As I learned about Bitcoin, I realized that the Bitcoin network is built on a very strong foundation.

You're using the block chain and proof of work and so on. But at the same time, I'm also [01:55:00] realizing that a lot of institutional centralized government, let's say like United States of China will very much want Bitcoin to fail because it's a threat to their centralized power by definition. So I realized that Bitcoin has been around for 10 years and has demonstrated to be very resilient, but what weaknesses do you think may still exist within the network that can let one of these powerful centralized players able to either kill it or at least reduce its power.

Pete Rizzo: Yeah. Interesting question. I don't think I have that concern about Bitcoin anymore, and I think I would certainly appeal to people who to work more to analyze threats to the network.

Certainly there's a lot of great people writing about issues with the lightning network and how we're building it. Shinobi is someone who I follow who writes a lot about different threats in the net and the lightning network, Alex B, another person who takes that threat assessment model.

I think for me, [01:56:00] you can look at events like the fork wars, the China migration of Bitcoin hash power and just see that, I don't think in it's current form the Bitcoin network could be susceptible to that type of event. I think governments can take steps to undermine it and they likely will.

So I think the greater threat, I think is honestly in the co-option of the cryptocurrency system as a whole, because again, one of the great obfuscations here is that these other cryptocurrencies are offering all these sorts of bells and whistles, but they're really coming at the cost of a couple of things.

One, the user rights are restrictive in these environments and two, that decision-making within these environments is beholden to political apparatuses. I think what you're likely to find over time. And this is why I've become more vocal about this issue, about how Bitcoin is different on user rights and other cryptocurrencies.

Because I do think governments will eventually realize that they can co-op these other cryptocurrency systems. And I'm not under the illusion that I think [01:57:00] they'll fail anytime soon. I think what's far more likely to happen is that the cryptocurrency systems are going to get bigger.

They're going to gain institutional adoption. This is the problem with systems that have systemic flaws, right? Where they're not immediately obvious so I'll give you the example of one that I've been thinking about a lot with communism.

Communism needed to be tested on the level of entire nations who adopted it prior to where it was clear that in a communist political structure, you as a user had weakened user rights and that it was a bad system for you as an individual but that required societal investment on a really massive scale.

And I think we should keep that in mind because I do think that the cryptocurrencies ecosystem broadly, my concern for them is not that they'll fail immediately, my concern for them as they grow exponentially larger, become co-opted and then become weaponized against Bitcoin.

And I do think that the biggest attack vector against Bitcoin are attack vectors against Bitcoiners. You as a [01:58:00] person for being in Bitcoin, I think you have to understand that you face a certain risk, right? You are someone who lives in a real place that interacts with other people and your rights can be restricted. I think what's likely to happen is exactly that.

I think when they realize that they can't attack the Bitcoin network or undermine it, two things will happen. One, they'll try to co-opt the existing cryptocurrencies systems and then two, there will be deliberate campaigns to undermine Bitcoiners, the rights of Bitcoiners and to turn the collective political masses against Bitcoiners.

But look, I think the other thing is that there is a geopolitical race now, right? El Salvador is a Bitcoin-friendly nation and I'll choose to go move to El Salvador, that's a beautiful thing, right? So I do think it's not all bleak, but I would say that choosing to be a Bitcoiner, I think while you are going to be empowered by this technology I do think that yes, you are correct, that we will live through likely lived through some period where either the network or us personally face some sort [01:59:00] of sling and arrow for that decision.

Stefano: Okay, thank you, Peter. Very interesting point of view.

Pete Rizzo: Yeah, you're welcome.

Saifedean Ammous: Peter has another question for you, Peter?

Peter Young: So in the discussion so far you two have focused quite a lot on current debates within the Bitcoin community and the history of Bitcoin, and it's great to get Peter's kind of bird's eye view of all of the characters and debates that have been going on during his time as a journalist. So my question is now about the future. Peter what do you think the future of Bitcoin is in terms of how large it will become within the global financial system?

Because there are some people that think we're heading to a multicurrency world where Bitcoin will take on this kind of digital gold role and stop there. But there are others like Knut Svanholm, who's coming on the podcast later in the month, who thinks that we are on a path towards [02:00:00] Hyperbitcoinization, where Bitcoin will become the only currency that is really relevant in the international financial system.

And he also thinks that could happen quite quickly. Like he says, in some of his books that he sees the path as being faster than some hyperinflations that have happened in the past. So I'd be really keen to see whether you think these kinds of Hyperbitcoinization scenarios are likely and what you think the most probable path for Bitcoin's future is?

Pete Rizzo: Yeah, interesting question. I appreciate that. Yeah, I would say I'm not as optimistic. I generally think that the greater the human endeavor is the greater equal opposite reaction from whatever powers which will try to restrict it. And I think that I've been critiqued in the past as being puritanical in this view, but I do think it's worth keeping in mind.

I think Bitcoiners are on the side of people who are aspiring to enhance the freedoms and rights of others. And generally, if you look at history, the people who have been [02:01:00] aligned towards that generally don't have a great time. You can go back through the ages and just find countless examples of that.

Are we going to be the Christians who were thrown lions? I don't think it will go that far, but again, there are a lot of historical examples where if you're trying to enact meaningful change on a large enough scale, the United States is an example, there was an entire revolution fought to make a democracy forum.

And to the extent that you think democracies are valuable propagate that political ideology around the world. Again, I think I prefer to look at that we're early in this. I don't think that certainly we're on the verge of a closed Hyperbitcoinization period. I think that part of that thesis for mine is shaped by how long it currently takes to have a sophisticated view on Bitcoin and the problems with the mainstream framing of cryptocurrencies being the default lens. We see just how much longer it makes the learning (???) for these kinds of things. [02:02:00] That said, I am sympathetic to Knut's argument and other people's arguments that I do think when Bitcoin really happens, it'll happen quite fast.

I don't know if we'll live to see it. I prefer to look at the scenario where we don't simply because I think that to me seems like the more logical or possible pathway, like what happens if we're wrong and this takes longer. You know, I just think that's an interesting counterpoint to put forward because I think a lot of people just immediately talk about Hyperbitcoinization as something that's going to happen very soon.

And I think an issue with that is that we, when we talk about the Hyperbitcoinization happening soon, we create and attract users who may again, talking about time preferences, this is something that Saif talks about a lot, are we really creating low time preference individuals if we're promising Hyperbitcoinization tomorrow?

I don't think so. So like, if [02:03:00] you are someone who thinks that Hyperbitcoinization is going to happen at the end of December, I don't know what to say to you. That's probably not a logical thing. But it does great. I'd be biased towards that for the reasons I've explained towards user rights and freedoms, but I worry a little bit about setting expectations with people that this will happen soon or that they should expect it to happen soon because I worry what happens if they don't.

Are these people only in it for Bitcoin because they think this is going to happen soon? I don't know. Are those the people we want to be biased towards Bitcoin? I'm not sure. I guess that's how I would answer that question. It's probably very unsatisfying.

Peter Young: I'm inclined to agree in general.

I think the economic arguments for the hardest money winning out, the arguments that Saif outlines in The Bitcoin Standard, are very strong. But how long that takes is very much an open question and it's an empirical question and as you [02:04:00] point out, we're talking about an extremely profound change in the way that international finance works and the power dynamics of the world work.

So we should expect that there will be a big tussle between forces on either side of that battle before we get to that Hyperbitcoinization stage but I do see it as a possible scenario.

Pete Rizzo: 10 years ago, would it have been possible for El Salvador to adopt it. Bitcoin is this interesting case where it seems to happen both slower than we want it to and then faster than we expect. You know, I think I only like to put out that counterpoint because I do think too often we argue the Hyperbitcoinization point and I worry about how that affects the preferences and expectations of those individuals who are in market.

We're still coming from that mainstream view.

Saifedean Ammous: Anybody else have any more questions for Peter?

Stefano: I have another one. [02:05:00] The question is the following about the framing of Bitcoin versus the other cryptocurrencies. So as I was learning about Bitcoin in the last few months, it was very confusing that there are so many cryptocurrencies and then the way they really helped me to frame the context was that in my mind, at least Bitcoin is the only truly decentralized digital currency.

And all the other ones are interesting technology projects. And so I see the other cryptocurrencies as basically buying a share in a private technology project, which may or may not be useful or may not be successful. That's just like investing in a private technology company.

Do you think this is proper framing or it's not really correct?

Pete Rizzo: Yeah, I used to be sympathetic to that framing. I think at points I probably had adopted it myself. I think at this point, I would probably say that I think most cryptocurrency projects are just competing with Bitcoin on time preference. They're offering you some feature that Bitcoin doesn't have now claiming that people will need it in the future.

[02:06:00] And I think the problem that I was bringing up in this article is that that freedom is an illusion because it's coming at the cost of you having weaker rights than you would in the Bitcoin system. I think ultimately if you think that the Bitcoin system is a financial system that can expand exponentially depending on consensual human progress as Saif said earlier, I really liked how we used the word consent.

I do think that Bitcoin is a consent based financial system at its heart. If you attempt to define Bitcoin in a more finite way than that, I would argue that you probably have some misaligned vision of the project, I think the people who tried to brand Bitcoin as a digital gold, I think it was well-intentioned.

And I do think Saif has done a great job of really showing that historically the role of gold within financial markets was very expansive. I just don't think that's how people listen to you when you say digital gold, they're just thinking, oh this is gold, and now there's Bitcoin.

When really Bitcoin is a financial system that can expand as [02:07:00] exponentially as the rate of human progress and I think it likely will. That's where I think that, to the extent that other cryptocurrencies may be valuable if they offer you some feature or service that exists today not on Bitcoin, then great.

You know, certainly if you use some sort of lending protocol, because you want to take a loan because no traditional financial institution will provide you a loan. I could understand why you would potentially want to do that. But does that mean I think that those systems will never be built on Bitcoin? I don't think so.

Stefano: Yeah, that makes sense. Thank you Peter!

Pete Rizzo: Yeah, you're welcome.

Saifedean Ammous: All right thank you very much, Peter. This is possibly been our longest seminar so far. Thank you for this really fascinating and thought-provoking stuff. Where can people find more of your work?

Pete Rizzo: Yeah, [02:08:00] twitter.com/pete_rizzo_ tweets pretty irregularly but when I do work I usually tweet it out. Also publish my Bitcoin history stuff over at Bitcoin Magazine, write a column on Forbes and yeah Saif, appreciate the forum. Was great to chat with you, as I said. I think right now The Bitcoin Standard is the only book on the shelf, hopefully to be joined by other, your subsequent publications soon.

Personally, I'm looking forward to The Fiat Standard! Love of the parts I've read so far and also Principles of Economics. Appreciate all the work you're doing and yeah, it was great to chat.

Saifedean Ammous: Thank you, sir. Thank you very much.

Have a good day! Bye-bye.

Pete Rizzo: Bye guys!